Tuesday, May 10, 2011

Braving the New World of E-book Pricing, Part 1 of 2 Parts

By Lori L. Lake

Nathan Bransford recently wrote a timely and insightful piece called “99 Cent E-Books and the Tragedy of the Commons” in which he responds to the latest news about e-book pricing.

In addition, Jeffrey Trachetenberg has an informative article called “Cheapest E-Books Upend the Charts: 99-Cent Titles From Unknown Authors Put New Pressure on Big Publishers”. The title says it all.

Many fellow writers and colleagues have fallen into a frenzy of excitement about the prospect of getting rich (or, in the alternative, at least finally making a living) with their writing. Self-pubbed Amanda Hocking’s name is bandied about. People are telling anecdotes about authors making thousands of dollars in mere days. At long last, maybe all of those years of toil will pay off!

The much-discussed dialogue between Joe Konrath and Barry Eisler is also cited as further evidence that authors may finally receive their due. All over the place I’m hearing writers saying that all you have to do is write a book, get it online, and voilá -- instant presto money!

The problem with extrapolating the Konrath/Eisler situation to a general author’s circumstances is that those guys have made names for themselves. They’ve already built huge fan bases to rely upon and have the stature to continue to gain more notoriety. Many small press and midlist authors have cultivated fan bases as well, but there’s only so much room for blockbuster authors. A writer friend of mine once said that for pop fiction, the public can’t recall more “Big Apostles” than 12 or 13 – and she argued that the number may be lower than that since most of us can’t remember all the apostles names either.

If a writer has a dedicated group of readers and libraries regularly purchasing his or her works, then putting out her or his own e-books can certainly bring in some revenue. But I would argue that little by little, the marketplace is flooding. A tremendous number of fiction backlists are popping up steadily online, and new books are being uploaded daily (some would say frantically). The more e-books that become available, the smaller the pie gets for everyone. I know, I know, the reports are telling us that people are buying more books than ever. But that always happens when someone gets a new toy. Once the market becomes saturated with e-readers, the sales will normalize.

At some point, quality is really going to start to matter. A lot of authors are getting away with substandard editing and formatting. That won’t last much longer. (See the Jacqueline Howett meltdown for a good example of how readers are starting to fight back: http://booksandpals.blogspot.com/2011/03/greek-seaman-jacqueline-howett.html).

But the vast majority of writers – certainly almost all of the ones aspiring to the mainstream (like many of those on the SinC Yahoo listserv, for instance) – do not have the luxury of a rabid following. They can post their books all they want on Amazon and other sites, but nobody’s going to find them on page 473. Having been with a publisher or having found a niche is a HUGE advantage.

Whether you have a name or not, I would argue that charging 99 cents or even $2.99 for a full-length novel is a wretched, stupid idea. If we do the math, you can see what I mean. I’ll just use my own work as an example.

It typically takes me about 300 hours to write a complete first draft. Add another 100 hours of my own revising and editing, then another 30-50 hours for working with the editor and proofing, and I’m up to, let’s guesstimate, 440 hours. (I’m not even going to count research and the time I spend dithering and fretting and all that. And of course, this doesn’t include e-book creation time with formatting/uploading/testing, cover creation, marketing and promotions, etc., or doing all the administrative work that a publisher used to do.)

Anyway, 440 hours x $30/hour means I need to make about $13,200 selling The Novel as an e-book or I may as well go back to government work. (And I need to make AT LEAST $30/hr because the government is going to tax me out of over 40% of it!)

I’ll use Amazon as an example because they have some of the best rates for writers publishing their own work – 70% for $2.99 to 9.99 price points and 35% for .99 to 2.98. Applying their price points, here are some calculations for how many units I must sell to make $30/hour for the work I did on the book:

• I have to make 37,714 sales if the e-book sells at 99 cents.
• I have to make 18,857 sales if the e-book sells at 1.99.
• I have to make 6,316 sales if the e-book sells at 2.99.
• I have to make 4,204 sales if the e-book sells at 4.49.
• I have to make 2,699 sales if the e-book sells at 6.99.
• I have to make 2,223 sales if the e-book sells at 8.49.
• I have to make 1,889 sales if the e-book sells at 9.99.

I share those numbers to illustrate how ridiculous – or perhaps I should say, damaging – a .99 cent price point is. How can the average non-blockbuster author make ends meet? And my needs are probably a lot lower than those of authors like Joe and Barry. They can probably sell 37,714 e-books easily, I suppose – but the rest of us I’m not so sure about. I know I’m a long way off from that. I happen to write in the niche of lesbian fiction, and for many gay/lesbian authors, we have a dedicated audience of GLBT people, along with some open-minded mainstream readers, but we get little promotional support. We’re often lost completely in the enormous and busy marketplace of mainstream works. 37,714 books would be a dream that few niche and/or self-pubbed authors could achieve.

To be continued...

Lori L. Lake is the author of six novels, two short story collections and is the editor of two anthologies. Her most recent book, Like Lovers Do, was released on May 10. For more information, see www.lorillake.com.


Michael Allan Mallory said...

Great post, Lori. As I was saying to someone recently, for every Amanda Hocking or Joe Konrath who take the ebook world by storm there are easily 10,000 other writers who never find their audience or only find a fraction of it. They plug away, do good work, pay their dues, but don't make a big splash. Hard work is a big factor in finding success. So is luck.

Jeri Westerson said...

Very well said, Lori. It's nice to see the numbers laid out like that. I've been trying to say the same thing to newbie authors but it's nice to have pie charts to really show it up.

Lindsay said...

Interesting to see the figures laid out like that. I'm getting ready to launch my first eBook and was wondering about the pricing. With the way you dhowed us I think it will help not only me but other indie authors.

Sasscer Hill said...

I couldn't agree, more Lori. It's the old law of supply and demand. It is a law that has never been broken and always proves true in the end!

Maryn said...

Great post, Lori. I decided to go the ebook route but with an ebook publisher. I opted for a built-in readership and editing, and I'm not sorry I did. Self-publishing is more than an unknown writer putting his/her book/s into Kindle or Smashwords format and reaping the rewards. It's doing double the PR to let readers know you're out there. For every one who succeeds, hundreds don't.

Nancy Lauzon said...

Hey Lori,

Interesting post - FYI, I self-published (after being with a small press publisher) not because I wanted to get rich, but because I wanted more control.

If anyone is writing a novel for the money, they should probably be doing something else.

Although I would love for someone to pay me by the hour to write, I think it's unrealistic to quantify it that way.

Very few people can support themselves writing. Most of us do it because we love to.

Regarding quality, you might be right that there are more editing mistakes with digital books (although I've seen quite a few in paper books also) but digital mistakes are easier to fix - it would take me about 2 minutes. But in any case, whether an editor is involved or not, every author should present a clean, polished manuscript, already self-edited and free of errors(IMO).

Finally, did you consider that a self-published author makes at least 70% of his or her royalties, compared to 10% with a traditional publisher.

Just sayin .... :)


Lori L. Lake said...

I'm not sure why I worried that people would react negatively to my blog post -- is that odd of me? Maybe it's Part 2 tomorrow about how I'm concerned that the NY publishers will disintegrate that's more problematic. I'm pretty sure that if eBook prices stay at $9.99, NY will cease to exist. (Read more about that in the morning.)

All six of you are singing to the choir. We all do agree that we may not ever make enough dough, we have to do it for love, and sometimes having control is more important than having a bigger name. (Still, it would be nice to have money, time, control, and a cool reputation. )

Nancy, I am totally on board with you regarding the 10% (maybe 15 or 25% in some cases) that the author gets from a publisher versus the 70% you can get if you have your own eBook rights. Because I have a small press print publisher and retained my digital rights, my backlist is actually supporting me right now. I have a new book out that's selling scarily well, too. I'm SO lucky that after over a decade of publishing, I have a name in the tiny little niche pond I write for. It's helped a lot.

It's hard to tell what's going to happen in the eBook realm. It's all changing SO FAST. I continue to be completely fascinated by how quickly the changes are occurring. Take a short vacation - come back and the whole playing field is different!
;-) Lori

Lindsay said...

Guess I'd better not take a computer free vacation then.

Fabian Black said...

I'm an independent author. I write, edit, format, upload to as many channels as I can and advertise as well as my budget allows. I pay cover artists to design my covers, pay someone to proof read and also to convert my work into formats such as epub. At the end of the day, because of the low prices I have to ask for my work in order to compete in the marketplace, I'm lucky to break even on my outlay. I'm often out of pocket. In a good quarter I might make enough to be able to treat myself to something nice, like a cinema ticket and a bucket of popcorn, lol.

Readers of ebooks have been led to expect they can pick up any number of great books for a few dollars. If they can't actually have a story for free then they want it for next to nothing, and who can blame them if that's the precedent that's been set. I don't think under pricing ebooks does any of us any real service in the long term. It devalues authors and their work and the industry as a whole.

Sometimes it sticks in my throat to put something I've laboured long and hard over on sale for far less than the cost of a cupcake. (I know, terribly vain of me, lol)

I love writing, that's why I do it. That's what keeps me going along with the occasional fan mail. :) If I had to stop writing I think I'd fall into deep depression. I'd love to think I could make my living from writing, but I can't.

Anyway, sorry to ramble. Great post by the way. Thank you. :)


Rick R Reed said...

"At some point, quality is really going to start to matter." I think this line, more than anything else in your piece, Lori, says it all.

Horror with Heart said...

Great to see it laid out like that. Thanks, Lori. I already felt that $.99 as a regular price for an e-book novel was insulting to authors. Now I have figures supporting that feeling.

Lori L. Lake said...

I know so many authors who are in the same predicament that you say you are, Libby. I was there for over a decade with print publishing. It wasn't until e-books came along that any appreciable amount of income started to flow my way. However, I own my electronic rights, and most writers who get published - by any sized press - do not. As you will all see in Part 2, the old system, as it's set up, does not favor the author financially even with all the new developments that are happening.

Of course, the way print publishing is set up, the typical author has never made much money. As Nancy and Libby both mentioned, many, if not most, of us got into this field because we loved it. But baseball players and doctors and businessmen etc. get into all kinds of work fields because they love them - and at least they get paid adequately!

BTW, Rick, quality is going to matter SO MUCH in the coming world of e-reading. Quality of plot, quality of storytelling, and especially quality of editing. You've been managing that quite nicely, and that's why you've made a name for yourself in the niche of writing that you work in.

One of the main grudges I heard for years from small press and self-published authors was that the big presses had the resources to give their authors the Maxwell Perkins treatment. As we've seen in recent years, this has ceased to be so. Whole copyediting departments have been laid off, and most NY editors have so much work on their desks (and kitchen tables) that they no longer have the time to coach and nourish and develop new voices. Instead, writers are expected to submit publication-ready manuscripts that need precious little work.

So the playing field has leveled in that respect. Non-NY writers can - and are - competing effectively more and more every day. But quality is *critical.* People won't come back for seconds if the first meal is less than adequate. Nancy is right that digital mistakes are a cinch to fix --- but somebody has to be aware of them to know to make corrections. Howett's THE GREEK SEAMAN is a perfect example. If the author hasn't got a clue about grammar and usage, most books will ultimately sink.

Dana Stabenow said...

Excellent post, Lori.

Anonymous said...

Excellent points brought up in your article. I know there are a lot of folks on Kindleboards for one who are sneering at your points, but that's because they have a stake in the e-publishing game and they feel threatened, it seems. It doesn't change the fact that you bring up good points to consider.