Russ
Istar
Okay so here is what I think the operative quote from your blog is:
Let us look at this from a business perspective, not as a writer for a couple of minutes and think about what you have to do to make this happen. And let's look at it from the role of the investor who wants to to make this staggering ROI. And let's use your figure of $100k of promo per genre shattering book. If you don't like the 100k figure just scale it down to 50 or 25 or whatever suits your fancy (which gives me an interesting idea for another thread). And to make it really simply let's make it an e book only business shall we.
So what does our angel investor have to do to make this work and what is it going to cost for him to do this as a business? And that is the fundamental difference here, the investor is making a business decision on what and who to invest in. The indy author doesn't have that problem, they have already decided to invest in themselves. A much easier way to do business.
And our investor cannot rationally just do this with one book. Because he might be wrong about how it is going to go. So he's going to have to do this with a group of books, at least, what ten a year? Because he wants to turn them over and make money and he has to spread his risk. It is hard to guess how many of the books that will take off. You suggest that picking works that are so good they can crush the big names out there and change the genre can be done consistently. I disagree.
Now he has to build his (albeit) electronic infrastructure. So he needs to find works. He is unwise to do it just sitting around reading books on his own and deciding what he likes and buying it and marketing in. So he needs people to pick winners for him. And those people have to wade through a lot of mud to find pearls. People who can pick winners consistently. He needs a lawyer and some legal agreements. And unless he is really lucky he needs to get editors to edit the work he buys. Sure he might choose to farm out the editing to indy editors, but good ones are not cheap. IF you want to be promoting top quality work you might need t to pay $5k per book. If you are putting out 20 of these amazing books a year it is cheaper to hire someone to do it full time than farm it out on a piecework basis. Then you need covers, formatting, etc for each book which ads to the cost.
Then you want to sell this amazing book. So you need for each book someone to do the marketing and someone to do the publicity work which are two completely different roles. Maybe, maybe you can get away without the publicist. But the marketing person costs. And marketing is changing quickly these days so you can't just do it via a simple formula. They cost a solid amount and once again fairly quickly it makes more sense to pay them full time than on a piece work basis.
You see what is happening here? Our poor angel investor needs to build himself a small publisher to do this thing. And what is it that you seem to suggest will make the difference for this guy? The ability to pick, and retain winners better than anybody else can. You believe that you can pick four indy guys who will be sure fire giant hits if they just had enough money behind them. I would bet you are not able to do that.
But if you can, and there are staggering profits to be made, here is what you should do. You should get ten of your buddies, and each borrow $12k and buy that book and offer that indy author royalties 30% higher than traditional publishing. Then spend the money you need to whip it into shape and then go blow up the industry with your nuclear weapon. Or at least make a really, really good profit on that book.
Then retain that author after he as had that really good success and a traditional publisher offers him as much up front as he just made on your project in the last two or three years.
Then do it a second time, and a third, and maybe a fourth. If you already know that next four Rothfuss' off the top of your head, this is a sure winner (keeping in mind Rothfuss got turned down by some publishers as well). I don't think it can be done.
And the math is not so hot for your investor as well, because some things aren't simply scalable. Your book I think is currently .99. I don't recall your cut of that but let's jack if up to $3 and say on the e-book 70% is coming back to your new publishing group after retailer costs. Fair? So you are paying your author above industry rates, let's say 40% of the net? Maybe more. So that leaves 1.26 coming back to your publishing company per sale. So before your angel makes a dollar he has to sell 100,000 copies of this book if his overhead is normal. Now you can play with the cost of the book to help out the math but then you have a different problem with sales because your readers change. And what happens if one of these books tanks and your angel loses 50k on it? Then this book has to sell almost 40k more copies to make up for that loss. You probably have a good idea of just how hard it is to sell 100k copies of a book let alone 140k copies. And to do it consistently? That is tough.
And there are all sorts of small presses out there looking for the same books and using a similar, perhaps slightly less well funded models and some of the make okay money, and some of them die out despite being run by very experienced people. I have know many people who run them and still do. Their ROI is not what you seem to think it will be. It rarely hits 12% after they pay wages etc.
In one case a hugely successful spec fic writer who had been in the industry for 30 years led the project, and did the editing himself, and almost always picked award winning writers. That imprint no longer exists. Other smaller and mid publishers sign lots of people on royalty only or very low advance deals, and some of them invest good amounts in marketing. No nuclear bombs yet.
Your whole theory is premised on the assumption that you can pick winners far better than any publisher (of any size) in history. That is a tough ask. IF you can do it three times in a row, stop publishing and become the greatest agent in history.
Let us look at this from a business perspective, not as a writer for a couple of minutes and think about what you have to do to make this happen. And let's look at it from the role of the investor who wants to to make this staggering ROI. And let's use your figure of $100k of promo per genre shattering book. If you don't like the 100k figure just scale it down to 50 or 25 or whatever suits your fancy (which gives me an interesting idea for another thread). And to make it really simply let's make it an e book only business shall we.
So what does our angel investor have to do to make this work and what is it going to cost for him to do this as a business? And that is the fundamental difference here, the investor is making a business decision on what and who to invest in. The indy author doesn't have that problem, they have already decided to invest in themselves. A much easier way to do business.
And our investor cannot rationally just do this with one book. Because he might be wrong about how it is going to go. So he's going to have to do this with a group of books, at least, what ten a year? Because he wants to turn them over and make money and he has to spread his risk. It is hard to guess how many of the books that will take off. You suggest that picking works that are so good they can crush the big names out there and change the genre can be done consistently. I disagree.
Now he has to build his (albeit) electronic infrastructure. So he needs to find works. He is unwise to do it just sitting around reading books on his own and deciding what he likes and buying it and marketing in. So he needs people to pick winners for him. And those people have to wade through a lot of mud to find pearls. People who can pick winners consistently. He needs a lawyer and some legal agreements. And unless he is really lucky he needs to get editors to edit the work he buys. Sure he might choose to farm out the editing to indy editors, but good ones are not cheap. IF you want to be promoting top quality work you might need t to pay $5k per book. If you are putting out 20 of these amazing books a year it is cheaper to hire someone to do it full time than farm it out on a piecework basis. Then you need covers, formatting, etc for each book which ads to the cost.
Then you want to sell this amazing book. So you need for each book someone to do the marketing and someone to do the publicity work which are two completely different roles. Maybe, maybe you can get away without the publicist. But the marketing person costs. And marketing is changing quickly these days so you can't just do it via a simple formula. They cost a solid amount and once again fairly quickly it makes more sense to pay them full time than on a piece work basis.
You see what is happening here? Our poor angel investor needs to build himself a small publisher to do this thing. And what is it that you seem to suggest will make the difference for this guy? The ability to pick, and retain winners better than anybody else can. You believe that you can pick four indy guys who will be sure fire giant hits if they just had enough money behind them. I would bet you are not able to do that.
But if you can, and there are staggering profits to be made, here is what you should do. You should get ten of your buddies, and each borrow $12k and buy that book and offer that indy author royalties 30% higher than traditional publishing. Then spend the money you need to whip it into shape and then go blow up the industry with your nuclear weapon. Or at least make a really, really good profit on that book.
Then retain that author after he as had that really good success and a traditional publisher offers him as much up front as he just made on your project in the last two or three years.
Then do it a second time, and a third, and maybe a fourth. If you already know that next four Rothfuss' off the top of your head, this is a sure winner (keeping in mind Rothfuss got turned down by some publishers as well). I don't think it can be done.
And the math is not so hot for your investor as well, because some things aren't simply scalable. Your book I think is currently .99. I don't recall your cut of that but let's jack if up to $3 and say on the e-book 70% is coming back to your new publishing group after retailer costs. Fair? So you are paying your author above industry rates, let's say 40% of the net? Maybe more. So that leaves 1.26 coming back to your publishing company per sale. So before your angel makes a dollar he has to sell 100,000 copies of this book if his overhead is normal. Now you can play with the cost of the book to help out the math but then you have a different problem with sales because your readers change. And what happens if one of these books tanks and your angel loses 50k on it? Then this book has to sell almost 40k more copies to make up for that loss. You probably have a good idea of just how hard it is to sell 100k copies of a book let alone 140k copies. And to do it consistently? That is tough.
And there are all sorts of small presses out there looking for the same books and using a similar, perhaps slightly less well funded models and some of the make okay money, and some of them die out despite being run by very experienced people. I have know many people who run them and still do. Their ROI is not what you seem to think it will be. It rarely hits 12% after they pay wages etc.
In one case a hugely successful spec fic writer who had been in the industry for 30 years led the project, and did the editing himself, and almost always picked award winning writers. That imprint no longer exists. Other smaller and mid publishers sign lots of people on royalty only or very low advance deals, and some of them invest good amounts in marketing. No nuclear bombs yet.
Your whole theory is premised on the assumption that you can pick winners far better than any publisher (of any size) in history. That is a tough ask. IF you can do it three times in a row, stop publishing and become the greatest agent in history.
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