1. Welcome to the Fantasy Writing Forums. Register Now to join us.

Show me the money...traditional verses self publihing

Discussion in 'Publishing' started by MichaelSullivan, Jul 14, 2012.

  1. MichaelSullivan

    MichaelSullivan Maester

    628
    227
    43
    Show me the money...traditional verses self publishing

    This post is in response to another thread - that I didn't want to derail. It relates to money and publishing. For those that don't know, I had a very successful self-published career and then signed on with traditional, the decision to do so was not based on financial considerations.

    Let's lay some ground works first. I want to compare apples to apples so in this case let's assume we have a book (and author) who has the option of doing either which means:
    • The book is of high quality, written in a genre that has demand, and would eventually make it through the query-go-round such that it would eventually be picked up by a publisher
    • If self-published, it would be done so professionally which means it would have: good editing, attractive cover, good back of the book marketing copy, competitive pricing.

    The money for each breaks down as follows:
    • Traditional: Paperback royalties (based on list) would be 7.5% for trade, 8% for mass market, and 10% for hard cover ,and 25% (based on net) for ebook and audio downloads.
    • Indie: No advance (probably - $1,000 per book on out of pocket fees), trade paperback - minimal sales but earning $3.50 per. ebook will be bulk of sales and will be 70% of list (we won't price lower than $2.99).

    Now given the above let's look at the authors who sell at various levels (notice I said authors not books - so it is quite possible that it may take more than one title to reach these sales levels)
    • Blockbuster - which will sell more than 1,000,000 copies
    • Successful - selling at least 100,000 copies
    • Solid: Selling 5,000 - 10,000 copies
    • Poor performer: 2,000 or less copies

    Notice there are gaps between the various levels but these tend to be the big classifications that are worth looking at.

    Blockbuster: For the most part we can ignore this as it is the world of the "outlier" by definition most people will never find themselves here - but for the few that have - your best option would be traditional. That is the venue that has the distribution to make the most money at this level, and to date there are only two self-published authors who have reached this level, and while many in writing/publishing may know their names, few people on the street can tell you who Amanda Hocking or John Locke are.

    Successful: At the high end but very attainable. I myself have sold about 195,000 copies and I can quickly name 50 other authors who would reach this category both through traditional and self-published. Let's look at this one more closely. If the publisher has this type of expectation they would probably offer a six-figure advance of around $100,000 - $150,000 (an it would probably be for a 3-book deal).

    • If initially released in hardcover let's assume 5,000 sold and then 100,000 in mass market market paperback. ebook at 30% of print. Prices are $25.00 for hardcover, $7.99 for mass market, ebook initially $12.95 for first year then $7.99 going forward. So..

      [table="width: 500, class: grid, align: center"]
      [tr]
      [td]Format[/td]
      [td]Quantity[/td]
      [td]Author's Share[/td]
      [td]income[/td]
      [/tr]
      [tr]
      [td]hardcover[/td]
      [td]5,000[/td]
      [td]$2.50[/td]
      [td]$12,500[/td]
      [/tr]
      [tr]
      [td]mass market print[/td]
      [td]100,000[/td]
      [td]$0.64[/td]
      [td]$64,000[/td]
      [/tr]
      [tr]
      [td]expensive ebook[/td]
      [td]9,000[/td]
      [td]$2.27[/td]
      [td]$20,430[/td]
      [/tr]
      [tr]
      [td]cheap ebook[/td]
      [td]22,500[/td]
      [td]$1.40[/td]
      [td]$31,500[/td]
      [/tr]

      [tr]
      [td]Total[/td]
      [td]136,500[/td]
      [td]$0.64 - $2.50[/td]
      [td]$128,430[/td]
      [/tr]
      [/table]

    • If released in trade paperback there usually won’t be a mass market run. The ratio between ebook and print would be about 60% paper and 40% ebook and all the sales would be required to get to 100,000. Trade paperback would be priced around $14.99 and ebook at $9.99.

      [table="width: 500, class: grid, align: center"]
      [tr]
      [td]Format[/td]
      [td]Quantity[/td]
      [td]Author's Share[/td]
      [td]income[/td]
      [/tr]
      [tr]
      [td]trade print[/td]
      [td]60,000[/td]
      [td]$1.12[/td]
      [td]$67,200[/td]
      [/tr]
      [tr]
      [td]ebook[/td]
      [td]40,000[/td]
      [td]$1.75[/td]
      [td]$70,000[/td]
      [/tr]
      [tr]
      [td]Total[/td]
      [td]100,000[/td]
      [td]$1.12 - $1.75[/td]
      [td]$137,200[/td]
      [/tr]
      [/table]

    • If released in mass market paperback then you would need 100,000 copies sold to be a success at this level and because ebooks are priced the same you would probably get an additional 50% in ebooks the ratio would be about 60% paper and 40% ebook and all the sales would be required to get to 100,000. Both the ebook and the mass market would be priced at $7.99

      [table="width: 500, class: grid, align: center"]
      [tr]
      [td]Format[/td]
      [td]Quantity[/td]
      [td]Author's Share[/td]
      [td]income[/td]
      [/tr]
      [tr]
      [td]trade print[/td]
      [td]100,000[/td]
      [td]$0.64[/td]
      [td]$64,000[/td]
      [/tr]
      [tr]
      [td]ebook[/td]
      [td]50,000[/td]
      [td]$1.40[/td]
      [td]$70,000[/td]
      [/tr]
      [tr]
      [td]Total[/td]
      [td]150,000[/td]
      [td]$0.64 - $1.40[/td]
      [td]$134,000[/td]
      [/tr]
      [/table]

    • If released as an indie two likely price points would be utilized $2.99 or $4.99. There would be very few paperback sales so I'm going to take them off the table completely so these numbers will be slightly unreported. Because the ebooks are priced much less than traditional they are likely to sell more than 100,000 copies but we'll keep stay within the confines we setup

      [table="width: 500, class: grid, align: center"]
      [tr]
      [td]Format[/td]
      [td]Quantity[/td]
      [td]Author's Share[/td]
      [td]income[/td]
      [/tr]
      [tr]
      [td]ebook - $4.99[/td]
      [td]100,000[/td]
      [td]$3.49[/td]
      [td]$349,000[/td]
      [/tr]
      [tr]
      [td]ebook - $2.99[/td]
      [td]100,000[/td]
      [td]$2.09[/td]
      [td]$299,000[/td]
      [/tr]
      [/table]

      So you can see for this category you'll always do better if you are self-published. You are getting a much higher per book income, and because you are offering the book cheaper than when traditional you’ll be able to live make good sales on ebook only and that will more than make up for the lost in print sales.

    Solid: In the “solid category” there are probably only going to be trade paperback as an option. Royalties at this level will be $5,000 to $10,000 per book. And we can use similar calculations to what we had for the “successful category:

    [table="width: 500, class: grid, align: center"]
    [tr]
    [td]Format[/td]
    [td]Quantity[/td]
    [td]Author's Share[/td]
    [td]income[/td]
    [/tr]
    [tr]
    [td]trade print[/td]
    [td]3,000[/td]
    [td]$1.12[/td]
    [td]$3,360[/td]
    [/tr]
    [tr]
    [td]ebook[/td]
    [td]2,000[/td]
    [td]$1.75[/td]
    [td]$3,500[/td]
    [/tr]
    [tr]
    [td]Total[/td]
    [td]5,000[/td]
    [td]$1.12 - $1.75[/td]
    [td]$6,860[/td]
    [/tr]
    [/table]

    Selling 7,500 (which is the average for most debut books would yield $10,290 and 10,000 which would be really successful at this level is $13,720.
    Once again in indie will assume all of the books are ebook and the numbers work out as follows:

    [table="width: 500, class: grid, align: center"]
    [tr]
    [td]Format[/td]
    [td]Quantity[/td]
    [td]Author's Share[/td]
    [td]income[/td]
    [/tr]
    [tr]
    [td]ebook - $4.99[/td]
    [td]5,000[/td]
    [td]$3.49[/td]
    [td]$17,450[/td]
    [/tr]
    [tr]
    [td]ebook - $2.99[/td]
    [td]5,000[/td]
    [td]$2.09[/td]
    [td]$10,450[/td]
    [/tr]
    [/table]

    Personally at these prices I think it is likely that you would sell 2x — 5x of what would be sold traditionally because even though they are all ebooks they cost just a fraction of the $14.99 and $9.99 price tag.

    So let's summarize:


    [table="width: 500, class: grid, align: center"]
    [tr]
    [td]Type[/td]
    [td]Traditional[/td]
    [td]Self - $4.99[/td]
    [td]Self - $2.99[/td]
    [/tr]
    [tr]
    [td]Successful[/td]
    [td]$128,430 - $137,250[/td]
    [td]$349,000[/td]
    [td] $299,000[/td]
    [/tr]
    [tr]
    [td]Solid[/td]
    [td]$6,850[/td]
    [td]$10,450[/td]
    [td]$17,450[/td]
    [/tr]

    [/table]

    At all the various sales levels you will do better with self-publishing. Any loss in print sales are easy to make up for by increases in ebook sales because the books are offered at deep discounting. As I mentioned for "similar" books (of quality, author time on market, etc) I find that self-published authors are selling much greater quantities, but even if they are just "matching" the traditional they still come out ahead.
     
    Last edited: Jul 14, 2012
  2. T.Allen.Smith

    T.Allen.Smith Staff Moderator

    4,044
    1,950
    163
    So I assume your decision to move from self-publishing to traditional was made for marketing purposes?
     
  3. Mindfire

    Mindfire Istar

    2,888
    496
    83
    I don't know. Something about these numbers just seems... off to me. Aside from the obvious investment of time and effort, which I'm guessing is doubled with self-publishing since you have to do everything yourself. where's the catch? The drawbacks?
     
  4. danr62

    danr62 Sage

    254
    46
    28
    Actually, the time/effort investment depends on how you look at it. If you go traditional, it will probably take a couple of years to get a book to market, and that's after acceptance, so add more time for the query process. Much time will likely be wasted while you wait for notes from your agent or editor about what revisions they think should be made. You could use this time to work on your next novel, but that novel will then be held up in the process as well.

    With self publishing, you are in complete control of the timeline. You only have to wait to hear from your test readers and any freelance editors you choose to hire. So, with self publishing it's possible to get the same novel to market in half the time or less.

    The major drawbacks of self publishing are the upfront costs of hiring freelancers (cover design, help with your blurb, editors, etc.) and the lack of an advancement. Also, because you aren't getting wide distribution in bookstores, you are missing out on that channel of promotion/sales. But bookstores are not the powerhouse they used to be.
     
  5. psychotick

    psychotick Auror

    1,830
    716
    113
    Hi,

    The problem is that you're not necessarily comparing apples with apples. Yes the book may be the same, everything else may be the same, but the one thing that will change is the number of sales. Going trad with an agent and a publisher grants you access to a sales / marketing machine that self pubbers don't have. So yes if you sold a thousand copies either way as a self pubber you'd be better off. But if you sold ten thousand copies through a trad route and one thousand through your own efforts, then how do the numbers stack up?

    For me, I went self because I was tired of rejections, so the thousands I've sold compare with none through trad routes. But if I could go trad for some of my new books I still would.

    Cheers, Greg.
     
  6. The fact that it's a huge amount of work and most people who try it are doomed to fail is the catch. Self-publishing, if you are a good writer and can successfully market your own work, is more lucrative than going the traditional publishing route... but nobody who isn't insane or naïve thinks that the part in italics is easy.
     
  7. MichaelSullivan

    MichaelSullivan Maester

    628
    227
    43
    Yes. As I mentioned in the other post that was the catalyst for this one, it wasn't a monetary decision but one of branding. I wanted to reach an audience that I couldn't with self-publishing (bookstores, libraries) and I was willing to take a cut in income. I had estimated that I would loose about $200K in the switch. As it turned out I think I ended up "breaking even" because I was able to get more foreign sales than I think I could have gotten when self-published. Those deals in total ended up being about double my US advance.
     
  8. MichaelSullivan

    MichaelSullivan Maester

    628
    227
    43
    Marketing time is the same in both situations (or should be - even when traditionally published you need to be the one primarily responsible for building an audience). The time differential comes from editing and cover design.

    The "catch" is that without a third-party vetting your work, you don't know if it is "good" (and in this case I define "good" as a book that sells well). Most self-published books shouldn't have been released at all because they just weren't "ready for prime time." It is very difficult writing a book that will sell well and just because you "can" push "the publish button" doesn't mean you should.
     
    Last edited: Jul 15, 2012
  9. MichaelSullivan

    MichaelSullivan Maester

    628
    227
    43
    I agree with everything that danr62 says.
     
  10. MichaelSullivan

    MichaelSullivan Maester

    628
    227
    43
    Read the text portions again. Self-published authors (by in large) sell MORE copies than the traditional counterparts. When I went to conventions and talked with traditional authors and told them I was selling 11,000 copies a month, they said, "You realize that most traditional books sell 7,500 over their entire lifetime?" If you look at any of the Amazon bestseller's list you'll see that a large number (for epic fantasy it is 50/50) are the self-published titles.

    A $9.99 ebook sells much fewer copies than a $2.99 or a $4.99 counterpart. Yes you loose the print sales, but unless you sell VERY well in print the self-published author is always going to sell more copies. Here is a a list of 36 self-published authors who have sold 200,000 or more and another 177 who have sold 50,000 or more. Most traditional authors I've spoken with have sold 2,000 - 5,000 copies.

    Nothing wrong with that...it's what I did after all. Just realize that you'll most likely take a hit (if you are selling only domestically).
     
    Last edited: Jul 15, 2012
    J. S. Elliot likes this.
  11. kennyc

    kennyc Inkling

    536
    186
    43
    Just want to say thanks for this Michael! Nice breakdown and great discussion.
     
  12. psychotick

    psychotick Auror

    1,830
    716
    113
    Hi Michael,

    I find that hard to accept. Most self pubbed authors sell very few books, (two hundred is the figure often bandied about though I have no stats for it), and if the average trad pubbed author / book sold only 7,500 copies authors, publishers and agents would be going to the wall at huge rates. Where it works for the self pubber in my view is at the bottom end, where they compare whatever sales they make against zero sales they would make by going the trad route because they couldn't get pubbed at all. And at the top end, where authors already have a name, so the trad pubber can't add a lot to their marketing and so the difference in royalties becomes the overriding factor.

    As for the other part, yes a lot of the best selling ebooks on kindle are self pubbed, but that's largely because of contractual arguments between the big six publishers and Amazon. The trad pubbed books aren't on the kindle which drastically skews the results.

    As for me, the reason I'd consider going trad is largely based on a few factors. First the professionalism,with book covers and editing etc. If I want to raise my work to the top level its the way I have to go. Second, getting some books into print - I personally find the entire createspace thing confusing at best. And third the marketing, which I admit, I simply don't do.

    Cheers, Greg.
     
  13. danr62

    danr62 Sage

    254
    46
    28
    The trad publishers aren't going to do a ton of marketing for you unless you manage to convince them to give you a larger than normal advance. You simply can't rely on them to sell your books for you.
     
    kennyc likes this.
  14. kennyc

    kennyc Inkling

    536
    186
    43
    Well, if you don't have a source for the info, then I'm not sure where you are getting it other than by rumor.

    And as far as the traditional publishers not being on kindle, that is simply wrong.
     
    Last edited: Jul 15, 2012
  15. T.Allen.Smith

    T.Allen.Smith Staff Moderator

    4,044
    1,950
    163
    They will, however, put substantial funds towards the cover design & various marketing efforts. The amount of money required to do this effectively is more than most self-published authors can afford.
     
  16. psychotick

    psychotick Auror

    1,830
    716
    113
  17. kennyc

    kennyc Inkling

    536
    186
    43
    Yep, saw that a while back. Okay so half the epubbers earn very little, how does that compare to those same people in traditional publishing?
    (my answer is that they would make $0 cause they wouldn't even get in the door)

    It also says the Average is $10K which is better than most advances from traditional publishers:
    "the average amount earned by DIY authors last year was just $10,000"
    As far as the money being concentrated in the upper 10% (or so) that is no different in self-pub than in traditional.

    Again the claim about traditional publishers not being on Kindle is simply wrong.

    What is your game here?

    You have a link to your books? I'd like to check them out if possible.

    Thanks

    Also just ran across this article (linked from the one above): http://www.guardian.co.uk/books/2012/jun/06/become-an-ebook-superstar?intcmp=239
     
    Last edited: Jul 16, 2012
  18. psychotick

    psychotick Auror

    1,830
    716
    113
    Hi Kenny,

    The second part of my first post is harder to pin down. Why are indie books polling in the higher sales ranking than trad pubbed ebooks on kindle. You are right trad publishers are there, and I mistyped, for which I apologise. Not running a game here, just working with memories from reading years of blogs and forum posts.

    However trad publishers are relatively poorly represented. In part this is I think due to the legal actions on going between the big six and Amazon, unless this has been resolved. And also that the big six are looking at other e publishers, I think Apple is their newest baby from memory.

    But the big reason why trad publishers appear poorly represented in the top sales ranks of kindle, is price.

    This survey shows some of the answers I think:

    Genre Surveys Part 2: Science Fiction and Fantasy Ebook Bestsellers Examined

    As you can see this is only a small survey, and its far from the only one. But if you want to see the difference between trads versus indies in the top one hundred sales ranks for sci fi and fantasy, look at the prices. The trad published books are in the dearer range, the indies in the cheaper. So what we're seeing here in my view is that indies are climbing the sales charts by lowering prices.

    Traditional publishers have a hard time competing with this as they invest in their authors and editors and all the other stuff that goes with publishing. They also have books out in printed forms and lowering the price of an ebook version significantly, impacts on their printed sales, making it difficult to get their books out on book store shelves. So they have to remain in the higher price ranges. Indies don't have these expenses, they may or may not be printed, and even if they are, createspace means that it costs them nothing if their paperbacks don't sell.

    Now as to the money. What we see in that Guardian article is an average figure by author not book. Not sure how your stats are but averages can be skewed badly. The ten thousand dollar figure is an average, but its primarily weighted by a relatively few authors earning the top bucks. I think the author says that 75% of the money goes to the top 10%. The median author (the guy in the middle) is earning less then five hundred bucks. The other thing as I said is that this is by author not book. So if the author earns ten thousand, it may be for one book or ten. He may be getting a return on his books of ten thousand bucks each (one book) or one thousand bucks each (ten books), to make this income. The median author if say he has five books out is making one hundred bucks per book per year. I imagine he would be absolutely thrilled to get a ten grand advance from a publisher. (And an advance is generally for one book as I understand it.)

    Having said that, yes, as I said at the outset, he's still ahead of the game than if he'd stayed trad and never been published at all.

    My conclusion from all of this would be that those who have contracts with reputable publishers, as authors, almost certainly do financially better then those without.

    Cheers, Greg.
     
  19. kennyc

    kennyc Inkling

    536
    186
    43
    Then why are so many established writers moving to self-pub and making significantly more money?

    I think your conclusion is wrong and will become more wrong as the industry continues to follow the path it is on.
     
    Last edited: Jul 16, 2012
  20. danr62

    danr62 Sage

    254
    46
    28
    If half of self publishers are making less than $500, doesn't that mean that half are making more than that?

    How many of those lower half have only published one book and done very little to no marketing? How many of them are just starting out and haven't really taken off yet? How many of them have more books in them that will allow them to steadily increase their sales over time?
     
Loading...

Share This Page