The numbers game.

Okay, today’s blog is about… numbers.

Yes, I hear you. We’re writers, not mathematicians, and words are our tools.

I know how you all hate maths, or even math, for our American readers.

But this is about real numbers. Numbers that matter to us as writers.

Royalties, in other words.

Yeah, thought that would get your attention.

As previously blogged, Barry Eisler’s turning down half a million bucks to “go indie” and darling Amanda “selling out” (not my words!) to the dead-tree guys has over-night changed the way the world views publishing.

On top of that, as Borders US finally succumbed to the inevitable and went into liquidation (Borders UK did so a year or two back) the CEO of Barnes & Noble stated on record that digital books would be the primary delivery system for books within two years.

For Amazon, that’s already the case. They sold more e-books than paper books last year, and that was before the Kindle took off big-time (eleven million Kindles sold).

Britain’s biggest retailer Tesco now sells Kindles over the counter and rival groups are selling rival e-readers. Six months e-readers were virtually unheard of in the UK. Now we see them everywhere, and the trend is growing by the day.

In the US, as the B&N CEO concedes, that trend is far more advanced.

A tipping point has been reached.

The next generation of e-readers will be more savvy, more creative, more must-have, and perhaps most importantly less costly.

There can be no question that e-books are the future. The question is just when, and how it will effect us, both as readers and as writers.

Nathan Bransford has just published a most informative blog that spells out the reality of numbers as they relate to us as authors. You can read his full blog here.

Essentially, he asks, is it better to go “indie” and e-publish, or to keep chasing the dream of a real, printed book in your hands and try to get an agent and publisher?

Of course we all want the pleasure of a real book, our book, in our hands.

We approached agents before we decided to e-publish, and had one offered us the chance at the time we would almost certainly have signed on the dotted line, agreed to anything they wanted, and now be sitting waiting for our book to appear in the shops in maybe a year’s time.

Hopefully having been given a huge advance, but as an unknown author with an unknown book the chances of any advance being offered was slim, let alone a life-changing one.

As you all know, the agents were intrigued but not convinced. So we put our book out as en e-book and got on with life.

Had we signed up with an agent and then a publisher, and leaving aside any advance (which is clawed back from future sales – it’s not a gift from the publisher!) what could we have expected?

Nathan has kindly laid out the figures for us and I reproduce them here with due acknowledgement.

Standard royalties via traditional publishers (note: these may vary):
Hardcover: 10% retail, sometimes escalating to 15% after sales thresholds are met
Trade paperback: 7.5% retail
Mass market: 8% retail
E-book: 25% net (usually translates to 17.5% retail)

Kindle revenue share for self-published authors:
Priced higher than $9.99: 35% retail
Priced between $2.99-$9.99: 70% retail
Priced below $2.99: 35% retail

B&N revenue share for self-published authors:
Priced higher than $9.99: 40% retail
Priced between $2.99-$9.99: 65% retail
Priced below $2.99: 40% retail

E-distribution fee:
Smashwords: about 15%. Usually translates to about 60% of the retail price.

Approximate E-book market share:
Amazon: ~55%
B&N: ~25%
Others (Kobo, Apple, Google, Sony, etc.): ~20% combined

Okay, so what does that mean in real money?

Let us suppose that we had been offered, and signed, a deal for Sugar & Spice and it had not been e-published independently by us.

What would have happened?

First off, you would not be reading this, because you would never have heard of the groundbreaking debut crime thriller Sugar & Spice, or Saffina Desforges or Mark Williams.

Possibly by the end of 2011, but more likely 2012 (according to Publishers’ Lunch most manuscripts now being signed up will not see print until spring 2013!) our book would finally be published.

Now unless that publisher is taking a huge interest in us, is buying us a plinth in Waterstone’s (don’t for one second think bookshops hand over the plinth and poster space out of the kindness of their heart!) and is sending out sample copies and lunch invitations to all their well-connected reviewers, etc, then our book will be just another spine on the shelf.

Again, who ever heard of Saffina Desforges?

In 2012 the name would be as just as obscure as in 2010.

But we’ll be hoping that readers who have never heard of the author or the title will risk ten pounds (or whatever the dollar equivalent may be) on us rather than spend that ten pounds on Stephen King, James Patterson or another big name they know and trust.

Come to that, dollar equivalent? Forget that!

Our book would only be available in selected high-street stores in the UK.

Okay, so sometime in 2012, a year down the line, our book is finally published and if we’re really lucky people buy it.

Nathan states royalties of 10% for hardback and 7% to 8% for paperbacks. E-book royalties if put online via a publisher are 25%, but in  reality only 14% to 17%.

Now this month, March 2011, we have sold approximately 13,000 e-books at our chosen retail price of 71p. That could go up or down next month, though the trend is most definitely up.

We were only a top twenty seller at the beginning of March. As I write this we are a top five seller. On our current daily sales we are on target to sell 20,000 next month if nothing changes. And believe me, those figures pale into insignificance compared to Stephen Leather’s sales!

And our sales are only for Amazon Kindle. We haven’t listed on Waterstone’s yet, and we haven’t started marketing ourselves on Barnes & Noble properly.

But let’s take 13,000 sales in one month as our base-line.

Now the Amazon royalties are public knowledge. No trade secrets here. We make 35% of retail because we choose a low retail price.

What chance our paper-published book selling 13,000 copies in a month? Virtually impossible.

Of course, the mega-names like Cornwell, Patterson, King, Grisham, etc, do it all the time, sure. But this is an unknown author with no history, no loyal readership built up over years, and no publicity machine behind it.

So in a year’s time Sugar & Spice is published by a “real” publisher, and released through them as an e-book on Amazon. And we’re lucky and it does as well as it is now, and we sell 13,000 copies in a month.

Read out those figures again, Nathan!

E-book: 25% net (usually translates to 17.5% retail).

17.5%!!! And Barry Eisler reckons the real figure is nearer 14%.

But let’s stick to 17.5%.

So we sell 13,000 e-books at the same price, with the same amount of marketing effort on our part.

But instead of getting 35% of the royalties we hand over half of that to the publisher!

Suddenly we have to sell over 25,000 e-books a month just to get the same money back we earn by selling just 13,000 as “indie” publishers.

True, only people with a screen can read our book now, and we are missing out on a huge number of prospective readers who only read on paper.

But by the time the book actually sees print the number of e-readers will have multiplied a zillion times while the number of paper readers will have dwindled.

Not fantasy. That’s the very near future as seen by the CEO of America’s biggest bookstore chain, B&N.

Now go a step further. Supposing our book continues to sell in volume over the coming months, or even increases as word spreads. Supposing we get our act together (remember, this is all new to us – we’re learning as we go) and get our book on Waterstone’s e-books list and somehow make it happen on Barnes & Noble too…

Supposing we maintained 13,000 sales a month over the coming year. That’s 156,000 sales that, if we had signed a contract and were waiting for our book to be published, would not exist.

And as previously said, we’d then have to sell 25,000 e-books a month (300,000 a year!) just to make the same money.

We have several more books in the pipeline this year and many more after that. The first of our Rose Red crime thriller series is due on Kindle this summer, and the first of our dark fantasy trilogy Equilibrium will be on Kindle in September. Two follow-ups to Sugar & Spice are planned for the future (Puppy Dogs’ Tails and Cold Blood), and the projects list beyond that is a book in itself!

None of these would be seeing the light of day before 2012/ 2013 if we were with a dead-tree publisher.

Perhaps more importantly still, we would not have had the confidence to be planning this far ahead if we hadn’t already proven we could do it through e-sales.

Of course, a “real” publisher can potentially offer so many things we’d love to take advantage of.

Professional proof-reading (if you’re not a writer you can have no idea how time-consuming that is – time that could be spent writing the next book), foreign language translation, etc, etc.

Don’t think for one second we are trashing “real” publishing.

We are most definitely not.

If the right deal comes along of course we’ll grab it and run!

We still have bills to pay, families to provide for, and we still subscribe to Private Jet Monthly, just in case… (The one in the pic is mine. Saffi wants a pink one!)

But if the offer ever comes, we will have to balance the short-term delight of being able to hand over a real, made of paper, signed copy of our book to our loved ones, against the realities of the new publishing world that is now emerging.

If you’re on the fence with your manuscript, still sitting on the hard-drive while you weigh up the same issues, ponder the following conclusion from Nathan.

If you can sell print copies, all things being equal there’s still the bulk of the money to be made there.

But if you’re not going out in print in a big way, a self-published e-book is absolutely the way to go.

  1. Those are interesting numbers. The only use I see right now of traditional agent/publishers is they act as gatekeepers (wanting to get paid, they only support what they think will sell) and marketers. If you have a book worth reading, and know how to market effectively in the electronic environment, you’re in. Still, the advance would be nice, and having someone else market for you so you can write is even better.

    • Unfortunately the marketing side, apart from arranging distribution, is still very much down to you as the writer unless you’re of one the mega-stars. See the feature on Ann Swinfen earlier this month for how they invest in you and then just leave you to it.

      Well over 90% of published books never sell more than 1000 copies, and given someone thought they were good enough to publish in the first place that can only be down to poor marketing.

      It’s just not possible to market as effectively through social media platforms for a paper book because of the logistics of being able to buy, read and react.

      Even if you hear about it and buy online a paper book has to be delivered. An e-book can be first heard of, paid for and on your e-reading device in minutes and being read and reacted to. An hour later you can be facebooking. tweeting, etc about this great new book you’ve found and your friends can be buying, downloading and reading it themselves the same day.

      This can only increase as the mainstream media embrace e-books. Imagine your e-book getting a favourable review on a prime-time tv show. Literally within minutes a million viewers who had never heard of you or your book before could have bought it and have it on their e-reading device.

      That would never happen with a paper book. Even if a million paper were intrigued enough to go to Amazon or B&N (European buyers cannot even by e-books from B&N!) it would be days later before they received it, and the price would scare off many would-be buyers.

      In the US e-books are at least acknowledged by the media. The NYT best-sellers now, belatedly, include the top selling e-books. In the UK you’d be lucky to see a mention they exist. But that will change rapidly.

      • I think you’re right that it speeds up the reader-reaction cycle. On an unrelated question, why doesn’t this page link directly to Rose Red?

  2. Gross incompetence on my part, nothing more.

    Saffi is the ID genius of the team. I’m just the back end of the pantomine horse (see next blog).

    Will try get links sorted asap.

    • Are you saying you’re a horse’s ass?

      • That was, Ella, not me!

        And a fine example of why the American language should be wrested back from these interlopers!

        A horse’s ass sounds like an inbred mule to our refined proper-English-speaking selves. 🙂

  3. Proper English? English is a dock-worker and street tough who drags other languages into alleys and goes through their pockets for loose grammar.

    • LOL! So very true!

      The history of British-English is the history of Britain itself. An abysmal story of cultural rape, pillage and plunder to match our imperial history.

      The evolution of American-English is almost the exact opposite.

      • “The evolution of American-English is almost the exact opposite.”

        Not certain what you mean by that, unless it’s that most of our non-English words come from immigrants who threw their vocabularies into our melting-pot.

  4. Precisely so. Our early English was an evolution of European languages brought to us by invasion from Normandy, Scandinavia, etc.

    Pretty much from 1400s on, and especially from Elizabethan times (1500s), as we began to assert our military muscle in pursuit of empire, our langauge evolved depending on what we took from those we conquered.

    By the time you guys turned the tables and threw us out in late 1700s modern English was pretty much in place in the newly independent states and therafter, as you say, American English evolved by give rather than take (although the indigenous Indians might disagree).

    Modern American imperialism takes military power to other countries but seeks to impose The American Way from afar rather than by permanent occupation (colonial) as was the way in previous centuries.

    The cultural hegemony of the US, very much aided by sharing a common language (or close, anyway) with that huge part of the world Britain had by force imposed English on, is now such that for much of the world the definitive English language is that version purveyed by Hollywood, the American legacy publishers and US financial and military muscle.

    If Britain made English the world’s common language, there’s no question it is America that has kept it dominant long after Britain ceased to be a world player.

    As a dreadful langauge learner myself I am every day thankful I was brought up as a English speaker, but always cognisant that it is thanks to the US, not the UK, that I can tour the non-English speaking world and still be understood.

    • It’s not a parallel, but the Greeks probably felt that way about the Macedonians(a bunch of hillbillies)who spread Greek culture throughout Asia Minor and the Near East.

      On the other hand, America retained its dominance only because of the bipolar contest of the Cold War; now that it’s over we’re gradually becoming just one Great Power among several again. And while I don’t buy the whole American Decline theory, the truth is it wasn’t WWII that destroyed England’s economic power–it was the imposition of a socialist economic system that prevented you guys from recovering economically after it was all over. As the US economy becomes more government-managed we’re beginning to lose the wealth needed to maintain the biggest and most advanced military machine the world has ever seen.

      Some people may consider this a good thing, but there’s a downside to the decline of American military power; check out a book called “Empires of Trust” sometime. It changed the way I look at international relations and America’s role in the modern world, right or wrong.

      • Would love to read Empires Of Trust sometime but unless it’s on Kindle that’s unlikely now I’ve escaped from the UK.

        Leaving aside the issues of socialist government for now, I think small matters like inability to control our colonies, the huge financial debt we incurred (to the US) and the destruction of our major cities and industries also played a role.

        We emerged from WWII nominally victorious but crippled in every meaningful way. Huge resources were pumped int Germany and Japan post-war to ensure their peaceful recovery. Britain became just the US staging post for its economic domination of Europe and it’s new Cold war against the USSR.

        Such are the realities of world economics. Every country has its own survival and long-term interests as its priority. Always has been that way and always will be. Control of resources and control of markets is the key.

  5. We could get into an interesting economics discussion here: Japan ended the war smashed to nothing, in control of no significant resources, and with hostile markets. Certainly the resources we provided them helped hugely (and yes, we did it to buy them as allies), but dozens of countries received aid and open markets only guarantee competition. Lots of countries receive aid today. The Russian government controls vast resources, as does the Chinese government; neither generates much wealth. The intersection between politics and production has always fascinated me, and certainly capitalism isn’t perfect, but another time. Empires of Trust is available on the Kindle but it costs more than the hardbound edition, which is on sale. Obviously that’s one publishing house that hasn’t caught on yet. They will adapt or die (unless they convince the government to subsidize buggy-whips).

    • Any aid except (including?) disaster relief is politically motivated to benefit the donor. Nowhere is that clearer than here in Africa, where all aid is conditional on tariffs, trade and other benefits to the donor.

      Neither Japan nor Germany had to carry the burden of formal defence spending post-war, so their resources were all directed to industry / technology, to suit largely American needs. In both cases aided by a culture and national ethic of work and efficiency that meant they would inevitably soar ahead of (economic) rival nations.

      America had the huge advantage of not being seen as a colonial power, until it blew it with the failed invasion of Vietnam.

      Aid was and is given conditionally, so the idea that open markets only guarantee competition is purely academic.

      The US is hugely protectionist when it suits its needs (cotton and steel spring to mind) and the Splendid Isolation of the nineteenth century gave way to a form of neo-colonial imperialism dressed up as democracy but driven solely by the needs of capital.

      The so-called communist countries were never a threat to the US except in terms of MAD, but from the very on-set of the Bolshevik Revolution it was recognised by imperial capital that the new Soviet Russia posed a huge threat to American commercial expansion.

      WWII reflected that. It seems improbable the US would ever have came in against Germany if Hitler had defeated Stalin. Quite the opposite. Similarly while the attack on Pearl Harbor was the notional cause for declaring war, the US had no issues with Japan when it was the USSR caught in a pincer movement between the Axis Powers.

      The USA before and after WWII supported and aided dictators every bit as obnoxious as those in charge in Germany and Japan.

      You’re right, neither Russua nor China generate wealth on huge scales, but as “free market economies” they are young and not particularly vibrant. They are also up against huge competition in the form of the USA, that effectively controls the world’s market system. he USA becae a superpower on the back of huge resources and the competition destroyed by two world wars, in neither of which the USA suffered huge losses.

      For how much longer the USA can stay the dominant economic power remains to be seen. China is investing quietly and efficiently in long-term developments across Africa and Asia, gaining control of future resources by controlling infrastructure and hearts amd minds, while the US is still going down the twentieth century route of military control, directly or through NATO.

      It works short-term as we see in Iraq, but the long term price of the so-called “collateral damage” is huge.

      Unless you travel in the “third world” it can be hard to appreciate just how hated the US is outside Europe and North America.

      Obama may not be the neo-Christian die-hatrd that Bush was but in real terms American policy remains unchanged: protect American economic interest at every level and by whatever means.

      The proxy attempt to gain control of Libya’s oil through European weaponry is a fine example and a master-stroke by Obama.

      • You are quite right about national self-interest. I don’t remember who it was who said “Nations have no friends, only interests.” I like to think that at least the Anglosphere sticks together, with its common political culture, though. Likewise after WWII the US pretty much guaranteed the military security of Japan and Europe because it didn’t want either rearming and kicking off another war. In a way it reminds me of the Napoleonic Wars, another hegemonic conflict.

        As for protectionism, don’t get me started; the prices of some things over here, like sugar, reminds me of the effects of the old Corn Laws–speaking of which we’ve been subsidizing our corn-crop forever, with odd results (most notably corn syrup and ethanol). Meanwhile President Obama, while restricting offshore drilling along our coasts and blocking nuclear power, is subsidizing the development of offshore drilling with Brazil–the worst case of Not In My Back Yard thinking I’ve ever seen.

        Decades ago President Nixon (nobody’s favorite president) warned that if we allowed our dependence on foreign oil to grow we would have to be a “tyrant abroad” to protect our economy. It was the Cold War and energy-dependence that created our schizophrenic foreign policy.

        As for how long America can remain economically dominant, that’s a good question. China is upgrading, but although it’s allowing some free-market growth it remains to a huge degree a command economy. There’s a reason why the most economically free nations (and the US is now getting beat on this score by Australia and a couple of European countries) are the most productive.

        You’re absolutely correct about Germany and Japan’s cultural advantage–have you ever read the book The Wealth and Poverty of Nations? (Yes, it picks up from Adam Smith.)

        As for the whole Libya thing, let’s agree not to go there–I think it’s the dumbest move Obama’s made yet, both politically and diplomatically. Personally I think it’s another Kosovo; a humanitarian campaign being carried out in the stupidest way possible. I have nothing against humanitarian campaigns–propping up or ignoring monsters is not a winning strategy–I just think we should be smarter about it. Europe, at least, has an excellent reason to depose Quadafi; the rebellion has already caused a huge influx of refugees across the Mediterranean–imagine how much worse it will get if Quadafi isn’t stopped?

        One spot of history where I’m afraid your off, though, is the US’s relationship with Japan before Pearl Harbor. It’s back to economics again; Japan’s bid to become a hegemonic power in Asia brought it right up against US-Asian policy in China and Indochina, to the point where we instituted an oil-embargo to starve their military machine. Now if they had gone after the North-East Resource Territory (Far Eastern Siberia) instead of China, we wouldn’t have done a thing–just continued the British and Russian Lend-Lease programs. But Japan’s gamble with Pearl Harbor opened the Pacific War, which brought us into war against Germany (which Roosevelt had wanted all along) when Hitler was crazy enough to declare war on us as well. Believe me, I’ve never understood that one; the idea of fighting in another European war wasn’t popular with most Americans at the time, especially after we’d been attacked from the other direction. If Germany hadn’t declared war it probably would have simply been a Pacific War for us. All things considered, though, I’m glad it worked out the way it did. I don’t know what would have happened if we hadn’t gotten involved, but it seems like, worst-case scenario, Russia and Germany would have stalemated till Germany got the bomb and blew Russia to hell. Can you imagine Nazi Germany with the Bomb? The swastika would probably still be flying over Paris and Europe would be Judenfrei.

  6. BTW, for the record I’m a big fan of England; if I ever became an expatriate I’d probably move there, or to Australia since I lived there for two years some time ago. Every nation has to overcome the sins of its past, and England and America are no exceptions, but for all our sins I think we’ve brought more good than evil into the world. I hope it remains that way. Meanwhile I think the last few posts have gotten so political you should consider removing them from your blog lest casual readers mistake the nature of the site! Not that it’s not fascinating.

    • You’re right that the debate has veered from the immediate concerns of the blog, although I am actually researching / writing a book on American foreign policy (from a European perspective) and much emboldened by the opportunities to publish non-fiction on-line in the future.

      But the debate here is far too interesting (for us two, anyway!) to leave, so shall return to your comments via email in due course.

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