I’ve recently been following a discussion between the head of Kensington and several indie authors. The discussion has been very interesting. One of the authors is Joe Konrath, who has published both traditionally and as an Indie.
The discussion between Joe and Steve has been quite enlightening. One of the things that I found most interesting is the disconnect between the way that Steve perceives the situation and the way that authors do. Part of it is due to the fact that Steve is running a business and the product he peddles are the stories that the authors write. As a business owner myself, I always look for ways to keep my costs down and maximize my profit margins. That means I’m always looking for ways to get my products and supplies as cheap as I can so I can price competitively. That’s why I ended up making most of my own products instead of buying and reselling someone elses.
In Steve’s case, he is working in a business where his product isn’t something he can make himself and sell. He has to purchase it from someone else. He takes a risk everytime he signs on a new author and pays them an advance. He incurs expenses for editing, formatting, cover art, printing(not authors get print books) and marketing(maybe). In return, he sells the author’s work for a percentage. His customer base is the booksellers such as Amazon, Barnes & Noble, Apple other bookstores (chain and independent) and big retail stores. They are the ones who are buying his books. The booksellers get a percentage of the cover price and the rest goes to the publisher. Out of what the publisher gets when the books are bought, they pay the author. The percent that the author gets ins incredibly small. The publisher gets their percentage for as long as they are selling the book and the author has not gotten their rights to their work back. As long as the book is selling with the publisher they get the same percentage. It doesn’t matter if they sell 5 copies, 500 copies or 500,000 copies, they get the same percentage as does the author.
But is that really fair? Lets look at their expenses. Cover art and editing are finite expense. You usually only pay for a cover once, unless the publisher releases your books at a later time with new covers. Editing is a one time expense though the cost could fluctuate depending on how much editing a particular book would need. Proofreading should be adding to list of expenses. I can see this being a finite expense that may come up again if there are problems that slip by the first time it was published. Printing, distribution and marketing would be recurring expenses. Also accounting expenses. As a business owner I want to keep my costs down and maximize my profits. I need to hire people to do all of these things. I have to have a place to house them. I have to pay them benefits. I need to make a profit. That means I need to cut costs wherever I can to do so. The long term expenses are in storage of unsold books and the accounting for sales and paying the author once their advance is paid back.
Its basic economics, supply and demand. The publisher is the equivalent of a wholesaler where I buy a resell item. There are multiple wholesalers I can buy from. I am essentially the bookseller. The wholesaler buys from the manufacturers. Multiple wholesalers buy from an single manufacturer and there are always more wanting that supply. Where in the publishing business, the manufacturer aka authors are literally knocking on the door trying to sell them their books because there are a limited number of publishers aka wholesalers. The authors/manufacturers are abundant so there is no need for them to offer authors a better deal. If an author doesn’t like the contract then they can walk but they don’t have anywhere else to sell their books except another publisher whose contract isn’t much different. That assumes that they would be picked up by another publisher and there is no guarantee that they will.
I don’t know off hand the number of books published each year by the various big and little publishers each year. Not everyone is going to hit the various bestsellers lists. Not all of them are going to sell huge numbers of books. That’s why until recently a lot authors worked at a fulltime job because they couldn’t make a living with their writing. That change was not brought about because of a change with the traditional publishers but by the advent of indie publishing through vehicles such as Smashwords, Amazon, Apple and Barnes & Noble.
For the first time authors had an opportunity to put their work out there in a way that allowed the readers to decide which books that wanted to read. The readers were no longer limited to what the publishers and the retailers thought they should read. They could now actually find books that were never available before and their favorite authors were putting more of the out. Finally the authors and the readers were connecting without the middle men.
As a reader, I am voracious. I’ve been known to read 3-4 books a day sometimes more. I’m lucky I don’t mind rereading favorite books because I couldn’t get enough new ones. If I want to feed my reading addiction I need to read more authors. Traditional publishing and book stores couldn’t keep up with my appetite for books. I know there are others like me out there. We create a demand on a limited supply. We all know what happens when supply is limited and demand high prices go up. The limited number of publishers controlled the supply to the retailer and were also able to pick which of the manufactures aka authors would get their products to market. They also controlled how often they got their work published. The better your books sell the more often you get published. Supply and demand.
eBooks and self publishing changed the face of the market. Thank you Oprah for embracing eReaders. Authors now have the option of publishing their books as they finish them. Some write slower than others. That means if I can write a book every couple of months I can theoretically publish 5-6 times a year if I publish Indie. I can also hit almost all of the same retailers as the publishers when it comes to ebooks. I can’t easily hit print markets as a traditional publisher but I can still get to some. As a reader I get more books to chose from and new authors to discover.
With the advent of new publishing venues opening up, authors aka manufactures are bypassing the traditional publishers aka wholesalers and going directly to the retailers of ebooks and readers. The world of publishing is undergoing a major market change. The traditional publishers are not the only game in town anymore.