Best-selling thriller writer Barry Eisler has just turned down a $500,000 publishing deal in favour of publishing his next book himself. His reasons for doing so reveal much about the changing economics of publishing, because it's the ebook route Eisler is taking.
Eisler, who has been on the New York Times bestseller lists with a variety of thrillers, explains his reasons in a discussion on specialist website Techdirt with fellow author Joe Konrath, who is becoming something of an evangelist for digital self-publishing.
At the heart of both authors' reasoning is the publisher's advance. Traditionally authors received a lump sum advance against sales which they would use to write the book. But that money has to be earned back once the book is published, and at a royalty – between 10 and 15% – of the sale price.
Insurance policyThis can be seen as a loan, an insurance policy, even a bet. Konrath says: "Signing with a big publisher is like signing a life insurance policy, where the payments keep getting larger while the payoff gets smaller as time goes on." Taking that loan, argues Eisler, only makes sense if "the loan is so big that you don't think you'd ever be able to make that much on your own".
Then there's the publishing process. Traditionally an agent or publisher has to decide a book would sell. They would print and distribute it, and while good publishers do market books, many insist the author does the bulk of the marketing. There's usually a big sales push on publication, but this dies off.
Self-publishing a digital book makes sense on many levels. Authors can put the work out there and see if it sells. And if the author is doing the bulk of the promotion work anyway, the need for a traditional publisher is reduced. All the author needs is access to the market, so they will pay a cut to the distributor.
Apple's iBook storeApple's iBook store, for example, takes 30%. That leaves 70% of the sale price for the author. There's no advance to fund the writing, but that also means there's no loan to pay back. As Konrath says: "Getting half a million bucks and 14.9% royalties, forever, isn't as lucrative as no money up front and 70% royalties, forever."
Eisler agrees, adding: "Especially because you first have to earn out the half million at 14.9% per book. That could take a while. After which, as you note, you're still only earning 14.9% rather than 70%. You need to move five times the volume at 14.9%."
The self-publishing, ebook route won't suit everyone. It helps if you have an audience already, and the chances of success depend on what you are selling – if it's a beautiful coffee table book of photography people will want the print edition, but if it's a novel the ebook serves the purpose.
Amanda HockingSome authors are already making a very good living by taking this route. Young author Amanda Hocking's latest ebook is selling 100,000 copies a month and her books are priced between 99c and $2.99. And what's interesting is that she was not an established author before taking the ebook route.
In fact, only six of the top 26 authors by sales on Kindle's indie authors list in December 2010 were already established. Between them those authors sold 292,000 copies. Those books had an average price of $4 – generating $1.162m. And Amazon takes 30% – about $350,000.
For Amanda Hocking that means she can earn $280,000 a month. No publisher can make that kind of offer. Hocking's only costs are to pay a cover art designer and give the ebook distributor their slice. She can sell cheap, which means she has more chance to build scale.
Not everyone can sell in those numbers. But the chance is there, and even with sales far lower than this the prospects for authors are attractive. That's why Barry Eisler decided "I think I could do better in the long term on my own" and walked away from a half a million dollar offer.