Why authors are leaving traditional publishing for e-books

This is why, in a nutshell, authors are going to leave the publishing houses:

Joe: We figured out that the 25% royalty on ebooks they offer is actually 14.9% to the writer after everyone gets their cut. 14.9% on a price the publisher sets.

Barry: Gracious of you to say “we.” You’re the first one to point out that a 25% royalty on the net revenue produced by an ebook equals 17.5% of the retail price after Amazon takes its 30% cut, and 14.9% after the agent takes 15% of the 17.5%.

Joe: Yeah, that 25% figure you see in contracts is really misleading. Amazing, when you consider that there’s virtually no cost to creating ebooks–no cost for paper, no shipping charges, no warehousing. No cut for Ingram or Baker & Taylor. Yet they’re keeping 52.5% of the list price and offering only 17.5% to the author. It’s not fair and it’s not sustainable.

Amazon offers 35% royalties on 99 cent ebooks, 70% royalties on $2.99 and up. Every way you turn it, the publishers are screwing authors on ebook royalties. And self-publishing has become easier, faster, cheaper, and more respectable. And it’s opening the market for short stories as well, a market that used to afford a living for writers like Kurt Vonnegut, but that now pays almost nothing.

Joe: You’re on track to make $30,000 this year on a self-published short story. I’m not aware of any short story markets that pay that well.

Barry: Well, it’s early yet, but yes, The Lost Coast has done amazingly well in its first few weeks, netting me about $1000 after the initial fixed cost of $600 for having the cover designed and having the manuscript formatted. I plan to continue to publish short stories and I’ll be getting the new John Rain novel, The Detachment, up in time for Father’s Day, and I have a feeling that each of the various products will reinforce sales of the others.

That sound you hear is the sound of thousands of authors realizing that writing for money is not dead. In fact, it sure looks like a new age of writing and reading is just around the corner.

Time to decide between Nook and Kindle, methinks.

For the real writing/reading geeks among you, here’s the link to the full conversation—all 29 pages of it.

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3 Responses to Why authors are leaving traditional publishing for e-books

  1. russ says:

    Traditionally, publishing houses provided services without which few authors could succeed: proof-reading, editing, printing and distribution, and marketing. I’ve been hearing lately that editing has seriously faded, as publishers find it easier to put all the burden on the author, and e-books address the printing and distribution angle. Which pretty much leaves only marketing as an issue – and it’s no longer the bookstore placement that matters.

    But you’d think there would still be a niche for ebook publishers who offered serious editing, e-marketing and market research. I know my own web novel could use those.

  2. There are still some houses out there that have editors who edit and shape books, but yes, they’re rarer and rarer. I was in publishing for 20 years, including copy editing book manuscripts. I stuck mostly to nonfiction tech books. They paid better. But the mergers of the eighties effectively turned publishing houses into shells of their former selves regarding author services. Publishing was always a low profit margin industry to begin with. I think we may see the print-on-demand aspect that we heard about years ago becoming a reality as ebooks assume larger and larger shares of the market. On the other hand–you can’t autograph an ebook.

  3. great article. it is a topic very.much on my father’s mind and i will be forwarding the link forthwith !

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