The Economics of the Writing Business – Updated

Kleo and Me
Kleo and Me

I dropped in on Dean Wesley Smith’s blog to tell him that I’d quoted him. Dean always has something interesting and well worth reading posted. This time it was in the comments.

UPDATE – Some of you who were more awake than the others may have noticed a math error in the spreadsheets. Curiously if anyone did, they didn’t let me know about it. I was going over the numbers with a writer who was visiting, looked at them and went “Opps!” The numbers are now correct.

Dean ran the numbers for an EBook sold at $4.99, under a variety of scenarios. The problem is that Dean didn’t take it far enough. He didn’t extrapolate beyond the sale of a single book. The difference between $0.75 and $3.50 isn’t enough to get most people excited.

So I decided to run the numbers a different way. I decided to assume that we had a book that ran low on the mid list. A book that would not have earned the writer a second chance. Something with really low sales. Like Fifteen hundred books per year.

So what happens when you sell that few books? In traditional, Dead Tree publishing, the writer’s career is toast. In EBooks, well, things are different.

At which point I’m going to have to ask your indulgence. I’m doing a screen shot, I know it will be hard to read. I am however uploading the spreadsheet files in both OpenDocument and Microsoft Excel formats so you can download them, and play with them yourselves.

First, the screen shot.

Estimated Sales for Three Years
Estimated Sales for Three Years

Now sales of fifteen hundred books a year is terrible for Dead Tree books. It just isn’t economically feasible to produce something that sells in those numbers, unless the book is a specialty book, like the pornography that Arthur Gwynn Geiger was renting out in Raymond Chandler’s The Big Sleep.

Note the one marked “Dangerous,” Dean was thinks that there isn’t enough money going to the Agent/Publisher in that scenario for them to make a profit. Dealing with them could be dangerous, because they are likely to go into receivership, owing you money.

Now look at the Lost Money column. The only option that comes close to the do it yourself option as far as earnings, is the dangerous one. All of the others leave a hell of a lot of money on the table.

This is a business folks. We are in it for our health. And our health includes being able to afford good food, good health care, nice clothes, gasoline for the car, and all the basic necessities that have gotten so expensive over the last half century (remember when a bottle of coke was $0.10, and you got $0.02 deposit back when you returned the bottle?)

That means that we have to maximize our earnings. The way to do this is to publish our books ourselves.

But it gets even better. What if you had seven books, and each one was selling on average fifteen hundred copies per year?

Estimated Sales with 7 Books
Estimated Sales with 7 Books

$36,750.00 per year? That isn’t bad. It isn’t enough for a family to live on, but it is enough to make a huge difference to your quality of life. A huge difference. This could make a nice, solid, second income for a family.

But what if you had twenty books? This isn’t silly maundering. I’m publishing my mother-in-law’s back list. She has over forty books out of print now. FORTY! But let’s say it was only twenty.

Estimated Sales with 20 Books
Estimated Sales with 20 Books

Could you live with $105,000.00 per year?

Now maybe we are overestimating things. Maybe you aren’t good enough to sell fifteen hundred copies per year. Maybe you can sell more. Maybe you have ten books. Maybe like Mom you have forty.

The point is that your back list isn’t earning you anything if it is sitting in a filing cabinet gathering dust. If you have five books, and you sell five hundred copies per year at $4.99, and you published them yourself, you could make $8,750.00 per year. That isn’t chicken feed.

Estimated Sales with 5 Books at 500 Copies/Year
Estimated Sales with 5 Books at 500 Copies/Year

If you went through a publisher and agent, assuming you could find a publisher and agent willing to talk to you, you’d only earn $1,875.00. Why would you give away $6,875.00 to someone else when you could do it yourself, including hiring a cover artist, an editor, etc. There are places that charge a flat rate of less than $100.00 to do this for you if you can’t do it…

As I told Mike Shatzkin, I just can’t see where the publishers can offer enough value to make what they have worthwhile. They want to take a cut of the pie, but what are they giving the writers in return? Not much it seems.


Wayne Borean

Saturday October 8, 2011

The Economics of the Writing Business – Open Document Format Spreadsheet

The Economics of the Writing Business – Microsoft XLS Format Spreadsheet


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