The New World of Publishing: The Big Hurry – A Different Look

Dean Wesley Smith

Dean Wesley Smith

 

Dean Wesley Smith has been writing an excellent series of articles titled The New World of Publishing. I highly recommend them. The only problem is that Dean knows his subject so well, that sometimes his presentation isn’t clear. I came at this from Sales, and while I was consider lousy at presentations, I think I can do a little something to make his one article, which consists of a horde of numbers, a bit easier to understand. Let’s look at The New World of Publishing: The Big Hurry in a different way.

First, I mostly agree with Dean’s numbers. Where I disagree, well, it’s because I know humans. Humans evolved as hunter-gathers. We think linearly, because that is how grain grows, and that is how our prey runs.

We don’t handle non-linear math at all well. Sales of the sort Dean is talking about involve non-linear math. When the time comes I’ll include a graph showing where Dean’s numbers might be a bit weird.

The numbers are estimates though. So they might be correct. There are other factors to take into account, which I will also try to cover.

Dean reduced an exceptionally complex idea into a simple explanation, and did one heck of a good job. I’m not criticizing what he did, I’m trying to build on it. Hopefully someone else will take what I’ve done, and add some more value.

Dean’s Assumptions

Dean made five assumptions. Keep them in mind as you read on. All of them are important:

There are a number of pretty major assumptions I am going to make in the following calculations.

#1 Assumption: I am going to assume that the writer is fairly smart and doesn’t go crazy self-promoting their first novel past normal Twitter, Facebook, and web site.

#2 Assumption: I am going to assume the writer just keeps writing and can finish a novel in six months. If you are faster, you can do the math.

#3 Assumption: I am going to assume the first novel is just a first novel and following books get better with practice. And the books are genre books, meaning if they sold in science fiction or mystery or romance, they would make about $5,000.00 advance.

#4 Assumption: I am going to assume sales are very low to start off on the indie side. And I count AROUND THE WORLD sales from ALL SITES, not just Kindle.

#5 Assumption: Even though I suggest writers do both indie and traditional in the real world, for the purpose of this article, the author either goes one way or the other. Not both.

Make sure you remember Number 5 above all.

Dean assumed that the writer would be able to finish one novel for publication every six months. This is a reasonable writing pace, even for someone who is working full-time. A lot of course will depend upon outside factors, but you can do it. It all depends upon planning (i.e. make sure that you work your writing time into your day).

So you have your first book ready to go on January 1, 2012.

January 1, 2012 - Book 1 Finished

January 1, 2012 - Book 1 Finished

It’s a start. Unless you are Snooki, or your father owns a publishing company, you aren’t going to make an immediate sale to traditional publishing. Ask J. K. Rowling, or Stephen King. Six months later Book 2 is finished.

July 1, 2012 - Second Book Finished

July 1, 2012 - Second Book Finished

Well, look at that. You aren’t getting rich, but you’ve got enough money to buy beer for the Canada Day weekend! You could buy those writing books that you’ve wanted to invest in. If you live in the United States one of the new, cheaper Kindles might be a good investment, or a Kobo if you live in Canada. If you want one of the more expensive ones, why not just wait a couple of months? And the new book is better than the first one. You know it.

If you went the traditional route, keep on writing. You’ll hit the jackpot sooner or later.

January 1, 2013 - Third Book Finished

January 1, 2013 - Third Book Finished

If you went Independent, you’ve made another $420.00 in the last six months. This isn’t enough to buy a Rolls Royce, but it is enough to buy your boyfriend/girlfriend/wife/husband a little something extra for Christmas. They’ll probably tell you that you could probably make more money by working some extra overtime at the factory, and they’d be right. For now. But you are getting better at writing.

If you went traditional, well, all you can tell your friends and family is that lots of name writers endured years of rejections. You aren’t any different.

July 1, 2013 - Book Four Completed

July 1, 2013 - Book Four Completed

If you went Independent, and you’ve been REALLY disciplined, and haven’t spent a cent since Christmas, you decide to celebrate Canada Day in style. You walk into the house carrying a brand new MacBook Air that your bought with $1,575.00 that you made in the first six months of 2013, and you’ve got money left over. Your significant other proceeds to have a heart attack on the spot. You point out that all the practice is paying off, and that your newest book is the best yet.

If you went traditional, you are considering getting Doug Wilson from Trading Spaces to redecorate your bedroom in Rejection Letters.

At this point the chart is getting to large, so I’m going to have to cut it off at the left. Sorry folks.

January 1, 2014 - Book 5 Completed

January 1, 2014 - Book 5 Completed

If you went Indie, in the second half of 2013 you made $2,520.00. Your total sales for the year are $4,095.00. At this point your family is probably starting to look differently at you. Sure, you’ll never make a living out of $4,000,00 per year, but you are making more money all the time.

Your total sales since starting to write are $4,620.00, which while it won’t set the world on fire, is making a difference to your lifestyle. More money means less stress.

Less stress probably will improve your writing. I know people who claim that they only write well when everything is crashing down around them. Somehow I just don’t believe that. I find that I write best when I can concentrate, which for me means when I have my writing partner (my beagle hound) cuddled up beside me, telling me how much she loves me.

Your new book is probably better than anything you’ve written before, with the amount of practice you’ve gotten over the years. Yes, it has been years.

The traditional writer has made a sale for $5,000.00! The only problem is that the check hasn’t arrived yet. Well, not the only problem. The payout is in three parts, and there is a contract provision giving the publisher right of first refusal on the next book…

July 1, 2014 - Book 6 Completed for Indie

July 1, 2014 - Book 6 Completed for Indie

This is where paths start to diverge. The Traditional writer has been on hold while waiting for the publisher to do their part. A check has finally arrived, for the sum of $1,666.00, assuming the writer didn’t have an agent. If the writer had an agent, they would have lost 15% to the agent.

It is possible that the Traditional writer has been writing, but they can’t do anything, until the publisher has had their right of first refusal. Publishers have laid off staff, so even if the publisher does want to move quickly, they may not have the staff to do so.

The Indie writer would have continued to make sales. In the first six months of 2014 they would have made an additional $3,675.00, or nearly as much as they made in all of 2013! Canada Day is looking pretty good.

Oh, and your writing is getting even better.

January 1, 2015 - Book 7 Completed Indie

January 1, 2015 - Book 7 Completed for Indie

At the end of 2014 the Indie writer has earned more than double what they earned on 2013. Again, it isn’t enough to live on, but it is the difference between comfortable living, and just scraping by. $8,715.00 is a nice bit of pocket change.

Total career earnings of $13,335.00 aren’t to shabby either. Oh, and book seven is now finished. All that practice has paid off with a book that is better written than anything you’ve done before. It may not win the Nobel Prize for Literature, but people will buy it, enjoy it, and recommend it to their friends.

The Traditional path writer has gotten their second check for $1,666.00, bring total earnings to $3,332.00, assuming the writer doesn’t have an agent. The publisher still may not have exercised their right of refusal. At this point the writer may decide to start writing under another name, in another genre. Of course the result will be more rejection letters…

Dean’s Numbers

The spreadsheet is available for download. There are a couple of points. As I mentioned at the start, humans think linearly. We are designed that way, and it causes problems when we run into non-linear systems.

Remember the change over from VHS tapes to Digital Video Discs? In less than a year VHS went from holding a majority of the shelf space in rental shops, to being relegated to the bargain bin. Linear thinking says that a change that quick is impossible.

Let’s take a look at Dean’s raw numbers.

Dean's Raw Numbers

Dean's Raw Numbers

Look at the per month figures. From Column D to Column E sales double. From Column E to Column F sales increase by 2.5 times. From Column F to Column G sales increase by 1.2 times. That’s a huge drop in momentum. It is masked by the jump in the number of titles being sold from three to four books, a 33.33% increase. This pushes the total books sold up, even though sales are tailing off, which they should not if the writer’s abilities are increasing.

I noticed that the numbers looked odd when I first read Dean’s article, but couldn’t put my finger on it at the time. It wasn’t until I feed the numbers into the spreadsheet that I could see how they played out.

Overall Dean’s numbers are close enough for horseshoes, hand grenades, and tactical nuclear weapons. He’s made his point, without overdoing it. In my opinion, the Indie writer, if willing to work hard, would probably do somewhat better than Dean has forecast, assuming Linear Sales.

Ah, But I Did Say Things Aren’t Linear…

This is where things get really fun. One hat I wear is Futurist. I’ve predicted that eBooks will outsell print books by October 2012. I could easily be wrong. A publishing industry pro has predicted October 2013.

Point is that eBook sales are rising. Fast. Dean’s numbers make sense if you assume a static eBook market. If you assume a growing eBook market, they are low.

How low? I don’t know. Nobody knows. Anyone who tells you that they do know is lying.

The print book system has so many inefficiencies built into it, that it was unable to deliver the right books to the reader a good part of the time. A constant complaint I hear from people is that they are unable to find books.

eBooks which are always available, are delivered within seconds, weigh nothing, take up no space, etc. have huge advantages. I know a lot of people who swore they’d never, ever, switch to eBooks. I was one of them. Now I buy nothing but eBooks.

While eBooks are more efficient, the reader has only a limited amount of money to spend. The Big Six Publishers are pricing their eBooks for close to the same price as their print books in most cases (Baen being a happy exception). Independent writers usually price their books lower, since Amazon and Smashwords offer a 70% royalty rate on books in certain price ranges. 70% of a $5.00 eBook is $3.50, which is far more than the writer would earn through from the same book sold to a Traditional Publisher, and the writer is likely to sell more copies.

So we end up with a system where the total dollar value spent on books might not increase, but the total number of books sold could increase drastically. Another option would be for readers to divert money from purchase of other leisure materials (Digital Video Discs, Computer Games, MP3s) towards more eBooks, in which case the total book market would expand.

My personal feeling is that the market will expand, that more people will become readers, and that more money will be spent. At the same time more Independents will be releasing eBooks, and since the largest market is Amazon, they will be working within Amazon’s pricing constraints, which means the highest price they can feasibly charge is $9.99 (the royalty rate drops dramatically above this price).

What does all of this have to do with Dean’s numbers? Dean originally started off with sales doubling between July 2012 and January 2013. This is a reasonable assumption, as sales of five books per month are very low. He then jumped sales by 2.5 times for July 2013, and then dropped the rate of increase.

But what if we assumed that the sales doubled every month through the entire time period?

Dean's Raw Numbers

Dean's Raw Numbers

Sales Doubling Every Month

Sales Doubling Every Month

Read across the top row, and compare it with the previous chart. July 2013 is at 20 books per month per title instead of 25, it is lower, and you lost 90 sales total. January 2014 is at 40 books per month per title instead of 35, it is higher, and your total book sales are at 960, which is a 240 book increase.

Continue out to January 2015. You are only selling 160 books per month, per title. That is not a lot of books. In fact it is NOTHING in the grand scheme of things. No Traditional Publisher would look at you. But run the numbers.

160 books per title * $3.50 royalty per book = $560.00 per book, per month

6 Titles * $560 royalties per month = $3,360.00

6 Months * $3,360.00 = $20,160.00

Let’s cross check the math.

$20,160.00/$3.50=5,760 books sold

None of this is Rocket Science. None of this requires Twitter Spamming. It just requires you to write, and to work hard to become the most professional writer that you can be.

Think about it. How hard is it to sell 160 books?

Spreadsheet with Doubling Variation Added

Spreadsheet with Doubling Variation Added

Wrong Assumptions

Both Dean and I made some assumptions that aren’t quite right. We assumed that the sales would be the same over a six month period. In books, this is usually not the case.

A new book will usually cause a sales blip in the month it comes out. So January and July should in theory be the highest performing months, with some hangover into February and August, for those like me who forget the exact date a book is due out!

Sales should also show an organic growth as new readers find the writer, which should push up sales in latter months of the half-year, i.e. sales in June and December should be higher. There is also the Christmas factor.

Another issue with our modeling is that later books should be more popular, because they are better written. Rather than get bogged down in math, we’ve averaged out sales across all books to simplify the explanation. There’s nothing stopping you from attempting to build a more complex model, however there also isn’t any real need for one. The simple model gives a solid explanation of how an Independent Writer can earn more money than a Traditional Writer, and how they can do so more quickly.

While there are Traditional Writers who will earn huge advances, those writers are the exception, the One Percenters. The Ninety Nine Percent will mostly never earn back their advance, and will never have control of their careers.

Independent writers will have full control of their careers, and have a wide range of options that we can’t even dream about now as the future unfolds.

Additional Complications – Series Writing

Dean didn’t address series, trilogies, and all those wonderful things. Let’s take “The Dresden Files” by Jim Butcher. The first book isn’t all that hot. It was originally printed as a paperback, but was later reprinted in hardcover when the series took off.

If you are writing a series, the later books will drive sales of the earlier books. Pat Hodgell’s excellent Kencyrath series is another example, the early books have been reprinted several times. Though it is hard to call what Pat is doing a series, since one book often picks up from where the other left off minutes later… It is more like one huge book written over thirty years.

Stand alone books just do not sell as well. If they have some sort of tie in with another book you’ve written, like the same setting a hundred years later, the book is likely to sell better. People like going to familiar places, and meeting familiar people. It is part of being human.

Genre Series books do really well. Think Star Trek, Star Wars, or A is for Alibi…

So if you have a follow-up idea, it might be worth writing about it. It could help sales of the first book as well. Just make sure that the second book refers to the first book so your readers know to buy it.

The Spreadsheet

As promised, here is the spreadsheet in both Open Office Format and Microsoft Excel Format. Feel free to play around with it. I divided it up into three sheets to keep things separate, I’d suggest that you work with a copy, not with the original. And think about those numbers. They really are quite conservative, even the scenario where I doubled the sales every six months.

Sales of 160 books per month, per title, is, well, tiny. There are writers like Joe Konrath, who are selling a heck of a lot more than that. Yes, Joe has become a bit of a name. Joe wrote a heck of a lot of books, and he has worked hard at it.

If you worked really hard at your writing, and sold 1,000 books per month, at $3.50 royalties per book, could you live on that? Think about it. That’s $3,500.00 before taxes and other expenses. Or $42,000.00 per year.

Or to break it down another way, six books selling 170 copies per month each…

Regards

Wayne Borean

Wednesday February 15, 2012

 

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One Response to The New World of Publishing: The Big Hurry – A Different Look

  1. Pingback: Links 16/2/2012: Scientific Linux 5.7 and 6.2, Mozilla Firefox 10.0.1 | Techrights

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