October 1, 2015
There's been a lot written lately about ad blocking.
A lot of the discussion centers around the difference between reading content online and in traditional media. The discussion will become moot as traditional media continues its decline and ceases to be a player in this market.
Say I access a site that has a lot of ads while using cellular data. I'm paying extra to download all of those ads. The site doesn't get this money. The carrier does.
Enough about ad blocking. I want to talk about author blocking.
I write technical books. Let's talk about books not articles.
Traditionally, I would get signed by a publisher. In the old days they would give me a reasonable advance along with an editor, production support, marketing support, and maybe a baseball cap with their logo on it.
They would pay me around 15% of net.
So on a $40 book, the bookstore or Amazon would take between 50 and 60 percent. For ease in calculation, let's err on the side that benefits me, and I would get 15% of $20. I would earn $3.00 on a $40 book. The publisher would earn $17.
"Oh wait," you say, "the publisher has to print the book. That can't be cheap."
Actually it's not as much as you think. It is likely less than $2 depending on paper, color, and binding.
The publisher has $15 in profit.
"But," you say, "they provide an editor, production help, and all that other stuff."
It turns out they provide less and less of that. Many of them have automated their production system. The author is doing much of the typesetting work. Most of them do little or no marketing for most titles. They pay their editors very little. They require their authors to index their books or pay for indexing (some publishers share the cost).
The author is doing more but their share isn't going up. I was recently contacted about a book series where I would have had to provide camera ready copy and they were offering 10% of net.
More publishers are running bundles and discounts to move titles. The author's percentage comes out of this money after the discount is applied.
Now I write electronic books.
One thing I like about Apple's iBookstore is they take a fixed amount. They take 30%, I keep 70%. I get to charge what I want for a book.
By the way, Apple got sued for that and lost. They got sued for letting me set the price of my book.
So if I want to make $3/book through Apple I can sell it for $4.30. There actually isn't a price point of $4.30 so I would probably sell it for $5 if I wanted to make at least $3.
Suppose I want to make $10/book. I know that books are harder to sell through the iBookstore. They aren't very discoverable and can only be read on Apple devices.
The formula remains the same. I keep 70% and Apple keeps 30%. If I charge $14.30 - or actually $15, then I will make at least $10/book.
Most of my competitors are traditional publishers charging $30, $40, ... $70 per book so I've raised my prices a bit. I'm selling considerably fewer than traditional publishers. People will still buy books from bigger names even if my books are more of what they need and want.
This is the "Hidden Persuaders" syndrome where people will eat at a national chain instead of trying a local restaurant that might be vastly superior. They know what to expect from a national chain.
My latest book competes with a book from a well known publisher written by a friend of mine that is many years out of date. The book is outselling mine despite the fact that the directions don't work and the examples are dramatically out of date. The book costs twice as much as mine and still sells on the iBookstore. Note - I'm not complaining about my friend or the publisher, I'm commenting that some people will stick with a known brand.
That's why publishers can still offer deals at 15% and authors will take them. Publishers know that their brand is the value they add. The books will sell more because they come with their logo attached.
This is not a knock on publishers. I worked for two of the best and still respect the books they publish and the people who work for them and with them.
Let's get back to the book market. Suppose I want to sell my book through Amazon as a Kindle book.
If I want to make $3 a book, that's fine. I charge $4.30 and life is good. In fact, if I want to make $7 a book I charge $10 and make my 70%.
Everything changes if I want to make $10 a book.
In order for me to make 70% on a book I sell through Kindle, I have to charge between $3 and $10 (as with the iBooks these are actually 2.99 and 9.99).
If I charge more than $10 a book, Amazon keeps 65% and I keep 35%.
Amazon hasn't gotten sued for this. Apple has gotten sued for letting authors charge what they want.
So in order to earn $10 a book from Amazon I have to charge $28.60.
I find that stunning. At the 70% rate I would charge $14.30. In order for me to make $10 I have to charge my readers an additional $14.30. The reader doesn't get $14.30 more value. The only one who benefits is Amazon.
The result is that most authors sell books for $10 or less.
Amazon is doing to authors what ad blocking is doing to websites. They are blocking the authors revenues. They are making it harder for authors and publishers to make money on their platform.
You're going to hear a lot about Apple and ad blocking - I sure wish someone would take up the ways in which Amazon prevents me from charging what I want without harming consumers.
I may be forced to publish on the Kindle platform - there aren't many players left in town - their attitude towards authors and publishers makes me sad.