The Open Author

Let’s talk a little about the price of books. Let’s say you just wrote a new novel, and you set the price at $10 per copy. At that price you will likely sell 10,000 books. Gross income will be $100,000. Now let’s say you raise the price to $20 per unit. Because of the higher price, maybe now you only sell 8,000 copies for a gross income of $160,000. This is good because not only do you make more money, but you don’t have to print, package, and ship as many books.

Ultimate, however, you reach a point where by raising the price you no longer get more money. For example, let’s say you raise the price of each book to $30, but now you only sell 5,000 copies, for a gross income of $150,000. In our simple example, it’s clear $20 is a good price per unit.

The reason I use this simplified example is to illustrate the idea that the more something costs, the less you will sell. Conversely if you lower the price, you’ll sell more. There are exceptions, but this is the general rule.

As a new author, you will likely sign a contract in which you will earn 5-10 percent for each print book sold. So let’s say you make 7.5% on a $12.50 book. Somebody check my math, but as an author you’ll be making roughly 88 cents per book.

Now let’s see how an author fares on the e-book model. Amazon pays 70% to authors. On a $12.50 book you’ll earn $8.75. But here is the kicker. You could lower the price to $2.99 and you’d still be making $2.10. At the lower price, you’ll likely sell more books, but you’re still making more than the 88 cents you’d make on a physical book.

Another added benefit is that once you’ve got the digital copy of your book online, you don’t have to worry about printing books, storing them, packaging them, and shipping them. You can sell 5 books as easy as you can sell 5 million. It makes sense to drop the price to where you’ll sell more books.

Does this mean publishers are pretty much worthless in this new model? Do they go extinct? No, but it does mean they have to adapt. There are several key things they must do in order to provide value to the process, and I may or may not talk about what those things are in a later post.

Ok, we’ve established the publishing industry is going through significant changes right now. People everywhere are predicting what things will look like in three to five years.

The future is hard to predict, but this article over at the Huffington Post so completely misses the mark I honestly wondered if it was satire. From the article:

“The book-buying habits sustaining [mid-list authors’] work may become a thing of the past when printed books are swapped for digital ones. As strolling and perusing the aisles of a bookstore is replaced with a mouse and computer screen, the demise of brick-and-mortar retailers will accelerate and critically important links between midlist authors and their readers will be severed.”

Right. Because if there is one thing we know the internet has a problem with, it’s creating links between people and things. The internet is all about putting people in a silo. /sarcasm

Again, from the article:

“As of yet, there is no digital substitute to this serendipitous manner of bringing readers and writers together. Furthermore an important symbiotic relationship between best-selling authors and their lesser brethren will end. Readers who buy new books by Dan Brown or Kitty Kelley frequently leave the store with another title under their arm. But it is often the invitingly deep and varied inventory of books by midlist authors that lure the reader into the store in the first place.”

No digital substitue? Has the author never bought a book on Amazon? Has the author never looked up a book on Amazon? Because as soon as  you do, you’re bombarded with ‘you may like this’ suggestions. The authors suggests that when you go to a store, the clerk might recommend a good book. Online you can read the opinions of thousands of other readers, not just the clerk who may or may not have the same tastes as you. It’s like shopping with a crowd of experts.

Compare this to other industries that have gone through the same digital growing pains.

Newspapers -Imagine ten years ago predicting big newspapers and magazines growing bigger, and smaller voices (blogs, e-zines, sites like Huffington Post) going the way of the dinosaur.

Or what about music? Have the big names gotten bigger, and the ‘midlisters’ dissapeared? Hardly. Just the opposite. Talented musicians have been able to go straight to fans and find a larger audience. They’ve been able to do much better under the digital model than ever before. Just ask musicians like Jonathan Coultan.

I don’t like to predict because I don’t know the industry as well as the insiders. However, I feel very comfortable saying that mid-list authors will in fact NOT suffer in the coming e-book revolution. In fact, we’ll see the opposite. We’ll see fewer ‘rock stars’ in publishing, and more and more good authors finding an audience because they can directly connect with fans.

Joe Konrath is often called a ‘mid-list’ author. You don’t have to read very far down his blog to see how he is faring under this new model.