May 28, 2014
Last night I read Hugh Howey’s take on the whole Amazon vs Hachette thing. I don’t know why. I knew it would make me mad, and it did. Howey is, by all accounts, a super nice guy who is always available for emerging writers to pick his brain. He supports the community and tries his damnedest to make sure creators are not getting screwed. So I had to think that, rather than trying to shill for The Man, he must just be incredibly stupid and ignorant. I was up half the night seething bitterly about how many customers I would face tomorrow who felt entitled to have temper tantrums at the cash register because we/publishers are unfairly getting rich off their backs, and why can’t we all just discount books like that great Saviour of the People, Amazon???
Except Howey isn’t stupid and he knows how publishing works. So what was up with his backward-ass approach to explaining how publishers arrive at their prices?
Then it hit me. Howey is thinking like a self publisher. He thinks Hachette is a self publisher.
When you self publish, the money you spend up front to produce the book is a gamble. It’s the cost of having a dream fulfilled, or of getting your foot in the door. It’s a “long term investment”, betting on the day, five books down the road, when you really start to take off. Nine times out of ten, you never see that money again.
A publisher does not gamble any more than it has to. It looks at its costs – editors, designers, publicists, customer service reps, distributors, warehouses, printers, lawyers, mistakes, everything – and works out exactly how many books they need to sell at what cost in order to make it back. Some years a book hits big, and in those years, somebody makes bank. But most of the time, they pay their employees and produce books.
Howey’s assertion that Hachette “get[s] the full wholesale price of $8.99,” only makes sense if you think Hachette is a guy, like Howey. When a self-publisher sells a book, they use that money to pay back the loan they made to themselves during that book’s production – a cost that Howey seems to be counting after profits, the same way one might buy groceries or pay the hydro bill. Publishers do this the other way around. The wholesale cost of the book pays for the cost to produce the book. You only look at profits after everyone has been paid.
If a self-publisher never makes their money back, they may decline to self-publish again. If they were publishers, this would be called “going out of business”. Hachette isn’t super-keen to do this.
But let’s back up a bit. Let’s talk about Hachette’s “crazy” ebook prices, now that we understand that they are not gambling the same way a self-publisher might.
What does it cost to make a book? What % is the author really getting?
Here’s a simplified break down of the cost to self publish. Back-of-the-napkin stuff.
Book cover – $150 – $200 (this is cheap. CHEAP. You can do it for less, and we will be able to tell.)
Editing services – $400 (this is also cheap, but this is what I will charge you for an 80,000 word novel)
ISBN/expanded distribution – $99 (this is to get an ISBN you can use outside of Amazon)
Copyright registration – $85 (your work is automatically copyrighted, but many people choose to register for ease of legal protection. Many.)
Layout & Design – $150
Kirkus Review (this is a handy stand in for “publicity costs”)- $425
A website – $600
TOTAL – ~ $1900
This was done on the cheap. You could do it even cheaper, true, but you will pay instead with your time, sanity, and quality of product. So, your mileage may vary, but this is a handy number.
The million dollar question is, how many copies will you sell? Truly, nobody knows. Here are some things I do know:
90% of books registered with BookNet Canada only sell one copy. One. Copy.
Tobias Buckell dissected some Smashwords data last year that shows the vast, vast majority of titles sell fewer than 100 copies.
The best-selling anthology I have ever contributed to has sold 141 copies.
Award-winning YA author Arthur Slade reports selling an average of 635 books per title over a whole year, but this is 4780 copies of one best-seller and an average of 175 books for each other title.
But, that said, I know a lot of first-time self published authors of romance & teen books that come off Wattpad with “fan bases” of 5k+ followers. They expect to sell 500 copies in the first few months, and they do that or better. So if you have an established author presence and a book with a known audience, 500 is a good number to shoot for.
Let’s say you’ll sell 500 copies because I am being very generous.
You price your ebook at $5.99 because that’s what Hugh Howey did. You sold 500 copies. That’s nearly $3000.
Amazon takes 30% ($900)
The IRS takes 30% ($630)
You made $1470. Congrats!
Wait, sorry. I mean you are still short $430.
What about Hachette? How does this break down for them? Let’s look at one subsidiary, Orbit books.
I don’t know how many employees Orbit has, but let’s say you only need the ones that cover the same services the self-publisher paid out for themselves – even though they also need laywers, customer service reps, account managers and so on. Orbit publishes roughly 60 books a year, so we will assume a book gets 1/60th of their services (though in reality, things aren’t this fair – still, short hand). Salaries extrapolated from the bottom end of Indeed.com’s salary estimator.
Cover designer – $48,000/60 = $800
Editor – $47,000/60 = $784
ISBN = $5.75 (you can buy them in blocks for much less than they sell individually)
Copyright registration – $85
Layout & Design/Typography – $58,000/60 = $967
Publicity – $44,000/60 = $734
Printing – $3.90/book x 500 copies = $1950
Author Advance – $5000
Website – $0 (the publisher probably won’t do this for you!)
TOTAL – $10,325
Well, we printed 500 print copies. Let’s say we will sell these in addition to 500 ebooks, because I’m going to pretend I don’t know full well that plenty of big-5 titles only sell 150 copies, period. Let’s say Orbit has high hopes for you, and you will sell 1000 books.
If Orbit sold them for Howey’s $5.99, they’d have $5,990. Amazon would take 30% = $1790. I can’t guess at Orbit’s tax rate, but let’s be generous and say it’s 30% too. $1260. The distributor, by the way, wants 10% on the 500 print books you sold through them. That’s $300. Well, so far Orbit has lost almost $7000 on this book.
If MSRP was $8.99? $8990, and Amazon’s already paid. Well, we’re closer. They’ve only lost $4000. Incidentally, if they don’t pay the author an advance and just give them “25%” as Howey suggests, the author “only” gets $2250, but Orbit has only lost maybe $400. Another few months and they might break even.
Hachette’s barely eking by at $8.99 MSRP, and the author is $2250 ahead instead of $430 behind.
Everybody thinks they will do better. You can make this look better for Amazon & the author by selling more units. In scenario one, you will break even after you’ve sold another roughly 150 books. You’ll make the same as you might have in the Hachette scenario 760 books after that – so in order to make the same money on 1000 traditionally published books at $8.99 MSRP ($14.99 on Amazon), you’ll have to sell 1400 self published ones at $5.99. Maybe you think you will make those sales. I feel that this is… optimistic of you, but that’s your business. It is your dream to gamble on. You might, after all, make it big, like Hugh Howey.
But it would be business insanity for a mainstream publisher to operate as if they are guaranteed 1400, or even 500, sales of every book they publish. They know very well they have to balance the misses with the hits. They have been doing this for decades, after all.
And, of course, there’s the pesky issue of the salaries listed there. It costs more for a publisher to make a book because it employs people – real humans making middle-class salaries. We should not begrudge those people their jobs. Hell, most of them are probably the same creators Howey defends. The $2200 you might make self-publishing a book is not going to pay your bills, not unless you can write a novel every three weeks. Even being a freelance designer or editor isn’t going to pay your bills – not unless you are extraordinarily successful – or you put your prices up. I don’t edit six 80,000-novels per month, let me tell you.
No, it’s publishing that supports the entire creative industry. That’s where book lovers find jobs. Is that worth a buck per book to you? Is it to me.
May 2, 2014
The hashtag #WeNeedDiverseBooks has been blowing up on Twitter this week. The idea is to give visibility (literally, photographs) to how little racial, gender, identity and ability diversity exists in publishing on all levels. We need diverse books, but we also need diverse stories, editors, publishers, agents and booksellers (eloquently elaborated upon by Daniel José Older on Buzzfeed and Bogi Takács both on eir blog and in Strange Horizons). No matter how you cut it, we need to see every face of humanity when we turn to a book.
Pictures are great, but is our money where our mouths are? I thought I’d take a trip around my own bookstore to have a look. I feel as if we offer a diverse selection of writers, but until you really take a calculator to it, you never really know. So here’s a case study based on our frontlist fiction shelf. These are the hardcovers on display at the very front of my store as of 10am on Friday, May 2nd 2014. This is what greets the buyer when they walk through the door.
Three Brothers by Peter Ackroyd (British Male)
Unnecessary Woman by Rabih Alameddine (Lebanese-American Male)
Forgiving the Angel by Jay Cantor (American Male)
The Luminaries by Eleanor Catton (Canadian-born New Zealand Female)
Every Day is for the Thief by Teju Cole (Nigerian-American Male)
Independence by Cecil Foster (Barbadian Canadian Male)
Andrew’s Brain by E.L. Doctorow (American Male)
Falling Out of Time by David Grossman (Israeli Male)
Boy in the Twilight by Yu Hua (Chinese Male)
The Wretched by Victor Hugo (French Male)
Fire in the Unnameable Country by Ghalib Islam (Bangladeshi Canadian Male)
In The Slender Margin by Eve Joseph (Canadian Female)
Kinder Than Solitude by Yiyun Li (Chinese American Female)
All Our Names by Dinaw Mengestu (Ethiopian-American Male)
Caught by Lisa Moore (Canadian Female)
Bark by Lorrie Moore (American Female)
Dust by Yvonne Adhiambo Owuor (Kenyan Female)
Between Friends by Amos Oz (Israeli Male)
Orfeo by Richard Powers (American Male)
Lovers at the Chameleon Club by Francine Prose (American Female)
Light and Dark by Natsume Soseki (Japanese Male)
The Valley of Amazement by Amy Tan (American Female)
All My Puny Sorrows by Miriam Toews (Canadian Female)
The Ever After of Ashwin Rao by Padma Viswanathan (Canadian Female)
Medicine Walk by Richard Wagamese (Ojibway Canadian Male)
By the Numbers:
In the interests of not spending all day picking into the personal lives of writers, I have decided to count only the most visible forms of diversity – race and presented gender. That will be what the readers sees when they pick up the book. Will they see people like themselves?
TOTAL # OF TITLES – 25
# Male – 15
# Female – 10
Country of Origin:
United States of America- 6
Canada – 6
Israel – 2
China – 2
Barbados – 1
Britain – 1
Lebanon – 1
Nigeria – 1
France – 1
Bangladesh – 1
Ethiopia – 1
Kenya – 1
Japan – 1
Visibly “white” – 13
Visibly a “Person of Colour” – 12
Biggest single group: White American Men, at 3.
I have opted to count writers by their country of birth rather than current residence because writers with solid literary reputations tend to be snapped up by big American universities. Ngũgĩ wa Thiong’o is currently tenured at New York University and University of California, Irvine – I don’t think anyone would argue that he is not a Kenyan writer.
“Visibly white” is tricky business. I counted both Israeli men as “white”, though Grossman and Oz are both Middle Eastern Jews who write in Hebrew. They are clearly writing from a different place than Richard Powers or Victor Hugo.
Two-thirds of these displayed writers are men, but I should note our two biggest bestsellers of the quarter are Donna Tartt’s The Goldfinch and Emma Donoghue’s Frog Music. These are not listed because they are sold out.
What does this mean for diversity? I think this looks good by a very low bar. We probably have one of the more diverse selections of books out there, but it is STILL a list in which more than half of the books are written by the dominant racial group. Putting aside countries of origin, a full 40% of them are American.
(Another 32% are Canadian, giving the North American contingent 72% of this shelf’s space – though this is mostly to do with the intricacies of publishing rights. We deal with Canadian distributors and Canadian publishers, who publish primarily domestic writers. International lists & translations do not make up the bulk of what they do. Another reason why “country of origin” is a more useful measure of diversity here: we want to see the faces of our neighbours, who are Canadian no matter how else they identify.)
Older asks us – those of us in the industry – to ask ourselves what we can do to make things better. What can we read, review, buy, sell? We carry fiction as a public service here – we don’t sell a tonne of it. We have it because we should, and when someone comes in looking, we want to be able to say yes. So we aren’t going to stop carrying Jay Cantor or E.L. Doctorow. These are good books. But we can add more good books. We take our cues from reviews, mentions in the newspaper, and customer requests. Last year one of our biggest fiction sellers was We Need New Names by Zimbabwean writer NoViolet Bulawayo because it got the buzz, and serious readers follow buzz.
To beat that dead horse, write reviews. Blog about what you’ve read. Pitch those reviews to the magazines and papers. Show the industry what’s good and nudge the buyers who’ll tell them what sells. Making a Top Ten Books That Do Something For Me list? Make sure it represents. If it doesn’t, wonder about what you’re reading. You are the mouth, my friends. We all are.