Ed’s Casual Friday: My TGI(‘m)I(ndie) moment of the day.

Posted on  by M. Edward McNally on Indiesunlimited.com (and reposted with permission).

Warning: I’m going to talk a little bit about my own writing in this post, which I usually try to avoid on Casual Friday in favor of topics that are of more general interest to people who are not, well, me. But I’ve got a point, I promise.

I am presently in the midst of writing the fifth book in an epic fantasy series, and quite suddenly, the wonderful absurdity of that statement hit me. The first book (The Sable City) went up at the usual virtual book stores about 20 months ago, and the next three volumes followed at slightly irregular intervals. They have sold…okay. Fair to middlin’. I’m not earning a living wage by any means, but enough to put some bacon on some cheeseburgers now and again. As I did not go into “Indie World” thinking I was going to be John Grisham in a month, I’m perfectly happy with that. Can’t complain.

What I am very happy about, is that I am now writing book five in a series that nobody would mistake for a colossal success. I am totally confident I am doing so only because I am an “Indie” author.

I’m not claiming to be any sort of expert about trad publishing, though I did do the usual two-step with the industry many, many moons ago while I was still a grad student in Lit; know plenty of trad published authors, have done the conference circuit, all that stuff. I can confidently say that if the first couple books of the Norothian Cycle were traditionally published and had sold what they did over the course of the first year they were available, there is no way I’d be under contract to write Book V. Yes, each time a new volume comes out, sales go up all the way back to book number one. But that is not the way trad publishing works: You don’t get to build an audience over time. You get one deal, you pretty much have one shot to score big. If you don’t, there are ten thousand other authors waiting for their turn on the Tilt-a-whirl.

Some might argue that with a publishing house behind my books, instead of just lil’ ol’ me, of course they would all have done much better, gotten wide exposure, etc., etc. To which I can say nothing stronger than “maybe.” But probably not. Lots of people, even writers, seem to think the four or five most famous authors in the world are somehow representative of the “typical” trad author, and from my own experience I have absolutely no doubt that is totally false. The Kings and Pattersons and yes even the E.L. James are very much the exception to the rule. The vast majority of trad pubbed authors, particularly the first-timers, face a day-to-day reality much more like that confronting the average Indie writer than what Stephanie Meyer is looking at.

Trad houses do not have infinite ad budgets, and take a look at how they spend their money. J.K. Rowling’s new book came out not too long ago, and has since sold somewhere in the neighborhood of a bazillion copies. I have seen ads for that book everywhere: Facebook, Goodreads, The New York Times, newspapers, TV,everywhere. And you know what? That book would have sold a bazillion copies if the publishers hadn’t spent a nickel on advertising: It is J.K. Rowling’s new book, for crying out loud! And yet, gigantic ad budget to sell a book that needs no publicity, thus allowing everybody at Little, Brown and Company to pat each other on the back and congratulate themselves on what savvy business people they are.

I did not decide to put books out in the world because I had any delusion that I was going to be fabulously wealthy as a result. I wrote, and am writing, the books that I want to write, and I put them out there because I think some readers might find them enjoyable. And readers have, quite honestly more than I really ever thought they would. That is very cool to me, and it makes me happy. So does being an Indie, because no matter the frustrations, the slow days or months, the pitfalls or pratfalls, this is still the absolute best time that has ever existed to be a writer, and to have a reasonable shot at getting your work in front of readers. Those readers then get to be the sole arbiters of what they like, or what they don’t. Though it might not seem true each and every day, today is the best day to be an author that has never been. I have not the smallest shred of a doubt that is true.

So back to work on Book V for me. Because the story, as ever, goes forward. 😉

M. Edward McNally is the author of the Norothian Cycle

Authors sue Harlequin over e-book royalties

By Chris Meadows from Teleread (original article).

The public may now be developing a love affair with e-books, but they may have lost their romance for some of Harlequin’s authors. Three such authors are suing Harlequin over a matter of miscalculated e-book royalties.

Barbara Keiler, Mona Kay Thomas and Linda Barrett allege (PDF) that Harlequin used a tax-purposes subsidiary, Harlequin Swiss, to cheat them out of e-book royalties between 1994 by basing their “50% of receipts” rate on the money Swiss received from Harlequin, rather than the money Harlequin received from selling the books. Authors thus ended up getting between 24 and 32 cents per copy, rather than the $2 they should by rights have received.

Harlequin has claimed (PDF) that, since e-books were such a niche market before 2005, low royalties were not unreasonable—since nobody even knew if e-books were ever going to take off, they hadn’t bothered to come up with specific royalty terms for them, and lumped them under a low-paying “All Other Rights” provision. Now that e-books are a big deal, of course, they’re paying more.

The plaintiffs in the suit don’t seem to find this argument terribly reasonable. They are seeking a jury trial and class-action status on behalf of all qualifying authors who signed contracts with Harlequin between 1990 and 2004. Harlequin states it will defend itself vigorously.

I don’t know how much money e-book royalties prior to 2005 account for, but no matter how much or little, the principle of making sure authors get all the money that’s coming to them seems like an important one to see honored.

(Found via PaidContent and GalleyCat.)

Covering the cost with $10

If Publishers Can’t Cover Their Costs With $10 Ebooks, Then They Deserve To Go Out Of Business

from the you-don’t-price-based-on-your-bloated-infrastructure dept

With the legal dispute over ebook pricing going on, one thing we’ve heard over and over again from the traditional publishing industry and their supporters is that higher prices for ebooks make sense because of all of the “costs” that the publishers have to cover. This is a fundamental error in how pricing (and economics) works. It reminds me of the MPAA folks who demand to know the business model for making $200 million movies. Years ago, someone who understood these things taught me why cost-based pricing will always get you into trouble. If you start from the overall pricing, including overhead and other fixed costs, then you’re not basing the price on what the consumer values — and, more importantly, you’re taking away your own incentives to become more efficient and decrease costs. Instead, you’re just “baking them in.” But the most important reason not to base pricing on overhead costs is that your competitors won’t do that, and they’ll under cut your price and then you’re in serious trouble.

That moment of reckoning is coming for book publishers, even if they don’t realize it yet. David Pakman, who watched all of this happen in the music industry for years, is pointing out that publishers are fooling themselves if they keep trying to rationalize higher ebook pricing:

In all the discussions about why book publishers demand that eBooks should be $15 and not $10, they say it is because they cannot afford to sell books at $10. That is, they cannot cover their legacy cost models on that number. Right. Which is why you must rebuild your cost structure for a digital goods industry with far lower prices. You start by paying your top execs much less than millions of dollars a year. Then you move your offices out of fancy midtown office buildings. Why should eBooks cost $15? Amazon is far more of an expert on optimal book pricing. They have far more data than publishers, since they experiment with pricing hundreds of thousands of times a day across millions of titles. Amazon can tell you the exact price for a title that will produce the most number of copies sold. Amazon is pretty sure that number is closer to $10 than to $15. Yes, they want to sell more Kindles. And they believe that lower eBook prices mean more eBooks sold which means more demand for Kindle. The negative coverage of Amazon is centered on them selling eBooks below cost in order to reach the $10 price point. But that is a function of publishers setting the cost higher than $10. If the profit-maximizing price for an eBook is $10, then publishers must adapt to set a wholesale price lower than that, even if it means your legacy cost structure doesn’t allow it. And that’s the rub.

The public seems much more interested in lower prices, not higher prices. You can understand why the publishers don’t like it, but they really ought to learn how pricing elasticity works. They can make a lot more money with more optimal pricing.

Original article here.

Self-publishing and pricing

On the blog The Bliss Quest, a blogger who goes by Athena writes a lengthy, thoughtful post looking setting a price for her self-published book. After her last publisher offered her a contract that would only pay her 5% of the book’s cover price (and her editor actually told her “Writers don’t write to make money, they write because they must”), she started looking longingly at the 70% revenue that self-publishing would offer her, and trying to figure out just how many copies she would need to sell at what price in order to make back minimum wage for the time spent writing the book.

She was looking at pricing it at $6, but the problem she runs into is that a lot of the people she talked to who might be inclined to read e-books are cheapskates—they only want to pay $4.99 or less. Athena finds this rather frustrating—as she points out, depending on reading speed, $6 for a book is often less than $1 per hour of entertainment, and people pay a lot more than that for movies.

If writing (my book) does not pay for me to survive well enough to write the next one and the next one – I’m clearly in the wrong profession. If my writing can’t entice people to pay $1 an hour for entertainment – then I might as well be doing something else. If people will pay 12$ for a two hour movie like Transformers 3 or the newest haunted flick, but they won’t pay 6$ for a book – then I’m not doing my job well enough.

I can certainly sympathize. As an unknown independent author, the problem she faces is not just a matter of price, of course. It’s a matter of all the competition out there at all price ranges, and the competition for people’s time from non-book-related activities. And from an economic point of view, it’s hard to figure out how to reach the optimum point on a price-demand curve since every book is going to have a different appeal and thus different demand.

But the question of what price to set is one that every self-publishing author is going to have to face, and nonetheless it’s interesting to see Athena’s thoughts on how to approach it. Hopefully she can get some good advice from writers who’ve gone that way before.

(Via Teleread).

99 cents? 2 dollars?

Dear reader, what is the worth of a story?

Yes, you have probably guessed it, I am contemplating to ask a modest amount of money for the Hilda stories that are to come out (and perhaps other ones as well). This is not a new thing for me, I have contemplated this many a time, and each time I dismissed it as something I can’t decide upon.

Lately however, I have tried to keep an eye on the amount of work, time and energy that goes into writing the stories, and that is quite substantial. I have talked about this with a few people already, and they agree that asking a small donation for the work is in place. In several reviews I found here and there I also read that people would be willing to pay for the Hilda stories, the more as they are getting better (for which I am very grateful. The getting better part, I mean.)

But what would be a proper price? There are rules of thumb, which simply determine the number of words that should decide on the price. Some opinions state that a low price is good, so it is affordable for almost everyone. Other opinions state that once you started selling e-books for 99 cents, you are forced to keep your prices low. And others again say that many people will deem it a bad book if you only dare ask 99 cents for it.

So I turn to you, dear reader. Probably you are one of the people who has read one or more of the Hilda stories, so you have, I think, a feeling for what I am talking about. What would be a proper price for such a story? Seven of them are available for free, so it should be possible to make an educated guess, after reading them.

Would you lay down $2.99 of your hard-earned pay for an e-book version of the next Hilda story?

Free vs. paid

Why am I giving my books away? Because yes, everything I have published so far is available for free.

Many people have asked me why I don’t charge money for my writing. “After all, it is your hard work that went into it, that should be rewarded.”

Well, dear readers and people who seem to be worried about my well-being, it is rewarded.

Not by financials, I agree, but by the sheer number of downloads that I see happening. Yes, I get a kick out of that. Now, that is all very nice, I hear you say, but kicks won’t keep you alive for long! Very true. For that I have my job. At this moment I have a nice job in IT and that pays my bills, my mortgage and everything else I like (and trust me, I like a lot!).

Will having more money make me… eat more, better or healthier? I doubt that, especially the more. Live faster or better? More doubts. Living fast is something I try to avoid, anyway. Write better? Hardly. I am happy the way things are now. Oh, certainly, I would love to be a professional writer and live off the fruits of my creativity in that arena, but I am realistic enough to know there are only few who manage that. Many professional authors get by just barely and have to take other jobs or assignments that pay better, to keep their life going.

No. I’ll take many downloads and constructive reviews instead, next to my daytime job. That way I am able and free to write what I want, when I want and how I want it. And judging from the feedback I have received on my writing, I am not doing that badly.

One more revelation: I collect quotes and proverbs, as they are often miracles of language-use and I adore those things. I chose this one as a good ending for this post:

“If you want to know how god thinks about money, look at the people that have it.”