The digital book worm.
July 7, 2010 5:34 AM   Subscribe

eBooks: In what ways have they impacted the incomes and/or business models of professional writers and novelists?

It's no secret that the digitalization of music has taken a huge bite from the income stream of recording artists, encouraging many to supplement their income in other ways.

A similar phenomenon seems to be happening with the advent of eBooks in publishing. True, eBooks haven't overwhelmed the publishing world to the extent that mp3s have challenged the recording industry. But publishers I've talked to are fearful of the dent that will be imposed on their industry by the Kindle and iPad.

Publishers (and printers) may have reason to be worried, but I'm curious about the effect of eBooks on writers. Have professional writers and novelists taken a significant income or royalty hit from eBooks? If not, will they in the future? In what ways will they need to re-tool their work strategy--"business model," if you will--to cope with the rising popularity of ebooks and digital reading technology? What are the potentials to lose--and, needless to say, make--money from the increasing digitalization of books?
posted by Gordion Knott to Writing & Language (7 answers total) 5 users marked this as a favorite
Unless you're on the bestseller list, most "professional" writers of books have needed to find ways to supplement their income since way before there was an This often means freelancing for magazines and newspapers, both of which are shrinking industries - a fact partially due to the proliferation of digital media. So now we work in coffee shops and restaurants much more often and for many more years than our predecessors had to.

As for e-books specifically, a lot of writers and small publishers have been using the e-book format as a sort of "testing ground" for books: it's much cheaper to upload a file to the ibooks and kindle stores than to print and ship thousands of copies of a book. The theory goes that if a book shows promise on Kindle, etc. then it's worth it to publish a physical version. There are a lot of problems with this theory, though.
posted by Jon_Evil at 5:53 AM on July 7, 2010

Joe Konrath has talked about this extensively on his blog, A Newbie's Guide to Publishing. He's certainly not a typical case, but it's fascinating.
posted by phatkitten at 6:12 AM on July 7, 2010

With most large houses now selling e-books through the agency model, royalties have declined -- they're now typically 25% of net receipts instead of a percentage of list price. The net receipts percentage is still higher than hardcover, but thee-book price is lower so the overall income is lower.

Some authors are still refusing to allow their publishers to release their book in e-book form. Some of this concern is about lower royalties, some of it is about piracy (misguided; most e-book piracy comes from scanning the physical book, not cracking the DRM on a digital book).

I think honestly that the biggest concern should be that right now there is no real way to track e-book sales. Before the agency model, you just had to trust what the retailer was telling you. Now that the publisher is the seller of record, that might change a little bit, but the retailers still have their own files that they're selling so it's not like shipping a carton of books and knowing that the store is going to sell them all before they re-order or return them. The accounting is still being worked out. Also, there's no body of oversight like Nielsen BookScan to provide an (inaccurate) but objective and widely-accepted report of sales.

Also, e-book sales are not included in bestseller list calculations, so an author with high e-book sales might find their physical book sales cannibalized and their placement on the list (and therefore their bestseller clause bonus) threatened.
posted by peanut_mcgillicuty at 6:30 AM on July 7, 2010

Seems to be a mixed bag. One the one hand, authors can self-publish e-books much more cheaply than hard copies. Some well-known authors are sidestepping their publishers to self-publish digital books. With an ebook, there are no shipping, printing, or bindery costs. A good summary of the drawbacks (no advance payments, smaller audience) of e-publishing is posted here.

As for actual statistics on author revenue, I'm no help. This report might be useful, if you can afford it.
posted by wowbobwow at 6:30 AM on July 7, 2010

You might want to peruse the archives of the blog Goodnight, Gutenberg which covers some of the technological and business shifts that are occurring because of eReaders and digital media.
posted by mmascolino at 6:32 AM on July 7, 2010

It depends on what you're publishing and who you're publishing it for.

O'Reilly Books, the name-brand for computer books, seems to be incredibly happy with ebooks. They don't even use DRM. But they're a comparatively young publisher with unique leadership. Here are a few of their thoughts over the last year, backed up with numbers:

Does digital cannibalize print?

2009 ebook revenue

Power of promotional pricing.

I know a few well established Self Help authors are very happy with ebooks. (Or perhaps 'ebooklets'. smaller, focused titles that would look awfully tiny on the shelf. It's sort of an extension of their seminars.)

I know tow small, struggling authors who are also big fans of self publishing/ebooks. They found out going through a traditional publisher didn't get them paid and didn't move many books. This way they still don't move many books, but they at least get paid.

But most fiction writers I know are terrified of ebooks. But that's because they don't really know what's going to happen. For fiction ebooks are still a tiny portion of the market.

See also the Baen Free Library, a rotating library of published science fiction that's available for free. Read the front page for some counter arguments to "OMG Piracy!!!" and data to back it up.

Anecdata: I and a co-worker have both stopped buying paper books since we go our got my Kindles. If it's not available digitally I'll go find another author. Which has led me to find some wonderful, more obscure authors.
posted by Ookseer at 10:30 AM on July 7, 2010

Disclaimer up front: I work for a major epublisher, so my thoughts here aren't without bias.

For top-selling authors, authors who are making the New York Times Bestseller List, this affects them not at all. Some of those authors choose to allow their work to be released digitally, as well, but realistically, those books are still primarily sold in print. They might sell a ton of ebooks, but they're selling a ton of print books, too, and probably would be just fine regardless of what a bunch of people on the internet are doing. If you are the sort of author who routinely shows up on these lists, you can opt out of ebooks fairly easily, though I'm of the opinion that it would be a bad decision on your part, at least in the long term.

For other authors, though, I think that the increasing wave of digitization is a good thing. The reports that I've heard (none official, obviously, but people talking) seem to imply that having your books available for Kindle is a huge, huge boost to sales. It takes a while to get payout on this (Amazon, I believe, pays quarterly, and you'll see your check from, say, December in April), but not nearly as long as it takes most authors to see payout on print books. (Print books get an advance, and then you don't get more money for that book until the advance is *earned out*--that is, if you got a $7500 advance, you have to earn $7500 in royalties before you get any more money. If the book earns $8500, you'll get a thousand bucks. It can take quite a long time for this to happen, and it's estimated that at least 50% (and probably more like 75%) of books never earn out--that is, the author never sees any money other than the initial advance.) To the best of my knowledge, most companies are still paying digital and print royalties as two separate things.

Publishers are worried about ebooks because for most of them, the real money comes from their print programs--the books in Borders and WalMart and whatever. They're worried that people are going to buy the less-expensive ebooks and that the publisher's bottom line is going to suffer; that the publisher will bring in less money because ebooks aren't as profitable. I suspect that this isn't the big threat that publishers feel that it is, or, at least, it's not that big of a threat yet. Yes, receipts are dropping, but that's hardly unique to the publishing industry, and to blame it on oh noes, the ebooks seems shortsighted.

It's both my opinion and my experience that for the majority of authors, ebooks are a good thing. Well, ebooks are a good thing if your agent has negotiated decent terms for you with regards to ebooks--if you've signed over electronic rights but haven't specified the royalty rate in your contract, you could get stuck with the same 8-10% you'd get on print books. This is shitty. If, on the other hand, someone pressed for something ebook specific, you might get the current going rate, which several publishers are trying to standardize as 25%. This is better, but not as good as it could be. If you've got a great agent or you're working with a company who's already used to the ebook model (or if you're publishing with an epublisher) you could get as much as 32-35%.

The real benefit, IMO, comes to authors who wouldn't have had hardbound releases anyhow. They're not the people making the Kindle bestsellers list, or, really, any bestseller list--they're the people who struggling along at midlist, who you can sometimes find in Borders and sometimes not. For those authors--which is to say, the majority of authors--it seems that ebooks can be a great equalizers, bringing authors a wider readerbase and more income than they would have had otherwise. I'm not saying that they're going to become household names or make enough to quit their day jobs, but in my experience with genre-fiction advances and the potential money in sales for Kindle and the like, I'd say that it could make a pretty big difference for a lot of those people.
posted by MeghanC at 2:14 PM on July 8, 2010 [2 favorites]

« Older Keeping the Energy Up for the Big Show   |   Calling all confection-makers! Newer »
This thread is closed to new comments.