Hello all,
Polarity Reversed is finished and I am able to return to many other things that I've eschewed for a few months now. I used to have hobbies somewhere... just can't remember where I put them.
I have much to write in this blog, but I still have to keep some wiggle room for subsequent editions and Polarity #3 - I will tentatively blog only on Wednesdays now.
Over the past few months, I've had several readers that expressed interest into what it takes to become a writer. I've written about this topic before, but I was remiss on expounding on what happens AFTER you're published. What's become front-and-center recently is the very public dispute of Amazon and Hachette. Since this is a blog about ripple effects, I felt it apropos to delve a little deeper into the ripple effects this will cause.
Most people (even readers) don't even know that Hachette is one of the 'Big 5' major publishers. If you read James Patterson, David Baldacci, or Robert Gilbraith (aka JK Rowling) then you are reading a Hachette book. I am not a Hachette author, having chose the Indie route for reasons outside the scope of this discussion. Many other authors have focused on the "bullying" nature of Amazon and have made more of a qualitative argument. Being that I'm more of a quantitative person...
The inside rumor is that Amazon wants Hachette to get 50% of the sale price instead of 70% for ebooks. In a nutshell:
1. Authors that sign with major publishers get anywhere from 20% to 30% of the sale price as their royalty for an ebook. This means that 30% goes to Amazon and 40%-50% goes to Hachette. If you think 20%-30% for the author is bad, consider that they usually get 5% to 12% for printed books. These numbers vary. Authors don't see any money until after they've exceeded their advance amount. 15% goes to their agent.
2. Going to 50% from 70% would really hurt both Hachette and their authors. You have a better chance making a living as a professional athlete than you do as an author. Hachette would undoubtedly have to reduce the royalty they pay to authors, thus making a living from it becomes even more astronomically bad.
3. 70% or more of ALL book units sold are ebooks these days. The chain of people - from author to agent to editor(s) to artist to sales reps to person X - get paid in money, not percentages. The math means that there is a lot less money for these people to make. Skirting the argument that greed exists in every corporation, rest assured that there are many people in this chain that add significant value and aren't rolling in the big bucks. Many of these people say that they must all work twice as hard for half the money. You, as a reader, can read whomever you want. My point is that the major publishers aren't trying rake as much money out of you, the reader, so they can be rich; they do it primarily to pay their employees and to have money to pay advances to up-and-coming authors. The industry has been bleeding immensely over the past ten years mostly because roughly a third to half of all sales are from self-publishers and Indies (something that was more or less non-existent about 15 years ago). Hugh Howey has done some great analysis on this subject.
4. Amazon offers a 35% royalty option and a 70% royalty option to those who self-publish. The 35% option gives some extra flexibility and some extra money for international sales. Most choose the 70% option. I scratch my head wondering why Amazon can't extend this to Hachette and I can only infer that I don't have all the details.
5. Amazon is really upsetting a lot of non-Hachette people out there because of the end result of what we see so far. One can only reason that Hachette had some kind of distribution agreement in place with Amazon that seemed to cost Amazon more money in the long run. Or that Jeff Bezos really needs that extra house on the moon.
6. I wonder what Amazon will do to me (and I refer to any author). I don't have to sell on Amazon, but the reality is that 41% of all new books on the planet are sold there. It is estimated that 90% of all book purchases originate with checking Amazon's prices at some point.
The upshot to all of this is that both Amazon and the publishers will have to streamline their processes even further. There is a vast over-supply of book titles out there given the demand of readers; you can't afford to lose fans. Fans are what drive consistent sales. As a reader, how many times do you try a new author and deeply regret wasting your weekend reading their book?
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