Publishing in a Changing Market

Even a decade into a market changed by ebooks, it’s clear – at least to me – that a significant fraction of readers [and some rather large publishers as well] don’t really understand what’s happened and the implications and ramifications of those changes.

First off, despite all the words and arguments to the contrary, the costs of getting a book published haven’t changed much, except that they’ve increased. What has changed, particularly with self-published authors, is who is paying what costs. The cost of physically printing a book was never the majority of cost. From what I’ve been able to determine, the actual cost – just of printing – a hard-cover book runs in the range of three to six dollars, depending on the length of the book, the quality of paper and cover, etc. The costs of physically distributing print books likely run around a dollar a book. A standard publisher’s other costs — editing, proofing, typesetting, cover art, marketing, etc.– still run around ten dollars a hardcover. Those costs are all attributed to the first two years of sales for most publishers, but only a small percentage of books bring in significant revenue after two years. Now, I might be a bit off on some of this, but I’m in the ballpark.

Under the old marketing agreements, and those that still exist for printed books, the publishers sell books to stores at fifty to sixty percent of list price. Since most large publishers are barely more than breaking even, and some are losing money, there’s not a lot of profit involved. Add to that the fact that, even for the most successful publishers, almost half of all books sold lose money, which is why publishers need best-sellers.

So… how come all these independent authors can sell their ebooks for $3.99 or $5.99? Well… they can do that because they’re personally absorbing all the costs that are born by publishers. They have to come up with the cover design and artwork. They have to line up editors, or alpha or beta readers; they have to do the formatting or hire someone else to do it. They have to do the marketing, and make the arrangements with Amazon or someone else [who takes a percentage, of course]… or spend the time handling the finances and the bookkeeping. And the vast majority of these authors – probably 98% – actually lose money… in addition to spending a huge amount of time for which they’re not compensated, except if the book sells really well. Now, the ones who are indeed successful reap solid rewards, if not as much as most people think, because they’re not saddled with the costs of books that didn’t earn out in the way a standard publisher is.

So the lower prices of all those cheaper self-published books come out of the hides of their authors… and those dollar and time costs are substantial. Why do you think that almost all indie-published authors who are offered deals by major publishers take them… gladly?

For those of us who are with major publishers, and who aren’t multi-million sellers, the rules have also changed. We have to spend more time personally marketing, arranging appearances, attending things like comic-cons and conventions, for some of which we may be partly compensated and for some of which we’re not compensated at all. We spend more time and effort, generally for less return, than authors did twenty years ago – just like almost everyone else. And authors whose later books lose money also risk losing their publisher, requiring either more non-writing work or trying to make it by self-publishing or going with a small press [and a great many end up taking on more non-writing work].

One way or another, lower prices for ebooks come at the expense of the authors of those books. In addition, the consumer demand for cheaper books is creating a secondary market of generally lower-paid writers who are all competing with each other to write and produce books at a lower cost, and that means either lower quality or even more cost and strain on the writer. The demand for lower-cost ebooks also fuels the demand for pirated works, usually of best-sellers, but that piracy reduces the sales of those best-sellers, in turn reducing the risks that publishers will take on new or unpublished authors… and they’re definitely taking less of those risks, for the most part. That reduces the scope of what’s available from some major publishers and in some bookstores, and it means that readers have to work harder to find those kinds of books in the mass of hundreds of thousands of self-published or indie-published electronic works.

In short, no matter what anyone says, lower ebook prices have a lot of costs that no one really thinks about, and even fewer care about – just like they don’t really care about what’s behind the lower prices from Amazon and Walmart, or not enough to change their buying patterns.

11 thoughts on “Publishing in a Changing Market”

  1. Chris says:

    I can definitely see that there are substantial costs that go into publishing a book, in any format. But are there costs that are unique to ebooks? It would seem that the proper price for an ebook, assuming the market weighted things out equally, would be something like (hardcover_price-hardcover_specific_costs+ebook_specific_costs) during the hardcover sales window, and then (softcover_price-softcover_specific_costs+ebook_specific_costs) after the hardware sales window.

    I suspect that is what is done for your books, as looking at the forthcoming Outcasts of Order, the cover price for the hardcover is $27.99, the discounted hardcover price is $18.29, and the ebook price is $14.99 (all prices on Amazon US). This would lead me to believe the wholesale hardcover price is ~$16.80 (60% of list) and Amazon is taking a small (8-9%) profit (because they don’t need the larger margin because of their other profits elsewhere). For the ebooks it is harder to tell what the profit for Amazon is since larger publishers can get different royalty rates than Amazon gives for self publishing, and I would really hope that Tor / you get more than the 35% a self publisher would for an ebook of this price (which was the last info I could find). Assuming you could get the rate that is listed for books $2.99-9.99, 70%, that would mean the “wholesale” price for the ebook would be $10.49. If the numbers you guessed for printing and shipping a hardcover hold ($4-$7 / book since the editing costs would be amortized across hardcovers and ebooks), then that definitely seems to come close to the price it “should” have been priced at in the hardcover window.

    To sum it up, if this is close to accurate, expecting the ebook to cost much less than it does right now it absurd, and it could be even less fair to the authors / publishers if the large publishers can’t get close to 70% royalties.

  2. Josh Meneely says:

    Well you’ve given me something to chew on. I thought it was easier then that. I still think it could be if we stopped seeing Hardbacks as the end all be all. But given that the Ebook has to make up some of the loss from Hardback and Paperback, I can see the price being higher.
    I don’t know how they would go about it but it would be interesting to see the price of a book that was major publisher made, but only Ebook “printed”. I still believe that would have to be cheaper. I cannot believe that server space would be more then, to use your math, 4-7 dollars a book. Or that the others cut would be more then that AND the mark up of the seller.
    But then I reread your $10 Publishers for a Hardback. Any idea if some of that is easier, cheaper, on a Ebook? Or just differently hard?
    What do you see out of Libraries with an Ebook lending library do you know?

    1. In fact, publishers have changed what they print, and what they don’t. If a mid-list author’s hardback sales aren’t strong enough, they go straight to ebook, and don’t print either a trade paperback or a mass market paperback. One reason for printing hardbacks, as one commenter alluded to, is that there’s still a solid, if modest, market in library sales.

      1. C. Stan says:

        That’s assuming the publisher does not simply drop the author altogether which I have sadly seen happen to a few.

  3. John Prigent says:

    I have to admit that nowadays I buy your books from Amazon in Ebook form. Please don’t scream, there are reasons and I did buy them as hardcovers for many years. But (a) I simply don’t have any bookshelf space left, and piling good books on the spare bed had also reached its limit. And (b) – I’m in England and I got tired of the interminable wait for them to be imported from the US. OK, the wait has shortened now to a week instead of a month, both including delivery delays in despatch by the importers, but it doesn’t help me find somewhere to keep my much-loved books so Ebooks are a Godsend.

    1. I don’t scream, or even mutter, about the way someone buys my books. I’m just grateful that readers buy some version of what I write. Of course, I’m especially grateful for the hardback sales. At the same time, I certainly buy ebooks, for exactly the same reasons you do. I do mutter, if under my breath, if they pick up pirated ebooks off the net.

  4. Brenda Steele says:

    Having read some self published books I have now appreciate the services that publishers provide.

    These systems were developed over many years. There was a reason and it still applies today.

  5. Brenda Steele says:

    The self published were full of grammatical and logic errors

  6. John Prigent says:

    Amateurs who self-publish are asking for trouble. But you don’t have to be a professional editor or proofreader. I bought the ARC of what sounded like an interesting new novel off Ebay and sent some suggestions and comments (which he used) to the author. Since then he’s had me beta-read all except one of a long series (the exception was while I was laid low by cancer treatment – I’m a long-term survivor).

  7. R. Hamilton says:

    For all that most of the costs are not due to printing, there are still ways in which an ebook is less expensive:

    * no inventory
    * no returns
    * lower costs to start selling an ebook (w/o print edition), thus lower risk

    all of which are especially advantageous to the self-published,
    I suppose, who may be willing to invest time, but not so much in the way of cash.

    Somewhat unrelated: I walked into my regular (and nearest) Costco recently. As recently as a few months ago, they still had a full aisle worth of tables (between clothing and outdoor/lawn gear) with books and other media on them. The latest time, they had less than half an aisle, less books (although proportionately more children’s?), and no CDs/DVDs. Even Costco, which goes for volume, seems affected, whether by digital replacing media, or by the changing book market. Now maybe part of that will be seasonal (perhaps it will come back to usual for Christmas?). But it’s an alarming change. (and no, I don’t remember what took up the space instead; it wasn’t something I was interested in at the time, is all I recall)

  8. Mournelithe says:

    Late to the party but it might be of interest.
    I started out with armloads of library books, then upgraded to second hand titles once I started earning money. I shifted almost entirely to ebooks around five years ago and haven’t looked back, and regularly buy them in the £3-7 region.

    But there is another reason for the high price of hardcovers – they are the initial premium release, like a cinema. You aren’t just paying for quality, you’re paying for access now instead of in a year.
    The cheap self pubbed ebooks are priced the equivalent of a mass market paperback or remainder, something to collect any price conscious readers on a whim, not fans with a demand. They are the equivalent of the dvd rental.

    The other big factor is the fundamental decline in bookshops thanks to consolidation and marketing budgets – there are three decent SFF shops in all of London now, and four second hand shops. Everyone else has barely two columns of the exact same titles, all paid for positioning. And that I think has lead to a collapse in book sales rather than followed it – the publishers and dealers aren’t even bothering with most of their book tables at the cons here now, just using flyers and promo codes for ebooks.

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