Some people were shocked a few years back by Lynn Viehl’s very revealing and incredibly generous post about how she only earned $24,517.36 after taxes and commission on her mass market NY Times Bestseller TWILIGHT FALL. In the post she also estimated the publisher’s gross at $450,000 and guessed the net profit to be something around $250,000.
This raised some eyebrows. How could publishers make so much and the author earn so little?
Well, my math is a little different. According to Amazon the list price of TWILIGHT FALL is $7.99. Discounts to booksellers vary and that’s not information others are always privy to, but since this is a rough sketch let’s just say they’re 50% across the board. For the purposes of this post that means that for every net copy sold (i.e. actually sold to consumers) the publisher receives around $4.00 and the bookseller receives $4.00.
Unit costs (i.e. producing the actual book) also varies anywhere from $0.75 to $3.00 depending on the format, quantity of the print run, etc. Since this is mass market let’s say that unit cost including shipping and warehousing is around $1.50 per book. Again, just a very very rough guess.
So we’re down to $2.50 per copy for the publisher. Lynn says net sales so far are 61,663, so according to the napkin the publisher is around $154,157.50
Lynn says she received a $50,000 advance, so the publisher stands at (approximately) $104,157.50 on the title.
Pretty good! This is a bestseller after all.
But you have to deduct all marketing costs (ads, sending out copies for review, bound galleys/ARCs if any, co-op), other production costs (cover, seasonal catalog, etc.), and overhead (salaries, health insurance, rent, etc.) before you get to the profit.
How much does all the rest of that cost? I don’t know, I’m not a publisher. But it all adds up to a pretty good chunk. And let’s not forget that historically most books don’t earn a profit and those have to be paid for as well.
At the end of the day, on all books that turn out profitable the publisher is going to earn more of the profit than the author barring a revenue share type of model where the author isn’t paid up front. After all, they put up the advance and the production costs, and the risk on any given book is exclusively theirs. While of course a book not selling can hurt an author’s career, they don’t have to pay back the advance or the amount the publisher lost.
But publishers aren’t exactly raking it in either.
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I think the bigger name authors sell way more offline than on, but that's becuase they get priority placement in the stores (co-op) and they're in the walMart's airport bookshops, etc.
For a new author today,online sales are extremely important.
I know I'm sounding stupid here, but could someone please explain how self-publishing is supposed to make more money than traditional publishing?
If a traditional publisher, with all of its resources and expertise, can "only" deliver $24k to a successful author, why would someone with little resources or expertise think that he can do better by himself?
I understand that there is a lot of overhead in marketing and distribution, but that overhead is essential in reaching readers, is it not?
P.S. Scrolling through some of the other comments… how many people really buy fiction from online stores? I don't. I have bought some non-fiction (mostly, ahem, writing books), but no fiction that I can think of *except* books by authors I already know and like.
If it's a new author, I want to hold it, skim it (not just the first 3 pages – I read somewhere in the middle) and spend some time deciding.
So, can a brand-new author *really* sell novels on the Internet? Or am I just way behind the times?
Chrisstine,
it's because, while the author is only getting 8% of the book's cover price, the publisher is getting the other 92%.
so some authors today are saying, "Hey, with more people buying books online and amazon so popular, i don't really need a publisher anymore because I can sell my books to readers by myself and reap 100% of the profits instead of only 8%. that way you can actually sell way less books than with a traditional publisher, but still make way more money.
I know I'm sounding stupid here, but could someone please explain how self-publishing is supposed to make more money than traditional publishing?
For most people it can't.
If you're famous, or have an established presence (like publishing from a popular blog)then you can turn a profit. Ditto for niche markets, like trade shows or local histories in gift shops.
But for novels? The odds are way worse than with commercial publication. The problem is, most people who self-publish buy the hype because it's what they want to hear.
Sure the royalties are (much) better, but 50% of nothing is still nothing. 50% of a sales to your mom and Aunt Sallie's bridge group isn't much better.
The stand outs have all had other things going for them. The kid who put out Eragon had his family's press to work with (and their connections which got him a display in a real book store which caught a commercial publisher's attention.) Other, smaller, successes have been spread by word of mouth through existing channels and groups with enough reach to get the word out.
There's an adorable blog I follow whose owner put out (and sold out) a $25 picture book. Without her large following, that wouldn't have happened. (She had sales before she had the books).
Most vanity published writers want the commercial system to fail because most vanity published books are slush that won't sell – no matter how many bookmarks they make or how many tweets they send out. They don't like being told they can't make the cut, and it's easier to believe the system is wrong or broken than to do what they need to in order to improve. (or in some cases just to accept that they're not professional writers and never can be)
Christine,
Brand new authors sell more on the net than not, because a lot of physical stores won't even stock unknown authors anymore. Amazon combined with social networking is an ideal platform for new authors to generate sales. But most debnuts simply don't end up in stores.
I agree that most self-pubbed works don't sell. But Amazon makes it that much easier to find out. People will figure, what have I got to lose? i already wrote it. Couldn't sell i traditoinally, I'll just throw it up on AMZN and see what happens…or in some cases, throw it up on AMZN and actively pormote it and see what happens.
Just to lay out a few more numbers for you all:
B&N posted a whopping total of $70MM in profit last year.
Pearson PLC made about $560MM last year
(numbers from SEC Filings)
Granted this was a recession year, but Barnes & Noble is barely surviving – $70MM for a store with 37,000 employees is nothing.
B&N had an profit margin under 2%, Pearson at 8% profit – so, you can't trim any off of Barnes and Noble, you really can't trim more off of Pearson.
The numbers don't lie – publishing and selling aren't that profitable. Why should writing be?
It's a symbiotic relationship that writers-publishers-sellers are in, and if one is suffering they all suffer.
"Also, I hardly think $50,000 a year for a book is minimum wage, guys. That's a nice living above the average household income in the US. I'll take it :)!"
I'd have to move out of my state to live off of 50k, but that's not what she actually MADE, that was her advance, BEFORE she paid her agent, and Uncle Sam and such. $24,517.36 is what ended up in her pocket and then I'd REALLY have to move-or move back in with my Mom…NOT.
And, Lynn writes something like 5 *FIVE* books a year, and has written something over 35 books in total. THAT's why she got that 50k advance.
Anon, but not that other Anon up there…
Ya know what's interesting about all this ebook talk… y'all are presently speakin' just ebooks composed of text.
Wait 'till art and color are possible – couple that with multi-media and story (text) and you've a whole 'nother critter!
Interesting to watch percentages, ebook vs paper, change when that's available.
Point being… fun math prognostications now, but specious eye-ballin' for what the future holds.
Haste yee back 😉
I'm a statistician, so yeah, the whole "92% of nothing is still nothing" argument really resonates with me. Not to say that there isn't a market for self-publishing, or good reasons to do it, especially in non-fiction, but I would definitely at least try the traditional route first.
And of course, get more people to come to my blog! Hey, come to my blog!
Just poured myself a glass of Chivas Regal 12.
Tell ya what ya'll–ya worry WAY too much. If ya wanna write, then write! Then try to sell what you wrote.
There's 3 basic tiers for selling:
1. try the agent-Big 6 route
if that don't work, you go to
2) small pubs
if none of them'll take you, that leaves
3)self-pub (or POD, whatever)
or I suppose,
4) scrap it without publishing
Then write something else and start again!
That's all there is to it, folks!
Couldn't be easier, right?! All yer goin on about "this is better than that"'sjust a waste o time. Write. Sell on the highest tier you can. Repeat.
Capiche?
Bottoms up.
Paper publishing business model;
Author 8% of cover price
Publisher 52% of cover price
Distributor 5% of cover price
Retailer 35% of cover price
Take out the distributor and the retailer for digital publication and that's 40% off. Take out production costs, that's another 30% off.
For a $25.00 casecover (hardback), that leaves $7.50, but actual e-books average around $10.00, Amazon and Barnes and Noble, about the same price as follow-on mass market paperbacks of the same titles.
25% royalty on e-books is Random House's policy as of 2009, or roughly $1.25 on 50% off average $10.00 list price revenue from resellers.
Fictionwise e-books go for about $5.00 and author royalties are 50%. So there's an edge there.
So then, Random House, $1.25 royalty, about consistent with paper publication royalties.
Fictionwise, $2.50 royalty.
The way I see it, there's currently a lot of padding in the e-book marketplace considering the titles are already making it into paper comparatively successfully. E-books look like a runaway gravy train for resellers.
Maybe it's been asked…ignore me if it has. I can't read all comments right now. She was given a $50K advance, but has made $27K now. Does she owe the publisher money? Or does she get a set time to earn more? Or am I non understanding?
Author advances are paid up front, usually in installments, one installment soon after final galley proofs are returned, and one installment when the book is released. Advances are not refundable. However, if a book doesn't sell through and pay off the advance based on accounted royalty earnings, there's no more income.
If a book's revenue and royalty accounting exceeds an advance amount, there's more income. There's no time limit, per se, unless there's a rights revision clause with a time dependent deadline. Most publishing rights contracts stipulate based on "in print," meaning there's undistributed copies in the warehouse or ongoing reprints. In Viehl's case, there's could be as many as 20,000 or so copies sitting in a warehouse somewhere.
One example, say there's a subsidiary rights sale for, like, a movie option, frequently a 50/50 publisher/author split, after an advance has been earned out, the author would then receive those earnings in the next statement season, typically quarterly. Then if the movie is made, there's more potential subsidiary rights income.
I was actually planning a post on the realistic figures a publisher would actually make on a book, but you got there first.
Though I'm glad you did post this, I think it is important that writers are properly informed about the finiances involved.
Writing is not a big money maker – for the vast majority of published authors – nor is publishing, you get into the industry because you love it.
In comparing the numbers you can't actually deduct the cost of goods sold and the salaries from the publisher's side without going back to the author's side and deducting her salary (50,000) and her cost of good sold (for computer equipment, home office, etc) — in effect reducing the author's 'profit' to a negative number. Sure the publisher's profit is low, but they 'get' around 150k and the author 'gets' around 50k – the true numbers to compare.
Bunkum! Although I do have a better expression.
Kristi,
It's sad that a best-selling author is not making much more than minimum wage on her book. I guess that's why they say not to give up your day job too soon.
I thinkt he saying is "Don't give up your day job until you get a movie deal."
Anon 12:59 said: Yup, what it come down to is that most writers are lazy when it comes to business…
As a former central coordinator of Novelists Inc. for a few years, I don't remember any of the authors being lazy about business. Quite the opposite.
Most publishing authors are very serious about the business. And I mean serious.
For those of you who are wondering which outlet for books sells what percentage of books, etc., there are Channel Charts around (PW runs them once in awhile).
These are breakdowns of retail sales by percentages (pie chart) for different types of books. Here's a piechart for Children's Books.
https://www.publishersweekly.com/article/CA6671949.html
okay one more try:
http://www.publishersweekly.com/article/CA6671949.html
add the https:// at the beginning if your browser requires it.
Most vanity published writers want the commercial system to fail because most vanity published books are slush that won't sell – no matter how many bookmarks they make or how many tweets they send out.
@ one of the many irrelevant anons,
This may be true, to an extent. But out there in the vast unpublished mass of authors is the next Hemmingway or Steinbeck, or Lee. These authors, given the current system cannot find representation or publication because the immediate commercial appeal of their fiction isn't there. Meaning, only books with immediate commercial appeal are available, and that means top names and sex only.
That's the state of modern literature. None of the top names are actually high quality literary artists, and I love Stephen King, but high quality literary artist, he ain't. Probably could be, but doesn't really want to be. Fine.
But I want a choice. I want to read, and as a publisher, find, the next Shelley, the next Poe. Unless we open the floodgates, we won't ever have access to them. They will either not write because of the current publishing environment, or they will write and their manuscripts will sit in a drawer somewhere until they die and then get thrown in the garbage by the apartment owner who cleans the place out for the next tenet.
Independent publishers are going to rise in the next ten years to untold numbers, and they will service the authors who have something to say. And I think that makes for something wonderful.
Good morning,
I am late to the party again.
I am confused. Did she get 50k up front, and then 24k ? So she is being taxed on 74k for her book so far ? This is the way I see it.
I've read comments on other threads about what my books are making. I've read I'm grossing twenty thousand and more for each book.
Interesting.
I come from an old fashioned New England background, where you don't discuss how much money you're making in public. It's really no one's business.
I come from an old fashioned New England background, where you don't discuss how much money you're making in public. It's really no one's business.
It's no one's business if they ask, but in the case of someone using their "top" earnings as an illustration for someone considering a profession, that's not the same thing. It EVERYONE's business to know what their earnings potential will be and someone willing to share that information is a tool.
Gordon –
I know you haven't yet figured out that negative attention isn't the same as good attention, so you'll keep making these kinds of statements, but the "anons" aren't irrelevant. Not everyone has a Google account to leave a verified post, that has no bearing on the validity of their words.
Disagree ghost. If writers were serious, and I mean SERIOUS about business, more of them would be self-publishing, starting their own pub companies as a vehicle to launch their own books, that kind of thing, instead of waiting for years for someone else to accept them.
And if the anons are so irrelevant, Gordon, why do you spend you rtime responding to irrelevant posts?! That would make you irrelevant yourself.
Don't forget that a 50K advance doesn't come in a lump sum. You get it doled out in portions over the course of up to a couple of years (or more.)
So your agent takes 15%, leaving you with a little over 42K (if my math is right). You get half of that (or, with some houses, 1/3rd or 1/4th) up front.
So 21K is in your pocket. Set aside 1/3rd of that for taxes. THAT is your wage to live on until you turn in the book, say, 6-9 months later, and then after revisions and maybe even copyedits another 3-4 months later, you get the second portion of the advance, which will be somewhere around half of what remains, so 10.5K, maybe.
Then, upon publication, which could be a year to two years after you turn it in the first draft, you get the rest of the money.
Some contracts specify different payout schedules, so you get money upon turning in the proposal instead of on release, or you get more upon turning in the manuscript and less upon release, but the point is, that 50K can take years to get.
That is why a 50K advance can still mean minimum wage.
Basically, the moral of all this is:
Prepare for the worst.
Hope for the best.
Learn how to survive in strange waters, but hope that they are calm and that the winds favor you.
(good old fashioned sailor language)
I'm the anon @7:58
"It EVERYONE's business to know what their earnings potential will be and someone willing to share that information is a tool."
Earnings potential? Tool?
I'm a writer, not a politician running for office. I spend my days and nights working hard to please other people with my work. That's my solitary goal as a writer. I want people to get their money's worth; I want them to be happy. But I like my privacy, and I'm not here on this earth to help anyone learn their "earnings potential."
Again. It's. None. Of. Your. Business. What any published writer earns is private. If a writer wants to disclose this, it's their option to do so. But most published writers I know would tell you the same thing. Most people I know don't discuss their earnings in public, and especially not on a blog thread. It's very low rent.
What any published writer earns is private.
Not even close.
It's a matter of public record as soon as the contract is signed. You're not talking about a salary here; it's a sale. The bigger the sale, the more it's talked about.
Just like anyone with Google and PM knows that Stephenie Meyer got around 800,000 for an advance on the first 3 Twilight books at auction, or that James Patterson signed a multi-million 17 book deal.
This isn't a business where your pay stubs are some secret the boss doesn't want you to compare under threat of firing. Public people. Public information.
You can check every deal signed as soon as its reported.
Comparing Barnes and Noble's B&M sales vs its online sales shows us very little because they are the top B&M bookstore while being Amazon's red-headed stepchild wrt online sales.
Comparing B&N's in-store sales vs Amazon's online book sales would probably give us a pretty decent idea of things, though. Compare the big B&M store vs the big online store. Can anyone come up with Amazon's book sales $$$s?
Christine H: "P.S. Scrolling through some of the other comments… how many people really buy fiction from online stores?"
The main reasons I buy most of my books through Amazon, both fiction and non-fiction, is:
1. Reader Reviews, and lots of 'em.
2. Price, including some good used books for .01 (+$3.99 s&h)
3. 2-day shipping on new books for one flat price per year
You can often read samples from the book, such as the first chapter. I doubt there are many who would only buy non-fiction online.
I really don't care if I make a penny by selling my novel – it would be nice, and I hope it does b/c that means it would be published, but that's not what I write.
Also, I'm not sure why people are surprised that a best-seller doesn't sell more. The expression "STARVING ARTIST" is around for a reason
Nathan… Re: Book Club Fiction, would you place Secret Life of Bees and Lovely Bones as YA? My agent insists that because I have a child protagonist, my audience must be YA, yet I am writing for the audience that would be interested in what you describe as Book Club fiction.
RE: Author expenses, there is a lot more than simply paper and ink. It's just like anyone else starting a sole proprietorship.
For instance:
Authors often pony up a lot more money for health insurance than those who work for large- or medium-sized companies. They CAN get it through Authors Guild in certain states (I think NY, MA, and a couple others), but even then, it's shockingly expensive. Far more than what anyone with a regular employer would pay.
Postage is pricey (you'd be shocked how much mail authors end up sending…books for reviewers that the publisher missed, books for their agents to use when marketing subrights, books for publicists, etc.) Most authors I know spend a good chunk on publicity–traveling to various locations for signings or to speak (often for free), creating and maintaining a website, creating e-newsletters and sometimes even snail-mailings, buying author copies of their books to use for promotional giveaways, etc.
Then there are trips to NYC. Not every author does this, but many try to get there once a year to see their editor in person, to talk about new projects, personally thank the publicity folks, etc. Yes, it's tax-deductible, but it's still a major expense.
If an author attends conferences (which most do), that's another expense. Most romance authors, for instance, usually end up spending around $1000-$1500 to attend the RWA conference (airfare, conference fee, and splitting a hotel room for a minimum of three nights, but usually four or five.) In other professions, a company often picks up the cost of an employee attending conferences for educational and networking purposes. For an author, who's essentially a sole proprietor, those expenses are theirs and theirs alone.
Obviously, these expenses vary a lot by the author. But most authors I know end up having expenses that are very much on par–or even higher–than what Viehl noted.
–Anonymous Author
Nathan, are the numbers any better for a YA book which develops an academic following, i.e.; is used in the classroom? Seems to me that might lead to slow but steady sales.
Also, production costs include more than just printing. There's cover design, text design, copy editing, proofreading, and (sometimes) indexing.