Self Published Authors are Hurting the Industry

How many of you are giving free ebooks as gifts to your friends and loved ones this holiday season? None of you, is the answer. That’s because with the price tag of “free”, they can get it themselves, so most likely you’ll purchase the book that they really want. It seems that indie and self-published authors drop the price of their ebooks to “free” as a sales gimmick to gain readers and create a name for themselves. However, what happens in reality is that they just want as many downloads as possible so they can shoot up the ranks of the Top “Purchased” (and I use that word loosely) novel in their genre. But do the ends justify the means? In this case, no. No they don’t.

I can understand how a new author that has no reputation and is trying to make a name for themselves could see that the price of $0.99 or Free make sense for their self-published ebooks. However, an author that sells 100,000 copies at $0.99 will only earn ~$12,000. Earlier, I described what the average income is for authors here, and contrary to popular belief, authors earn very little (especially the self-published ones). Here, take a look at CreateSpace’s (the popular self-publishing service provided by Amazon) royalty calculator here to see for yourself. So if you still think it’s possible to make some money by pricing your book cheap, how many authors do you think have actually sold over 100,000 copies in a year? Take a guess. A whopping 30. I think $0.99 would be a great promotional price, but doesn’t do anyone any good as a permanent price.

Indie and self-published authors are focusing on the wrong thing. They believe that price is the important factor, when I say it is quality that counts. There is no doubt in my mind that when you have a quality product, readers will pay a higher price and will also become returning customers. Not only are many indie and self-published authors reducing the price of books, they are publishing books that don’t have the same level of quality that traditional published works have. I’m referring to editing, fact checking, etc. I’ve downloaded quite a few free ebooks myself, and I’ve come across a lot of novels that I stopped reading due to their need for a copy editor. I’m not exactly sure why, but perhaps some indie authors are just too excited to press “publish” that they don’t want to do another round of editing? My book has been “complete” (and I use that word loosely) for 8 months, and I’m still finding things that I want to edit or emphasize.

So, do the ends justify the means? Let’s consider the super success stories of John Locke and Amanda Hocking, each selling over 1 million ebooks. They might be what keeps you motivated, and may be the proof that you’ll use to debunk my opinion, but if choosing the $0.99 price point was used to gain a following, a reputation, and an easy way to enter the market, then why do these mega-authors still keep their books at $0.99 today? Are they afraid they won’t sell if they raise the price? There is no doubt that the publishing industry is in flux and no one knows where it will land, but if more and more quality novels are self-published and sold for $0.99, then they are setting the expectation for the consumer and are therefor hurting the industry. If the market is expecting prices to be that low, then how are authors ever supposed to make a living selling books? Are we destined to always hold a day-job and write at night? Books are something that can take a year’s worth of our time to write (sometimes more), so we shouldn’t be selling them for $0.99. Our time is more valuable than that.

For further insight and detail into this highly sensitive topic, please read through these two articles:

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How Much Money Do Authors Make

Authors are often stereotyped as being very wealthy, when in most cases, that is not accurate. Only the heavy weight authors (those with the most fame attached) are pulling in the big bucks. For me, being an author was mainly about providing me with a creative outlet as well as being a potential supplement to my income. While I have dreams of having movies and merchandise made after The Soul Smith and The Blacksmiths series, the realist side of me has become comfortable with the idea that my book sales may never become my primary source of income. So, in order to get an idea of what to expect, I started doing some research. According to fellow fantasy author Michael J. Sullivan, (writer of The Riyria Revelations series) the breakdown for how much authors make is shown below:

“Let’s look at some examples for a typical release that starts out in hard cover and is later released in mass market paperback

  • Hardcover: $25.95
  • Kindle: $12.99 (1/2 of hardcover – set by publisher)
  • Amazon buys the books at a discount (usually 50-55% off cover, so they pay $11.57) and might sell it at a discount for $15.24.

The money breaks down as follows:

  • $3.67 to Amazon ($15.24 – $11.57 they pay)
  • $2.60 to author (10% of list price)
  • $8.97 to publisher ($11.57 they get from Amazon – $2.60 paid to author)

On the ebook priced at $12.99 the breakdown is:

  • $3.90 to Amazon (30% of the price the publisher sets)
  • $2.27 to the author (25% of net price)
  • $6.76 to the publisher (Net price – 25% for the author)

Once a book is in mass-market paperback the ebook and paperback are usually priced the same and Amazon does no discounting.

So for $7.99 mass market paperback the print breakdown is:

  • $3.59 – Amazon (No discount – and assumes a 55% discount)
  • $0.64 – author (8% of list price)
  • $3.76 – publisher ($4.40 from Amazon – royalty paid to author)

For the e-book it breaks down like this:

  • $2.40 – Amazon (30% of the list price set by the publisher)
  • $1.40 – author (25% of net price)
  • $4.19 – publisher (Net price – royalty paid to author)

Bottom line, when in hardcover the author makes slightly better money if you buy the print book ($2.60 versus $2.27). When in mass-market paperback the author makes MUCH more if you buy an ebook ($1.40 versus $0.64).”

-Quoted from source: http://bit.ly/QgY3IJ

Books are, of course, the primary product that is being produced when you are an author, however, there are other products that are made that can bring in revenue to the author. There are obvious things, such as Audio Books – and then there are non-obvious things (merchandise) that become obvious once you have a successful brand (and Trademark), such as: T-shirts, board/card games, video games, movies/television, etc.

According to Forbes, the world’s top-paid authors this year (2012) are:

  1. James Patterson, $94 million
  2. Steven King, $39 million
  3. Janet Evanovich, $33 million
  4. John Grisham, $26 million
  5. Jeff Kinney, $25 million
  6. Bill O’Reilly, $24 million
  7. Nora Roberts, $23 million
  8. Danielle Steel, $23 million
  9. Suzanne Collins, $20 million
  10. Dean Koontz, $19 million
  11. J. K. Rowling, $17 million
  12. George R. R. Martin, $15 million
  13. Stephenie Meyer, $14 million
  14. Ken Follett, $14 million
  15. Rick Riordan, $13 million

The majority of the authors listed above make that much money because their novels got turned into a movie or TV series (or in O’Reilly’s case, use TV to promote their books). With media attention like that, many people see the movie/show, buy the book, and purchase the merchandise.

The alternative is self publishing, and statistics show that over half of indie-authors make less than $500 a year. In fact, less than 10% of indie-authors make enough to live off of their earnings. http://bit.ly/Qh7l7J

“According to the Bureau of Labor Statistics, or BLS, independent writers with the highest earning potential can expect to earn a median salary of approximately $93,420 per year, as calculated in May 2009. The National Salary Data listed on PayScale lists the average author salary, tallied in December 2010, as being between $30,678 and $71,045 per year, with the middle 50 percent earning less than $50,000 per year.” (Quote from source: http://bit.ly/V5ONKW)

Only time will tell if I will be on the Forbes list, or be a statistic for the Bureau of Labor Statistics or the National Salary Data.