Ebook pricing Storify and the Cult of the Debut

Today just before lunch, I saw this story on Publishers Weekly. Which reminded me of other reports like this one from the New York Times. But there’s a lot to *why* these reported print #s are likely dropping, and a lot these reports leave out. Which is where this discussion started.

I’d also like to say a bit more about the Cult of the Debut. This is a huge thing in publishing. Authors, Agents, Publishers, Reviewers, Booksellers, nearly everyone in publishing is culpable here. We all participate in the Cult of the Debut. The shiny new author, the undiscovered gem, the instant phenomenon new voice that will Revolutionize Publishing, so on and so on. Houses get into huge bidding wars over debuts they think will be the Next Big Thing, spending millions and millions of dollars on an unproven author.

And as authors, we get so worked up about The Big Debut. We see our colleagues getting six, seven figure deals out of the gate, and we despair, thinking we’ll never have the career they’re going to have. We fetishize the Big Debut as the One True Path to writing success? When in reality, a lot of those big debuts fail, and a lot of authors that do end up becoming bestsellers do so by building an audience over time.

VE Schwab just hit the NYT list with A Gathering of Shadows, the second book in a series, and her ninth book overall. She built an audience over six years, bringing her YA audience to her adult series. She has put the work in over time, alongside her publisher, to make this success happen. Stories like Schwab’s are far more achievable, far smarter of a strategy (even with the extraordinary circumstances of her film and TV deals, which are impressive and laudable in their own right), in my opinion, than throwing big stacks of money at debuts and hoping to win the lottery. Schwab has proven her work to be a good investment, has fostered a strong fan base, and now she is reaping the rewards. This is how to succeed without the Cult of the Debut.

Some people do debut right onto the NYT list. My agency-mate Jason M. Hough did with his novel The Darwin Elevator, but that happened because he busted his ass writing all three books in the trilogy so they could be released back-to-back-to-back, so his publisher had all the ammunition in the world to push the book hard. And then? It hit the NYT list probably in no small part to getting a very strong NPR on-air review during drive-time. But there’s no way to guarantee that kind of buzz or support. You make your bets, you give books everything you’ve got, and you pray. Sometimes the magic works, and sometimes, a big advance is the last advance you’ll ever see.

Me? I’m a career slugger so far. I do the work, I write pretty quickly, and I promote the ever-loving crap out of my work by being active online and at conventions. I refine my process, I look at what in my list is working and what isn’t, and I try to focus on writing to where my existing readers are – the pop-culture-savvy action/adventure kind of story.

A lot of writers carve out solid careers for themselves without ever hitting a Bestseller list, without ever getting a major award. They write, they make smart choices about what books to write when, and they find good publishing partners. They develop their careers deliberately, thoughtfully, and by making good bets. Publishers can and often do this, too. But publishers are still frequently distracted by the Cult of the Debut.

And this focus on debuts goes all the way down – Big Debuts get the budget, so they get the support. Which means they get more ARCs, more ads, more events. They get more time during presentations to buyers and librarians, which means they get more exposure to readers and reviewers. All the while, career writers, the long-term proven creators, just hammer out incrementally stronger books, trying to build their audiences organically because they’re not the New Hotness anymore.

We can all do better. Debuts are fun, and it’s exciting to be the person to spread the news about a brand-new author, but there’s a lot to be said for the experience and honed skill of a veteran writer. That’s what I’m hoping to become. It’s not as sexy a role, but it’s far more realistic.


My latest book is The Absconded Ambassador, Episode 2 of the Genrenauts series. The Genrenauts are a group of storytellers that travel to dimensions informed by fiction genres to find and fix broken stories in order to protect their home world.

The Absconded Ambassador

The New Landscape – Access, Discovery, and Media De-centralization

Several things popped up in rapid succession that got me thinking. The first was this announcement regarding YouTube Red, the new ad-free paid tier of YouTube. The second was the news of a new Star Trek series, to be aired (almost?) exclusively on CBS All Access, a streaming service. And then, just as I was writing this post, Amazon announced Amazon Books – a Bricks & Mortar test store.

So now, I’m going to put on my digital media scholar hat once more and talk about some high-level stuff going on right now. Some pitfalls and pain points I see, as well as opportunities.

YouTube Red has been some time in the making. January of this year, musician Zoë Keating got a lot of shares and chatter with her post “What should I do about YouTube?” on this very topic. I see this move as part of an overall shift in the landscape toward more and more de-centralization of content, where 1st-party streaming systems and subscriptions replace once-agnostic content aggregation-esque systems like YouTube, Hulu, etc.

Here’s YouTube creator Hank Green discussing some of the ins and outs of this move.

I appreciate him spending the time to talk about the positives and negatives, avoiding a hard knee-jerk reaction. I’m worried about the independent creators who had found an equilibrium between Patreon, YouTube, and other venues who now have to pivot and adjust in a big way. It’s the way of life, but any logistical interruption costs creators money, because have to spend spend more of their time on admin and strategy rather than the actual creation.

And then, just hours later, I saw the news about the new Star Trek show, and that it was going to be almost exclusively available on CBS All Access, a paid streaming subscription which currently costs $5.99 a month.

It looks to me (and others, from what I’ve seen), that this is CBS positioning the new show as a Killer App for their streaming service, which I’d not heard of before today (I’m mostly out of the Media Criticism game day-to-day, thanks to having two other careers).

It’s potentially a very smart approach – and one that most of these proliferating paid services are following. HBO, Netflix, Hulu, Kindle Unlimited, all of them are bringing in or commissioning exclusive content to serve as Killer Apps for their individual services.

But here’s the thing about that proliferation – if every service has its own killer apps behind their pay walls, most consumers are very quickly going to max out on the $ they can or choose to pay for these services.

 

Consumer Side

An example – I have a steady, middle-class day job and I have a writing career. I’m married to someone who also has a steady job, and we have no kids. So we have more disposable income than a lot of US families. Between us, we pay for Netflix, Hulu, and High-speed internet. I get my razors on a subscription, I subscribe to a fiction serial (Bookburners), I’ve been an intermittent subscriber to Oyster and Scribd, as well as supporting a half-dozen creators on Patreon and intermittent subscriptions to broadcasters on Twitch.tv. As a household, we’re probably in the top quartile of subscription service users in the US. And I’m very much at the point of ‘Okay, that’s all I can do’ when it comes to subscription services. If I add one at this point, it probably involves dropping another.

And there are *so many* of them these days:

Twitch, YouTube, Netflix, Hulu, Crunchyroll, HBO Now, CBS Access, Spotify, Apple Music, Kindle Unlimited, Scribd, Amazon Prime, etc.

And that’s not even counting subscription boxes (L00tCrate, etc.) and subscription services outside of entertainment, like Harry’s, Blue Apron, StitchFix, etc.

Economic recovery in the US is happening, but it’s slow, and it’s accompanied by wage stagnation and income inequality (I can’t speak well to the economic situation elsewhere, so I won’t). So the % of people in the US that can afford numerous subscription services without seriously re-framing their budget is still not too large, from what I can tell. Whether this is part of an overall paradigm shift in how people budget and consume content is a different discussion (there are too many ways this could go – I have to focus).

 

Creator Side

Switching hats now – what does this look like on the creator side of the equation?

I see this proliferation of paid/gated services as a double-edged facet of the overall creative & commercial ecosystem. There are opportunities, but they’re potentially fraught.

Here’s what I see as the dominant progression for a creator trying to make money from their work (visual art, music, prose, comics, video, etc.)

Level 1 – Start small, give stuff away for free, sell some stuff. At Level 1, a creator is almost totally reliant on big systems, for both discovery and fulfillment/delivery. Basically no one knows who they are, so they join larger infrastructures and services to get the word out about their material through algorithmic and organic discovery.

Level 2 – Building Audience & Relationships — At this level, it becomes viable to sell some merch (T-shirts, mugs, stickers, patches, etc. Here, a creator can bring dedicated fans onto a growing mailing list. This level enables direct sales and stronger performance on retail sites, but the creator may still be largely dependent for discovery-enabled growth and a lot of fulfillment/delivery

Level 3 – Big Creators – Here, creators have a dedicated audience large enough they can get a living wage directly from their base, either totally direct or through Patreon/Kickstarter. Maybe they supplement their income speaking/appearance fees etc., being large enough that they are in demand not just as creators, but as entrepreneurs/thought leaders in their field. They may still use large systems, but if they do, they do so from a far stronger position – they are less dependent on any given system, since their base is strong, a base that is specific and mobilized, not platform-dependent.

This system is reductive, and by applying it broadly across media, I lose some nuance. Musicians can tour and get money from in-person appearances and sell merch there – novelists and poets largely cannot. Visual artists can sell commissions at conventions for solid income, writers have less opportunities in such situations. Etc.

Some take the pure indie path and are less reliant on the bigger systems, but then don’t have access to their discovery engine.

As the landscape moves toward more gated content, more push for exclusives as killer apps, more and more places to publish and publicize, creators have to have our eyes wide frakking open as we consider every new platform, every new distributor agreement, every new book deal, and so on.

Because things are moving fast, and these big platforms are only allies for as long as we’re useful to them. ACX changed its payout terms last February, and because ACX was the only real game in their town (self-publishing audiobook service), creators were forced to sign the new terms or walk from that service entirely. It’s the same type of choice YouTube creators have been forced into, though with notable differences (ACX was a flat-out rate cut, YouTube might come with additional payment, but requires more opt-in and cuts off other options). Any creator that relies on a single or small # of services/sites/retailers for a large % of their business is vulnerable to disruption, as Chuck says in the link re: ACX.

Anytime one of these big companies makes a shift, it causes huge ripples, and creators, especially those of us reliant on platforms for fulfillment, discovery, or other services/opportunities they offer have to roll with the changing tides.

In my opinion, creators right now have more to fear from Monopsonies and monopsonic behavior, than monopolies. Since so many creators are currently beholden to retailers and/or content services (writers and Amazon/B&N/Kobo/iTunes/Physical Bookstores, musicians and iTunes/Spotify/Pandora), if a creator wants to retail their work but doesn’t have enough reach/audience on their own, they use a seller/vendor. But if there are few enough vendors in their world, and those limited vendors exhibit monopsonic behavior, the result tends to be a major squeeze on the creators.

Paradoxically, the creators are the only reason the monopsonists can survive – if a majority of creators pulled out of monopsonic vendors, those vendors would collapse. But in the meantime, the lost income, the lost access could easily bankrupt a huge % of the creators pulling away from the monopsonist.

In a healthy market, there are a range of options, and creators can respond to a change of terms they dislike by removing their content from that platform. But for most video creators, removing everything from YouTube stands to present a loss of a huge % of their access and income, just as a prose writer would stand to lose a huge % of their access and income if they decided to not sell through Amazon.

Monopsonic behavior also impacts larger creator groups, like publishers – if one retailer or wholesaler gets too strong, it can create problems. It’s the WalMart problem. Wal-Mart pushes down prices, then makes up their $ in volume and by demanding better terms from their vendors, The vendors (publishers, manufacturers, etc.) then get to choose – pull out of the single-largest physical retailer, or accept the terms. Because individually, Wal-Mart doesn’t need most vendors. They need a plurality or majority, but as long as the selection adds up, individual vendors can come and go.

So when you’re one of those vendors, one of those creators, you end up in a really terrible situation. And that worries me. I want a healthy marketplace, where creators (authors, musicians, etc.) and the publishers/labels/etc that work with them have options, have recourse for if/when terms change in a way that becomes untenable.

The sky is not falling. But I will continue to point out rain clouds when I see them forming. Because then the smart folks can put out buckets and save on the water bill, or pull the lawn furniture inside before the storm breaks.

I’ll stop there before torturing the metaphor any further.

What do you all think about these streaming service moves – YouTube Red, and Star Trek on CBS All Access?

Mike’s latest book is Hexomancy, the fourth Ree Reyes urban fantasy. Geek magic squares off against a quartet of fate witches hell-bent on revenge.

Hexomancy cover

The Many Sides of Bundling

Earlier this week, Tor announced that it had partnered with BitLit to offer discounted ebook editions to readers who already own print editions ($2.99 per book).

Books

Angry Robot has had a bundling promotion running for some time, offering free ebooks to customers who buy the physical from one of several bookstore partners, or at conventions.

Bundling has been an on-again, off-again hot-button topic in the publishing world, as readers lobby for getting the ebook edition for free with their physical purchase. A frequent argument I see is that if a reader pays for a book, they feel like they should be able to consume that book in whatever format they want – they’ve bought the content, so format shouldn’t matter.

The production realities in publishing aren’t quite that simple. The final steps in book production diverge between print and ebook – so the  work-hours that make an ebook are different work-hours, with different skills and programs needed, than the work-hours that produce a finished physical book.

 

Don’t get me wrong – I think print + ebook bundling should be universally available. TV and Film companies have already figured this out – in the US at least, consumers can by a DVD, DVD + BluRay, or DVD + BluRay + Digital Download. Sometimes there’s even a 3D BluRay in there. But the different formats are available together. And sometimes the programs involved in the digital download even work (and sometimes they don’t – I’m looking at you Ultraviolet).

To sell a bundled print + ebook edition, here’s what publishers have to do:

1) Partner with BitLit or similar companies, selling companion ebooks at a discounted price to verified print owners (who mark up their physical book to claim the ebook).

2) Create a separate edition (with a separate ISBN) for bundling. That bundling edition would likely cost $1-$5 more than the normal physical edition, just as the DVD + BluRay + Digital Download edition of a film/TV show costs ~$5 more than the DVD + BluRay edition (though digital films/TV shows tend to cost more than individual ebooks). This probably means creating a series of download codes for every book, printing a pull-off-sticker on the inside cover or the like. Printing download codes in plain sight in or on the cover would be incredibly rife for abuse, so some precautions are expected. Marvel comics does this as the default for some comics, offering a free digital download.

2a) As above, but offer universal bundling for no additional cost. That has its own difficulties, as expressed below in Show Me The Money.

3) Publishers broker deals such that every print edition retailer creates a partnership with ebook retailers to enable bundling up-sales at point of sale/checkout. Buy a paperback book, automatically get prompted to buy the ebook at a discounted rate. Amazon has something like this with MatchBook, though only a few publishers have signed on for the program.

 

 

Show Me The Money

Here’s the big question, the one I don’t see asked as often.Who gets paid, and how much?

How does bundling impact how authors are paid?

For this, I’m going to get very hands-on with #s and $. There will even be charts. You have been warned.

Royalties, the amount per sale that writers are paid (against advance or directly) is determined by the specific contract with the publisher. In self-publishing, the terms are not royalties, but instead the creator’s share (as the author-publisher).

But if a physical edition AND ebook edition are being sold at once, how is the royalty calculated? If the ebook is a free add-on, then the author only gets the paperback royalty despite that when looked at from the current paradigm, the book is being sold twice, once in each format.

Part of the trick here is that physical royalties are calculated differently than ebooks. In most contracts, print royalties are calculated off of list price (aka the published price on the cover), 6-8% for Mass Market, 8-10% for Trade Paperback, and ~12% for HC. These rates vary by contract.

Ebook royalties, however, are calculated on net sales, the publisher share of the list price. That’s usually 70% of list price in agency agreements, and usually 50% in Wholesale agreements.

This means that in many cases, authors can get more $ proportionally and in real $s.

Let’s do some comparisons:

For each format, I’ve market the highest royalty for the author in Bold, the 2nd best in Italics, and the third is left in plain text.

Paperback Price ($) Royalty ($) 8% Ebook price ($) Royalty ($) – Agency 70% Royalty ($) – Wholesale 50%
Mass Market (8% Print royalty) 7.99 0.64 6.99 1.22 0.87
Trade Paperback (10% Print Royalty 14.99 1.49 9.99 1.75 1.29
Hardcover (12% Print Royalty) 25.99 3.11 12.99 2.27 1.63

 

So we see that Agency Ebook is the best deal for the author in paperback, but Hardcover tends to pay more than even agency. This is due to the fact that ebook prices scale up as the formats get more expensive, but not at the same rate that print edition prices increase. There’s been major consumer pushback against fiction ebook prices above $10, and especially over $12-13. Ebooks for titles released in Hardcover would need to be priced at $17.99 for the ebook to earn a higher $ royalty than the Hardcover.

N.B. – These price levels are not universal, nor are the royalty rates. Angry Robot prices all ebooks for individual books at $6.99, and Saga Press’ recent release of Ken Liu’s Grace of Kings is priced at $7.99 in ebook, even as the hardcover sells for $27.99.

Price elasticity of demand is a thing, here, and it’s likely that when a book is cheaper than the physical edition, they ebook may sell proportionally more, makin up the per-unit royalty loss with volume sales. Several publishers have tried this approach, and it is the default approach for author-publishers, who tend to set the print $ far higher than the ebook price to show the discount, while usually pricing ebooks at $4.99 and below (sometimes far below). And yet some of these author-publishers have made incredibly good $ selling at those bargain prices, even with a lower author’s share due to vendor agreements (bringing in 35% per sale instead of 70%).

Given that authors tend to receive a better $ royalty for ebook sales when the title’s physical edition is a paperback, how do publishers adjust the sale royalty for a bundled edition?

If the bundling happens with its own edition, how will royalty be calculated – List or Net, and at what rate?

I’d propose that a bundled edition, being sold as a physical book, would probably need to be based off of the print royalty, with a bonus for the ebook, maybe around +5-8% of list.

 

So 8% of list for the MM, but +5% bonus for the ebook, for 13% of list. The reader is effectively paying $2 extra for the ebook, and the author is getting about 2x the royalty as they would on a $7.99 MM.

The result would look like this:

Bundle Edition Price ($) Royalty $
Mass Market + Ebook (13% List) $9.99 $1.30
Trade Paperback + Ebook (15% List) $17.99 $2.70
Hardcover + Ebook (20% List) $29.99 $5.99

 

The royalty gain is higher in Hardcover due to the fact that the promotional price increase of adding $2 is very small in a Hardcover, and publishers margins on a Hardcover are quite good, so I added 8% to the royalty rate instead of 5, especially since Hardcover books are the ones most vulnerable to losing sales to their ebook edition counterpart (due to the larger price difference).

The question then is – would readers pay these rates to get print + ebook as a default? I know I would, as I like to have both editions when I can. you have other thoughts on how to implement a bundling model? Do you want bundled ebooks with physical editions? How would you want them?

Do you have any other thoughts on how to implement a bundling model? Would you want bundled ebooks with physical editions? How would you want them? How much extra is a fair price to get a bundled ebook?

How We Can Save Borderlands

A while back, Borderlands Books announced that they would have to close up shop. This was met with much despair and many calls to investigate options to avoid closing.

Borderlands held a planning meeting earlier this month to consider options. Writer and Reviewer Sunil Patel took notes at the planning meeting, which I Storified here (N.B. these are not official meeting minutes).

And last night, the staff announced a proposed plan for how they would be able to stay open: yearly sponsorships at $100 each, offering special perks.

On Twitter last night, I saw a huge outpouring of support for Borderlands, and it looks like they’re well on their way to reaching the goal of 300 sponsorships to stay open through at least the end of 2015. I will be buying a sponsorship, for sure. And I would invite you, dear readers, to take a look at their website, look up the events they have hosted, the role they play in the SFF community, and to consider buying a sponsorship if it is within your means and your giving allowance.

Even though I’ve only physically been to Borderlands twice, I have felt the positive impact their presence has on the community. There are a very small number of specialist SF/F bookstores in the country, and Borderlands is one of the very best. It is my hope and sincere belief that the broader SF/F community can come together and give them the boost they need to continue to serve the San Francisco SF/F community, the city that is their home, and the genre writ large.

Side note – this post is not the place for discussion of the minimum wage regulations or Borderlands’ state reason for closing. That has been much-discussed elsewhere. This is about coming together to help the store.