What if (when) royalty rates go down for eBooks? A red flag for indie authors.
Publishing is a business. In a capitalistic society, the goal of most businesses is to make a profit. Currently, the largest eBook platforms have P&L statements that aren’t exactly golden, with slim profit margins. Some of that is competition and a desire to be the leader. But are they sustainable rates for those businesses? Even more importantly, what is keeping those rates in place?
Self-published authors are relishing their 60-70% royalty rates for cover prices between $2.99 and $9.99. On a $2.99 eBook, I make roughly $2.09, which is a far better royalty than I made with a traditionally published $5.99 mass market paperback at 8% of cover price which was roughly .48 cents. In essence I’m making over four times as much per eBook. Love it.
One of the tenets of Special Forces is to worst-case situations. Worst case here is the Mayan calendar proves true before the end of 2012 and we’re all getting our hearts ripped out on top of pyramids and our brains are being eaten out of our discarded bodies by the zombies massed around the base of the pyramids while hovering vampires are sucking what little blood are left out of our still beating hearts.
Okay, so let’s move past that one for the time being.
What happens if the major eBook platforms such as Amazon and PubIt (Barnes and Noble), having a captive audience with their Kindles and Nooks, decide to alter that royalty structure? Agency pricing is already in place with the Big 6 and most other publishers. Amazon is battling IPG over their contract. In essence Amazon would be adjusting the rates for a broad cluster of players who really have little clout—the indie authors in KDP. What’s to stop them?
I’m not suggesting this will happen, but I am considering it and factoring it into Who Dares Wins Publishing plans for the future. Why? Because I’m a realist, I’m an ex-Green Beret and it’s good business sense. And yeah, I’m a bit paranoid. It’s served me well. Still standing while others around me have gone down.
Traditional publishing ignored the rise of the eBooks and Skynet becoming self-aware even while the data was flowing on the walls and the music business crumbled.
I believe indie authors need to be aware of the possible changes to their world. What will I do if my royalty rates get cut in half? Well, I’m keeping the string on my crossbow waxed and ready for the zombie onslaught. Got food supplies piled up. But what if my income is cut in half? How do I not only have my business survive but flourish?
More product in more markets is the first and immediate answer. I’m investing a lot of money in Audible ACX audiobooks. In just two months, several of my first audio titles there have already shown a profit such as Area 51, Atlantis and Write It Forward: From Writer to Successful Author. I believe audio will be an ever-expanding market and interestingly, I’m finding nonfiction is a very solid seller there.
Translations. We’ve got Area 51 and Atlantis in Spanish. Bodyguard of Lies in German. Several other translations in progress, including Area 51 in Airlia, the language of the aliens. Their mothership is really cool by the way. Been there a few times. They told me they will likely sit back and side with the winner of the Human-Zombie-Skynet war. Or wipe us out. They aren’t sure yet, but if they see another episode of Orange County Housewives, we might be doomed.
New content. I, Judas: The 5th Gospel will be out within two months. I’m working hard on Area 51: Nightstalkers which merges the science thriller aspect of my Area 51 and Atlantis series and the Special Operations aspects of my Black Ops and Green Beret Books.
And yes, even preparing for the worst, I’m working on The Green Beret Survival Guide for the Apocalypse, Zombie Attacks and Other Lesser Disasters.
Another answer? I was talking to a very smart friend in New Orleans this past weekend in his club on Bourbon Street. He told me that when he was a lawyer he realized there were only so many billable hours in a day. That to move past that barrier he needed to get a slice of other lawyer’s billable hours. To do that in an equitable way, he had to provide a needed service to those other lawyers.
At Who Dares Wins Publishing, while we have done very well initially on my backlist, we’ve got authors who are really starting to sell and Jen and I love that. Colin Falconer is featured in Nook First in March with Venom and has been knocking himself out promoting on-line. Kristen Lamb has built her WANA community. Jen Talty’s romance titles based on her solid reviews. We’re talking to some agents about their clients’ backlists which they have rights to. Rather than try to build their own in-house publishing arm (a lot harder than most people think it is) we’re offering our services, already established; tried and true experience in e-publishing. We’re negotiating very favorable author royalty rates with agents for select clients with solid backlist to support their traditionally published frontlist. It’s a win-win for the “hybrid” author, a term I believe I invented about a year ago on my blog. It’s a win-win for the agent and even the traditional publisher as we adjust what we do to support the author’s future titles via their backlist.
Also, remember a truism of eBooks: If someone hasn’t read your backlist, it aint backlist.
So what are you doing to prepare for 2012?