"A publisher recently contacted me to explore the possibility of me writing a book for them. The terms, which I believe are fairly standard, are you make about $1 for every book sold, or about 5% of the total revenue. A technical author can expect to make about $10'000 if their book sells well. The publishing house makes about $200'000 on this, with the rest going to distribution and book stores."
I'm not directly in the publishing industry, but I've been a technical reviewer on several books and have a fair number of friends who are authors/editors - mostly in the non-fiction market.
From what I've experienced those publisher profit numbers don't make sense.
Let's assume 5% author royalties (which, in my experience, is the low end 5-15% is the normal range, upper end for track record very successful folk — more for some publishers in some contexts), so that $10k = $200,000 total sales for the book.
Typically the publisher will take around 45-55% of that $200k (including what they pass onto the author). The rest will go to distributers & retailers. Let's take the upper end of that.
So 55% of $200l = $110000 to the publisher.
- the author royalties = $100k
- 10% printing costs = $90k
- 15%ish for pre-production = $75k
So absolute best case it's more like $10k vs $75k. Then there's marketing, the fact that most authors don't earn out their advance, the shenanigans over book discount, etc. So the profit to publishers coming out of that is often significantly lower.
(The slice taken by marketing in the first example above seems high from what others have told me. Its also a somewhat simplistic breakdown since it ignores some of the long-term costs from publishers that aren't related to "books" directly. e.g. the advances to authors who never get published, etc. - so the potential publisher profits aren't quite as large as they appear here - there's other overhead outside the printing/distributing/selling books bit)
"Now compare to people like Brennan Dunn who have made $100'000 or more from their books, by publishing online and capturing 90%+ of revenue. You don't need a publisher for distribution. You don't need a publisher for typesetting. If you need an editor or proof reader you can hire one for maybe $10K."
That's the best-case success case. Which is nice. But not common. Almost everybody I know who has gone the self-publishing route has ended up with the high-hundreds and single-digit-thousands.
They'd have got more from a publisher advance. They'd have also learned a lot more about how to write a good book from the publishers — since they're in the business of helping their authors be profitable.
Is a traditional publisher the right route for everybody. No. But neither are they the rapacious idiots who are exploiting authors that some folk portray them as. Almost everybody I know who went the traditional publisher route felt they got value out of it. Many of them are more than technically literate enough to go the self publishing route if they had wanted to (and some of them have for other kinds of product/market).
> Almost everybody I know who has gone the self-publishing route has ended up with the high-hundreds and single-digit-thousands.
For what it's worth, I self-published my programming book[1] about a month ago and I'm beyond that threshold already. This is (depending on how you look at it) despite the the fact that the book is also freely available on the web, or in large part because of it. (I believe the latter.)
Either way, I'm very happy I self-published now. Not only did I get the satisfaction of feeling in control of every aspect of production, but it turns out that getting a larger slice of the royalty pie is a really nice bonus. I figured that pie would be pretty small so it didn't matter much, but I've been pleasantly surprised at the number of sales.
I don't have anything against traditional publishers and can see myself using one in the future. But one thing that feels strange to me is that most of what they provide: editing, layout, type-setting, proof-reading, is a fixed quantity of work, but they are compensated for that with a fairly high percentage of ongoing royalties.
If you think of a publisher as providing those services to the author, then it means over the long lifetime of the book, they can end up costing you quite a lot.
Self-publishing basically means you accept a bit of risk by paying for those up-front (either by hiring freelancers or doing it yourself). But, in return for that, you get a larger share of the long tail of the revenue. That's a worthwhile trade-off for me.
The first link is (a) talking about John Grisham, not technical books or even most fiction ("$2.00 - Marketing - Book tour, NYT Book Review ad, printing and shipping galleys to journalists"), and (b) double counting the wholesaler/distributor ("$2.80 - Wholesaler - The take of the middlemen who handle distrobution for publishers" as well as "Most books are sold to retailers at X% discount of the cover price by the wholesalers. ... [S]o we can assume a midlist novel might be 20-30%").
The five thoughts at the end of the second are...interesting:
"There are a lot more stages and costs than anyone would imagine.
"This convoluted process can be optimized in innumerable ways – Mr. Bezos would be hard pressed to find a more ‘improvable/kaizenable’ business model.
"Everyone who works for publishing companies claims that there is little money to be made and everyone does it for the love of it. Not sure if this is a function of profits not being shared with employees or there simply are no profits.
"There is huge consolidation of power...
"The number of people employed is staggering. A bail-out for Publishing doesn’t seem as crazy an idea.
"[There are immediately obvious optimization opportunities.]"
Thanks for adding the detailed breakdown. I was concentrating on my side of the deal so I probably misremembered their side.
> Almost everybody I know who has gone the self-publishing route has ended up with the high-hundreds and single-digit-thousands.
A technical book should be selling for about $50, more if you bundle correctly like the Rails Tutorial (https://www.railstutorial.org/). 1'000 copies sold is income of about $40K (accounting for processing fees) if you self publish and don't bundle. About $100K if you bundle and have an average sale price of ~$100. I was told a typical advance is ~$5K. To earn that you'd need sales of just over 100 copies, which seems very achievable.
Just to add another data point here, I just crossed $40k gross revenue on my self-published book in a year and change. I sell entirely from my own site, bypassing Amazon entirely.
I'm not directly in the publishing industry, but I've been a technical reviewer on several books and have a fair number of friends who are authors/editors - mostly in the non-fiction market.
From what I've experienced those publisher profit numbers don't make sense.
Let's assume 5% author royalties (which, in my experience, is the low end 5-15% is the normal range, upper end for track record very successful folk — more for some publishers in some contexts), so that $10k = $200,000 total sales for the book.
Typically the publisher will take around 45-55% of that $200k (including what they pass onto the author). The rest will go to distributers & retailers. Let's take the upper end of that.
So 55% of $200l = $110000 to the publisher.
- the author royalties = $100k - 10% printing costs = $90k - 15%ish for pre-production = $75k
So absolute best case it's more like $10k vs $75k. Then there's marketing, the fact that most authors don't earn out their advance, the shenanigans over book discount, etc. So the profit to publishers coming out of that is often significantly lower.
See http://journal.bookfinder.com/2009/03/breakdown-of-book-cost... and http://ireaderreview.com/2009/05/03/book-cost-analysis-cost-... for some examples of real world publisher cost breakdowns.
(The slice taken by marketing in the first example above seems high from what others have told me. Its also a somewhat simplistic breakdown since it ignores some of the long-term costs from publishers that aren't related to "books" directly. e.g. the advances to authors who never get published, etc. - so the potential publisher profits aren't quite as large as they appear here - there's other overhead outside the printing/distributing/selling books bit)
It's also something Charlie Stross has posted about a fair bit see this collection of posts http://www.antipope.org/charlie/blog-static/2010/04/common-m...
"Now compare to people like Brennan Dunn who have made $100'000 or more from their books, by publishing online and capturing 90%+ of revenue. You don't need a publisher for distribution. You don't need a publisher for typesetting. If you need an editor or proof reader you can hire one for maybe $10K."
That's the best-case success case. Which is nice. But not common. Almost everybody I know who has gone the self-publishing route has ended up with the high-hundreds and single-digit-thousands.
They'd have got more from a publisher advance. They'd have also learned a lot more about how to write a good book from the publishers — since they're in the business of helping their authors be profitable.
Is a traditional publisher the right route for everybody. No. But neither are they the rapacious idiots who are exploiting authors that some folk portray them as. Almost everybody I know who went the traditional publisher route felt they got value out of it. Many of them are more than technically literate enough to go the self publishing route if they had wanted to (and some of them have for other kinds of product/market).