How Authors Really Make Money: The Rebirth of Seth Godin and Death of Traditional Publishing

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What do the economics of publishing look like… really? (Photo: thinkpanama)

(Special thanks to my agent, Steve Hanselman, and my anonymous sources within the world’s biggest publishing houses)

Print is dead!

This has become a popular headline, and a great way to get quoted, as Nicholas Negroponte has shown. Iconic author Seth Godin, after 12 bestsellers, just announced that he will no longer pursue traditional publishing, and the writing seems to be on the wall: the e-book is the future, plain and simple.

But what are the real concrete numbers? How are established authors actually making money, and what should new authors do? Go straight to e-book?

In this post, I’ll look at real-world numbers to discuss some hard truths of publishing, explain economics and pay-offs, and provide a few suggestions for aspiring authors.

To start, some contrasting numbers…

The 4-Hour Workweek is one of the top-10 most highlighted Kindle books of all time.

– The 4-Hour Workweek was the #1 business book when Kindle first shipped after November 2007, and is currently around #116 in the Kindle store.

– In my last royalty statement, December 2009, digital book sales (all formats, including Kindle) totaled…. ready?… a mere 1.6% of total units sold.

My own book has been on the bestseller lists for more than three years, and I’ve tracked most multi-month bestsellers for all of those 36+ months using Nielsen Bookscan (among other tools) which covers about 75% of all retail book sales since 2001, including Amazon but excluding discount clubs such as Sam’s Club. Titlez has also been useful for looking at detailed trending on Amazon.

This all gives me a good pool of data, and I feel like I have a good grasp of what authors are selling and… realistically earning directly from books. If you’d like to get a basic idea, just subscribe to Publishers Lunch to see what authors are getting paid as advances. Enjoy.

We’ll come back to the Kindle numbers, but first, here’s a sketch of book economics, incentives and options:

– For a hardcover book, authors typically receive a 10-15% royalty on cover price. This means that for a $20 cover price, the author will receive $2-3. If you have a $50,000 advance, a $20 cover price, and a 10% royalty, you therefore need to sell 25,000 copies (“earn out” the advance) before you receive your first dollar beyond the advance. This is the basic rule, but several quietly aggressive outfits — both Barnes and Noble’s in-house imprint (Sterling, acquired in 2003) and Amazon’s in-house print arms, AmazonEncore and AmazonCrossing — could prove to offer more attractive terms. Then there are the fascinating rogues like Andrew “The Jackal” Wylie.

– For a trade paperback book, authors typically receive around half the royalty of a hard cover. If you are making 15% on your hardcover, you might get 7.5% when it goes to paperback. Guess what? This means you now need to sell twice as many books to break even. I think going to paperback is a bad idea for almost all authors, unless you want to double your work for the same income. Do you really need the people who won’t buy a $20 book hardcover that’s already discounted to $12-14 dollars through Amazon or Barnes and Noble? I don’t think so, yet most authors follow the hardcover-to-paperback progression without question.

– Electronic books, including Kindle, do not count towards the most famous bestseller lists
, such as The New York Times bestseller list. I suspect this will change within the next two years, but for now: print is what will make you famous in the mainstream.

– If you choose to self-publish but stick with print format and retail distribution, you might double your royalty earnings. This is based on conversations with friends who own their own boutique publishing houses, all of which have distribution in large chains like Barnes and Noble. It’s fun to imagine that you could print a book with a $20 cover price and pocket $15, but that isn’t how the math works out. Once you factor in retailer discounts and distributor percentages, you might end up netting 30% of cover price vs. 15%, if you’re lucky and have a print run of 20,000+ units (Can you afford the upfront cost, especially if retailers are paying net-30, net-60, or beyond?). Keep in mind you also need to manage things as a publisher, which could make your dollars-per-hour earnings less than with a traditional publisher. There are a few promising companies, like Author Solutions, trying to solve this problem for authors.

– If you choose to go digital only as an e-book, this is where profit rules and amazing numbers can be achieved. How amazing? I know one man who nets between $5,000,000 and $10,000,000 per year with a single e-book and affiliate cross-selling to his customer lists. I’m not kidding. The downside is that you need to be a world-class marketer and understand affiliate and CPA advertising better than anyone else in your niche (since there is little barrier to entry, and therefore plenty of competition). Prepare to be an uber-competent CEO or fail if you choose this option.

The Kindle Phenomenon — How Press Releases Are Misread

Amazon is incredible and I expect nothing but more innovation from them. Putting aside their coming bloodbath with Apple, though…

What of this announcement that Kindle sales have now passed hardcover sales on Amazon? I believe this to be true, but there are a few things I suggest we keep in mind:

1) Kindle books selling well does not mean that print books are selling poorly. In fact, it appears quite the opposite. From the Wall Street Journal coverage of the announcement:

Still, the hardback comparison figure doesn’t necessarily mean the end is near for paper books. Amazon said its hardback book unit sales also continued to increase.

It will be fun to see more precise Kindle sales when they are shown as a separate line item in Nielsen Bookscan, which should happen in the next year.

2) The top-five Kindle selling authors of all-time, over 500,000 copies each, are all fiction writers (including Stieg Larsson, Stephanie Meyer, and others). In the top-50 Kindle bestsellers right now, I counted just three (3!) non-fiction books. If you’re a non-fiction author, I’d think carefully before jumping the gun to all digital. Remember that comment about print being dead? What if we ask a high-level exec at one of the “Big Six” (explained later) about how print sales are declining?

Hardcover trend is mixed and dependent on hot books. If you are wondering about ebooks, commercial fiction is where you’re seeing the erosion. Paperbacks are ok. Mass markets are taking a hit.

What are “mass market” books? The NY Times describes them thus:

Mass-market books are designed to fit into the racks set near the checkout counter at supermarkets, drugstores, hospital gift shops and airport newsstands. They are priced affordably so they can be bought on impulse. There are other production differences in binding and paper quality (historically, paperbacks were printed on “pulp” and could fit in the consumer’s pocket). The format is often used for genre fiction, science fiction, romance, thrillers and mysteries.

Is it a coincidence that print impulse purchases are also the biggest sellers on Kindle? I don’t think so.

3) I believe (conjecture, yes) that the figure we are missing is Books-Per-Person. If you have a Kindle, as I do, how many books did you buy in the first week or two? How many unread books do you have on your Kindle? Unlike with print books, you don’t have to look at a stack of unread material like undone homework. Ergo, you purchase more digital books than you would ever purchase in print. If Amazon is selling 180 Kindle books for every 100 print books, I wouldn’t be surprised if 10-20 people are responsible for the former, whereas 80-100 people are responsible for the latter. This reflects that Kindle owners are buying more books per capita, not that paper purchasers are buying fewer.

Now, don’t get me wrong. There has to be some cannibalization of sales, and much of print will die eventually, but it will take a long time. Print is far from dead… and far from unprofitable. Despite the industry-encouraged myth that print has no margins, a hardcover book sold for $20, assuming no graphics or color, can often be produced for less than $2 a copy. With the proper economies of scale (unavailable to most individuals), the publishing biz can be quite a little cash cow.

Let’s cover some basics of traditional publishing next.

What “Traditional” Publishing Looks Like

Traditional publishing looks something like the following for non-fiction authors. For fiction authors, you need to write the entire manuscript first. Here are the five steps:

Step 1. Get an agent (best done through a referral from one of their authors).

Step 2. Put together a book proposal, which is like a business plan. It will contain marketing plans, your existing “platform” (who you can sell to or reach without publisher help), an executive summary of the book concept, and 1-3 sample chapters, among other things.

Step 3. Pitch to specific editors at different publishers through the agent and schedule meetings.

Step 4. Sell the book. The editor will probably have signing authority up to a certain advance amount, but higher ups will need to sign off on larger advances. If you don’t have a great platform for selling books without publisher help, don’t expect anything more than $50,000, and that’s being optimistic. The $50,000 will not be paid all at once, but in several installments, something like this: 1/4 upon signing the deal, 1/4 upon publisher acceptance of manuscript, 1/4 upon publication, and 1/4 upon paperback publication (assuming you start with hardcover).

Step 5. Write the book. Keep in mind, you’re not getting paid the advance all upfront, and writing a good book will probably take at least a year if you’re hoping to have good word-of-mouth and some longevity. I’ve been working on my new book for more than three years. I’ve spent this time because I want it to sell like mad for no fewer than five years after publication, preferably more than a decade if I update it on an annual or semi-annual basis.

For more detail and recommended books, which I used as guides, read “How to Sell a Book to the World’s Largest Publisher,” which explains exactly what I did.

Below are the “Big Six” publishers — most of the bestsellers you see come out of one of their divisions (called “imprints”). In no particular order:

Lagardere (owns Hachette)
Harper Collins
Macmillan (owns St. Martin’s)
Penguin Group
Random House (the largest, and where my book lives within the “Crown Publishing” imprint)
Simon and Schuster

All of these publishers have iBook agreements with Apple except for one… Random House. Why? Is Random House just unable to see the obvious future? Nah, I don’t think that’s true. There are plenty of smart people working at Random House, and that includes their legal department.

The paragraph that follows is all hypothetical:

What might happen if the iBooks agreements of the other Big Five all have suspiciously similar terms? If there were a federal investigation, might that lead to charges of collusion among the publishers and have terrible financial consequences for an already fragile industry? It certainly would. By distancing themselves and coming in late to the game, Random House — again, hypothetically — would be playing a very smart hand, indeed.

For those of you who are devoted to your iPads (I do like mine), you can always use the Kindle app to read Random House books on them pretty screens.

So What Should Authors Do?

First off, writing books is a terrible revenue model for authors.

Precious few books sell more than 25,000 copies, so it’s unlikely you’ll make even $75,000 a year from book royalties. In rare cases, you might have a perennial bestseller, but this is less than 1% of all books sold and not a good bet to make.

There are still a few reasons you might consider writing a book and going through traditional channels:

– Speaking: Particularly in the business category, if you target your Fortune 500 audience well enough, you can stair-step your way into $20,000 per 60-minute keynote without needing a miracle. Hundreds, if not thousands, of authors earn this kind of money. The higher echelon can make $80,000 or more per speaking engagement. Needless to say, this adds up fast.

– Reputation and audience: Money is a means to something else. Not unlike wampum, income is traded for either a possession or an experience. If you use your book to build a reputation as a thought leader, and if you can establish a direct line of communication to intelligent readers (through a blog, for instance), it is possible to bypass income and get almost any experience for free or next-to-free. The middleman of currency is removed, and you also have access to things money can’t buy, whether it’s interesting people or unusual resources.

Though I have done high-level speaking and enjoy it with the right audience, I typically do fewer than a dozen engagements a year. I prefer to focus on connecting with my readers and having fun with cashless adventures.

How do you build a base of fans or supporters and build a high-traffic blog? Here are two detailed closely related case studies:

How Does a Bestseller Happen? A Case Study in Hitting #1 on the New York Times
How to Create a Global Phenomenon for Less Than $10,000

So what of self-publishing versus the more traditional route?

Reputation, at least in the mainstream and for the next few years, is difficult to build if you self-publish. In the below five-minute discussion, NY Times bestselling author Ramit Sethi and I discuss the pros and cons of self-publishing vs. getting a “real” publisher:

In Closing

For established and successful authors, like Seth Godin or Jim Collins, self-publishing in print or digital is a supremely viable option. Jim Collins self-published his last print book, How the Mighty Fall, and was featured on the cover of BusinessWeek magazine to help push it up the bestseller ranks. Seth could do the same.

Why is this possible?

Because they have incredible reputations that were built, in part, on top of the traditional publishing machine. The Big Six and their close cousins are in real trouble. Some of them might adapt (which will include massive lay-offs), but most will not. In the next few short years, there will also be many interesting publishing alternatives for aspiring authors.

But, all that said, there is still real value in having the rare stamp of approval that a “traditional” publisher provides. I don’t think this will change much in the next 12 months, perhaps even 24 months.

Now, a handful of first-time, self-published authors hit the New York Times list, that’s an entirely different story…

###

Recommended reading – Below are the three books I’ve suggested to a dozen or so aspiring-author friends. Almost half of them later hit the New York Times bestseller list. Reading these doesn’t guarantee that outcome, of course, but it will help:

The 22 Immutable Laws of Marketing (to help you craft the right message and themes)
Bird by Bird (to help you write the damn thing and not shoot yourself)
Author 101: Bestselling Book Publicity (to help you reach and excite big media)

Afterword: Book Format and Multimedia Books, etc.

In the comments below, I was asked the following question:

“Tim, I have a question… Before I decided to self-publish, I got a couple decent offers from traditional publishers, but they all involved 10+ months of lag time between when everything is ready to actually print and when they would actually print. I’m not nearly patient enough for that much delay. Is the world of “real published authors” really limited to people who are comfortable waiting around a year for their book to manifest?”

My answer addresses a few other common questions I get:

Hi Jeff,

With the big boys, yep. That’s the lag time in production. I actually kind of like it. Allow me to explain:

It forces you to think about your material and attempt to make it perennial. Which advice will be obsolete in 12 months? Delete. Which advice would be obsolete in 24 months? That means it will only be good about 12 months after pub date. Delete.

I find that it helps refine your thinking, just as having the content in a fixed form (print) forces you to consider your writing and editing more seriously than if you could change it willy-nilly like a blog post. There are certainly benefits to the multimedia books on the horizon, but I wouldn’t call them “books”, and I think the bells and whistles of video, hyperlinks, etc. will be used to mask sloppy thinking as often, if not more often, than they will be used to create a more compelling argument or presentation. The wordsmithing and precision of the language will suffer with the crutches of embeddable video, etc. Will they make perfect sense for some books? Absolutely. Will they distract and detract from the flow of the prose, story, or argument in most cases? Absolutely.

To me, “timely” books are a bad bet for writers. If the content delivers value based on timing near recent events, other media have it beat. I think long-form books should have a longer shelf life, and therefore require harder thinking throughout the process to ensure the content has value 1 year, 5 years, even 10 years down the line.

Hope that helps!

Tim

Posted on: August 23, 2010.

Please check out Tribe of Mentors, my newest book, which shares short, tactical life advice from 100+ world-class performers. Many of the world's most famous entrepreneurs, athletes, investors, poker players, and artists are part of the book. The tips and strategies in Tribe of Mentors have already changed my life, and I hope the same for you. Click here for a sample chapter and full details. Roughly 90% of the guests have never appeared on my podcast.

Who was interviewed? Here's a very partial list: tech icons (founders of Facebook, Twitter, LinkedIn, Craigslist, Pinterest, Spotify, Salesforce, Dropbox, and more), Jimmy Fallon, Arianna Huffington, Brandon Stanton (Humans of New York), Lord Rabbi Jonathan Sacks, Ayaan Hirsi Ali, Ben Stiller, Maurice Ashley (first African-American Grandmaster of chess), Brené Brown (researcher and bestselling author), Rick Rubin (legendary music producer), Temple Grandin (animal behavior expert and autism activist), Franklin Leonard (The Black List), Dara Torres (12-time Olympic medalist in swimming), David Lynch (director), Kelly Slater (surfing legend), Bozoma Saint John (Beats/Apple/Uber), Lewis Cantley (famed cancer researcher), Maria Sharapova, Chris Anderson (curator of TED), Terry Crews, Greg Norman (golf icon), Vitalik Buterin (creator of Ethereum), and nearly 100 more. Check it all out by clicking here.

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276 comments on “How Authors Really Make Money: The Rebirth of Seth Godin and Death of Traditional Publishing

  1. I definitely buy a lot more Kindle books that I was buying dead tree books.
    Thing is Kindle books are half the price of dead tree books so I’m still coming out ahead – enough to more than pay for my Kindle.

    Question. Suppose you have a successful self published ebook selling a few thousand copies. Does this provide a significant help to getting a mainstream publisher? I’m considering going this route. Ideally keeping the digital rights for myself (where the profit is) and having a published dead tree book as a promotional tool.

    Like

  2. Tim,

    Do you have any thoughts on manga or graphic novels?

    Is the model still the same for these types of books?

    I’ve read that the popularity of manga continues to rise at a rate faster than the rest of the publishing industry. Also, I know there are independent publishers of comics.

    I thought it might be a way for a friend of mine who writes thrillers to find an audience beyond the traditional publishing model.

    ??????????

    Like

  3. Great read as always Tim. I love how you break out from conventional blog wisdom and have long detailed posts vs. shorter ones. I am sure time spent on your site reflects the effort you put into creating a quality product.

    Regarding your theory about Kindle counting soon I tend to agree as it is clearly a big market they will need to account for much like TV Ratings needing to count TIVO’d/DVR’d and On Demand views.

    Like

  4. I’ll add one more post to this discussion (as I posted one yesterday)…

    Two questions:

    Question: Does anyone think the general populous holds printed books in higher esteem than an ebook?

    Question: Am I the only one that finds it odd that people will spend up to $800 on a reader to read a $4 book?

    Like

  5. Tim (or Tim’s VA),

    Thanks so much for responding to my post. In my attempt to quickly scan this I misinterpreted the dollar values for 5k or 10k not mill, haha! I have a sense of relief as my info marketing plans are full steam ahead.

    My dreamline was not that complex to require 5 mill or 10 mill a month, haha.

    Can’t wait for the new book! When can we expect it?

    James

    Like

  6. Awsome Tim.

    Puts everything in perspective, and really (as with everything you do) pushes the boundries of what everyone traditionally things.

    Like

  7. Awesome post. Although it appears that more and more people will move away from traditional publishing, does this really mean that printed books will soon be extinct?

    Like

  8. Oddly, you’ve completely missed the self publishing plan that yields the highest profit per copy. If you’re interested, I’d be happy to send you review copies of my books “Aiming at Amazon” and “POD for Profit,” which describe this plan in detail.

    Also, I should point out that the kind of experience with traditional publishing — as well as the royalty level — that you describe is rare. And that’s assuming you can get published traditionally at all.

    Like

    • Hi Aaron,

      Thanks for the comment. Actually, the royalty levels (percentages) I mentioned are quite standard. On the other points, I cannot speak, as you have more experience with self-publishing than I do.

      Best,

      Tim

      Like

  9. Here’s some fiction for you…
    In order to save the trees the government requires all books to be digital. In the digital form they can regulate content. Censorship. Farenheit 451 becomes a reality.
    Sometimes I look negatively on things, but it is so hard to after reading another of these great posts. Anytime I need to feel like the sky is the limit I come here.

    Like

  10. Hi Tim,

    thanks for recommending “the 22 Immutable Laws of Marketing”. They seem to be really usfull – not just for publishing books ;-).

    Jan

    Like

  11. Hi Tim,

    I would love to hear more on this (similar to what John Bardos was talking about)

    I know you have a lot of info on your site and I have gone through a lot of it, but what about a similar article about becoming a market leader in an area. Using all the above tools to promote yourself as, say a consultant (im looking at Health Risk Assessments in particular) seems like the way to go, when starting out.

    Like

  12. Great post, as always. Just finished Seth’s latest book, and it was awesome. Required reading for everybody trying to make it today. Everyone’s talking about the Kindle, because it was first, but we should also start talking about the Nook, because it’s coming on strong, and selling very well. Barnes and Noble has something like 800 actual stores, and they all seem to be selling the Nook quite well.
    Thanks to both of you guys for the great free content. You are really leading the way, and I’m happy to be following your lead!

    Like

  13. The huge danger in articles like this is that you are selling a fantasy to many authors who will believe that they can make money simply by publishing an ebook. Most books published will only sell a few hundred copies and nothing like 25,000 copies and most authors only make a living by having lots of books published. Of course there are few examples of huge successes but these are either established authors or public speakers who have a ready-made audience for their work. The truth is that the majority of authors will not make a profit and profit is the only valid way of comparing a traditionally published book with a self-published book. The majority of authors are not skilled business people and do not have the first idea of how to market their books. Publishing companies have a vast wealth of experience in all aspects of publishing profitable books, they benefit from economies of scale, big investment in new technologies and international deals that can improve profit margins dramatically. I have done the sums and the bottom-line profit margins on ebooks are almost exactly the same as on print books if you take into account the set-up costs, distributor discounts, download payments, VAT which is charged on ebooks at 17.5% here in the UK and all the pre-publication work (research, editing, design and typesetting, proofreading, artwork, etc.) that still has to be done to produce a quality product.

    Your discussions about royalties completely misses the point of the mutual risk nature of the publishing contract. Authors are not employees of publishing companies. They enter into a mutual risk arrangement where the author risks her time/reputation and the publisher risks the upfront investment. If the book is a success both the publisher and the author win and the publisher recoups the upfront cost and makes a profit (which they must do as a commercial company). If the book fails the author doesn’t make money but they don’t lose any money either, whereas the publisher loses out financially – but may still continue to invest in the author if they think that there is potential there.

    Your article only really applies to certain market segments – some fiction and a few areas of trade non-fiction. There are many publishing markets (educational, academic, STM, highly ilustrated books, co-editions, etc.) where none of what you say applies. I have always worked in educational publishing where the publisher commissions authors to write their books and then works closely with them to develop the book so that it meets market needs. This also happen with fiction (though a lot of people claim it doesn’t anymore, which is not true) and many published authors greatly value the input of an experienced and market-savvy editor.

    Self-published ebooks are ephemeral. Publishers will continue to invest in traditionally published successful books because they have a vested interest in doing so. Self-published ebooks will die on the death of the author as there will be no-one to continue to invest the time and money to keep them in the public eye.

    Finally, print publishing will never die because most of the book readers I know, who spend a great deal of money on books, don’t want to read on screen. Also, I have calculated that I will only read another 3-400 books (leisure reading that is ) in my lifetime. What is the point in having a device that holds 1000s of books that I will never read and why would I be dumb enough to pay for these books? I think ebooks should be free and that publishers should and will invest more in well-edited high quality and high price print books for the discerning reader who likes to take time over their reading, who probably re-reads some books several times, who takes pleasure in good design and quality editing and who appreciates the added value that the best publishers can offer. In my own business I have discovered that publishing ebooks has actually increased the number of print books that I sell and that they are little more than a marketing tool. The ebooks themselves have made very little money but the print books continue to be profitable.

    Like

    • Hi Judith,

      Thank you for the comment. However, I find — in this context — the claim that I “missed the point” to be a bit strong. I actually disagree with almost all of your points, but we’re all entitled to our opinions, and I’ve been wrong before.

      Thank you for contributing to the conversation and dialogue.

      Best,

      Tim

      Like

  14. Great points about the publishing industry (I’m an author of three small business accounting books myself), but what about the oddball contrarians out there like me who prefer reading a paperback to a hardcover? And it has nothing to do with the price of a paperback vs. the price of a hardcover…I would actually pay more for a paperback than I would pay for a hardcover b/c I find them easier to carry, easier to store, and easier to read (but, I’m the same guy who would pay more for fabric seats than leather seats in a car and more for lunch sushi than for dinner sushi b/c I enjoy a bigger rice-to-fish ratio).

    I’m not sure how many others out there feel the same way, but I assume quite a few. I think there are more reasons than just the price as to why more people buy paperbacks.

    Like

  15. Great post. As a young writer who is (very slowly) working on material for a book, it’s nice to see the intimidating process broken down a little further and see some emerging options!

    Like

  16. Don’t have much to add but just wanted to drop in and say great article as usual !! … didn’t know much about the publishing world but this article was a great intro/primer. Thx!

    Like

  17. Tim,

    Your ability to break-down a situation continues to amaze me.

    I’m just glad you use it for “good” instead of “evil”. The last thing we need is someone like you building a giant #$@# laser beam, holding the world hostage, and asking for a “billion” dollars in ransom.

    Cheers,

    Mitch Fanning

    Like

  18. E-publishing will find its niche and its audience, but I doubt that it will totally supplant hard material publishing, much like paperback has not yet conquered hardcover.

    Hardcover will always have its place. I can pull down my copy of Ferdinand Porsche: Genesis of Genius and read it in any light, study its photos, randomly access any of its pages with a flick of a well-placed finger. I will pass this on to a fellow enthusiast when my time comes.

    My children will pause a moment and glance at my Kindle as they clean out the house after my death, then add it to the pile of Dad’s useless junk.

    Consumable literature will find its place and Kindles their market. There will always remain a market for high quality hard copy.

    Like

  19. This post is jam-packed with inspiration for the budding (never before but planning) published author. My husband was just saying the other day, what should he do first, electronic or hard copy. I think we will run the hard copy and give it a go.

    You shared a lot of insight. Thanks for a great article as always.

    Like

  20. Hi AHA,

    I hope to have much, much more to say about this, but I can’t disclose his name without his permission. Eben does incredible things and knows how to do this, but I’m not referring to him here.

    Tim

    ————————————–

    I like the guessing game. I think it’s Joe Polish.

    Like

  21. My book should be out this Fall. I do agree Self publishing is the way to go if you want higher royalties.

    But the real money is in Speaking engagments. Most authors make more doing that than actually seeling the book

    Like

  22. Many similarities to when Radiohead made the step to self-release (at least initially) In Rainbows, digitally in the pay-what-you-want set up. Radiohead is one of the world’s biggest bands, built up by the major label machine over a decade. They are the Seth Godin of music, if you will. The model worked for them, but how many little indie rock bands in Brooklyn will this work for? I have a rule in life that I’d like to mention here: There are no short cuts. Authors, and bands alike, will have to keep putting in tons and tons of time and work before they can expect to become an “overnight success”.

    Like

  23. Great thoughtful post. The breakdown of the economics will be helpful to many. This is also relevant to the film business. Similar inefficiences in the value chain, lots of players taking from the revenue pie. Creators getting laughable particpations. A few companies addressing DIY for film: Neoflix, Indieflix, CreateSpace (Amazon) and MagNET. Of course enablement of commerce is one thing, getting consumers to find you in the long tail is another. This latter problem also getting bombarded with attempted solutions, will be interesting to see how it pans out. The world is changing and possibly many old school value chain players will follow the trajectory described in Jim Collins “How The Mighty Fall.”

    Like

  24. Great post and fantastic insider insight into the rapidly changing publishing world.

    As it turns out, I am particularly interested in this subject since after reading your book three years ago, I quit my job and started my own Muse in this same arena. It’s called backmybook.com and it is a platform designed to help aspiring authors (self-published and otherwise) effectively promote and market their work.

    I agree with you that in the near term (12-24 months), reporting around self-publishing and ebooks in particular are fairly exaggerated. What’s very interesting to me, however, is the broader long-term trend that is clearly evolving. It is very clear that in 5-10 years, we will not be consuming books the way we did 10 years ago, and that the publishing industry will be radically different than it is today.

    Authors will need to adapt their strategies as well, and I’m excited to be helping as best I can through my Muse.

    Like

  25. Tim,

    Thanks for writing such an informative article. It answered many questions for me, and gave me many others to ponder.

    One channel you did not discuss, which I would like to know your thoughts on, is that of “on-demand” printing and publishing through providers like Lulu.com (I know there are several others as well). As I understand the process:

    1. The author writes the book and uploads it in a printable file (PDF, etc.) along with cover art.
    2. The per-unit manufacturing cost of the book is determined by the number of pages in the book, the type, size, and quality of the paper and binding, and the volume of the books sold during a period of time (usually a month).
    3. You establish the selling price for your book, and then (through your own marketing efforts) direct customers to buy it through your “store” on the on-demand publisher’s (POD) web site.
    4. The POD handles payment processing, printing, and shipping, and you earn the net of your selling prices less the manufacturing cost and any other associated fees or commissions that may apply.

    What are your thoughts/opinions on this channel?

    Like

  26. Great timing for this blog post, Tim, as I’m in the midst of writing 2 books for niche markets (I was motivated by my reading of the 4 Hour Workweek, of course!) 😉 Intriguing analysis of print vs electronic publishing and I see your point about boutique publishing; however, you did not address print-on-demand publishing (via Amazon’s CreateSpace or directly via Lightning Source). Based on my readings, it appears that these are viable avenues along with self-initiated and vigorous social network marketing to niche market authors. Your thoughts?

    Like

  27. Hi Tim,

    Thanks for asking…

    Robert Ringer is probably best known for writing Winning Through Intimidation.

    Ringer’s website is: http://www.robertringer.com

    From his website: “As the only person in history to write, self-publish, and market three #1 bestsellers, Robert Ringer is in a unique position to teach you how to convert your book idea into a bestseller that brings you fame and fortune.”

    I learned a lot from Robert in the short amount of time I spent with him.

    I quite certain you and your readers could too.

    I sent him an email offering an “introduction” but haven’t yet heard back from him.

    No surprise there – Ringer long ago adopted the Tortoise as his alter ego.

    If I don’t hear back from him this week, I will post or forward his contact details here with your permission.

    Cheers,

    Tim Cohn

    Like

  28. Tim,

    I find it interesting that Seth doesn’t include you in his writings. I may have missed a reference, but I don’t believe so. Do you believe it has anything to do with the same reason he uses the pronoun “she” when referring to what he calls “linchpins”?

    Like

  29. Hey Tim, I don’t know if anyone else is having the same problem but that Mazda pop-up ad is messing stuff up. When I X out of it, I lose the ability to scroll until I switch to another tab and switch back. Not a big deal except that I have to do it after loading every single page on your blog. Maybe it’s just my Firefox, but I thought I’d let you know. I’d hate to have you lose stickiness for something like that.

    Like

    • Thanks for the feedback, Meredith. It shouldn’t show up again. Just wanted to test that for 24 hours and see the effect.

      Thanks again!

      Tim

      Like

  30. Tim

    I just bought 22 Immutable Laws of Marketing on audiobook on your recommendation… listened to the whole thing. What a PERFECT example of a timeless book! That was a great comment about dealing with the wait time in publishing – it’s good reminding to step back and think about the big picture.

    A bit off point, but something I’d noticed which I wanted to comment on for some time. There’s a Rails Conference interview you do from a few years ago… for the entire hour interview you sit with your leg crossed and completely parallel to the floor!

    Was this intentional? Just wanted to point out that I noticed and found it somewhat fascinating – since starting yoga and pilates in the past year things like this catch my eye. I’ve tried sitting like that for longer than a few minutes and it’s a bit of a challenge.

    Like

  31. To go off of Dan’s statement, I ALSO bought 22 Immutable Laws of Marketing and listened to the entire Audiobook and it certainly was a great listen. What I found interesting was that several of their examples, notably the tablet computer did indeed “flop” according to their prediction in the 90s, although you might consider the iPad and so forth a distant and completely revised cousin with genetic enhancement.

    I also searched for the “Bird by Bird” on iTunes and did not see any, but I DID find an hour long documentary that the author has done that you can rent. It seems to be along the same lines and she seems like a fascinating person.

    I certainly appreciate the additional resources that you provided. Thank you!

    Like

  32. Tim

    I am an affiliate marketer with a few simple “muses” that have worked in different media channels in the CPA world with our own email lists.

    We have an interest to use ebooks to develop new revenue models that would use the ebooks as giveaways and free downloads to qualify leads and produce what we would see as excellence value to our potential clients.

    Where are a few places to learn how the most successful are doing this and to uncover the best revenue models.

    Best,

    Jeremy Nichele

    Like

  33. Hi Tim, Im a guy from Mexico.. and i want to know if you have the book 4hourworkweek on spanish becuase i want to read it.. thank you and im your Fan!!!

    Like

  34. “I know one man who nets between $5,000,000 and $10,000,000 per month with a single e-book and affiliate cross-selling to his customer lists.”

    There are quite a few self-published novelists making more than $5,000 per month publishing on Kindle (though typically with more than one novel). Some, like Joe Konrath, established themselves first through traditional publishing, but others, like Amanda Hocking, had no platform before putting their novels on Kindle.

    Nonfiction is still a harder sell on Kindle, but that wave is coming.

    David

    Like

  35. A downside to the digital format is sharing. This is an upside to the author. I believe, at least for the short term, digital buyers will actual sell more books both digital and traditional. I get together with a business group once a month and one of the topics we discuss is great books we have read. In many cases we would bring the book to share with the group. Now most of us have an Ipad or Kindle. Instead of borrowing the book we write it down, or buy it right there on the spot.

    Like

  36. I like the concept of removing the middle-man – currency, not agents. If you can trade in labour for something that you want without trading currency, you don’t pay taxes on earned income, right?

    So does that mean that governments will fail and we’ll all be anarchists?

    Like

  37. Thanks for writing on this- I write articles, and my wife is a Poet – and we had a conversation tonight just before reading this about how best we should prepare for publishing in the future. Thanks Tim, I’m a huge fan – and am really excited to see your new book!

    Side note of contacting celebs: I met a semi-famous guy who is a regular “consultant” on a TV show – we hit it off and I asked if he knew your book – he said no, and I told him he should check it out. THEN I decided that night to buy him a copy, figure our his office address, and send it to him in the mail for next day delivery. HE WAS BLOWN AWAY, and it gave me a certain stickiness that he keeps wanting to meet up for coffee and talk about 4HWW ideas.

    Like

    • James, thanks so much for the comment and for mailing off the book! It’s a great approach. Seneca is one of my overnight books of choice.

      Tim

      Like

  38. Tim, is your 4HWW tale of writing your best college research paper in an insanely small 24 hour window and your now spending three years to write your next book contradictory? (You might be interested that I whipped open repeatedly for motivation that Parkinson’s Law section of your book when I had to write a not-short “idea palette”–I’m being vague on purpose–for a multibillion dollar project for which a 6 month deadline would have been reasonable, but my deadline was, instead, four–sleepless!–days. And after I turned it in on time I got thumbs up all around.) Because I’ve more than once faced insanely tight deadlines for insanely expensive projects, I’m very alert to who did what in what amount of time, such as, to cite an extreme comparison that comes immediately to mind: Axl Rose took 15 years to record the last underwhelming Guns N Roses album CHINESE DEMOCRACY, whereas the the Doors recorded their first and (to many) greatest album–titled THE DOORS–in six days. Anyway, do YOU think you’re “experiencing” Parkinson’s Law to any degree with your next book?

    Like

    • Hi Lupercalia,

      Good comment and good question. No, I don’t think I’m inflating to Parkinson’s Law, and I’ll tell you why: I had to do 100s of experiments on myself for the new book! No joke. Literally. So, “writing” the book took at least two years of doing crazy mad-scientist stuff to myself. No Parkinson’s Law at work here. I’m a fast worker and like fast deadlines. This one really had to take this long (or close to it).

      Cheers,

      Tim

      Like

  39. what types of books do you see eminating to which form? will children’s books gain ecommerce traction, or will the need to protect artrist copyritghts maintain hardcopy? as the youngest generations mature, generations that are entirely comfortable living digitally (too comfortabl?) will we see less hardcopy, or will the need for tactile solidity remain in reference? will any forms of fiction maintain validity in the hardcopy world, or will pulp die with the boomers, and take the classics with it? would authors such as salinger, whose work was largley successful due to traditional serial publishing to pulp conversion to large scale success, will those authors survive and emerge in an era when controversy will be minimalized? will “FOX News” style publishing–stuff where fact check isn’t so important, but buzz is–become the prevelant form in non-fiction?

    so may questions….

    Like

  40. Hey what’s up, i just wanted to ask you if you’d ever publish a fictional book? thanks for including fictional data in the topic also btw

    Like

  41. Saw a panel on CSPANII on electronic books recently and the authors on the panel were quite adamant about the small royalties offered on e-books and the fact that the publishers won’t release the percentages that they were offering (that’s how I heard it but I may be wrong).

    Like

  42. Tim,

    First of all, thank you for your work. You have been a huge inspiration in my life.

    I recall reading something about a book you started but never finished about writing while working full time. Any chance you would be willing to share that content with us on your blog?

    Thank you!

    Anne

    Like

  43. Any ideas for increasing sales? I’ve found that my ebook is getting tossed around a lot on torrents. Should I be concerned about this? Do you think I’m targeting the wrong demographic and maybe should switch altogether? I also need some web-help. I can write and research, but my web expertise is almost zip. I’ve had a few partners give up due to lack of time so right now the project is at a stalemate.

    Like

  44. Tim,

    Have you seen any data on the number of readers per printed book vs number of readers for any pay per download electronic format?

    I bought your original book shortly after it first came out, and loaned it to several people over a couple of years before losing track of it. When I went to reference it again and couldn’t find it, I went out and bought the updated edition. So for the price of buying your book twice, at least 4 people that I know of have read it. Don’t know if I’m a typical customer in that regard, but I imagine a printed book only gets loaned a few times on average before the original owner no longer knows where it’s at and never sees it again.

    I recently started getting my books through Kindle and reading them on my iPad. I have bought more than one Kindle book because a bibliographic reference in the book I was reading sounded good. With the ability to link out from ebooks, it seems to me that there is a superior opportunity for cross promotions and for revenue/benefits that are not immediately reflected in the royalty.

    No way I’m lending my iPad to somebody so they can “borrow” my book.

    To me, it was never a matter of trying to save a friend 10-20 bucks to when I loaned a book, but rather a knowing on my part that the person would be unlikely to take the effort to actually buy the book themselves and read it, and I wanted to have a better quality of conversation with them. With the ease of getting Kindle books, however, I now feel perfectly comfortable emailing a link to the Kindle store, and if they don’t want to read what I’m recommending, or they are too cheap to download it… their loss.

    Thanks for making me think today.

    Dan

    Like

  45. If someone write books, must thinking if he only want to sell this book and make money. Or if he want builid herself value.
    If only make some money probalby writing only e-book and don`t printing book is ok. But if he want make seminar, or want to show people that he is very important person, he should print book.
    For most people book in hand means: it`s a writer, very inteligent person, he can write this, this is his book… etc.

    Like

  46. Hi Tim,

    I’ve learned so much here, today. Thank you for this supremely useful information and analysis. You are a wise and generous human being and have, in a single post, achieved “hero” status with me. Very pleased to meet you, sir.

    Now I’m off to read everything you’ve ever written. 😉

    Cheers!

    Like

  47. Quote from the post: “I prefer to focus on connecting with my readers and having fun with cashless adventures.”

    Have you read “Accelerando” by Charles Stross? (Same author linked to in another comment.) I’m not very far into it yet, but early in the book there’s a character who lives in much that way. He gives away ideas that make other people very rich, and in return they give him drinks / meals / hotel rooms / clothes / plane tix / robot cats / whatever. Very little cash is involved. It’s an interesting idea.

    Full book for free at the author’s web site: http://bit.ly/5saUpU

    Like

  48. I expect text-books (heavy, bulky, expensive) to be one area where Kindle et al will soon shine. As a teacher, I am encouraging students to buy their books this way because they will get better long-term use out of them. After all, how many text-books (even the best ones) are either resold, or never unpacked after college is over?

    Like

  49. Hey Tim, today I bought your book The Four Hour Work Week (Expanded And Updated). I’ve already gotten to the end of Step 1. It’s a pretty clever book. Indeed I’ve found that when something questions my basic assumptions, whether these assumptions are concious or not, it tends to lead to the most profound learning.

    I’ve got a problem though. You see, I’ve done a lot of hard and frusterating work with self-development and goal setting before. I’ve tried following The Success Principles by Jack Canfield. I wrote a long list of affirmations and goals, said it to myself three times a day, and attempted to visualize. I had no fun, made no progress, and got pretty tired of it.

    I also tried following Bob Proctor’s method. He said to come up with one breakthough goal and repeat it to myself three times a day, with genuine emotion, and take any actions you can come up with to complete the goal. I decided to make $5154 in two months. (I wanted to get into Bob’s intensive coaching program, and buy a really expensive electric violin) I then called up Bob’s sidekick for help, and he made me shorten the deadline to three weeks. During these three weeks I tried really hard to come up with ideas, but it just wouldn’t work. The frustration was making me depressed.

    This brings me to why I commented. The dreamline you’ve designed is clever, but I need to either find a reason why it’s more practical and enjoyable than what I did before, or a reason why I failed before that I can correct this time. To repeat the same exact mistakes again would surely SUCK, but to succeed at something genuinely worth succeeding, or at least “fail better,” would not.

    I’d like for us to get in contact via email or phone so we can talk about this. Would you please suggest a way to do that that would keep my contact info private?

    Like

  50. Outstanding article with tons of information and insight into the world of publishing in so many formats! I thorougly enjoy the information you put out, and would love one day to meet you in person. Please continue the great work!

    Like

  51. Early 2011 For The Superhuman Book? All Those Resolutions Are Gonna Have It Selling Like Hotcakes. Hope You Hit 500 Lbs. On The DL Before It Drops…

    Like

  52. Thanks for the insight Tim!
    My first novel came out in print 8 months ago from a small publisher that plays by different rules. They acquired my book after it did quite well as an ebook in the Scridb store. Anyway, I’ve been building my platform by giving speeches on subjects related to (sometimes barely related, other times right on top of) my novel’s subject matter.
    So I think you’re just a bit off the mark when you suggest (in one of the comments above) that speaking doesn’t work as well for fiction. My novel, The God Patent, for example has three major themes that translate will into topical and focused speeches. First, it has a lot of science content – authentic and accessible quantum physics which goes over nicely in speeches at “science cafes,” Mensa clubs, university colloquia, etc. I based a character on a should-be-famous turn-of-the-century mathematician Emmy Noether and developed a speech that’s half biography and half popular science. The women in mathematics angle has generated a dozen speeches, one at the top of a mountain.
    Second, the book is set in the science-religion culture clash and everyone seems to love to get into that, so the speech was trivial to formulate and usually amounts to me being more referee than speaker.
    The God Patent concludes with a concept of the soul inspired by several different ideas from physics – this is a great speech for spiritualists and new-agey types. I’ve given this one at the Institute of Noetic Science and a few Unitarian churches.
    Finally, and this is an example of how pretty much any novelist can formulate a speech to promote their book, The God Patent is centered around the mentoring relationship between a man trying to rebuild his life after making a ton of mistakes and a teenage girl struggling to recover from the death of her father ==> I’m speaking at Mentoring organizations, Big Brother/Sister groups and so forth. In fact, half the royalties for October will be donated to the Mentoring organization here in town.
    So, dude, you’re right as usual, but your wisdom extends farther than you give yourself credit for.

    Like

    • Hi Ransom,

      Thanks so much for this comment. It’s well thought-out and I stand corrected. I’m not as familiar with fiction, but I shouldn’t make assumptions in that case! Really well done. Keep it up, and congrats on jumping from Scribd to publisher! That’s awesome. You earned it.

      Best,

      Tim

      Like

  53. Tim- Thank you for all of the extremely helpful information! I am an author for John Wiley & Sons with my first of SEVEN books to be released October 4th. I had a different experience than what is posted as I was approached by my publisher, instead of the other way around. I got the publisher, then wrote the book(s) and now trying to find an agent! So when a friend sent me this link, it just could not have been more timely! THANK YOU! 🙂

    Like

  54. I would NEVER waste my time as a self published author. E-books are the future and this information is definitely gold. Self published authors are regarded as trash and most writers do NOT have the necessary drive to do the things required of them to get such income.

    Like

  55. Hi Tim – my first exposure to your blog and a great post. As a fiction writer (not yet published but getting there) I think your analysis is very helpful. I’m working with literary agent, Chris Bucci, on a series of posts called The Business of Writing which is an attempt to (a) understand how the writing industry is changing and (b) help authors figure out what to do. We have published four posts to date with several more in the pipeline.

    I used to make a living as a management consultant and it’s clear that the power dynamic in the writing/publishing industry is fundamentally changing. Authors who develop an effective strategy for this ‘new world’ will operate very differently from the old world where control rested with publishers and agents. Even calling it the writing industry is a start.

    I look forward to reading more of your posts.
    Best,
    Mary Tod

    Like

  56. “I know one man who nets between $5,000,000 and $10,000,000 per month with a single e-book and affiliate cross-selling to his customer lists.”

    Can’t get that one out of my mind 😉

    I’m curious in what kind of industry / subject matter things like these are possible. Please give us just a bit more insight without disclosing any secrets…

    PS: I read 4HWW, found my muse and self-pblished a book+ (book with add-ons to cross the 50$ boundary as you recommend). Works quite well and is growing… 🙂 Going eBook (plus e-PDF for self-printing the add-ons) as well very soon.

    Like

  57. Great post Tim. I’m dying to to know who the “one man who nets between $5,000,000 and $10,000,000 per month with a single e-book and affiliate cross-selling to his customer lists,” is.

    It couldn’t be Leo Babauta could it? or the Stop Your Divorce Now guy? Two shots in the dark (Eben Pagan was my first guess).

    Also,
    Where did you train in San Shou? I’m looking at schools in the bay area. So far EBM [kungfu.net] seems off the chains. Any recommendations?

    Like

  58. Tim,
    Thanks for the post, I just signed a contract with a publishing house to print my book. It will be coming out next spring. This whole post is really helpful to me, I am looking for opportunities to speak and sell some books.

    Thanks again.
    Tim

    Like

  59. Tim and/or anyone else who can provide feedback

    Thanks for the great Economic analysis.

    I just read 4HWW and I was most interested in the Auto Income chapters, as those chapters really focuses on the revenue model.

    I’m just getting started on PPC / niche online marketing. In one example in the book (page 204, “Chapter 11, Step 3: Splitting the Pie”) you estimated that a business model with $1000 Advetising for every 50 sales. That comes out to $20 per item PPC costs. You also advise not pricing under $50 (range of 50 to 200). At $20 per item, and pricing at 50, means the gross margins drop to 30$ right from the start, even before other expenses. Furthermore, if we are producing an “information product”, is it realistic to price at $50, or even 30$, assuming an “information product” is the same as in E-book? What is the realistic price for an E-Book? At $20 per item PPC cost, it seems your lowest break-even price puts you at about $30

    Like

  60. Thanks so much for taking the time to explain how the publishing industry works. This is really helpful to someone like me that’s working hard to help the publishing world embrace a rapidly evolving marketplace.

    I believe in the power of print and have successfully proven a tie between offline print publications (magazines) and the online world. I preach media modality to the people I speak to – meaning various media is consumed in a variety of ways just putting all your stuff everywhere splits your audience, it doesn’t build it.

    I recently wrote about the evolving media landscape and Seth Godin too. Thanks again!
    – Andrew

    Like

  61. Great article, but…stating that Author Solutions is a “promising” company “looking to solve this” can not be accurate. Author Solutions owns a bunch of the giant self-publishing companies. One is Trafford. These companies mark up printing so high, that it causes the wholesale (and retail) price of the books to be so artificially inflated that no retailers would ever think of buying the books.

    Take a typical 200 page, 6×9, paperback. Trafford authors get a discount when ordering copies of their own books. Here is how much the markup is

    Number of books Discount Author Price Markup
    1–24 30% $10.53 170%
    25–49 35% $9.78 151%
    50–99 40% $9.02 131%
    100–249 45% $8.27 112%
    250–499 50% $7.52 92%
    500–999 55% $6.77 74%

    Don’t take my word for this. Just go to http://www.trafford.com/FAQ/BookSalesOrdering.aspx#Discount

    So, Author Solutions isn’t really making this better for those self-publishing. If it was, it wouldn’t be marking up printing so much.

    Like

  62. Hello Tim,

    I’m a book lover, I like the object itself and the touch, the smell or it.
    For now Kindle and other devices don’t have those features 🙂

    About affiliate marketing, I hope future authors will not only write books around the idea to place their affiliate links.

    A book is really valuable, it allow to transmit knowledge between generations, and it often happen that I find it’s content valuable 10 years after. But if it’s full of “blablablabla and if you want to know more go visit http://myaffiliatelink/johndoe” I won’t value it anymore.

    I’m also curious to know who’s making millions with an affiliate marketing book? David Allen?

    Like

  63. I am writing a book aimed at MMORPG game players – one major game (World of Warcraft) which i guess has about 6~7 million english speaking subscribers.

    I do wonder if this is too ‘niche’ to get it published in paper.

    Also, when you were searching for publisher for your first book, did you go at it alone or did you have an agent?

    Like

  64. Awesome info Tim. I’m just a couple of weeks away from releasing my first book, Do Over. I was 90% finished with my book for almost two years. I saw you speak at USC approximately a year ago and I was inspired to get back on it and complete the book. I’m happy to say, it’s done! Thanks for sharing, via your words and actions, what’s possible.

    Cheers, peace and blessings…

    Like

  65. Excellent post; very detailed and very informative. I always wanted to write a book but I didn’t know exactly where to start. This post outlines each step, thanks for writing it.

    Like

  66. I remember very distinctly Frank Warren (of Postsecret fame) discussing why he uses Amazon affiliate links for his own books. Basically the $1-2 he makes on every book is almost as much as his royalties, and his website is of course a major promotional tool for them.

    Lots of money to be made on the back-end of things, with everything from speaking tours to better-paying writing gigs, to connecting with startups in Tim’s case. Whatever you want, you can parley your writing or entrepreneurship into an opportunity for that.

    Like

  67. Great article Tim! I found this to be a very informative, well-presented article. This issue is being debated all over the place, and one thing I’ve noticed is that people are choosing the paths that best suit them at the moment, from their personal perspectives. There certainly isn’t a one-size fits all option, pros & cons abound, and the landscape is evolving. As with any of life’s decisions, it’s vital to gather all the info one can before jumping in – this article certainly helps in that regard, so thanks!!

    Best of luck with your new book!

    Rai Aren, co-author of Secret of the Sands

    P.S. – I also got a lot of value out of reading the comments – lots of good opinions & debates. As a bonus, I found a new book I’m intrigued by – Ransom Stephens’ ‘The God Patent’ – I’ve added it to my Amazon & Goodreads wish/tbr lists! Sounds great!

    Like

  68. Tim,

    How much does Amazon cut into your earnings? It seems that most people (myself included would much rather pick up your book used with a significant discount as opposed to picking up a new copy).

    My family works in the retail business and it’s getting creamed because everyone can buy things cheaper online.

    Do you see a parallel between the retail business and the publishing business?

    Do you think that this is going to get worse for authors as internet commerce continues to grow?

    Like

  69. Hi Timothy,

    First of all. 4 hour workweek is great book!
    You gave me lots of ideas.

    I have to agree with Judith that not many authors can make that huge money. Actually majority of the authors are not even earning their living expenses.

    80/20 RULE
    According to 80/20 rule 80 per cent of the world income is owned by 20 percent of the world population (the rich guys)

    That means 80 percent of the best selling books are owned by 20 (even less) of the best writers.

    Hey, the 80/20 principle is in your book!

    Getting rich selling Books?
    To make money with books, you need three things:
    – Good writer
    – Good marketer
    – Good business person

    Missing one of these skills, you will fail.

    Getting rich selling E-Books?
    To make that huge amount of money with Ebooks you need more:

    – Good writer
    – Good marketer
    – Good SEO / Social Media marketer
    – Good business person

    One tip, you can outsource the SEO and buy some copyright software to prevent your Ebook being copied. But how many authors have that money to do outsourcing?

    I also agree with Judith, printing will not be dead. If that will happen, what’s Amazon going to do? I don’t see Amazon starting to sell a lot of Ebooks yet

    How many people will read these Ebooks from the computer or E-reader?
    Maybe it will start picking up after I see everybody walking around with that Ipad

    Well, I don’t. I prefer to buy a printed copy.
    Your 4-hour work is sitting at my desk right now. Bought it from Amazon. Nice hard-cover.

    Like

  70. Thanks for the article Tim,

    Somehow even though this is food for thought for authors, I’m thinking it could also apply to aspiring musicians working on the release of their debut album (physical CD/vinyl versus digital-only release). Plus, the lesson I’m really taking in here is your thoughts about working on a product for years because you want it to sell like mad after publication. Wicked.

    Cheers,

    Like

  71. You no doubt nailed the ‘timeless’ aspect in the 4HWW. I read it each year with new insight and inspiration. All still seems super relavent. You knocked it out Tim!

    Scott

    Like

  72. Nice overview of the industry. I think there are some unidentified gaps in the whole self-publishing process for budding authors. Most important that new authors represent the quickest way to change the whole pricing model given that new authors primarily look for just a way to get their books into people’s hands. As someone looking to publish my first book, I don’t want to rely on a publisher or agent to get my message out or market for me. I just want a cheap, on-demand way to digitally distribute my book through channels that people can access easily.

    Undoubtedly the traditional and existing ebook publication and distribution process is limiting the creativity and range of books making it to people’s hands.

    And though I don’t believe print or today’s ebook publishing and distribution channels will be overthrown soon, a sea-change will happen much the same way print news is being hurt by online content providers.

    And for those who think every author wants to be an immediate best seller, of course we’d all like that but are reasonable enough to know that it probably won’t happen. We just want to be able to take a shot now that production costs should be drastically lower.

    To his credit though, Godin’s just the beginning of a wave. Big-time authors soon will realize they don’t need to rely on the traditional models either.

    If they realized those of us with Kindles, Nooks, and other e-readers would be just as satisfied buying directly from the authors as existing channels, they’ll push for change themselves too.

    Like

  73. Another great book is the 22 Immutable Laws of Branding, also by Al Ries, together with Laura Ries. The book has a whole section on the 11 immutable laws of internet branding. A great read.

    Like

  74. “What might happen if the iBooks agreements of the other Big Five all have suspiciously similar terms?”

    Hi Tim, I may have missed it, but I couldn’t find a mention of an ebook royalty rate. I’m a children’s book author-illustrator, and my understanding from colleagues is there is a uniform ebook royalty rate being offered from the Big Six for new and backlist books. They call it the “standard” ebook royalty and unlike print royalty rates it is NOT based on the retail price.

    Instead, it is 25% of publisher’s net (for author-illustrators of picture books, can’t speak to other genres). Translated for comparison purposes, that *may end up being 12.5% of retail. The hardback royalty on paper picture books is typically 10%, so for a digital product with no paper, no ink, no warehouse or shipping costs, OR returns, authors/illustrators get a 2.5% “raise.” *It is hard to say now what the actual dollars will turn out to be in practice.

    Included with the backlist “offers” is a zero advance, and no publication date requirement. So far I have not heard of any children’s book publisher offering better terms (of course, they may be keeping it quiet.) Publishers have recently sent out thousands of agreement letters to authors to attempt to lock in ebook rates for their entire backlist, wherein primary ebook publishing rights were NOT included, only subsidiary rights which often called for a 50/50 split with the author (obviously a better deal for authors.) The publishers seem to be in a big hurry to get signatures on these deals… why? Because it may soon become super obvious how easy it is to make ebooks? Just a theory. ; )

    Another hard-to-justify component is that apparently the distributors expect to get the same percentage as with paper books even though they don’t have to unpack, store, pack, or ship ebooks. Perhaps the big distributors are holding the publishers hostage… “We want the same terms on ebooks or we won’t carry your print books.” I don’t know but it seems like there should soon be some major price competition coming from upstarts in the ebook aggregator business. Distributors are supposedly needed so a buyer can place one order for a bunch of ebooks by many publishers. This may be another outmoded 19th century concept, though. There should be some way of compiling orders in the cloud or something, right?

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  75. Great post and excellent commentary following.

    I’d like to differ with one perspective. You make conclusions about the fiction vs. non-fiction eBook markets based on statistics for the top 50 books. These are likely to be driven mostly by outside sources such as book reviews. You suggest that since only two non-fiction books are in that top 50, fiction is the better market.

    But like local bands who never sign with a record label but bring in the dancers and drinkers night after night, there are excellent opportunities for writers to make decent income well below the #50 slot on the list. It’s not a get rich game, but it can mean decent money and indy writers don’t have to set their sites on the top of a pyramid controlled by mega-industry.

    Many eBook selections are made after people search for specific topics, and in these cases, success has to do mostly with your findability on Amazon. My novel is a needle in the fiction haystack, but my One Hour Guide to Self-Publishing shows up near the top on a kindle book search two weeks after being published.

    Consider sampling the top 5,000-10,000 books before directing writers towards fiction as their best opportunity. I’m a novelist at heart, but I’m betting my publishing business on nonfiction. Fiction is an art product, while nonfiction provides a solution to a need recognized by a reader in search of an answer. That sounds like a sounder business proposition to me.

    All the best and thank you,

    Dave Bricker

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  76. I believe that your friend makes a lot of money
    because e-books sold online are mostly focusing
    on giving solutions that deliver fast results.

    For example like “how to lose weight in 14 days”,
    “how to get flat abs fast” etc.

    It is different from the majority of physical books
    that do not deliver fast results.

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  77. @Loreen Leedy: “25% of publisher’s net”

    Danger! Danger! If this is true, it’ll be very risky for authors and illustrators. Movie studios routinely offer a percentage of “net” rather than “gross”. Guess what, they’re notorious for fudging the numbers so every runaway blockbuster turns out to lose money on paper. They can be very creative trying to cause a “loss”. Thus the studio and the more famous actors make big bucks while the original writer gets almost nothing – or even somehow ends up in debt to the studio.

    Beware of inevitable misbehavior if book publishers push for a move to the same model… Remember, your cut needs to come off the top, not off the bottom.

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  78. @Charlie re “25% of publisher’s net”

    It’s true all right, but presumably pubs wouldn’t use Hollywood accounting… mainly because their authors would jump ship. In Hollywood there are “writers” (as opposed to authors) because there are so many other people that contribute to a film. With book publishing, the content is provided by authors (and with picture books, illustrators/photographers)… there isn’t anyone else.

    On the other hand, it may be that the software developers are hoping to get a big piece of the ebook pie, and pubs are trying to allow for that. My theory is, what’s the rush to sign a contract when nobody knows what form the ebooks are going to take, what the retail cost will be, and when they’ll be “published” and on and on?

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  79. Like your afterwords..

    I have just gone from e-books to paperbooks! I have to say I enjoy reading real books much more then e-books. I spend enough time on the computer already, and reading a book in a paper format seems much easier on the eyes then reading on a computer.

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  80. Hi Tim,

    Ive read your blog and followed your blog for awhile. Truly some great food for thought here.

    Your recommendations are great. Produce great content and build your tribe around it. Publish a book only if and when you are ready. Speak only when you have the desire to do so.

    If you have a large enough tribe, and that may only be 1,000 fans, you will be able to make money in one form or another, and it doesn’t necessarily have to be a book.

    Cheers,
    Jeremy

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  81. Jim, I have a electronic newsletter I send to about 200 people I know who are interested in writing. I would like to excerpt part of this excellent post in the next one. I will certainly give you credit. I don’t charge those receiving it for this so there is no money involved. Let me know if that’s OK. John

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  82. Hi Tim, I’ve been looking into an agent, for a book title that a few publishers have expressed interest in. What I don’t understand is the fee structures of agents, for which 15% seems to be standard.

    My thinking is this: I could get a 10% royalty *myself* – don’t I need an agent to go above and beyond that? I would rather do something like pay an agent 15% of up to a target $ amount, and 30% for every $ above that. Here’s hypothetical numbers on $100,000 worth of books.

    STANDARD COMMISSION OF 15%
    Your royalty of 10%: $10,000
    Your agent’s 15% cut: $1,500
    You get: $8,500

    15% COMMISSION UP TO $10K, 30% ABOVE $10K (assuming your agent gets you a 20%
    Your royalties of 20%: $20,000
    Your agent’s 15% on first $10k: $1,500
    Your agent’s 30% bonus for above $10k: $3,000
    TOTAL FOR AGENT: $4,500 ($1,500 more than they would have gotten with standard 15%)
    You get: $15,500

    It seems like with a commission structure like this, a publisher would be better incentivized to actually get you a better deal. Any experience with, or thoughts about, this? Thanks.

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  83. Could you please correct this obvious typo–it’s over-exciting the kids.

    “$5,000,000 and $10,000,000 per month”

    If any writer is pulling in 7-8 figures a month on a self-pub, then we’d have heard about it before now. CNN would be all over that one like a cheap suit.

    The royalties for the vast majority of e-pub writers is more like $5.00-$10.00 per month–if they have a large family and lots of friends.

    I see too many of them on CreateSpace with their 50-page Twilight and Eregon-inspired epics hoping to make it big.

    Or the adults blow money on a vanity house or worse, PublishAmerica, thinking their books will get into stores.

    Yes, some of the numbers are impressive, but the money tends to be mostly for writers who have made a ton of print published sales and have a solid platform of readers to support them.

    But please–fix that typo.

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    • It’s not a typo. The biggest players don’t care about public recognition; they care about their revenues. They view themselves as product sellers, not authors.

      Tim

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  84. Hi Tim,

    I just recently found your blog via reading your book excerpts on the web while actually looking at another book! LOL. I have been very impressed at reading all of your different articles, advice and amazing tips and help sites for so many different interesting subjects.

    I was intrigued about this particular one regarding publishing as my husband and I are missionaries in Colombia, South America and we work with youth in education. I have actually written two books and have been looking for the opportunity to get them published.

    Recently I found a website on the Barnes and Noble site called Pubit…not sure if you have heard of it? I just signed up and it is strictly for authors who would like to publish their books as an Ebook, it does not cost to join and you only have to have a SS# or TAX ID # if you have your own company and then you can publish.

    The cool thing is that they publish it on their BN website and is also available through NOOK via your phone, android, IPAD or PC. The publisher is allowed to set their own price from $2.99 to $199.99 and depending on the price set, royalties can be either 40 or 60%. It seems to be an awesome alternative for people like me who want to get started right away.

    I want to publish and see what happens so I can at least get started but was also wondering…..IF you might have some thoughts or insights on this website?

    I look forward to hearing from you!

    Blessings,
    Youthmissionary

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  85. Traditional books contrast to its competitors should be stay in the trend. You can say it is very risky as compared to the technology today but still for me traditional reading take out more impact compare to others………….

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  86. Traditional books contrast to its competitors should be stay in the trend. You can say it is very risky as compared to the technology today but still for me traditional reading take out more impact compare to others. We must keep what me have in practice is stay on it traditional reading is the best way to touch more lives and must be enjoy by the next generation that will follow.

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  87. Forgive me for possibly coming from left field, but books, like art, take a set of ideas and permanently affix them in our world whether significantly or hardly at all. it’s hard to take back ideas in a printed book like images on a painted canvas. they exist. with that said, Van Gough as most of us know is rumored to have only sold only 1 piece his whole life – The Red Vineyard. Right wrong or indifferent, the point is he didn’t sell many.

    then he died and paintings like Portrait de l’Artiste sans Barbe sold for $71m making it one of the 10 most expensive paintings ever sold.

    The question I ponder is; are you making art, or are you writing books? Tim refers to high level writers as “product sellers, not authors” – so I guess we all have to pick our poison as far as semantics are concerned.

    I’m writing a non-fiction piece to ‘sell product’ and build social capital more than real money. others are writing to be permanently affixed in a world where words are art and books are top selling paintings even if it takes 10 years after you die to accomplish.

    so with my limited experience on the topic, i think we need to determine as perspective writers our purpose in publishing before we can dissect and appreciate the myriad of publishing methods.

    best of luck to all those who are not afraid of the challenge of publishing

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  88. Great article! I second the fact that AuthorSolutions is not a great self-publishing solution.

    I recently published my book “Naked Lens: Video Blogging & Video Journaling to Reclaim the YouTube” via Lightning Source. With this model, you need to form a publishing company and learn the ropes (no hand holding). But I’m earning the maximum possible $ per book sold. Now that I’m all set-up a second title is on the way.

    I’m happy to share more on my experience with LSI if anyone is interested.

    Tim – thanks for keeping this blog and writing your book. My biggest challenge is marketing and you make it look easy (and fun!)

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