Falling Book Advances Not the Fault of Ebooks
Reading an article on how ebooks are affecting author’s advances and earnings ability over at the Wall Street Journal (still free I see) I was having trouble seeing all of the points.
The argument seems to be that the lower price of ebooks compared to hardcovers means authors are getting substantially lower advances and because they get a percentage of the cover price, they earn less from each copy.
Financial Belt-Tightening
It’s interesting to note that while the article states the price of a hardcover at $28 and an ebook at $12.99, looking at the top sellers on Amazon most of the hardcovers are going at around $14-15, while paperbacks are going for $7-8. It’s true that the electronic version, where available, is going for significantly less than the hardcover though.
Are authors getting lower advances because of ebooks? I doubt it. The whole industry is under pressure, the only people who seem to get big advances these days are celebrities and best selling authors. That’s the result of a downturn in book sales and a reining in of the stupidity that followed Harry Potter and The Da Vinci Code where everyone’s eyes filled with dollar signs and threw money at any possible best seller for fear of missing out on a big pay day. It has nothing to do with ebooks, which are still such a small market as to barely register.
I’m guessing that publishing has just followed the film industry. The big boys, the only ones with the pockets to pay the huge advances, are vast corporate entities, part of media groups, who need to keep their eyes on the bottom line. In the same way Hollywood makes spin-offs, sequels and franchise films for most of its profit to allow it one or two critical successes (which themselves can be commercial successes), publishers do the same. In order to underwrite the next great piece of literary fiction, they need to publish Katie Price’s latest ramblings from a ghost writer.
Even using big names to sell books doesn’t work all the time (much like stars in movies):
"David Blunkett’s The Blunkett Tapes: My Life in the Bear Pit, for which Bloomsbury paid £400,000, sold a pathetic 4,000 copies, and the series of books of essays the Harry Potter publisher commissioned from Gordon Brown – Courage, Wartime Courage and Britain’sEveryday Heroes – reportedly sold only a few hundred copies each."
Even Tony Blair’s memoirs, for which he received a £4.7 million advance, seem to be struggling.
As such, it has been left to small, independent publishers to bring threw new and interesting titles in the same way independent production companies (and indeed, independent arms of the big boys) bring through the more innovative films.
As for reducing the cover price, supermarkets and massive stores like Amazon drive the price of books down much faster than anything else and, lest we forget, hardcover sales are usually much lower than paperback sales which are offered at even lower costs than ebooks.
Embrace the Future
While ebooks are probably not to blame for lower advances (financial prudence is) you can hardly say that’s an issue if authors do what they’re supposed to do: shift copies. I can’t think of another industry in which you get paid for something you have yet to deliver and which may not earn back that money in sales. It’s a bit like Apple thinking up with a new gizmo, someone saying they expect it to sell a million units in the first year and then Apple requesting the money from suppliers before actually producing the hardware. There are differences I know, but still.
A couple of authors have actually posted earnings reports for their respective books (Lynn Viehl (a pseudonym), whose book appeared on one of the NY Times best seller lists has an initial article and a follow up, and Peter Cooper lists his earnings from his non-fiction book). These aren’t big authors by any means. Having said that, Viehl did receive a $50,000 advance (though not all at once), though it was for a book in an existing series and she was an author with an established track record. Cooper, by comparison, only received $6,000 and that in three instalments.
Viehl’s book, Twilight Fall, did shift 90,000 copies though, but still only earned her about $25,000 (net), she doesn’t seem to expect to earn out her advance for two to three years after release. She estimates the publisher earned around $450k (net around $250k). So, while the publisher did OK you could argue, you’re still looking at up to three years for the author to make in sales what they were paid out in advances. You can see why it makes business sense to lower advances so the authors earn them out much faster (and in some case, actually earn them). Veihl (or rather, Sheila Kelly, to use her real name) seems to solve the earnings issue by churning out books at a fair rate instead of expecting one to make her fortune (let’s not forget, most authors don’t make enough from book sales to live on and that isn’t new).
Cooper actually argues higher royalties are better than advances (he states that he would only have needed to sell 2,000 copies if he had signed with a different publisher who offered 50% royalties to match the 8,500 copies he sold with the publisher who actually published his book). And he wanted to give away his electronic copy! Cooper even points you to a royalty statement for a similar book which sold over the same period and earnt less, but whose author received a bigger advance.
In fact, one benefit of ebooks is that there is nothing held back for possible future returns as is the case mentioned in the royalty statements of both the authors above. Electronic copies should also mean an end to out of print books, so authors can have their novels available for much longer periods compared to the relatively short time shelf space economics forces them back to the publisher. It opens up the possibility for a long tail. The use of DRM on electronic copies also means authors may benefit from additional sales as people can no longer lend, borrow or resell old books (more on that in a later article).
In the future there’s the possibility that publishers could take some of the sales back in-house and so raise the profit margins on each book sold. Something that would never be possible with physical copies. Authors could, with the right marketplace, even sell them without publishers and keep the lion’s share of the profits.
The Biggest Challenge
As Cory Doctorow has argued for a long time, most author’s biggest challenge is obscurity. The books that sell well, that make the best seller lists, are those that make it into the news, get recommended by book clubs (think Oprah and Richard and Judy) or get made into films. 200,000 books are published in the UK each year (more than any other country, apparently). Letting people know you have published something and then allowing them to sift through the piles of books out there to find your one, let alone getting them to buy it, is by far the biggest challenge for a new author. Finding a book is rather like mining for gold or diamonds, you have to move a lot of earth to uncover it, shouting about it and lighting the way with neon signs is a good ide
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So stop whinging about how ebooks spell the end and embrace them and the simple fact that to make money writing books you need to shift copies.