The Economics of Writing a Book | Hacker News Reader

The Economics of Writing a Book

priceonomics.com

116 points1337biz32 comments

Minor nit here:

Generally, publishers don’t just accept submissions from any aspiring author. They go through agents. So you must first convince an agent that you will be a lucrative investment. As a rule, agents take 15% of everything you make from a book.

Speaking as an author, I love my agent. My agent is on commission, on my side. A good accountant is supposed to save you more money than they cost you; a good agent will actually make you more money. The agent's job is to match your book with the right editor, or if there's more than one who's likely to buy it they run an auction: once they've got you a publisher they then squeeze as much money out of the publisher as possible -- publishers always low-ball the advance and terms they offer an unrepresented author -- and then vet the contract small-print for landmines. A survey an author of my acquaintance conducted about five years ago came up with statistics for agented vs. un-agented books in the SF/F field (which is what I write), polling professional authors on a mailing list; in general, the book advances of authors who go through agents are between 150% and 200% of those received by unagented authors.

The benefits of an agent are likely to be lower for a non-fic author who writes technical/business books on an irregular basis -- but still reasonable. But for a fiction author who eats or starves on the basis of pushing out at least one book a year, the agent's ability to market the author and push their career track is essential.

They are, after all, on commission. And the more they can earn for the author, the more they get to take home too.

That stands to reason, however, do I decide to read a given book because it is a 'find' of a given agent or published by a given publisher? Or do I read something because it is heavily promoted? More importantly, do women - as in those people that actually read a lot of books and keep the publishing industry afloat - do they care about those behind the scenes that have marketed a given book?

If a book comes from a word-of-mouth recommendation or if it is by a favourite author then that will be sufficient to make the purchasing decision. Reviews on Amazon are sufficient to make the purchasing decision. To a large extent a book sells on merit and someone taking the self-publishing route with something that people really do want to read and tell the world about can make a success of it. They were not able to do so before the e-book revolution came along, they were beholden to agents and publishers. Yes, people in the publishing trade secretly fear 'they don't need us...!'

Here is something:

http://www.literaryrejections.com/best-sellers-initially-rej...

A good reading list (Da Vinci Code and a few others excepted).

"do I decide to read a given book because it is a 'find' of a given agent or published by a given publisher? Or do I read something because it is heavily promoted?"

The former makes the latter more likely. A good agent will:

* get a better advance for the author, which makes it more likely the book will actually get finished

* be on the author's case to get the book finished and out (otherwise less money for them).

* negotiate better promotion with the publishers

* be on the publishers case to make sure that what was agreed actually happens

* etc. etc.

All of which make it more likely that the book gets published, gets promoted, and so seen, and so read, and for that word-of-mouth to kick off ;-)

As for the number of successful authors who were rejected. That's to be expected. Publishers are the VCs of the book industry. They say "no" a lot, and most of the people they say "yes" to aren't hugely successful. Every VC has said no to a successful company. Every publisher has said no to a successful author. They doesn't mean either group are necessarily failing as a whole.

To push the analogy - not everybody needs a VC. Some people can bootstrap. Some people are happy taking on the extra load of marketing, financing, producing, distributing, advertising, editing, admin, etc. etc. They find it fun and interesting and are happy to take the time to do it. Some market segments make that work considerably less than others do.

Other authors want to use that time to write.

I find the analogy to VCs interesting. In term of investing your own money (as in investing in a fund), I have seen graphs showing that VCs have a pretty bad ROI, if not the worst This is partly attributed to highly subjective decisions from a small number of like-minded individuals, which often end up in poor and mostly misapplied metrics. (I don't want this to be the debate, this is just something I have seen reported many times, and at least once on HN not too long ago, and most people seemed to agree with that, so lets assume that VCs are not a very sound way to invest your retirement money).

Is the same true for Publishers? Could make a comparison using data about this $15B revenue vs how much was spent?

Moreover, the best ROI for VC funded anything, seems to be an exit IPO. What would be the equivalent of an "IPO" for authors? A movie?

"Is the same true for Publishers? Could make a comparison using data about this $15B revenue vs how much was spent?"

Good question. I have no idea ;-)

I guess it might not even matter. If what you're interested in is the best way to get more good books into the world rather than make the most money. From my experiences the folk in the publishing industry I've met are more interested in the former than the latter.

The issue I was trying to highlight though is that many people seem to ignore the "invest" part of what publishers do and see them as just people who print books. The publishers advance + the publisher/agent network are an investment. And with new authors an especially risky investment.

"Moreover, the best ROI for VC funded anything, seems to be an exit IPO. What would be the equivalent of an "IPO" for authors? A movie?"

I'm guessing getting a Terry Pratchett or a J. K. Rowling. That combination of talent and public zeitgeist that produces wads of cash.

Alas, you can't gamble your company on getting a Terry Pratchett or J. J. Rowling -- or a Dan Brown. Those folks come along once a decade in the worldwide English language market. The overwhelming majority of works of English language fiction sell less than 100,000 copies (hardcover, ebook, and paperback, across the North American, and UK/Commonwealth markets, and in translation); indeed, many sell fewer than 10,000 copies.

Most folks have no idea how micro-targeted a niche business publishing is. The goal of a large publisher is to find a lot of these small fry and hope one or two of them will break through and make the big time; just one such author can float the rest of the midlist at a publisher for many years, raising the chance of another huge bestseller coming along.

Actually, looking at the size of investment with individual authors, I guess folk accelerator/seed folk like YC would be a better analogy than the average VC firm.... but I'm really pushing the analogy too far.

I would say that the list of rejections is very mixed. There are plenty of commercial successes there that aren't particularly good.

I disagree - consider real estate agents: the buyer's and the seller's take home a total of 6% of the purchase price. If you were an agent, would you settle for, say, 300k, and take your 9k in your pocket, or would you fight a great fight to get to 310k? Commissions should be, in this example, zero until 270k, and then a big chunk of anything above that, to really incentivize the agent to do your best interest. Same for book agents. I self published two books for this reason. To be clear, I'm not saying that agents are ALWAYS bad. I am only saying that commissions are not designed to serve the author's best interest.

It's a different kind of relationship.

Estate agents have many one off customers. Literary agents have many long-term repeat customers. It's worth their while to make them as money as possible and accelerate their career.

I admit it's a small sample - but the authors I know have made considerably more money post-agent than they did pre-. Which matches what cstross mentioned in his post.

After 30 years of writing both professionally and privately while I learned to code and then train teams, I finally came to the conclusion about what I am: a writer. I'm not a celebrity writer, a best-selling writer, or a major-league writer. Just a writer.

So I wrote a book. Because I have a passion for technology teams, my book was about how to create, prioritize, and manage those to-do lists of work we all have: backlogs. Because I'm a science fiction junkie, it had robots. And because I'm a Douglas Adams fan, they were robotic chickens. Plug: http://www.amazon.com/Backlogs-1-Daniel-Markham-ebook/dp/B00...

I'm also a startup and business junkie, so even though I was writing the book no matter what the business model, I spent some considerable time learning the economics of book publishing. There are a hell of a lot of blog articles out there titled something like "How I made Seven-Hundred Thousand Dollars publishing an E-book. And you can too!"

Meh. Not so much.

I think it's clear that self-publishing is the future. Except for the big-league authors, publishers have too much overhead to be very useful to us small fry. However the author's conclusion is correct: "Without question, we can say that authors have extraordinary opportunities in the 21st century publishing world. It’s just that making a living from book sales is rarely one of them." There just isn't that much money for most authors no matter what the publishing route.

The good news is that ebooks can be part of a larger conversation a writer has with his audience. In this case, the process isn't to create a "business book proposal" and then execute it; it's more like creating a community of people with similar interests, then having a conversation with them. Ebooks can be a useful part of that conversation.

Self-publishing rocks, but it's not just the old way of publishing where you do it all yourself online. Wish it were that simple.

As someone who has seen more than a few self-published books, I hope you won't take offense if I give you a bit of advice: get a better cover done. I can't quite point out what's wrong with the one you have (I'm not much of a designer myself), but the elements don't go together very well, and the title looks flat. The chicken is ok, it just needs to be worked in there differently, I think.

I do agree with the other poster - a revised cover and proofreading (m ore) would make a big difference to the perceived authority of your book. As a designer I can't resist giving you some unsolicited advice here (apologies in advance, feel free to ignore):

The central image is perfect - a good photo, and says everything you need it to say. You should cut the other images (and in particular the awkward 80s perspective grid layout), and just use that one image big on the front, with the titling superimposed or on blocks of colour above and below. The result would be an instant increase in credibility.

Now perhaps the WTF chicken reflects the folksy style of the writing inside, so there is an argument for keeping that poking in from an edge (I see why you have included this), but the rest of the images and their styling absolutely do not and fight against your premise, and the green grid communicates 1980s business title.

You may also want to consider a strapline that tells people what is in the book, and why a rubber chicken features on the cover of a management book, perhaps pair the chicken with that.

Thanks guys for the great advice.

Many times HN is full of people just picking apart things because they can. This was good stuff. Thank you.

Persionaly, I was about to click buy when I saw 10$ which is more than I am willing to spend on an ebook from a new author.

It's a good book. I'm not on HN pimping books. Shoot me an email and I'll hook you up.

Looking at the percentage of authors making more than $500 a year is misleading. It's never been easier to publish a book, so the pool of marginal books will grow. This doesn't necessarily reflect the prospects for serious authors.

I'm a self published author. I make around $10,000 a year from print sales. My books started as experiments. I already had e-books. I decided to turn two manuscripts into print books.

I spent about $500 and two weeks on formatting and design. I didn't copy-edit beyond what I had done myself. And I waited to see if it sold.

It did, so I turned more e-books into print books, and made new books aimed at print.

But if the books hadn't sold, I would be classed as one of the poor authors making less than $500 a year. But that would be a misleading data point, because my initial foray was rather tentative.

> This doesn't necessarily reflect the prospects for serious authors.

This is a good point. My father, who self-publishes a book about his childhood for his grandchildren, does not expect to make a living from it. This is vanity publishing, but without any sneering implied. (I have no idea what percentage of authors fall in this category, but I suspect that many authors in self-publishing do not expect to sell to the wider world.)

Educators often publish books tailored for there classes which may represent minimal sales but also minimal effort. If you make 500$ from something that takes 20 hours to put together and or saves you time managing handouts that's hardly failure IMO.

Could you say more about your approach to print? I'm reasonably far along with a manuscript, and now I'm trying to figure out what to do with it. LeanPub seemed nice and easy, but they don't do print.

Start with the eBook and see how that goes: they're really cheap to produce. If it's going decently, reinvest some of the profits into making a print on demand book. Print and eBooks are very different, so what you invest in one won't translate to the other.

Aaron Shepard's books give a pretty good overview of how to publish on amazon.

Createspace is pretty easy to use. If you already have a pdf you sell online, you just have to format it for print, and put a cover on it. I found a designer on elance to help me with both.

Last time I looked LeanPub had an option to produce a print-ready PDF that you could then throw at something like Lulu. Info is somewhere in the author FAQ.

(Note: not done it myself - so don't know how well it works.)

There's one very important service the publisher provided, which the author missed: assessing whether the book was likely to be a successes. Telling people who won't be successful not to bother (or at least, not to bother with an expensive campaign) is costly, and an important service.

Ironically, the people who pay for this service (i.e. the people who are successful) are the ones who don't really benefit from it.

But they do benefit from it in the form of higher sales -- publishers that do a bad job at this generate a reputation for publishing bad books, which can make booksellers less likely to carry them and consumers less likely to give an author the benefit of the doubt.

LoL you have it backwards. Publishers do not have magical pre-cognition of the success of a book. We have myriad examples of them shoveling money at authors for books which bombed and we also have them turning up their noses at manuscripts which went on to earn billions. Case in point, Harry Potter.

Survivorship bias. I bet they've knocked back a lot of books which wouldn't have made a lot of money.

> Self-publishing [...] is historically unprecedented, providing the means for millions of people around the world to bypass the elitism of the publishing establishment [...]. In terms of access to a worldwide marketplace, it is fantastically democratic. In terms of access to financial success, it is far from it.

Just give me democratic and let's let product do the rest.

____________

Speaking of financials, another reference point to consider is selling via lulu where profit would be $6/copy (15.99sale-8print-2lulucut=6), which is not stellar but still beats amazon's predatory $4.18.

Print-on-demand and epub are nothing short of revolutionary. Suddenly the incentives are right for people to earn a living from their intellectual labour---distilling knowledge and sharing their research with others for profit. I wouldn't buy a access to a website with lots of info on a subject, but I would buy a book.

UPDATE: More thoughts on the subject: http://minireference.com/blog/the-economics-of-writing-books...

The author of the article perhaps should have spent more time discussing the intangible benefits of writing a book.

I started writing using big name publishers and then switched to self publishing. Because of being an author I have met many very interesting people and I have received offers for interesting work. I can't quantify the value, but it is huge.

"Having one’s first book published by a top five publisher conveys all kinds of non-financial kudos to the author. That prestige is hard to replace with pure sales dollars. In some cases, that prestige can lead to lucrative opportunities like speaking gigs, increased seminar sales, and better academic prospects."

Speaking as someone who has a very good reason for having gotten into collecting bookcases (the last one is a sweet, 7', 6-shelf oak stack with mullioned glass; when I saw it at an auction, I knew it had to come home with me), this is really kind of a strange situation.

I recognize that many people, particularly commercially published authors, see publishers as a source of prestige, which is what gives the publishers prestige, but for me a publisher is more of a liability. If I see Apress, Morgan Kaufmann, Springer, or (heaven forbid) Baen on a cover, I'm much more likely to set it aside for later rather than buy it now. Offhand, I can't think of any publisher that adds something; maybe MITP, but academic books are pretty sketchy anyway.

"The benefits from the legitimacy of a well-received book go well beyond the sales numbers, and working with an accomplished editor helped make the book a critical success, earning positive reviews from Publishers Weekly and Kirkus Review."

One wonders whether the editors efforts best come under the heading of "improving the book", or under "getting it on KR or PW's list".

Regarding one of the links in the article, I think Dinosaur Porn has got to be up there with Bingo Cards in the department of opening your eyes to the possibilities of a niche market.

Interesting that the main picture links to a Lifehacker article on saving money on Textbooks. Somehow I managed to click the link and load that page without realising - wow did the title and first few comments here confuse me!

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