Friday, February 4, 2011

Maybe the Mayans were right...but they were talking about the publishing industry

I have to be careful here. For all kinds of reasons. But here goes...

For the last six months I have been in negotiations for a book deal with the editor-in-chief of a publishing house. It doesn't matter who. It doesn't matter where. What matters is that, after much work by both of us, I had to abruptly cut off all further discussions about the project just as it appeared we were nearing a deal. Why? Because, last Friday, after a long and fruitful conversation on the phone about the new project, and his continued interest in the e-book rights to one of my previously published books, I sent the editor an e-mail in which I asked this question: "What is the split for e-books?"

His response: "The split for e-books is 75% company, 25% author."

Me: "Is this correct or do you have that backwards?"

Radio silence. I figure he thinks I'm kidding. I send up another flare:

Me: "I never heard back from you about this. I was serious in asking if this was a typo. Does the publisher actually take 75% of the e-book dough?"

Him: "Yes. The publisher takes 75%."

Me: "How do you justify that."

Him: "The number has been handed to me."

After about 20 seconds of hard thinking, I do what I usually do when faced with these situations. I set fire to the bridge ahead of me.

Me: "I'm just amazed at this. No amount of "platforming" can justify this rate. If this is the way publishers are going to try to hold onto the business, then I think they are doomed. If that's the rate they expect me to sign up for if I do a deal over there, I'm going to have to pass and save us the time working on the pages. If there is the chance of doing a book deal where I retain the e-book rights, I would be interested, but I think that's what they are really looking for anymore anyway. So guess this is it.

Good luck over there."

Rash? Yes. Stupid? Possibly.

I've spent the last week checking around with some of the agents, editors and writers I know and have found that this is, indeed, the standard rate that publishers are expecting on e-book sales. When I asked my agent how they can justify this, he told me that they would give me a large enough advance that it wouldn't matter for a long time. And yes, the advance we were discussing was very good money for someone who hasn't had a book published in five years and has had what could only be considered "minor" success in the writing field, if that. I was probably a fool to walk away from even the possibility of such a deal. But I had two good reasons for doing so.

My two children.

While this deal may have given my family a quick infusion of cash, the fact is that by the time I finished the book in question the cash would be gone. And by the time that book "earned out" at a rate of 3-1 in the publisher's favor in e-book sales, the publisher would have seen a small fortune without noticeable expense. And we would be saddled with a deal that would probably haunt my family long after I was dead and gone.

(I'm going to bypass all the variable calculations about hardcover sales, paperback sales, editing, marketing, artwork and distribution expenses for right now - let's, for the sake of this discussion, call those elements of the book deal a break-even situation for both sides, so we can just discuss e-books here as if we were starting at zero expense for all involved.)

What this "sizable advance" now looks like to me is a very expensive loan. I have been watching the e-book revolution carefully for the last two years and it is clear to me that by 2012 everything we have thought about traditional publishing will be history. The bookstores know this. The publishers know this. And some of the writers know this. But I have a feeling not everyone has gotten the memo yet.

I'll do some quick math here. Let's say Amazon sold the Kindle edition of a writer's book at $10 per copy. Amazon takes $3, leaving the publisher with $7. Their take would be $5.25, leaving the writer with $1.75. (In my case I then have to cut in my agent and attorneys for an additional 20%, so my take would be $1.40.) So the "publisher" makes $5.25 per copy and the writer makes between $1.40-$1.75 per copy. And this is all with very little tangible expenses, other than the accountants to keep the money all straight. I think the publisher will be doing pretty good while the writer is "earning out" that advance. Does this seem right to anyone out there? Other than publishers?

Another way to look at it would be this: Let's say the publisher picks up one of your old books and turns it into an e-book: text transfers, new editorial, a new cover, placement with the vendors, etc. Right now you yourself can do this for far less than $2,000, so we'll assume the publisher's cost will be that or less. By the time your book has earned you $10,000 in royalties, the publisher would have collected $30,000 for themselves. And what would their contributions have been? A "platform"? Publicity? We've all seen how well publishers promote "mid-list" books. What would make us think that things will change in this new e-world?

Obviously this model can't hold. There will be a revolt. The big time writers out there are already negotiating better terms, but I bet they are still getting the short end of the stick. In the meantime a lot of the little folks who just want to see print again are probably going to be seduced by new interest from publishers. I have a feeling there is going to be a tidal wave of cheap purchases by the publishers hoping to tie up as much material as possible at these usury rates. And then how much will your "platform" be worth? If you are just another name in a list of hundreds fighting for attention on a giant slate of titles you will have handed in your work cheap, with no way of getting it returned to you. Yes, that's right. E-books don't go out of print, so if you don't fight for time limits, your work will be lost to you. Permanently.

This is not for me. So I have no choice but to go full indie here. You heard me. I am walking away from a potential traditional publishing deal and joining the ranks of the self-published. I plan on putting my first two books and a short story collection up as e-books in the next month or so, possibly followed by a few works that I keep hidden in the bottom drawer of my desk to prevent them from harming the public at large. Hopefully this will help finance the completion of the big book that I started those six months ago.

This is a huge gamble for someone in my position. I am not prolific. My habit has been to publish two books every seven years or so. That time was approaching and I was hoping that I had found a new home with this editor and publishing house. But I can't sign away my financial legacy to my children in this fashion, however small it may be. I am far from a big name in the writing biz. Barely a blip on the radar. The fact that this editor had sought me out in the first place was extremely flattering to me. And now I am sure he will feel betrayed by this post, but this is not my intention. He's a good guy. Smart, talented, well read. This is not his fault. This is a global problem in publishing right now. It has nothing to do with individual publishers and is certainly no reflection on editors. (It's just going to make their jobs that much more difficult.)

This is a big topic and I have taken up a lot of your time here. I have so much more to say, about many different aspects of this post, but I think it should be broken up into digestible chunks, so I will continue posting about this over the next few weeks. I am going to have to use this blog (and anything else I can utilize) to reach out and build a community if I am to have any success at "self-publishing" so please sign up here if you can so I know who is reading these messages. Right now it's just me and a jury of 11.

I know an announcement like this by a minor figure in the business will not make much of a difference in the big scheme of things, but maybe my voice will be heard by a few others who are facing similar deals and they will ask themselves if it will really be worth it in the long run before they sign on the dotted line for the short score. This is how a revolution begins. Sometimes. One disgruntled citizen at a time.

As I said last week, for me, I have drawn the line.


  1. two words for you: self-publish. (well, one hyphenated word.) i self-published my first book, kept ALL rights, and sold the movie rights myself. did my second through a "real" publisher, and even though it's in its second printing, i'm still paying off the "advance." (read: loan) publishers? scr*w em. before they scr*w you.

  2. Good luck. You have more support than you realize.

  3. As an aspiring author I am asking similar questions. Thanks for sharing your experience. And much luck to you and your books.

  4. A brave and difficult decision I think. Congratulations on being decisive and best of luck with your future publishing.
    I am not in the publishing business but am from a business background.
    What I don't know if the size of the advance. You say "What this "sizable advance" now looks like to me is a very expensive loan." My response is 'of course it is' ... what else would it be.

    If a Publisher is a) spending a good deal of money on promotion and b) is advancing a significant sum .. then it makes sense for them to get a significant cut. They after all are taking the gamble that your title may not sell. That HAS to be recognised. Only you know the answers to those questions.

    Absenting those two factors then writers must look to go indie as you have decided.

  5. Uh, yeah. By saying no to three print deals int he last year and publishing myself, I am making a living at writing for the first time ever. Good luck.

    Scott Nicholson

  6. What on earth could justify a publisher taking such an exorbitant sum...when an e-book (for all intents and purposes) is bloody digital...requiring the publisher to put up zero dough for things like printing, binding, layout ect....That is completely ludicrous!

    Good for you dude!

  7. Go for it, Terrill. I am an unknown mystery writer who has self-published seven ebooks (one of them a short story collection). I've never been traditionally published. I'm already earning $3,000 per month on Amazon alone, and I'm just getting started.

    Best wishes for your success!

  8. Welcome to the club! I run a series of articles on my site called Adventures of Epublishing if you're ever interested in stopping by or have a question!

    I've not been in your position (having a book deal) but now that I've epubbed, I'm not going back to queries and waiting and low royalties! No thanks!

    Best of luck to you!


  9. Right on target as I see it. I'm new to this game, but my efforts over the last two years at getting published has met with some seriously indifferent agents and publishers.
    So, I have been driven to EBOOKS and self-publishing. THEIR LOSS, because I'm a good writer--just a new one.
    Best to you.

  10. Howard, you are right of course. And I am used to thinking of advances as expensive loans. It's the "very expensive" part that startled me this time around. Yes, they have a right to be rewarded for their gamble, but I find this current rate to be beyond anything remotely reasonable.

    Even with a small advance the writer will appear to be upside down on the deal while the publishers are raking in sizable profits for quite some time. This is not remotely close to the previous pay scale calculations and cuts involving hard cover and paperback sales. It's roughly double the cut without any of the expenses of producing and shipping a physical product. The initial overhead is the same, but that is minimal compared with the expense that happens afterwards per book out in the marketplace.

    This appears to me to be an old fashioned land grab.

  11. Go see Joe Konrath's website!

    He's done the sums on ebooks and has plenty of authors coming on to guest-post about their experiences.

    You might also like to check out the Writer's Cafe section of Kindleboards

    There are plenty of self-published authors making massively larger sums of money than they ever could have received through paper publishing.

  12. A scary leap but the best moves I've ever made in my very long life (79 years) have always involved jumping off a cliff of some sort. I'm with ya, buddy.
    And as I wander around the vast Internet network of perplexed writers, it's starting to appear to me that many are indeed making self-publishing ebooks work. Takes some doing, but it's being done.

  13. I have been seriously thinking of approaching New York again (after publishing 23 books - some of which did very,very well) but I have been on the fence. My ebooks are doing great. For the first 3 months I had 3 in the Kindle top 5 after that I had 5 books in the top 100 Kindle Store. I still have 2 there and 2 in the top 50 at Barnes & Noble. Why would I give up 75% of my ebook sales and take only 8.5% on paperback sales? I miss traditional publishing but I can't bring myself to jump back in the fray. I would love to have an agent and publisher work with me. I'm ready to be creative in how to publish in this brave new world but if I can't do it with them I guess I'll do it on my own. Luckily, there are lots of us doing the same. Welcome to the club! We're so happy to have you.

  14. I was baffled to hear recently from an editor I know at a mid-sized house that they have been told they can't sign a new author unless the author signs over ALL e-book rights. As you say, this is ridiculous. I think you are right--and eventually the paradigm with change and publishers will look to acquire popular eBooks that have been put out there directly by authors (similar to music artists today). The trick for publishers to going to be finding the niches that can still make them money (they do exist)--the ones that are too lazy to do so are the ones who are going to be left behind. Thanks for standing up for yourself! I worry about what it means for the rest of us writers when writers (and other freelancers) don't stick up for their rights.

  15. I wish you the best of luck in pursuing self-publishing. While more and more folk are finding success, there are still huge numbers that don't, though this isn't much different in the paper world. It is however, a trade-off.

    With a good house, you're getting good editing, cover artists, copy-editors, distribution, pursuit of foreign rights, things far more difficult to come by on your own. You're also paying for time, the time to write more because you don't have to devote time to these non-writing aspects of publishing. Is the gain in royalty worth it? For some, yes. But I think the market is in such a state of flux right now that it's a very, big risk to say "screw you" to publishers because they are taking a bigger slice of the pie. I don't think a lot of writers, especially those new to publishing quite understand the time, effort, and money required. It's a big step to take, and not one to take as lightly as some may believe.

    You seem to have a pretty good grasp though and know what you're getting into. I hope it works out well for you. Perhaps I am playing it safe, but I'm happy with the trade-off I'm giving to my traditional publisher. Perhaps down the road, I may feel otherwise, but for now, I'm good.

  16. First off, I want to thank everyone for dropping by and leaving comments here today. And thanks for joining the blog, if you did so.

    To jnduncan: I hear you. This is not a step I take lightly. I fully understand that I will have to find a great line-editor and do a lot of graphic work myself or with vendors. But you do some aspects of these jobs with the publisher anyway and often you have little final say over covers, fonts, etc. So I don't mind getting my hands dirty here. Yes, there will be some additional work and expense, and it will take some time before I know if it was worth it financially. But at least my destiny is in my own hands here. I'll have no one to blame but me if I fail.

    As far as saving time, as you know an awful lot of time is spent doing various dances with the publishers. Some of that time proves beneficial to the projects, some of it doesn't. There is also something to be said about the extremely shortened wait time between when the manuscript will be ready and when it can hit e-books compared to the time a book sits on the shelf at a publishing house waiting for its release date. Due to complications beyond my control at various publishing houses I've waited anywhere from between 16 months and four years between contract signings and publication.

    I'm getting too old for that stuff.

    I hope to write more about this on JAFO in the near future.

  17. 25% is the standard (unfortunately). I'm a bit surprised that you were in negotiations for 6 months and didn't know this - would have saved a lot of time.

    This really has to change but it will take more and more authors like yourself "walking away" to get this to happen.

  18. Yes. I know I sound like an idiot on that front. But when the editor and I first began talking about getting into business with each other we briefly discussed e-books and I was told that that part of the deal would be "highly negotiable." The editor and I then set about deciding which project of mine would be best suited for the House in question. Once we did that I expanded on the material and wrote about seventy pages that he could present to the publisher. We were entering the notes phase of this process when the e-book subject came up again. A lot had changed at that House since we had begun talking and the "highly negotiable" aspect of e-book discussions was now off the table. I had been far more concerned with the writing of the book than the rapid changes happening with e-books. We weren't talking much about the business aspect of the deal, other than a general number we were looking at for an advance. The other details I usually leave up to my agent and attorneys (of course the last time I did a publishing deal, the e-book business barely existed). It was a bit of a fluke that we ended up talking about e-books when we did, and it was only because the editor brought up the subject of reprinting my first novel, Shooters, again. I was shocked to learn that this split was now the standard. Should I have been more diligent, business-wise? Absolutely. But I was more focused on writing at the time than arithmetic.

  19. Anonymous - I really think you are not helping the situation.

    What authors need to do is make use of Publishers services wisely and with open eyes. Writers NEED editors and marketing. While it is perfectly feasible to use independent editors and/or marketers, there is a new breed of publisher-producer that is starting to offer a much better mix of services with greater eBook awareness.
    One example is Jacqui Lofthouse at

    Not every writer wants to do all of the marketing himself. Not every writer wants to 'manage' each and every step of the process themselves, while at the same time they may not want to go to one of the old fartish publishers. But smart dealing is the way to go, not necessarily demonising every publisher-producer.

  20. Bully for you, I have also refused to sign any crappy 25/75 splits. Wouldn't worry about wasted time with this publisher... you know it's a good project or they wouldn't have offered the deal at all. You can put together your own team from editor to book designer to publicist and/or trade services with other authors. We are self-organizing in various ways all over the Internet. Some authors may still work with pubs for some projects for "street cred" long term or until profit stream from digital books can be built up. It's not a sure thing, but you won't know until you try. Bon chance!

  21. "This really has to change but it will take more and more authors like yourself "walking away" to get this to happen."

    Yes. 100%.

  22. Great post Terrill! I wish you tremendous success. I love reading Joe Konrath's blog (also mentioned here) where he talks about this issue a great length. I too, agree that the 25/75 is 100% unacceptable. So many authors (which Joe frequently highlights) are making amazing money on their own with their stable of titles - and they control their own destiny. This is not to be underestimated. There are some super savvy authors out there making the most of this new territory - it's exciting to see and to be a part of. You've made the right decision.

    Rai Aren, co-author of the award-winning mystery novel Secret of the Sands

  23. Terri - like Don Henley said, "Sometimes you get the best light from a burning bridge."

  24. I found the link to your blog on an Indie Author / Reader website that is fairly new (only started 3 weeks ago). It's terribly sad that large publishers are screwing authors over like this. You can't make it big unless you sign up and if you sign up, you make a deal with Satan. While I am not an author and have no idea of the pain and pleasure it takes to see your final product in the bookstore window, I am really glad that more of you are turning to the indie route. Good luck.

  25. “...My Two Children...” Terrill, your children will reap more of your legacy than publishers via your indie ebook venture. Am predicting you will love the control and immediacy of the indie process; after all, what you don’t want to do, hire out, maybe costing you 10%...your still waaaay ahead. Welcome.

    Garry M Graves,

    BTW, I’ll be following your blog AND when you do a ‘blog tour,’ stop by, glad to have you.

  26. I had to share it on my blog. Hope you don't mind. Wishing you much success even though I think you'll be just fine.


  27. I had a NY agent that contacted me about some of my work with Psychology Today. He had some pretty high list clients and wanted to work with me.

    I had to walk away. I see the potential in e-books and felt it would be my best move. I haven't regretted it yet.

  28. Lee, from now on I'm e-publishing first on my own terms and letting the publishers pay me squat for hard copy rights, even if that means hard copy doesn't happen.

    What's this new book, anyhow?

  29. Sounds like a plan, Scott. But what about the P.O.D. thing that guy on your short story post was talking about? Wouldn't that work as well, maybe better?

    The book in question was a big historical that dealt, partially, with formation of SWAT and the SIS in Los Angeles. It covers about fifty years of turbulent times and will be a very tough book to write. I put aside some other projects to work on this one because the editor felt it would be the best fit for his House. Now I will put aside this project and go back to some of the ones that are closer to completion before tackling something that complex.

    Maybe the publishing industry will have changed their practices by the time I actually finish it. Actually, I'm sure they will have. But I don't see them going much above a 50/50 split on e-books any time soon, if ever. By the time they make that move everyone will think they are doing the writers a big favor. And it will still be a rip off. They are losing a lot of good will and good writers with this current policy. And I'm not talking about me here, Scott, but I am talking about you. I can't wait to see what you come up with now that you have cut lose those ties that bind.

  30. It is really great to have a true-to-life story to read. Seeing other authors have the courage to follow through with "walking away" is how the tsunami will start.

    I think publishers have a lot to offer, but I also don't think they can continue treating the -good- authors in the same manner. They'll need to learn to negotiate in a more fair manner - but authors also need to realize that they run a business. That business cannot continue if they run themselves into the ground paying out unearned advances and not cashing in on their highest profit margin - eBooks.

    I don't think print books will die, and I think that when publishers put their muscle behind it, indies could be in trouble. They have a lot more pull in the business world than a bunch of dissatisfied independent authors - and I'm sure they'll turn to quoting about how hard they were bashed to back up their claims.

    I don't necessarily think we need to publicly bash publishers to get our point across. I'm more a fan of the quiet sit in (or in this case, walk-away) than the rioting and burning.

    J. E. Medrick

  31. You're right, J.E. Publishers run a business and take risks with writers. But writers take risks when they sign with publishers as well. And we all run our own little businesses right out of our houses - our careers. At this current e-split I think the publishers are shooting themselves in the foot. I have lots of friends in publishing and I'd like to see them all succeed. I have even more friends who are writers. I want them to be able to succeed as well. Who truly deserves the Lion's share from a piece of writing? The person who created it or the ones who marketed it and sold it? (That's an argument that could burn out of control very easily.)

    This boils down to a question of readers and writers and one day anyone who seeks to profit as middlemen may be out of business. The current policies have made it an easy decision for me. If the split looked like they were remotely trying to be fair it would have been a different story altogether. I'm easily seduced by flattery and cash. But as the cops say this was a SDNLR situation. (Something Does Not Look Right.) I had to trust my instincts here. It will probably take quite a long time before I know whether or not they were correct.

  32. Good luck. Post the title and a link when you can. I've read Earthquake Weather and liked it. I'd love to read more.

  33. I can't find a way to sign up for your blog posts.

  34. Sarah, look on the right side of the page and click on the box that says "Follow" (above all the smiling faces) and it should lead you to a page where you can sign up.

  35. More power to you! This is a fantastic article and it only reinforces my own decision to self-publish more strongly. Congratulations and best of luck.

  36. Hurray!
    It can't come soon enough. The greed is astonishing, but then they've always been about milking the writers and keeping them half starved.
    Great article and I wish you all the best.

  37. So . . . are there ANY publishers adapting to the e-world out there? Perhaps even smaller or start-ups?

  38. Baen has their webscriptions. They offer their books - both old and new catalog in pretty much every major format. They offer free books which are usually the first one or two books in a series by participating authors and are kind of like literary gateway drugs. The also offer advance reader copies online and do bundle pricing for several books by various authors. I don't know the details of the business model, but they may be unique in what and how they offer e-books.

  39. Good for you. I wish you all success.

  40. fascinating & i wish you the best of luck. i especially enjoyed your frankness in getting to the decision, which i am sure is sound and right. i've been working with publishers as a researcher and i know they're scared - probably they're reading this, too. the best combination seems to be getting some critics and a small but loud audience behind one using print or electronic distribution & then following up & making a living using electronic self-publishing. i haven't made up my own mind yet-still at the "trying to win a contest which includes publishing" (traditional) stage. but in terms of market penetration and community, the net can't be beat - especially if you write in english but hail from berlin! cheers!

  41. I've been resisting the temptation to e-publish while my agent shops my current book, but you're pretty persuasive. If Barry Eisler can turn down a $500,000 advance to self-publish there must be some validity to it.

  42. I was very close to a deal with Viking a couple of weeks ago for my "first" literary thriller, and even though, unlike you, I wasn't lucky enough to be in the position of walking away--one top person at the house made the editor and everyone she'd gotten on board do so--I am now asking some of the same questions you've posed here. (Thank you for the additional angles and edges you provided). Are the big 6 trying to grab something they're not really entitled to? Do they have enough to offer in return--someone like me say, less well known and not established?

    It's a tough call.

    But it's a brave new world.

    I wish you much success in it.

  43. Good article! I've been researching doing a second edition of a book I've written as an e-book and you've convinced me to go ahead and do it. Thanks!

  44. I happened on this site via John Kremer's Book Marketing Tip of the Week (questions and answers section). All good stuff and so too on this interesting site. I think... no, I KNOW I'll be back. Keep up the good work.

  45. Hi, just to let you know that the sentence that resonated deeply with me was 'I know an announcement like this by a minor figure in the business will not make much of a difference in the big scheme of things'.

    I'm about to start a blog focusing on the challenges and decisions I make in writing my novel. After years of rejections in the nineties, I'm now a wife, three children and a tough job to the good and I'm getting back into it.

    It's a different world. I'm conscious that the opportunity is there for me with e-publishing but that will be just as much hard work.

    Best of luck to you mate, we're all just trying to do what we love and hope someone will give us a few bucks because they too enjoyed it :)

  46. MARCELO DE ALMEIDAJune 11, 2011 at 5:20 PM


    1. That sounds like a scam.

  47. It's really best blog. Sound like a very best.

  48. One has to think through it before coming to a conclusion on about it,beautiful site I like the header.

  49. This is a very thought provoking blog. I gained much from reading it and look forward to reading more.

  50. I believe you have made the wise choice. Short-term gains can often blind us and in those moments of visions of fame and fortune we are inclined to sign on the dotted line. I agree with you that these are not comments targeting any specific individuals. Rather this is a matter of looking at the industry, assessing the situation, and making the best move for your career. I am now learning InDesign, html, PhotoShop and other programs to publish my own material in POD fashion. This does not mean I ignore the traditional publishing houses. It does mean that I will be reluctant at best to accept any deal with certain time restrictions. It also means that I will defer any offers to temporarily sign a deal based on a publisher's promise to 'consider' the deal for future negotiations. At best, I will discuss short-term options only after the provide more explanation regarding their choice. Stick to your guns. The advent of new technology is putting publishers of all sorts in a precarious situation. They know it and are as concerned as you. Simply put, they are not sure what to do next and I don't blame them. I am looking at downloading songs and books from my internet page and have researched the implications such as piracy and quantity of sales v. return on investments. It is a lot more complicated than writing good material and passing it along at a cost to the audience. However, if we as artists bear this simple analysis in mind I think some of our fears and concerns can be quashed to degrees.

    Best of luck.

  51. I am preparing a blog for my masters work in Business Education. I find much intriguing content in your posting. Would you agree to be interviewed via internet as part of my work? Please let me know.

  52. It sure sounds to me like you've made the right decision. It's the path I'm taking too as a new author. I don't want to gamble away my future earnings for a little up front money. That's a bad bet.

    And so, I've published my first book "Four Seasons, Four Lessons: A Parable About Changing One's Fortune" direct to Kindle. I have more in the works, but we'll see how things go in the weeks and months ahead as I learn the ropes and hone my craft.

    Believe in yourself and have the courage to blaze your own trail! That's my motto. It sounds like it's yours too.