The Business Rusch: Bestselling Writers Continued (Changing Times Part 9)

The Business Rusch: Bestselling Writers Continued

(Changing Times Part Nine)

Kristine Kathryn Rusch

It’s dark and raining and cold, prime winter weather here on the Oregon Coast.  I have a hot mug of tea beside me, and holiday music on the stereo (iPod dock, if you want accuracy).  I have 50 to 100 pages to go on my current novel, and I’d like to finish it before Christmas.  I am so deep in the book that I forgot what day of the week it was until I went on Twitter during a break.

And then I realized I had to write this blog.  To say that I am reluctantly approaching this week’s topic is an understatement.

But my streak of posting every single Thursday since the first week of April 2009 brought me here.  And here I’ll stay.

Discussing bestselling writers and the changes in publishing.  If you haven’t read the very first post in this long series, please do so. Then read the post from two weeks ago (the writer overview post) and last week’s post.  That should bring you up to date so that this post will make some sense.

The New  York Times bestseller and current president of the Authors Guild, Scott Turow, seems terrified of e-books.  All of his comments revolve around the problems e-books will bring to writers.  From my standpoint, as a long-term professional fiction writer and an advertising bestseller (see my definitions from last week), I think that e-books are one of the best things to happen to writers in a long time.

Turow and I disagree for a variety of reasons.  One reason is simple: he’s a lawyer, and lawyers are trained to see the dark cloud in every silver lining. (If they didn’t, they wouldn’t be good at their jobs.) His worries about e-piracy and privacy are lawyerly worries.  (I will deal with the e-piracy issue later in this series.) His economic worries—the ones that concern royalty rates—are more germane to our discussion here. But the other reason—the more important reason—is this:  Turow and I disagree because our writing careers are vastly different.

Every since the publication of his first novel, Presumed Innocent, Scott Turow has been what I call a Guaranteed Bestseller. His subcategory  is The Occasional Bestseller.  Turow is still a practicing attorney and a partner in a law firm.  He is not a fulltime writer, nor has he ever been one, even though he has earned millions of dollars at his writing.  Ever since he was in law school and published the classic nonfiction book, One L, he has combined writing with his love of the legal profession.

I have been a fulltime writer most of my adult life.  I make a living writing, day in and day out.  Unlike Turow, I haven’t found another profession I love as much as the writing, which enables me to focus on it.

But we differ in more than our approach to writing. We differ in the types of careers we’ve had.  Neither of us has a “standard” career although, honestly, his comes closer than mine.  He spends years on a single novel, while I write at least four per year, under various names.  My pen names all have different careers than my Rusch name.  You could say that I have at least five different careers going at one time. They’re all in writing, but they are different.

And while I’ve hit the bestseller list with two of my careers (Rusch and Nelscott), I haven’t become a Guaranteed Bestseller with any of my names.  Turow was lucky enough to hit that position first time out of the box.

That word “luck,” however, is a tricky word.   And these days, I’m beginning to think the fact that I am not a Guaranteed Bestseller is a lucky thing indeed.  It makes me nimble enough to change with the industry.

The Guaranteed Bestsellers are having a lot more trouble with these changes, and might have even more trouble in the years ahead.

Before I go too far down this argumentative road, however, I still need to explain a few things.  Last week, I focused on definitions of bestseller.  Now I have to focus on a few other arcane aspects of the publishing industry.

First, let’s discuss money and royalty rates.  I know many of you who read this blog regularly are not writers or agents or publishers.  You work in other industries, and have followed me since I started The Freelancer’s Survival Guide.  So let me explain how the relationship between the writer and the publisher works.

Remember what I discussed in the second post in this series.  For hundreds of years, the relationship between writer and publisher was one of necessity.  The writer provided the content, and the publisher distributed that content to readers.  By the late 20th century, the business model looked like this:

Writers provide content (product) to Publishers.

Publishers distribute that content to Distributors.

Distributors distribute books to Bookstores.

Bookstores distribute that content to Readers.

Generally speaking—and I can only speak in a general manner here—the relationship between the publisher and the writer is governed by a contract on a per book basis.  Very few writers are employed by the publisher (although some are).  I’m not going to deal with them here.

The contracts vary from publisher to publisher and from writer to writer.  Often the contracts vary from book to book.  For example, when I worked for a textbook publishing company in the early 1980s, that company—which was small—had 80 different contract templates to offer to writers, and writers would often negotiate those 80 templates into something else entirely.  If that publishing house published 160 books in the time I worked there, 140 of those books were probably governed by a contract that looked nothing like any other contract in the publishing house.

Yes, that’s confusing, and yes, that’s publishing, and yes, that’s why I can’t be specific here.  A contract exists for every book on The New York Times Bestseller List, and that contract is private, unknown and unknowable to anyone who is not involved with the publishing house, the book, or the writer.

So when I say I’m guessing in the next few paragraphs, I am truly guessing.  I’m using the law of averages and I’m working from there.

Until the last five years or so, it was very, very difficult for a writer to reach a mass audience on her own.  She had to partner with a publisher to do so.  In that partnership, the writer would contractually agree to give up 90% of the retail price of a book in exchange for wide distribution.  The retail price, by the way, gets set by the publisher.  The writer would make 10% of the retail price even if the book sold for half off.

(As I type all of this, my fingers twitch.  Yes, I know about deep discounting and escalators and all of that, industry people.  I’m ignoring it for the sake of simplicity.)

Most writers—even the bestsellers—are interested in writing, not in marketing, and are more than willing to give up that 90%, figuring they’d make more on 10% with national distribution than they would with 100% and no distribution.

Part of the issue reason was that big New York publishers were the only game in town.  Yes, over the years regional presses developed. So did university presses.  But they didn’t have the ability to reach a huge audience the way that Big Publishers did.

Writers can and do make a lot of money on that 10%.  (Generally, bestsellers will make at least 15%, but 10% is standard for most writers across the board, which makes this series of blogs more consistent—and the math easier.)

Let’s use an example here.  I’m picking That Old Cape Magic by Richard Russo for a variety of reasons. They are, in no particular order:

1. I own the book.

2. I know where the book is.

3. The book is listed on Publishers Weekly’s 2009 Facts and Figures List (if you don’t know what that is, see last week).

4. The book’s sales make it one of the top sellers in 2009, but it falls 85th in a list of 141 top selling hardcover novels.  So it’s not one of the highest sellers of the year, but it’s not one of the lowest (of the best) either.

5. Richard Russo—Pulitzer Prize winner, New York Times bestseller, screenwriter—falls into the Occasional Bestseller subcategory of the Guaranteed Bestsellers.  A new book of his is an event, not a regular occurrence.

Before we get to the math, realize that I’m guessing here.  I don’t know Richard Russo, I’ve never seen his contracts, I have no idea what the actual terms are.

According to Publishers Weekly, Russo’s publisher Knopf sold 164,437 copies of the hardcover edition of That Old Cape Magic in 2009.  The book’s listed retail price is $25.95. So to find out how much Russo earned only on the hardcover, multiply 164,437 by $25.95 and then take 10%.

164,437 x 25.95 = 4,267,140.10

4,267,140.10 x 10% = 426,714.01

So on the hardcover alone, by my admittedly low numbers (if Russo is only making 10% on his books, he is signing criminally bad contracts), Russo made $426,714.01.  This does not count hardcover sales in 2010 nor does it count the future paperback sales.  It doesn’t count the sales on the reissues of his other novels, re-released to coincide with the hardcover release of his latest book.  Nor does it count Hollywood sales (there will be one; Russo’s novels have been made into a critically acclaimed HBO miniseries, Empire Falls, and a wonderful Paul Newman film, Nobody’s Fool.  Plus Russo also writes screenplays).

Even at 10% writers make a lot of money.

Or let’s look at it this way: Before the changes in publishing, the average regionally published book sold about 1,000 copies. Let’s say Russo printed it himself and distributed it himself.  He kept the $25.95 cover price.  He would have made in that same period of time, $25,950.  Not bad, until you subtract the same expenses a publisher would have to subtract. The cost of the book’s production, along with overhead, the discounts, etc.  If our fictional Russo did that, he would have been lucky to clear $5,000 on the very same book.

I’m playing with loaded dice here, because the difference between Big Publishing and all other types of publishing shows up most starkly in the bestseller category.  I know of only a few writers who have parlayed a self-published book or a regionally published book (two different things, both small) into a New York Times bestseller.

Two of them I only know about because Michael Korda mentioned them in his book, Making The List: A Cultural History of the American Bestseller 1900-1999.  He shocked me with this passage:

“Authors have even been known to make their way onto the national bestseller lists without a publisher.  Wayne Dyer, one of the self-help gurus of the 1970s, sold his first book, Your Erroneous Zones, from store to store across the country out of the back of his station wagon and was already high on the list before book publishers even noticed what was happening.  The late Peter McWilliams, one of the early popularizers of Transcendental Meditation, did the same.” [pg. xv]

Most writers who tried to hit a bestseller list that way had the same experience John Grisham had with his first novel, A Time To Kill, which was not self published.  Grisham’s novel had a standard 5,000 copy first printing, and the book sold badly.  As Grisham says in the dedication to Ford County Stories (which I read in paperback, but whose hardcover sold [according to PW’s Facts and Figures list] about one million copies):

“When A Time To Kill was published twenty years ago, I soon learned the painful lesson that selling books was far more difficult than writing them.  I bought a thousand copies and had trouble giving them away.  I hauled them in the trunk of my car and peddled them at libraries, garden clubs, grocery stores, coffee shops, and a handful of bookstores….”

A Time To Kill eventually became a New York Times bestseller.  The version that became a bestseller is not different from the version Grisham peddled in the trunk of his car.  The quality of the writing remains the same.  The storytelling is the same.

The difference is that by the time Grisham’s publisher released A Time To Kill, Grisham had become a Guaranteed Bestseller.   A Time to Kill was not a breakout book—something we’re not going to deal with here—but it is a good, solid John Grisham novel, a novel that did not disappoint his legions of fans.

Grisham’s point here is a good one:  Selling books is far more difficult than writing them. At least for writers.  We’re content providers.  Rarely are we business people.  The partnership with publishers, even with the changing publishing environment, works for most writers because most writers aren’t self-help gurus like Wayne Dyer or Peter McWilliams.  Most writers are introverts who prefer to sit in a room and make things up.

For every Wayne Dyer and Peter McWilliams, there are hundreds of thousands of writers who tried to sell a book from the trunk of their car and failed to make a dime.  They didn’t come close to a bestseller list.  Like Grisham, they probably didn’t even sell out their print run.

But…back to Guaranteed Bestsellers in the modern era—the quick-changing publishing environment at the beginning of the second decade of the 21st century—what do they get from their publishers that other writers don’t get?

If you ask the other writers, the ones who don’t know the business, they’ll say that the Guaranteed Bestseller gets advertising and promotion, a book tour, and the occasional appearance on television, and that’s the only difference.

Actually, those things make little difference at all.  As Korda says in that very same essay,

“Despite the inherent suspicion on the part of authors that the list is manipulated by somebody, in fact it isn’t controlled by publishers any more than it is by bookstores.  Of course many of the books on it are reasonably predictable—particularly novels by big, established authors—but at least half of the books on any given week’s bestseller list are there to the immense surprise and puzzlement of their publishers.  That’s why publishers find it so hard to repeat their successes—half the time they can’t figure out how they happened in the first place.” [p. xv]

So if you can’t predict a bestseller, and you can’t force a bestseller, no matter what you do, why stick with a Big Publisher after the very first bestseller?

The answer isn’t as simple as you’d think.  Aside from the contractual obligation—generally, the author has agreed to let the publisher bid first on the next book—there are all kinds of other business reasons that aren’t obvious unless you look for them.

The biggest reason isn’t overt advertising—that television commercial you just saw for James Patterson’s latest book or the full page ad in the Sunday Times Book section.  It’s market penetration.

I was traveling one February on the very day that a John Grisham book got released.  I don’t recall which book it was now, but I do remember the day vividly.  In publishing, big books like Grisham’s are often embargoed—they can’t be set out for sale until a particular date. As a result, they have what’s called a one-day lay-down, meaning that tens or hundreds of thousands of copies that weren’t in the store on Monday appear in the store on Tuesday.

When you’re dealing with an author as big as Grisham, however, you’re dealing in millions of copies, and there simply aren’t enough bookstores to accommodate that many books.  On that lost February day, I arrived at O’Hare to find stacks of Grisham novels five feet high beside the caramel corn stand and inside the Hudson News shop as well as in the airport bookstores.  I nearly tripped over two different stacks near the Starbucks in the United terminal.  You could buy that book everywhere.  It was the same in the airport I arrived in, although I noticed it more in O’Hare because I spent more time there.

When I returned home one week later, there was no sign of the extra Grisham books, although stacks still filled the bookstores in O’Hare.  That one-day lay-down established market penetration and got millions of readers to notice that book’s release.  We may not have bought a copy, but we knew the book existed and that it was important.

Going back to last year’s Facts and Figures list, The Lost Symbol by Dan Brown had a one-day lay-down.  It sold 5.5 million copies in the first six months of its release.

Here’s the hard truth of 5.5 million copies—or even of the 1 million copies of Ford County Stories or the 164,000 copies of That Old Cape Magic:  The publisher spent all of its money on the book before publication and wouldn’t see a dime of return until 90 days after publication.

No writer I know—not even a New York Times bestseller—is willing to spend millions two years in advance of a publication date to make even more millions one year after that publication.

So…let’s go back to Richard Russo and my general numbers.  Did his publisher make $3,840,426 in profit on his novel?  (164,437 x $25.95 x 90%)  Are you kidding?  Publishers make, on average, a 4% profit on each book they publish.  So the publisher—after years of investment—probably made $170,685.60 in profit on that book for its 2009 sales.  Of course, the publisher will keep the hardcover in print into 2010, publish the paperback, and might even get a goodly percentage of the foreign rights.  But I had to put that detail in this part of the blog for the folks who are going to scream that no publisher deserves a 90% profit for market penetration.  Publishers aren’t making 90% profit.

Nor did Russo make a straight 10% profit.  He had to factor in his time and his own overhead.  I have no idea how many years it took to write the book and how much he spent during that time, but I’ll wager he still made more than a 4% profit on his part of the partnership.

Writers—even in Big Publishing—do just fine.

But the business model is changing, as I’ve been saying, and writers will feel the impact in good and bad ways.  Next week, I’ll finally get to the reasons why so many Guaranteed Bestsellers think e-publishing—and the other changes in publishing—will hurt writers.  All of it comes from the differences in experience with the publishing industry—not so much financial changes (royalty rates, etc) but changes in the way books get marketed.

And that, my friends, will take another three thousand words, so I am saving it for another day.

If I hadn’t been in the middle of finishing this novel, I would have done an extra business post this week.  There was so much market news, so many new things that I’ve learned just in the past few days, that I was tempted to do a bullet-point essay on everything.  Instead, I’ll incorporate it into the future essays on the changes on publishing.  But scroll through this past week’s business news. There’s more than enough to confound, bewilder and please you all at the same time.

A lot of  you have been posting and responding and e-mailing me about this series. Thank you! And thanks for the financial support for the nonfiction as well.  It keeps me at the computer, even when I should be writing something else.


“The Business Rusch: Bestselling Writers Continued” copyright 2010 by Kristine Kathryn Rusch.

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7 Comments

  1. Wonderful article! Excellent. I have been published by traditional publishers (Pocket and Heyne), non-traditional publishers, and I just self-published an eBook. There are certainly pros and cons to each of these avenues. With the shifting paradigm, I find that I’ve had to become way more involved in the business end of this industry than I was prepared for. Everything is changing so fast and is rather overwhelming. I really look forward to reading more of your insights!

    Reply
  2. Oh, yes. The business side is very important in this new world of publishing. That’s one of the reasons I hope writers will pick up the Freelancer’s Guide or read it for free here on the website. The business part of publishing can make or break careers, so it’s good to learn as much as possible. I’m glad you’re enjoying the series and wish you the best with your own writing.

    Reply
  3. I’m an aspiring writer, really enjoying this series and column. I’m lost in the Grisham part, though.

    You say: “A Time To Kill… Grisham’s novel had a standard 5,000 copy first printing, and the book sold badly.”

    “A Time To Kill eventually became a New York Times bestseller. The version that became a bestseller is not different from the version Grisham peddled in the trunk of his car. The quality of the writing remains the same. The storytelling is the same.

    The difference is that by the time Grisham’s publisher released A Time To Kill, Grisham had become a Guaranteed Bestseller.”

    I’m really lost. In the last part, do you mean that the publisher re-released the book, after he had already become a Guaranteed Bestseller, and it was at that point that it became a bestseller?

    Reply
    • Yes, Kaitlyn. That’s exactly what I mean. You’re right: I should have said “rereleased.” Good catch.

      Reply
  4. Thanks for writing this series, Kris! Someone recommended it to me on my blog and I’m finding it fascinating. You’ve also made a lot of sense of why BIG authors stay with their publishers. Market penetration is a very good point. Even if an author is rolling around in endless pots of money, it doesn’t make sense for an author at that level who has always reached their readers in that way to do this all themselves out of their own pocket.

    There’s independence, and then there’s stupidity. For where I’m at and what I’m doing, being indie makes sense. There is no publisher that would offer me a deal good enough to be worth giving up the creative control.

    But once an author is BIG, they’ve generally got enough negotiating power over nearly every aspect of their book that it’s not like they’ve really given up creative control.

    I really appreciate both you and your husband posting these kinds of business posts.

    Reply
    • You’re welcome, Zoe. You’re right about creative control at the Big Bestseller level, and you’re anticipating some of my next posts on what makes sense for those of us who aren’t NYT bestsellers on anything more than an advertising level. :-) I’m going to be fascinated to see where this all shakes out and what kind of posts I might write in, say, ten years. (Or what I might write them on or for…)

      Reply
  5. Ooooh can’t wait for the new posts! One of the things I had to think about when deciding which way to go for myself as a new writer was the odds. Odds were that I wasn’t going to be an uber bestseller, but like most writers would end up somewhere on the midlist, which appears to be a fairly precarious place for a new writer to be right now. I figured I could make a living on my own if I worked hard enough and built backlist and cultivated a fan base online, etc.

    And someday I want to be an “advertising bestseller”. with NYT starting an ebook list… who knows some day in a few years I might have a chance at that. And if I ever do get there, you better believe I’ll milk the marketing angle to widen my platform!

    Reply

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