The Business Rusch: Writers: Will Work For Cheap

The Business Rusch: Writers: Will Work For Cheap

Kristine Kathryn Rusch

Here’s something that has nagged at me since the start of the indie publishing revolution: writers—published writers—dismissing money as a factor in publishing their work.

The argument goes like this: Traditionally Published Writer A says she’ll never self-publish. When told that her $5000 advance is the only money she’ll make on that book, she shrugs and says, “I’ll sell more copies if I go traditional,” as if that’s a fact rather than a supposition.  And even if she does sell more copies of the book through her traditional publisher than she would in the same period of time if she published the same book herself, the traditional publisher will take the book out of print after a year or two. The indie published book will continue to earn over years, maybe decades.

Americans have lost the ability to look long-term. Most Americans would rather take one cookie right now instead of a dozen cookies tomorrow. There’ve been a lot of studies on this: the most famous is the Stanford Marshmallow delayed gratification study. I don’t know if this trend is worldwide, because cultural differences do have an impact on our upbringing. But I do know that Americans, for the most part, believe getting something now is preferable to getting more later.

This attitude has an impact on everything we do. In writing, it particularly makes me crazy. Because writers are constantly working against their own financial interest, both in traditional publishing and in independent publishing.

Let’s take traditional publishing first. What got me started on this thread for the first Business Blog of 2012 was my Asgard Press Vintage Sci-Fi Calendar. As I turned the pages to January, I passed the page with the months displayed for the entire  year. The piece of art that went with that page (which isn’t on the website, dang it) comes from Amazing Stories in 1929. Prominently displayed on that cover was a short story contest run by good old Hugo Gernsback himself, offering $300 to the winner.

You probably scanned right over that, but you shouldn’t have. Because $300 in 1929 dollars is a boatload of money. There are a million ways to examine how much that $300 would be worth in today’s dollars, but I prefer a good old purchasing power index.   The ones I found always gave me a slightly different number, based on slightly different calculations, but none of them could give me 2012 dollars. I had to settle for 2010 dollars.

In 2010 dollars, that $300 from 1929 is worth $3782.12.

That’s right. More than ten times the amount that $300 is worth now. Yet you still see writing contests that offer $300 like they’re offering gold.

That little poster reminded me of my shock as I read Jack Williamson’s autobiography, Wonder Child: My Life In Science Fiction, at the end of 2008. Jack kept track of all of his writing earnings on index cards, and he recorded them in the book. Most shockingly were the earnings from the 1930s, the Great Depression, when he routinely earned $300 or more per story. He got paid anywhere from one to ten cents per word.

Sound familiar, short story writers?

When I sold my first short story in 1982, I got paid five cents per word. I recently sold a story to an anthology for…you guessed it. Five cents per word.

In Jack’s day, a writer could make a good living on short stories, not just because the pay rate was phenomenal, but because there were more paying markets in need of good material. (That is slowly becoming the case again: see my piece on the new short story golden age from last year.)

In the 1950s, writers moved from writing short stories to make their living to writing novels. Lawrence Block, in his wonderful Afterthoughts, talks about writing novels for $1,000 advances—and writing a lot of those novels.

But let’s talk about my career instead. When I started, a first-time novelist could expect an advance of $5000 for her book. That advance would be paid in two installments—on signing and on acceptance (please note that acceptance meant the same thing then as now: when the novel gets approved by the publishing house and not before).

Now the average advance that a first-time novelist can expect is $5000, which is often paid in three installments—on signing, on acceptance, and on publication.

I sold my first novel in 1989. I received more than the average advance. But let’s use my career timeline, and to make it easy, let’s assume Writer A got her $5000 advance in 1990, in two payments, selling North American rights only (because that was standard) and very few auxiliary rights like audio (also because that was standard).

In 2010 dollars, she would have made $8233.46.  At least 3200 more dollars in purchasing power than if she sold the novel a year or so ago.  And in fewer payments (two instead of three), and selling fewer auxiliary rights.

Publishers have not increased writers advances at all since I started in the 1980s. Not one thin dime. And compared to the 1950s, well, writers are getting miniscule advances. Compared to the glory payment days of the Great Depression, writers are getting next to nothing at all.

Recently, several writers with bestselling careers have received advance offers on their new books of one-half or one-third the previous advances. This trend started during the summer, and continues: I know of at least two writers in December who were told to take lower advances because their publishers “couldn’t make back the advance” at the higher level.

In addition to the lower advance, all of these writers were told they had to sell world rights to the publishers, as well as get 25% of net for their e-rights. And other auxiliary rights were usually in the bargain.

I got one of those so-called offers in August, and said no, quite emphatically. Why in the world, with the rise of indie publishing, would I take less money on all fronts from advance to royalty for the same amount of work?

Other writers simply don’t question this. Nor do they question their agents who tell them that they have no choice in this matter if they want a deal. “Publishers are hurting,” the agents say. “You have to accommodate them.”

Two mistakes in that sentence. Publishers aren’t hurting, and writers should never accommodate their business partners without consideration to the writers’ own business. But writers have had the attitude for years that it’s better to be published than to be paid.

How do I know publishers aren’t hurting? I read the trades. I wrote a blog about third quarter profits late last  year, which showed how traditional publishers are making money on this new revolution in publishing.  But at the beginning of this year, Michael Cader of Publishers Marketplace had this analysis of 2011:

“We’re actually going to wait until all 52 weeks of the year have been tabulated by Nielsen BookScan before reporting their print stats for the year, but the indication of a decline of about 9% in print units in 2011 can be seen as unexpected resilience given the disappearance of Borders and the continuing growth of e-books.

“For 2010 the new BookStats tabulated 76 million ebook units were sold. If that number doubled in 2011, that would mean more units gained than Nielsen says were lost on the trade side. We’ll see.”

You should know that BookScan only tracks about 50-70% of print books sold. And BookStats doesn’t seem to monitor indie e-book sales all that well, so the news is probably even better.

No matter what the statistics end up being, Cader’s entire analysis is excellent. You can find it—along with the examination of increased profits for traditional publishers—here. And a side note: If you consider yourself a professional writer and you don’t subscribe to Publisher’s Marketplace, then you’re hurting your career by failing to keep up with the traditional publishing (and some indie publishing) news.

And you’re probably going to take that stinky advance, selling your “poor” traditional publisher more rights for half the money.

Writers don’t need inflation to eat away at their earnings. Writers have to fight their very natures.

For some reason, writers seem to think it’s better to be published than to be paid.

Before we move on, let’s look at that sales versus money picture that so many traditionally published writers are using as an excuse to sign those awful contracts.

Let’s look at this in two parts. First, money.

Somewhere in the 1920s, writers convinced publishers to give them advances on their royalty income so that the writers had enough cash to write the next book. Let’s not discuss how profligate many of those writers were with their cash—how F. Scott Fitzgerald blew through a small fortune in those years or how Ernest Hemingway always ended up short of cash.  Let’s just assume that advances actually help writers write a book. Because that’s what an advance is for: to fund the writer while he is spending all of his time writing. Not part-time while teaching. Full-time.

So, you folks can live on $1666.67 a year? Seriously?

No wait! It’s not $1666.67. I forgot to remove the agent’s forever 15%.  You guys are apparently so good at money management, you can live on $1416.67 per  year.

Because that’s how a $5000 advance, divided into three payments minus agent, pays out. $1416.67 over three years.

And because no one is paying any kind of interest on savings accounts, you can’t even bank that money and have it earn for you.  Yeah, you might get more immediate sales on that book—it might go out to bookstores at 7,000 copies or 10,000 copies, and on those at $6.99 you will get 55 cents per copy.  But half of those books will come back as returns, meaning you have yet to earn out your advance.

E-book sales might be a lot better, but you’ll only get 25% of net, which some publishers never even define. I’ve been doing the math on every single royalty statement I’ve received since this whole ebook thing ramped up, and no disrespect to those who say that 25% of net equals 17.5% or 14.2% or whatever figure they’ve come up with (in the teens), but on all of my royalty statements, the actual e-book royalty rate I have received is less than 10% of the retail price for that book. And from the so-called Big Six publisher that also routinely underreports e-book sales by factors of 100 or so, I only received 8%.  (And according to that contract, I should’ve gotten 50% of retail. Ooops.)

Math doesn’t lie, y’all. Most of you traditionally published midlist writers—you’ll never earn your measly $5000 advance back, y’know, the one paid in installments over three years? The thing you licensed most of your rights for to get 5,000 or 10,000 or maybe, if you’re lucky, 20,000 copies of your book into stores in the first six months of publication.

What happens after six months? The paper editions go away. Out of print, out of sight, out of mind. The e-book will remain in print, but you try earning back an advance with inaccurate sales reporting, and some kind of math that turns 25% of net into 8% of retail.  Good luck with that.  If you get any royalties at all, they’re years down the road.

You’ve licensed almost everything you could on that book for an extra 5,000 or 10,000 sales in a six-month period that is rapidly disappearing in your rearview mirror.

And you bestsellers are having similar problems, particularly if you’re accepting lower advances. In another report on Publisher’s Marketplace, Michael Cader examined the Year in Deals, using data reported to them by authors, agents, and publishers to examine traditional book deals. (This data is woefully incomplete. For example, I have never reported one of my traditional book deals to Publishers Marketplace. Most writers I know don’t report, and agents only report when they get a six-figure deal or better, so the data is skewed high from the get-go.)

Still, about the big money deals, Cader writes this:

“In nonfiction, the size of the biggest advances is also shifting, with significant deals ($250K to $499K) rising, and major deals ($500K and up) declining, at their lowest point since we started measuring in 2004. Our highest category fared better in fiction, though major deals declined somewhat. Children’s was even with 2010’s record 28 major deals.” [Emphasis mine]

Cader’s deal tracker doesn’t look at rights licensed, but I can tell you from my discussions with bestselling writers that they’re having the same problem as the rest of us: publishers want to pay less money for more rights. (And if you’re wondering why I use the word “licensed” when I talk about rights instead of “sold,” then you do not understand copyright. Get thee a copy of The Copyright Handbook immediately, and learn your business. I do use “sold” with books and stories [above] simply for ease of communication. No writer ever talks about licensing a story to a magazine, even though, technically, that’s what we’re doing.)

What does Calder’s information show? Writers working for cheap. Writers taking yet another pay cut, just because they’re asked to do so, because writers aren’t smart enough to learn their own business and stand up for their own rights.

But what if the publisher won’t buy my book? I hear some of you whining. You have options now. I wrote an entire blog post about it. Check it out here.

For you midlisters, though, is it really worth signing away so many rights for the same amount of up-front money you would have received in 1990? Even with (or especially with) all of the options?

Are those extra 5,000 or 10,000 sales worth it?

Only you can answer that, but here’s something to consider. You will make a lot more money on a lot fewer sales if you indie publish. And your book will never go out of print. So you might not get those 5,000 or 10,000 sales in the first month of release, but you’ll have those and more in five or ten years.

And you give yourself a chance to have lightning strike. For example, my husband Dean Wesley Smith’s first novel, Laying The Music To Rest, was published in 1989. The novel is set on the Titanic, which wasn’t a big deal in 1989. But in 1997, when the movie Titanic came out, readers bought any and all Titanic-related books they could find. Dean’s book was six years out of print at that point. He would have had a flurry of sales, maybe even become a bestseller because of that lightning strike, but he didn’t even have the chance.

Nowadays, writers have the chance. I saw a significant increase in sales of my novelette G-Men when J. Edgar came out, and that movie wasn’t a blockbuster by any stretch. Surprisingly, the sales of my short story Jackie-O, went way up when the release of those tapes came out in the fall.  The sales of both pieces have remained strong ever since.

Could I have predicted that? Maybe for a novel, and maybe I could’ve convinced my traditional publisher to re-release the book to time with the movie. But for short stories? No.

And when I notified one of my traditional publishers about the release of two TV shows about fairy tales and two upcoming Snow White movies, they shrugged and hoped for a halo effect for my fairy tale romances. No one at the publishing house has made an effort to tie those books into the Once Upon A Time phenomenon, but readers are discovering the books because the ebooks are available.

Back to the main point, however. Is that short-term increase in sales worth the lost revenue? Each writer has to make that decision for herself.

But let me tell you something that surprised me this fall. Because of all kinds of factors, the promotion on my latest novel Anniversary Day, which WMG published in December, changed. We decided to let the book sink or swim on its own and we would put the money into promoting the next Retrieval Artist novel.

Sales figures for Anniversary Day are not yet at the level they would have been at if the book had been released by a traditional publisher. (I’m not counting audio sales here.) But they’re good. And I haven’t even seen one-tenth of the sales figures yet because they’re not in from Kobo or the iBookstore or any of the big international players.

As for the money? I earned more in December than I would have earned on 1/3 of $5000. I earned more than I would have earned if I got the same old advance I had gotten from Roc Books on the previous Retrieval Artist novel.

And that’s just December. We have years to go on this book, years of earnings, years to make money.  Years to accumulate sales.

The best part, as far as I’m concerned? The book will continue to sell. It won’t go out of print.

I’m not even telling you about the sales of all the other Retrieval Artist books. Roc took them out of print within two years of publication, the first book of a series, The Disappeared, wasn’t available after 2004. WMG put it back into print in 2010, and it’s sold fantastically ever since. When Anniversary Day was published, The Disappeared’s sales went up ten-fold.

That’s a halo effect I can get behind.

So is it worthwhile for me as a midlist writer to sell more books to traditional publishing? Hell, no. I see no advantages at all. Is it worthwhile for me to sell a book at what Publishers Marketplace calls “a major deal,”—$500,000 or more? It depends on the rights negotiation, it depends on my financial situation at the time, and it depends on how badly I think I need help in getting to major book markets at that point in time.

Right now, I’d at least consider the offer on the table. Five years from now, who knows? I certainly don’t know, but if I had to wager on it, I’d bet I wouldn’t take the deal at all.

So, you indie writers who’ve self published, you’re feeling pretty smug right now, aren’t you? You’ve read this post, you’re thinking, I’m glad I didn’t walk down that road.

And yet, how many of you have novels selling for 99 cents? How many of you have all of your novels priced at 99 cents? How many of you have a novel up for free somewhere, even though you’ve published fewer than ten novels? How many of you have nothing priced over $1.99? $2.99?

How many of you fled all of the other e-publishing platforms so that you could be in the Kindle Select program, just because they give you five days when you can market your book for free?

In some ways, you guys are much worse than the traditional writers. You have no vision and no understanding of business. Most of you are running around the internet, promoting your one novel, following some kind of crazy Get Rich Quick scheme.  According to Michael Cader’s figures, only 20 self-published ebook authors made the bestseller lists in 2011. Only 20, out of the hundreds of thousands published.

You’re gambling on a wave that won’t ever reach you, wasting all your energy on one or two or three books rather than doing the one thing that will guarantee you more readers: Writing (and publishing) the next book.

And even if you’re one of the fortunate few for whom lightning does strike with your 99 cent ebook, you won’t make much money. The bestselling ebook published in 2011 was by a self-published author, Darcie Chan. Her Mill River Recluse sold 413,000 units at 99 cents, which means she made roughly one-third of that (because under $2.99, most e-book sites only pay 35% or less). In other words, she made about $143,000. Not bad.

But if she had priced at $2.99, and sold half of those 413,000 units, she would have made around $432,000.  (206,500 units times $2.99 times 70%)

Here’s the thing: If the book is good—and clearly that one is or it wouldn’t have sold that well—it would eventually have sold 413,000 copies or more, and Darcie Chan would have made a lot more money. She’s a news story, and the darling of the Kindle Boards right now, but her wave will dissipate, especially if she doesn’t publish another book soon.  Anyone see Amanda Hocking on any bestseller lists lately?

Most books—whether traditionally published or not—never ever ever even sniff at a bestseller list of any kind. To pursue that as your goal is like trying to win the lottery. You’re better off writing the next book, getting a lot of books out there and making money on all of those books over time.

But you guys are typical writers, looking at the business upside down, and as a result, selling yourself short.

It’s as if writers stand on a street corner with a sign in front of them. That sign doesn’t even say Will Write For Food. It says Will Write For Acclaim. Whatever that means. To some writers, it means being “validated” by the traditional publishing establishment. To others, it means hitting some kind of bestseller list. To others, it means getting 5-star Amazon reviews.

Writing is a business. You should be building a career, working on a profession, and building your brand. You should have a long-term view, not a short-term one.

The short-term view makes you sign up for half the advance while losing twice the rights. The short-term makes you sell a novel for 99 cents when you should charge at least $4.99 for it. The short-term view makes you cut off all of your other e-book markets just so Kindle will put your single novel up for free for five days in some random month in the hope of getting on a bestseller list.

The short-term view guarantees that you won’t make a living at this business.  And if you don’t make a living at this business, you won’t write very many books. And if you don’t write very many books, you might never get to the book that makes your reputation, the book that lasts, the book that readers love.

Writers: Willing To Work For Cheap.

I find that ever so sad.

And yet, here I am, putting this blog up for free in the hopes of  paying forward. I can’t pay back all wonderful writers who taught me, so I’m doing my best to help future generations. However, I am mercenary (you got that from the blog, didn’t you?). If I don’t make enough money on this project to justify the time I spend on it, I will shut it down.

So if you’re getting a benefit from it, please leave a tip on the way out. I do appreciate it, just like I appreciate the comments, e-mails, and links y’all send. Thanks.

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“The Business Rusch: Writers: Will Work For Cheap” copyright 2012 by Kristine Kathryn Rusch.