Business Musings: The Indie Publishing Lesson (2017 in Review)
2017 began with a blow to indie writers and continued to prove what those of us who have freelanced forever learned the hard way: Never have your eggs in one basket, even if that basket is making you huge profits.
The year started with the collapse of All Romance Ebooks and OmniLit. ARe and OmniLit were big players in the early part of the ebook boom. They sold books on their site and they distributed to hard-to-get-to places, like iBooks (back when it was almost impossible to get into). A lot of writers, particularly romance writers, were making a fortune on ARe.
Then, on December 28, 2016, ARe, sent out an announcement that it was closing its doors. I wrote a quick blog about this, advising writers to pull their properties down—and, if they could, to eat the loss rather than go through a big lawsuit against ARe.
The reason? Life is too short. I, unfortunately, learned that the hard way years before.
Now, more than a year after ARe’s closure, I decided to see how the writers who were owed a lot of money from ARe faired. I could find dozens of blog posts about the crisis with ARe, but very little after March.
There was an active Facebook group (which I did not join, since I had no books at ARe by the time it closed), and I have no idea what’s on that group. I do know that a number of authors sued to get their money out of Lori James, who mismanaged the company into oblivion.
(A note: usually when someone mismanages something into oblivion, they spent all of the money too. That’s what it looked like with ARe, although I don’t know if that’s true. So, suing their asses might feel good, but it probably will cost more money than it nets. Just a rule of thumb.)
I finally found a late September blog and a post on the Kindle boards by romance writer Marilyn Vix. She too was wondering what was happening with the ARe writers, and did a lot of research (which I piggybacked on).
According to a Facebook group that I joined for authors burned by the owner, Lori James, of ARe, some people have been paid the small amounts they were owed. Some people didn’t get their settlement. It seems to be pretty staggered on who got paid. Some got 1044s that were from earning in different years when they should have been for 2016. There also seems to be supposed burned readers asking authors to give them free copies of the books lost. Many authors and publishers were trying to make good for where Lori James failed….
Vix also had a link to the Florida lawsuit, which went nowhere, but gave me enough information to let me find it. There was a ton of activity from January to August. (Note: Sometimes you have to search “status” and “Lori James” to see the case.) And then…nothing. Not a thing. Not a peep. Until a notice filed on December 22, 2017. The notice is a Notice of Voluntary Partial Dismissal Without Prejudice.
In other words, the case was settled, and if the parties don’t meet the terms of the agreement whatever they are, the case can be revived. So, a bunch of writers spent the better part of a year chasing this case in court.
I do hope the writers managed to get some writing done as well. Cases like these are time-consuming and nightmarish and never end up the way you want them to.
I don’t blame the writers for going after Lori James and ARe. Some writers were out tens of thousands of dollars, and a few even more than that. James wanted to settle last year at 10 cents on the dollar and from Vix’s note above, James didn’t even seem to manage that. We might never know how it all shakes out. Often, settlements like this contain a nondisclosure agreement as part of the terms.
So, essentially, we started 2017 with hundreds of thousands of dollars (collectively) vanishing from the pockets of writers, and ended 2017 the same way.
At the beginning of December, Patreon announced a new fee structure. For years, Patreon’s creators received 90% of the money pledged, with remaining 10% split evenly between fees and Patreon itself.
The change that Patreon announced would have charged each patron 2.9% plus .35 cents for each transaction. The creators would take home 95%, but the patrons would be charged a weird and sometimes incalculable amount every month. It hit the patrons who pledged tiny amounts the hardest. If a patron supported 100 different artists at $1 per month, that patron would have spent $138 in fees, rather than the $100. (If that same patron had supported only one artist at $100, they would have spent $103.25.)
Patrons who specialized in small support of a lot of people canceled pledges the moment the change was announced. Within a day, creators’ Patreon accounts lost tons of money. Patrons were upset too, unable to access content. Conspiracy theories abounded. No one knew what was going on—and the policy hadn’t even been implemented yet.
One week of social media shouting, phone calls to Patreon, letters, and media attention later, Patreon announced that it had made a mistake and would not implement the fees. But by then, the damage was done. The pledges were cancelled, writers and magazines and vbloggers and many others had lost a lot of income.
I lost a few supporters, but had many others up their pledges (for which I’m grateful), so my net sum went up a few dollars. But I was never on Patreon to make a living. My readers had asked me to go on Patreon, so that they had a second way to support the blog. Some objected to working with PayPal for political reasons after the U.S. election; others never wanted to deal with PayPal in the first place. Still others wanted a place to go for an annual payment.
But a lot of writers, particularly traditionally published writers, used Patreon to even out their monthly income. (Many traditionally published writers only got paid once or twice a year in huge lump sums.) These writers did a lot for their patrons, doing things like writing a story a month or more only for Patreon. Readers came on with small amounts mostly, just to be part of the community and to support their favorite writer.
The instant loss of income hurt. A lot. Patrons left immediately, canceling everything to do with Patreon.
And this wasn’t the first major change that drove people off Patreon in 2017. In October, Patreon expelled anyone they believed to be involved in porn or to have adult content, by changing its terms of service. In fact, erotica writers, in particular, have had the somewhat unique experience of being kicked of various platforms, sometimes overnight, going from making thousands to making nothing at all, with no recourse.
Of course, every site has the right to manage its own content its own way. Some of the adult content crackdowns came as businesses grew and ran into problems with investors or libraries or (in one case) governments.
But the way that sites change and manage content has had a huge impact on individual creators in 2017.
YouTube changed its partner program in 2017, and a lot of people who made a living on YouTube didn’t know about the change until they stopped receiving payments. Now, you can say that these folks should have stayed on top of the changes, but sometimes the impact of a single decision made on a corporate level isn’t easy to spot. This article on Mobile Marketer sums up a lot of the YouTube changes pretty well, I think (at least, I hope, since I’m not deeply involved in the YouTube side of things).
Other changes brushed by me, and I know they had a huge impact on writers. Goodreads starting to charge for giveaways changed the way a lot of writers promote their books. The same with changes (or proposed changes?) to Facebook ads.
Amazon always toys with its algorithms. It seems that the minute Amazon-only indies know what Amazon’s doing, Amazon changes things again. The big fight that I’ve seen is over spikes in sales—even if those spikes are easily explained by some kind of major promotion. Amazon will (at times) remove a book’s sales rank, even if that rank is the direct result of a Book Bub or something else.
Some of these changes that major sites do are to get rid of pirates and scammers, and in the big sweep of the change, regular honest folks get swept in. Other changes came about because of investment, change of ownership, or new managers—things that happen in every business.
For eight years, I have told indie writers to go wide and to make sure they’re protected, legally and otherwise. Be cautious and conservative when you join new sites or new ventures. Make sure you understand the terms of service, and realize that with many companies, the terms of service are take it or leave it. When you have terms of service like that, your decision to take it had better be informed, and when you get bit on the ass, you should have known that the bite was coming.
I am not victim-blaming here. I’m trying to protect you folks going forward. My ass is full of bites, because I learned this the hard way decades ago. When you’re in business, someone will screw with you. If you want to stay in business, you make the choice that will allow you to keep working with a minimum of fuss.
If you have lawyers on retainer (and can afford them), then you might consider lawsuits. If not, you might consider writing off any losses on your taxes.
Yes, that means that you will incur huge losses sometimes. It also means that you might have to rebuild from scratch.
Please know that I am not saying that lightly. I have rebuilt, several times. It’s hard, and painful, and awful. I’ve had hundreds of thousands owed me, and not paid ever, and I know how infuriating it is to lose that kind of money—particularly when the people in question continued with their lives and businesses as if nothing went wrong.
Yes, I know. You believe you can’t change your behavior. Even wide, 90% of your income comes from one source.
You need to ask yourself what will happen if that single source suddenly closes shop, like ARe did a year ago. You need to plan for that. It might never come true, but it might.
You also need to expand your reach. Don’t decrease what you’re doing on your 90% platform. Expand your reach on other platforms. Grow them so that they become more of your income.
What I’m telling you to do is increase your income by expanding your cash streams. Then, a year from now, you might be earning as much or more from the current 90% platform, but instead of that platform making 90% of your income, it only accounts for 60%. Then in 2019, you might be able to make it 40% of your income—not by reducing what you do on that platform, but by adding in other platforms.
I hope that’s clear.
Because the biggest lesson for indies in 2017 is that it’s extremely dangerous to get all of your income from just one source. That source can go bankrupt, change its fee structure, ban your kind of content, or just ban you because…well…because.
And then what?
So plan for the worst by expanding your business in 2018. Investigate new cash streams. Figure out how to get your work into other channels.
Save your money. Don’t spend it all on ads. Don’t increase your expenses significantly.
If you do anything in 2018, expand your reach.
And, of course, write more.
What a dark and gloomy indie post. The only reason it is dark and gloomy is because I decided to divide up the indie posts. The next post will be on all of the great innovations in 2017. I expect more in 2018.
As Marie Force said in the comments last month, this is still the very best time ever to be a writer.
One of the most amazing parts about writing for me is this blog. You folks have consistently visited this website every Thursday since 2009 (with a small hiatus). Thank you! Your comments, interactions, questions, and inspiration keep this blog alive, as do your donations.
Thanks ever so much.
Click paypal.me/kristinekathrynrusch to go to PayPal.
“Business Musings: The Indie Publishing Lesson,” copyright © 2018 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / fizkes.