Authors Always Pay to Publish
Today we’re going to discuss a popular meme used to explain why traditional publishing is better than self/vanity publishing. The meme is that:
“In self/vanity publishing, the authors pays to publish while in the traditional model, the author is paid to publish.”
At issue here are the costs of purchasing publishing packages from a self publishing company like iUniverse, the costs of hiring freelance professionals to perform the various steps of the process or the costs to learn how to perform all steps of the process. If we are to believe the statement above, authors don’t have to pay for those steps in the publishing industry.
I present to you that authors always pay to publish and the only differences are in author cash flows (slightly better in traditional publishing), effort (equal in both models) and return on investment (better in self publishing).
Consider that the publishers are businesses in the exact same way hedge funds, car dealerships and credit card companies are businesses. Consider that in a business, every cost must be covered by revenue. This means that when a publisher picks up a book for publication, it expects the revenue from the book to exceed all the costs of producing the book so that it can make a profit.
The author does not make an upfront payment for the cost of publishing the book in the traditional model, but the author DOES pay on the back end because the advance and royalties the author receives are significantly smaller than usual because the publisher must deduct the cost of publishing the book and a small profit.
Still, this difference in cash flows is a significant advantage for the traditional model. But the advantage begins to deteriorate once we consider that self published authors receive their royalty payments much faster than traditionally published authors. The advantage deteriorates even further when we consider the return on investment.
Common royalty rates in traditional publishing are 10% for hardcover and 6%-8% for paperback. More and more publishers are moving towards paying these rates against net receipts (cover price – discount to booksellers) instead of cover price which further reduces the amount the author receives.
Contrast these rates with royalty rates in self publishing which are usually not lower than 40% and can reach as high as 100% (for author sold books). Even almighty Amazon will be paying a royalty rate of 70% come July. Self published books usually sell a significantly lower amount of books than traditionally published books but they difference is offset by the much higher return on in investment.
Things get murkier when a book performs so badly (saleswise) that it cannot generate enough revenue to cover costs. In the traditional model, the publisher bears the loss (including any advances it paid to the author) and author bears no costs (except lowered chances of further publication). In the self publishing model, the author bears the full costs.
Let’s publish a book shall we. We have written a 200 page novel involving brooding Minotaurs, gentle Ninjas and Jay Leno’s chin. All costs and benefits are to the author.
Traditional Publishing
Production Costs: 0$
Marketing Costs: Every waking moment.
Retail Price: $25
Copies Sold: 3000
Royalty Rate (retail): 10%
Author Revenue: 7500
Payment Schedule: $5000 advance upfront + $2500 (90 days after sales).
Self Publishing
Production Costs: $2500
Marketing Costs: Every waking moment + $2500
Retail Price: $25
Copies Sold: 1000
Royalty Rate: 60%
Author Revenue: $15000
Payment Schedule: $15000 (30 days after sales)
Even with lower sales, self published authors stand to make just as much or money than traditionally published authors. The mechanics (cash flows, payment schedules, royalty rates etc.) may differ but at the end of the day, the author ALWAYS pays to publish.
What do you think of this “pay to publish” reasoning?
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That´s really interesting! I´m not sure, both methods seem to be good (self publishing slightly better), but I have a doubt: Are there best selling self published novels?
If there are, I´m in, I want prestige baby, yeah lol!
Self publishing seems really cool.But I dont know, I still think being published through the traditional way is better. Not as much on the money aspect, but, well, on everything else. NAturally, this may vary with time and experience. I´m probably in a "romantic phase", soon my literary heart will be broken. Definetly will after countless rejections!
I always learn something new about the publishing industry on your posts.
So does that mean you're going to self-publish? Just wondering!
@Clara,
Self published books usually sell less than traditionally published ones (despite the big self published whales like Konrath and Zoe). With self publishing you don't need to sell as many copies to turn a profit.
I can totally relate to the romantic notion of the industry. One of the things that worries me about self publishing is that I wont be eligible for the critics awards. But then I think about why I'm writing and the critics don't matter so much, readers do.
It's a very personal decision (i'm not esure what i'll do either). I do want to explore all options and not just rule out one because of my sentiment or ego.
Thanks for stopping by.
@Lydia,
I'm glad the posts help somehow!
I don't know if I'm going to self publish yet but I know I'm considering it more and more every day.
I want to be published traditionally but only if I can find the right terms (odds are slim). But then again I think, what is there to be afraid off? Low sales? Traditional publishing doesnt guarantee high sales. No critical acclaim? Less than 10% of books get reviewed every year.
I got a partial request today and to be honest, I wasn't particularly excited…maybe I'm just jaded hehe.
Thanks for stopping by.
There are several angles to the self Vs traditional publishing debate. You just trashed this one out quite well. It featured in my decision to go along with Authorhouse. But more important was, writing for critics and prizes Vs the readers. That was what decided me.
@Myne,
That's definitely a biggie right there, are we writing for critics or readers.
How has the experience been with AuthorHouse? Up for an interview about it?
Thanks for stopping by.
This is a really nice explanation of the financials for authors. I agree that a traditional publishing deal is not necessarily the pot of gold at the end of the rainbow for authors. You might be interested in my blog post on 'authorpreneurs'; see http://sallycollings.com
@Sally,
I enjoyed your post. I love the parallel between an author's manuscript and a product for a startup business.
Thanks for stopping by.