Thursday, November 03, 2005

Self-Publishing...The Future?

Ok, it’s an established fact that the absolute hardest thing to do in business is to create a product or start your own business that takes cash away from the already established businesses.

Here’s an example, and the reason why the record industry is absolutely shitting itself.

Before the internet, here’s what would happen.

A singer, or a band would want to be powerful, rich, famous and have as many people as possible listen to their music.

After lots and lots of gigs, they’d maybe get spotted by a decent label. The label would record the band, then market and release their CD.

The bad part of all this for the artist is that the record label would make a whole butt load more money than they would. .For example, a standard recording contract today would net the artist a small percentage of the record sales. However, they may also be required to pay for half the music video production costs, wardrobe, equipment, travel expenses etc, out of their cut.

Now, while at first, this may seem outrageous, when you look at it, it’s almost fair.

You see, it’s the record label that’s taking all the risk. Before the record is released, they’re paying for absolutely everything. Then, if the CD fails to sell, the record company gets absolutely nothing back.

The same situation is also in effect in Book Publishing.

I’m a writer in the process of finishing my first novel. When it’s finished, I find an agent (who takes a nice big cut), who I need to hawk my manuscript to the publishing houses. Then if I get picked up by a publisher, depending on what my agent can negotiate for me, I get an advance, an amount of money based on how many copies they think I can sell.

This is a hell of a lot less than you think.

At least in England, the average advance for a first book is a measly 2000GBP. Think about that, a book, that might sell 20,000 copies (First run, hardback only…paperbacks tend to sell much more, basically they’re cheaper.), something that could have taken you two years to write, netting you a measly two grand.

In any business that requires you to go to an outside publisher, someone who will actually pony up the cash to produce whatever you’re selling, the only time you can actually make money off it is if you become insanely popular.

Basically, when you’re making that publisher truck loads of cash, then you can start to make demands. If a publisher is making millions per year off you, they have to give you more money, because they know there are hundreds of other publishers out there dying to snap you up.

If you’re a new artist, you can make all the demands you like, it’s not going to do you any good whatsoever. It’s the same as you bankrolling someones new project, you putting up all the money and taking all the risk, and then them turning round and demanding more money. How would you react? You’d say “Screw you, if you don’t like it, you can sod off, and I’ll bankroll someone else who’s much more cooperative.”

Basically, despite the fact that it's you, the artist, that is coming up with the 'product' for sale, it's the publisher that calls the shots, makes the rules...and makes the money.

In short, the current way of doing things is absolutely great for the publishers, and absolutely terrible for the artist. Think about it, there are literally millions upon millions of authors out there, and only a handful of them are as popular as your Stevie Kings and Joanne Rowlings. Rowling can write her own ticket and call the shots, because which publishing house is going to turn down the next Harry Potter book? Someone like you or me just starting off is going to get, quite frankly, screwed over with their first few books and will only cease to be screwed over if we make the publisher buckets and buckets of money. The other sad fact is that very few of us are going to ever become popular enough to actually make a living from writing.

However, there is good news, and this is why the publishers, especially the music industry, is currently bricking it.

With iTunes, and all the other online music services, the control (and therefore the money) is being taken from the publishers and being put in the hands of the artist.

Recording, producing and marketing a CD the traditional way, costs a hell of a lot of money. However, it’s now possible to record a high quality CD with a $1500 PC and about $500 worth of software. Now while this isn’t exactly chump change, considering that would only pay for a single day of studio time, you can understand how cheap that is.

You then go through an online music service, and sell your music for about 50 cents to a dollar a track, and get a much higher percentage of that dollar.

Now from a volume of sales point of view, you simply aren’t going to sell nearly as many copies as through a traditional record company. However, if you only sell 20,000 copies, (versus around 100,000) an amount that would have you dropped from a traditional record label like a bad habit, it would would net you around $10,000.

Even if you don’t want to go through that route, you can start your own website, and sell your MP3’s yourself, keeping every single penny.

Now, to me, the e-book thing is a lot more interesting. Rather than go to a publisher, and make $2000 for two years work, I sell my book in electronic format on the internet. If I sell my novel for $2 per copy, I only have to sell 1000 copies to make the same amount of money that I would through going through a traditional publisher. Also, I wouldn’t have to deal with the fact that my book actually made in excess of $20,000, and I only saw $2000 of it.

The added advantage is that if you actually become incredibly popular, and your ebook somehow sells a million copies, you get to go to the traditional publisher with a head start. Rather than being a ‘new’ writer, a huge risk, and having to bend over to every single on of the publisher’s demands, you can turn up, point out you’ve already sold a million copies, have a big fan base, and they can do things your way, or you’ll go somewhere else.

In short, media is becoming cheap enough to produce, that the individual can can become their own publisher, and the internet is the perfect distribution tool.

The added benefit of this is that it allows for ultra small niche markets. By removing the publisher, it’s possible for the individual to produce profitable media, that could never be a commercial success. Through traditional media, if your market is only a few thousand people, you simply couldn’t produce a traditional book, CD, TV or Radio show that would be profitable.

However, if you’re a writer, and can establish a readership of say 5 thousand people, who are willing to pay about 5 dollars for your book, 5 dollars that goes directly to you, it’s possible to make enough to live on. Think about it, that’s 25 grand per book.


MC Etcher said...

Very cool!

As a devout follower in the Pauliusan tradition, (Hallowed be his name, yea unto the highest), why would I pay for an e-book when I can download it for free? I'm not getting a physical product, so it's a victimless crime!


Paulius said...

Actually, if I released an ebook, and people began to steal it, I'd be delighted.


"Hey, I got this book off the internet, by this guy called paulius! It's f**king fantastic!"

"Wow, I'll have to check it out!"

"Let's see if he's got anything else available!"

Being able to 'steal' an ebook, means there are plenty of people who will read it, who wouldn't otherwise. I've downloaded music (which has led to me buying the CD) for a few bands I never would have listened to otherwise.


More readers = More word of mouth = more $$$ in the long run.

Pirating stuff off the internet isn't a victimless crime, but it's a crime that has the side effect of making the media producer more money.

If I lost the purchase price of one sale, but that one 'theft' leads to one or two more sales...

OzzyC said...

What a novel idea.

Sorry, I couldn't resist.

Kato said...

Have you seen It's pretty cool, the concept is that unlike a publisher, they print your book on demand--if someone orders a copy, they print it, and then send it off (at least according to an interview I heard with the founder). Nifty. And the founder is the guy who co-founded Red Hat.

MC Etcher said...

Cool, Kato thanks!