This morning, I was interviewed by Matt Galloway on the CBC’s show Metro Morning. This was a result of the announcement on Friday that Newscorp is acquiring Harlequin. There’s been a suggestion in the media that Harlequin’s sales are down because of authors choosing to self-publish or go indie. I’d been interviewed on that show in 2009 when I was the writer-in-residence at the Toronto Public Library, so they called me again.
Matt asked me why I would leave traditional publishing to go indie. The answer is much longer than the format of a short radio interview could possibly allow, so I thought I’d elaborate here today.
There were several contributing factors to my decision, so let’s have a peek. It wasn’t an easy choice to make after 20 years in traditional publishing, but the more I thought about it, the more sense it made.
1. The way that books are promoted to readers has changed in the past decade.
This is mainly because of the internet and the popularity of social media. Increasingly, and particularly in genre fiction, publishers rely upon authors building connections to their readers. This makes sense as readers feel a bond with their favorite authors. Romance authors were early to establish blogs, websites, reader newsletters, and then later to engage in social media. This allows us to remain in contact with our readers. This takes time and carries some expense (website hosting, design and maintenance, for example). It also means, in an era of online marketing, that we can reach our readers directly.
2. The disappearance of bricks-and-mortar bookstores has decreased print distribution.
The physical distribution of books, particularly mass market titles, has been steadily eroding over the past decade. Not only have bricks-and-mortar bookstores been disappearing, but space for books (again, especially mass market) has decreased in other outlets. There are fewer books at the grocery store, for example, and other non-traditional portals. Sales of print books have migrated to digital portals—readers have been buying their print copies online, because they either don’t have a local bookstore anymore, or the one in their vicinity isn’t stocking every title. The impulse-buy is one of the big advantages of a print distribution, IMO, and something that only a big publisher can provide. If sales are going to be mostly made through an online portal, though, that advantage from traditional publishing is decreased. In fact, there’s no reason why online sales can’t be fulfilled by print-on-demand.
3. The introduction of self-publishing portals for digital content has made it easy to deliver content to readers.
Portals like Amazon KDP improve tremendously on the old options of vanity publishing: in making content available through this portal (and others subsequently introduced), an author immediately has international digital distribution. The upfront cost is comparatively small, even if the author hires service providers. Also, the algorithm used by the online portal to recommend books to customers (the algorithm is a mathematical means of trying to emulate the handselling done by booksellers) means that the portal itself can help to sell the author’s books. Most importantly, the financial model is radically different from traditional publishing. Let’s walk the math.
In traditional publishing with big publishing houses, an 8% royalty rate is common on genre fiction mass market paperbacks (which has been the format of choice for the romance genre). If the book is priced at $6.99US, the royalty due to the author on each unit sold is roughly 50 cents. (I’m rounding down because most authors have agents, whose compensation comes out of the monies paid by the publisher.) Note that a royalty from Harlequin, if the author was published in one of their series programs, would likely be lower, due to a lower royalty rate and a lower retail price point.
Digital royalty rates from traditional houses are in flux. They can range from pennies (see the Harlequin lawsuit) to 25% of gross sales. 15% of net sales is pretty common, but then there’s the question of defining “net”. Let’s ballpark at $1.50 paid to the author on a digital edition priced at $7.99US. (Digital editions from traditional publishers are often priced the same or slightly higher than the mass market edition of the same book.)
In contrast, the royalties paid by these digital portals range from 35% to 70% of the retail price. (The rate varies based on the territory where the sale occurs, and the royalty rate offered at that price point.) So, if we look at a digital book on Amazon.com, pricing it at $2.99 will earn the author a royalty of roughly $2 per unit for units sold to readers in the US. (The US is the major market for the romance genre.)
That price point is less than half of the traditional publisher’s price point, so it’s reasonable to expect that more people will buy at that price. In romance, which is distinctive in having so many avid readers, price becomes a consideration for many readers. I’ve noticed that my readers are more price sensitive in certain sub-genres, probably the result of the number of books they read per month or few year.
4. A rapidly changing market
Digital is emerging as a major (if not the major) format for genre fiction, and it’s changing very quickly. Pricing, for example, is settling down after several years of energetic variation. I had a number of concerns associated with this transition.
If sales are going to be driven by my promotional efforts, I need to see results to decide upon marketing strategies, and I need to see those results in a timely manner.
Traditional publishers tend to report in semi-annual royalty statements which are delivered to the author (or agent) four months after the end of the reporting period. Digital publishing portals, in contrast, display sales data in real time. I have been lucky to work with editors at traditional sales houses who shared weekly sales results, particularly in the first weeks of a book’s release, but that’s not at all the same level of detail.
(In addition, most portals pay author-publishers in 60 to 90 days after sales revenue is earned. The key difference here is that they are dealing with end consumers not wholesalers and commercial accounts. Readers pay immediately for the book or else they can’t download it. This means online portals can not only report sales as they occur, but can pay authors more quickly.)
Last Wednesday, for example, I published a new book, Serpent’s Kiss. I was checking the sales figures on the online portals on Friday for that title when I received an email from one of my former publishing houses that my sales report for the second half of 2013 was available for download. The contrast made me laugh.
When a book is traditionally published, it has one kick at the can. It is packaged once; it is given copy once; it is launched once. In mass market format, promotion efforts are focused on the on-sale date because it’s believed that the majority of sales will be made in the first two weeks that the book is available. This is partly true because print books are stripped and removed from sale after two weeks, and again after 30 days, to make room for new incoming titles.
Digital can have a completely different sales model. There is no real cost in keeping the book available for a long period of time (if not indefinitely) so long tail marketing is a more typical marketing model. Authors who are indie-publishing often update their book files over time, maybe changing out a cover to give a book a second chance, revising the copy or adding an excerpt from a new book to the back. In an evolving market, I think it’s important to have the flexibility to respond to change.
For example, when I began to publish my backlist titles in 2010, it wasn’t common for digital books to include a clickable table of contents. That has become the standard, as it aids navigability for readers. I could update my book files with clickable TOC’s and did so. I’ve no idea whether my traditional publishers did that—I doubt it, because the books that were available in digital format had already been formatted once. I also doubt that they have clickable links in the end matter, so that readers can easily buy the next book in the series.
As an author, I’ve learned that how important it is to be published with enthusiasm. In this market, I believe that the publisher that will publish my work with the most enthusiasm is me. That might change, but until it does (and unless it does), I’ll continue on this path. I do love that authors have choices in this new market.
Phew! See? That would take more than 4 minutes to say. Now I have a question for you: Matt also asked me the appeal of the romance genre to readers. That’s another complicated question! I said it was because of the emotional connection that readers feel with the characters and the authors, and the resonance of the stories for readers. That’s why I read romance. The stories feel pertinent to me.
How about you? Why do you read romance?
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