Six-figure publishing contracts are the stuff most writers dream of, but for Barry Eisler, publishing his work online had even more allure. The bestselling thriller author and former CIA agent turned down a “half a mil” publishing contract for two books, opting to release his work as e-books on Amazon and other e-publishing platforms.
Though Eisler is opposed to the onerous DRM that traditional publishers impose on the books in their stables, he says his decision was motivated by economic realities rather than highfalutin principles. When he was sitting at the table with his family and trying to figure out the terms of his next deal, his eleven-year-old daughter asked why he didn’t just self-publish — and he realized that she had a point.
Whereas a self-published author on Amazon takes home 70% of the revenue on their work after Amazon takes its 30% cut, a traditionally published author, by Eisler’s and friend and fellow writer Joe Konrath‘s math, gets just 14.9% of earnings.
Joe: We figured out that the 25% royalty on ebooks they offer is actually 14.9% to the writer after everyone gets their cut. 14.9% on a price the publisher sets.
Barry: Gracious of you to say “we.” You’re the first one to point out that a 25% royalty on the net revenue produced by an ebook equals 17.5% of the retail price after Amazon takes its 30% cut, and 14.9% after the agent takes 15% of the 17.5%.
Joe: Yeah, that 25% figure you see in contracts is really misleading. Amazing, when you consider that there’s virtually no cost to creating ebooks–no cost for paper, no shipping charges, no warehousing. No cut for Ingram or Baker & Taylor. Yet they’re keeping 52.5% of the list price and offering only 17.5% to the author. It’s not fair and it’s not sustainable.
Of course, traditional publishers do offer key advantages, namely editors and promotional budgets. But on that latter score, Eisler thinks self-publishing still wins:
Barry: A lot of people don’t realize–and I probably wouldn’t have realized myself if you hadn’t pointed it out–that the appropriate measure for determining how much your books can earn you in digital is forever. In paper, with rare exceptions, there’s a big upfront sales push, followed by either total evaporation or by years of low backlist sales. Digital isn’t like that.
Joe: Or to put it another way, getting half a million bucks and 14.9% royalties, forever, isn’t as lucrative as no money up front and 70% royalties, forever.
Barry: Yes. Especially because you first have to earn out the half million at 14.9% per book. That could take a while. After which, as you note, you’re still only earning 14.9% rather than 70%. You need to move five times the volume at 14.9%.
How applicable is Eisler’s example to other authors, though? It’s tough to say; considering that he’s an established author with a following, he has a lot more license to pass up the publicity and prestige advantages that signing with a major publisher can convey. And it’s worth pointing out that Eisler became an established author with a following by signing with major publishers in the past. Still, the economic equation that he lays out is striking for any writer, and if traditional publishers want to hold onto their clients in this increasingly Kindleized age, it may be high time for them to reconsider some of those variables.