Business models, or the McQuestion question (I'm sure that joke never gets old for her)

I mentioned earlier that Karen McQuestion has sold 36,000 copies of her books in 11 months as Amazon e-books. That raises some interesting questions about the future of book publishing, so I wanted to look at it a little closer. (Yes, once a business reporter, always a business reporter--get used to it. In fact, delving into this strange little world is probably going to be a significant sideline to this blog.)

Selling 36,000 copies of a book is not bad in traditional publishing--but it's not great, either. McQuestion would definitely be considered a midlist writer, not a bestselling author, but she would probably get a contract for a second book.

Assuming, that is, that those 36,000 copies sold were all of her first book. But that's not the case: She has six books up on Amazon. Selling 6,000 copies or 10,000 copies of a particular title--that's just not enough if you're at a commercial house, and you won't get another contract. You're off to the small presses.

But...McQuestion sold those books on Amazon, as e-books. Now, Amazon didn't start its 70% royalty program until last June, but let's pretend that for the sake of simplicity that over the past year McQuestion sold 36,000 copies of her books at $3 a copy. We'll round that royalty, too, and say that she got $2 for every book sold, and Amazon got $1.

In that scenario, in a year, Amazon makes $36,000 (minus production costs, which are reportedly quite low, plus whatever they make selling Kindles, which is the real reason they're publishing e-books in the first place). McQuestion makes $72,000! For a writer, $72,000 in a year is pretty darned good--most writers make far less (impressionable youngsters reading this should know that they'll make their parents much happier if they go to law school). Plus she got a movie deal out of it, so there's more money there.

In other words, McQuestion's sales are of zero interest to a large, commercial publishing house. But because of the way Amazon is set up, she's still doing fine!