The New York Times has a story about how traditional publishers now want their authors to crank out a ton of titles, title after title, including short fiction and novellas that the traditional publisher can sell as 99-cent e-books.
Isn't that swell? That's exactly the business strategy many self-published writers use, and it works great! Once again, it turns out that all the Very Special Services a large publisher provides don't work nearly as well as offering a lot of titles at a low price!
Fantastic! Traditional publishers are saved!!!
There's just one problem: How much are the writers making in this scenario? You know, those writers who are now being forced to crank out title after title, regardless of whether or not this is something that helps the quality of their output?
Oh, yes--almost nothing!
Let me quote me again, because I can never get enough of that:
OK, so on a 99-cent book, [traditionally-published author George Pelecanos is] making 17 cents--which is half of what he'd make putting that sucker onto Amazon himself at that price, but that's not the scary bit.
The scary bit is that he gets $2.27 on a $13 e-book! !! !!!! !!!!! He could get that kind of money for a book he self-published on Amazon and priced at...wait for it...$3.25.
That's almost a TEN DOLLAR DIFFERENCE to the buyer! And a ZERO DOLLAR DIFFERENCE in profits to the author!
This is why you read all this hand-wringing about how low book prices are going to bankrupt authors. They certainly will--if authors stay with their publishers. As traditional publishers act more and more like self-publishers, authors will in all likelihood get less and less money.
But the problem there is not the cheap books. The problem is the fact that you're working for someone who wants you to produce more and more product while paying you less and less for it.
I mean, I guess you can become the literary equivalent of a sweatshop worker if you want, but I personally object to that sort of thing and don't see the point of doing it unless the alternative is subsistence farming. Which it isn't. The alternative is keeping 35% to 70% of the revenues generated by your titles, and deciding yourself when you want to produce them.
Or, as Passive Guy put it, "Just wait until authors under contract learn indie authors are making serious money from $0.99 or $1.99 short fiction. That only works if you don’t give the publisher 75% of net revenues* from ebooks."
*An accounting aside: What is meant by "net revenues"? Well, the problem is that typically this term isn't very well-defined in contracts, which is bad, because "net revenues" can be whatever your publisher says it is.
If we took a common-sense approach, "net revenues" for an e-book would mean "revenues after the retailer has taken their cut." It's something to look out for, because sometimes publishers say things like, "You get to keep 50% of net revenues" and it sounds really good, because if you self-publish you're keeping 70% of total revenues, and isn't it worth a small discount to have the publisher take care of everything for you?
Buuut...the best-case scenario is that they mean 50% after Amazon has taken its 30%. So it's really 35% of total revenues, which is a much more significant chop to your income.
Kristine Katheryn Rusch's blog is back up (yay!) and she has a great post about this.