How E-Books Are Changing the Economics of Writing

e-bookIn November, The New York Times reported that approximately 9 million electronic reading devices are in use in the U.S. When holiday purchases are tallied, that number will most certainly go up. While there are many different kinds of e-readers, they share one thing in common: They need to be filled with books.

Two years ago, e-books constituted 1% of total book sales, a figure that's now closer to 10%. As electronic media accounts for a larger and larger portion of the book business, consumers are benefiting from lower prices for books, and manufacturers are enjoying massive sales. But how is the e-book revolution affecting authors?

A Boon for Self-Publishers

For an author under contract with a major publisher, not much has changed. Most publishers still insist on acquiring electronic rights along with print at the royalty rate that's been in place for years: 25% of net profits. Amazon (AMZN), on the other hand, offers authors a whopping 70% of net profits for e-books sold in the U.S. Admittedly, the online retailer carries a large number of caveats, most notably that the book must be priced between $2.99 and $9.99. Barnes & Noble (BKS) and Apple (AAPL) offer similar royalty rates.

This raises the question of whether an author can really make money with a book priced so low. J. A. Konrath, author of the traditionally published Jack Daniels mysteries and nearly a dozen self-published e-books, offers an interesting perspective on the numbers behind the e-book/traditional publishing dilemma.

"I have an acquaintance who is a New York Times bestseller," he notes. "She got a great advance. But I'm on track to earn $200,000 this year on e-books alone, and the e-book market is still in its infancy. If she'd kept the rights and self-published her e-book, I bet she would have earned more money in three years on her own than she will with her publisher."

Konrath offers a breakdown: "Her Kindle book is priced at $9.99, which earns her $1.75 per sale. I'm pricing books at $2.99, and making $2.09 per book. Currently, I have seven self-published e-novels earning more than $24,000 a year each. I wish I had more novels that I couldn't sell [to traditional publishers], because I'm making a nice chunk of change with them on Kindle."

Finding Readers

Then again, just because authors can turn their manuscripts into e-books doesn't mean that they'll make money from the new platform. Many inexperienced authors naively upload the contents of their hard drives to e-publishing platforms like Kindle or Smashwords, expecting to make thousands, then wonder why they have no sales. Additionally, unless authors can do the artwork, copy-editing and formatting themselves, they must pay $50 to $200 for each book, with no guarantee of success.

As with print books, quality matters, as does effective marketing, proper formatting and an eye-catching cover. Most of all, the author has to have written something people want to read. Eileen Cruz Coleman is a literary fiction author who has been represented twice by different agents for different novels, but she has yet to see a traditional print sale. With the advent of e-book self-publishing platforms, Coleman decided to publish Rumpel, her dark and quirky retelling of the Rumpelstiltskin fairytale, and let readers decide the story's fate.

"I could have let Rumpel sit on my hard drive and collect dust," Coleman says. "But there is a wonderful community of fairytale-retelling aficionados on the Internet. The more I read about what they were looking for, the more convinced I became that my novel would find an audience, and not just among my friends and family. So far, Rumpel has been well received. I am hopeful that as more people learn about it, the book will gain momentum."

A Question of Distribution

For an author in print, being published by a major publisher ensures that the book will be distributed to bookstores. In some cases, publishers even purchase co-op, or front-of-store placement, for certain titles. In the electronic world, however, distribution is instant, equitable and in some cases, global. Readers rarely take note of a book's publisher. Rather, they make purchases because they like the author's work, or because they've heard about the book through the author's marketing efforts or from another reader.

Sponsored Links
Traditional publishers do more than simply print and distribute books, of course. They send out review copies, purchase advertising and promote their titles to booksellers and librarians. They ensure that books are line edited, copy-edited, typeset and furnished with an attractive cover, all at no cost to the author. But for a self-published digital edition, these jobs can easily be outsourced.

"The real issue for authors and e-books will be marketing," says literary agent Jeff Kleinman, of Folio Literary Management. "How to market an e-book, how to get the book noticed, how to make an e-book rise to the front page of Amazon, how to connect with readers, how to sign digital copies -- these are the questions that are going to need answers in the expanding digital market."

Meanwhile, given the success of authors like Konrath, more and more traditionally published authors are considering self-publishing e-books. It's a brave new e-world for authors. Exciting. Empowering. Electronic.

Karen DionneKaren Dionne is the internationally published author of Boiling Point, an environmental thriller that will release in print and as an e-book on December 28. Karen is the cofounder of Backspace, and serves on the board of directors of the International Thriller Writers. Visit Red Room to find out more about her books and to read her blog.

Read Full Story