In a blog Smashwords founder Mark Coker posted earlier this year, he discussed the issues of ebook pricing and royalty percentages among independent authors versus traditionally published authors. I discussed that issue, too, in my “Crunching the Numbers” blogs, the links to which I include below.

So I won’t repeat that material here. The gist of it is: an independent author is able to charge a competitively lower ebook price than a traditional publisher (a traditionally published author has no power to set the price at all). This is because an independent doesn’t have to support a Manhattan skyscraper, the costly print side of the business, or a high-priced staff. I would contend that professional authors (that is, authors previously or presently traditionally published, like me) but first-time and totally independent authors, too, are capable of producing an ebook with the quality (content and appearance) of a traditionally published book.

How does an independent potentially earn more if her ebook is priced lower than a traditionally published ebook? Because the independent earns a 70% royalty of the ebook’s price, as opposed to the 10—25% royalty paid by traditional publishers to their authors.

And traditional authors only earn that amount every six months, and the amount is funneled through the author’s literary agent, which adds yet more wait time. Whereas independents collect their royalties every month (two months after the close of the sales period, but if you earn royalties every month, as I do, that amounts to monthly checks from all the retailer sites on which you list your ebook. Every three months (quarterly) from Smashwords from the numerous e-sites they distribute your book to.)

That’s all well and good. But the question remains: how can independents compete against traditional publishing with its Big Media marketing power?

Mark Coker asserted in his blog that independents are capturing more and more of the market share of ebook earnings. He predicts that independents’ market share of ebook earnings in 2014 could approach 60%. He predicts the independents will capture an increased market share in the years ahead, with independent authors (collectively, mind you) earning half of all ebook sales and four times the amount of royalties earned by traditionally published authors by the year 2020.

For every dollar of ebook revenue earned, the independent author earns 70 cents, whereas the traditional author earns 15 cents.

I appreciate Mark Coker and Smashwords very much, but bear in mind he’s got a vested interest in getting you excited by the prospect of ebooks. He and Smashwords earn money when you list with them.

Mr. Coker admits this assessment doesn’t include traditional advances paid by big publishers to authors and the sad fact that the great majority of advances never “earn out” (earn revenue at those low traditional royalty rates to pay back the advance). This is one of my greatest objections to traditional publishing. Not that the publisher failed to accurately assess the commercial appeal of a book (as Mr. Coker asserts), but that the publisher doesn’t give an author a print-run and media exposure to give the book a fighting chance to earn out.

Mr. Coker also assumes that print books will continue to decline in importance. That may be so, but I still think many avid readers want to hold a glossy book in their hands.

These days, of course, young people are being taught to go to all things digital. It may be that, by 2020, ereaders will more common on the beach or in the park as the print books I continue to see on people’s laps.

Mr. Coker correctly notes the inventory of high-quality ebooks that never go out of print means those books must compete with the steady stream of new releases. Every author—independent and traditional—will be competing for a limited number of avid readers.

Competition has always been fierce in publishing. It will become fiercer.

Mr. Coker sets out 10 reasons why independent authors will capture 50% of the ebook market by 2020. Many of his speculations are assumed in the list. I’ll summarize it here. My comments follow each point in paranthese:

1. Print will continue to decline as more readers transition from page to screen. (That’s a huge speculation.)

2. More brick-and-mortar bookstores will go out of business. (The closure of stores has loomed large in this last decade. But old stores find ways of surviving, people still love their local bookstore, and new stores are slowly cropping up. So I don’t know.)

3. The perceived value of a publisher will decline to traditional authors as print declines. Traditional authors will explore independent publishing. (Absolutely true. Every traditionally published author I know has his/her own publishing company and ebooks for his/her backlist. Including me.)

4. Independent authors have become more professional in producing better books. (Probably true, but a lot of detritus remains out there.)

5. The number of self-published books will explode. (Yep.)

6. Independent authors mentor other independents. (I haven’t seen this at all.)

7. The stigma of self-publishing is vanishing. (Probably true.)

8. Authors are discovering the ease, power, and satisfaction of self-publishing. (Absolutely true, for the reasons I set out above. There are even more reasons I haven’t mentioned.)

9. Readers don’t care who the publisher is. (Probably true, but I can’t say for sure.)

10. Professional writers are becoming more disgusted and alienated by the traditional literary agent/big publisher business model. (Absolutely true.)

All this raises a plethora of other questions. What percentage of the total book market do ebooks represent? The Hatchett Book Group, one of the Big Five Publishers, recently reported that 30% of its billion-dollar earnings in 2013 were from ebooks. That’s a stunning number. A mere four years ago, the percentage was only 10%, at best. So this is real progress. Yet 30% leaves the other 70% of the book market to print books.

That remains not a very good percentage.

The all-important issues of readership and market exposure loom large over independent authors. And the issues of quality of the writing and professionalism. A career path of hybrid publishing looks very promising, and traditional publishers and literary agents are starting to bow to a reality they never wanted to acknowledge before. I’ll address these issues in later blogs.

So there you have it, my friends. The news is good, but still not reason to break out the champagne. Being an author was never a get-rich-quick scheme. It remains a calling requiring your dedication, hard work, talent, and time.

Previous Blogs in this Series:

State of the Biz: Publishing in 2014 and Beyond, Part 1: Introduction https://lisamasontheauthor.com/2014/03/18/state-of-the-biz-publishing-in-2014-and-beyond-part-1-introduction-lisa-mason-sfwapro/

State of the Biz: Publishing in 2014 and Beyond Part 2: Who’s Reading? https://lisamasontheauthor.com/2014/04/07/state-of-the-biz-publishing-in-2014-and-beyond-part-2-whos-reading-lisa-mason-sfwapro/

State of the Biz: Publishing in 2014 and Beyond Part 3: The Shady Case of Fifty Shades https://lisamasontheauthor.com/2014/04/17/state-of-the-biz-publishing-in-2014-and-beyond-part-3-the-shady-case-of-fifty-shades-lisa-mason-sfwapro/

State of the Biz: Publishing in 2014 and Beyond Part 4: The Comet and the Long Tail Lisa Mason #SFWApro https://lisamasontheauthor.wordpress.com/2014/05/27/state-of-the-biz-publishing-in-2014-and-beyond-part-4-the-comet-and-the-long-tail-lisa-mason-sfwapro/

From the author of Summer Of Love, A Time Travel (a Philip K. Dick Award Finalist and San Francisco Chronicle Recommended Book) on BarnesandNoble, US Kindle, Canada Kindle, UK Kindle, Smashwords, Apple, Kobo, and Sony. Summer of Love, A Time Travel is also on Amazon.com in France, Germany, Italy, Spain, Brazil, Japan, and India.

The Gilded Age, A Time Travel on BarnesandNoble, US Kindle, Canada Kindle, UK Kindle, Apple, Kobo, Sony, and Smashwords. The Gilded Age, A Time Travel is also on Amazon.com in France, Germany, Italy, Spain, Brazil, Japan, and India.

The Garden of Abracadabra, Volume 1 of the Abracadabra Series, “Fun and enjoyable urban fantasy,”on BarnesandNoble, US Kindle, Canada Kindle, UK Kindle, Apple, Kobo, Sony, and Smashwords. The Garden of Abracadabra, Volume 1 of the Abracadabra Series, is also on Amazon.com in France, Germany, Italy, Spain, Brazil, Japan, and India.

Celestial Girl, The Omnibus Edition (A Lily Modjeska Mystery) includes all four books. On Nook, US Kindle, Canada Kindle, UK Kindle, Smashwords, Apple, Kobo, and Sony; Celestial Girl, The Omnibus Edition (A Lily Modjeska Mystery) is also on Amazon.com in France, Germany, Italy, Spain, Brazil, Japan, and India.

Strange Ladies: 7 Stories, five-star rated, “A fantastic collection,” on Nook, US Kindle, Canada Kindle, UK Kindle, Smashwords, Apple, Kobo, and Sony. Strange Ladies: 7 Stories is also on Amazon.com in France, Germany, Italy, Spain, Brazil, Japan, and India.

My Charlotte: Patty’s Story on Barnes and Noble, US Kindle, UK Kindle, Canada Kindle, Australia Kindle, Smashwords, Apple, and Kobo; My Charlotte: Patty’s Story is also on Amazon.com worldwide in France, Germany, Italy, Spain, Brazil, Japan, and Mexico.

Visit me at Lisa Mason’s Official Website for books, ebooks, stories, and screenplays, reviews, interviews, and blogs, adorable pet pictures, forthcoming projects, fine art and bespoke jewelry, worldwide Amazon.com links for Brazil, France, Germany, India, Italy, Japan, and Spain, and more!

And on Lisa Mason’s Blog, on my Facebook Author Page, on my Facebook Profile Page, on Amazon, on Goodreads, on LinkedIn, on Twitter at @lisaSmason, at Smashwords, at Apple, at Kobo, at Sony, and at Science Fiction and Fantasy Writers of America.

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