A few days ago, Eric Felten published an interesting essay in the Wall St. Journal on the value of the publishing industry. His take is that the publishing industry primarily serves as gatekeepers or bestowers of quality labels. This function allows the book buying public to have some confidence that the book they’re buying is up to the acceptable standards for quality publishing.

In comparison, self-publishing is the Wild West. Or as Mr. Felten calls it “American Idol” for authors. I agree there are a quite a few poor quality books in the self-publishing world. The worst being people who don’t even write their books, but essentially steal material from other people then publish under their own name (book spammers, in Mr. Felton’s lexicon).

However, I don’t believe the entire self-publishing arena is bad. There are books that have a small audience that can’t be profitably produced any other way. For example, some years ago I worked on a book (nonfiction) on a medical topic. I dutifully sent it out and eventually found an agent to assist me. However, the word came back that the target market was too small. I put the book aside. But, what if it could have profitably been published? Wouldn’t people concerned about this condition have been able to learn from my knowledge? Maybe felt better able to handle their condition or even to avoid developing it? No one will know since the book wasn’t published. But, now, in the crazy, wild world of self-publishing, maybe those type of books can have a home.

Where publishers need a large staff and have considerable overhead, self-publishers can publish with a small coterie of freelance assistants. The reduced overhead means that books with lower sales can be profitable since the creation and production cost is lower. Thus smaller, niche audiences can be served.

Yes, in the Wild West of self-publishing, much sifting is needed. However, there just might be other Amanda Hockings out there. Plus what is one man’s dross could be another man’s gem.

It’s official, last week e-book sales surpassed those of paper based books for the first time.

The Financial Times (April 15, 2011 by Andrew Edgecliffe-Johnson) reported that in February 2011, e-books sales tripled reaching $90.3 million compared with adult paperback book sales of $81.2 million. That means 9.1 million more e-books were sold than paper back books.

The numbers also showed that in January and February, e-book sales increased 169% compared with a decrease of 24.8% in paper based book sales.

The trend looks firmly entrenched especially given the ever increasing types of devices that readers can now use to view e-books including new tablets as well as the Kindle, Nook and others. RIM just announced a new tablet to compete with the iPad and a Sony tablet.

These changes will ripple throughout the publishing industry and all book related organizations. Even libraries are struggling to keep up. My library just sold off their entire CD collection in a move to digital. One wonders if books are next and if so, how will libraries transform?

Any change is sure to be gradual. One road block is that Amazon allows only limited sharing of books on the Kindle. Thus libraries can’t share books for the Kindle currently.

Even if books are eventually primarily digital, I think libraries will survive because they are so much more than book lenders. My library, like many others, is a community hub. Students meet with tutors, citizens come to hear lectures by authors or attend computer training classes, or teens just hang out.

For authors these are roller coaster times. The challenge is to adapt to e-books. Yet still profit. Perhaps e-books can even improve profit for authors. Perhaps authors will simply be lost in a tsunami of content. It seems too early to tell. The exciting part is to be in early on change and hopefully to shape change into a helpful, rather than mischievous sprite.

If you earn money (or try to) as a freelance writer or blogger you may be frustrated by the generally low pay or even total lack of pay. Often writers are told, “You’re just starting out. This is an opportunity to get your name out there,” or “You’re building your platform.” However, the promised pay day never comes- there is no golden pot after months or years of toiling away. If you feel this way you’re not alone. And some of these writers and bloggers are now saying enough is enough and fighting the system.

Here are two news stories where writers are raising awareness of the pay (or lack of it):

http://news.yahoo.com/s/ap/20110412/ap_on_hi_te/us_aol_lawsuit

http://yhoo.it/h1z5jx

In the first link, a former Huffington Post blogger is suing the company for pay following the large amount reaped by the company in it’s recent sale. In the second link, a freelance writer started her own company to subcontract out writers at better pay.

If you want to be a professional (career) writer, pay is a must (being part of the base definition). Even the IRS distinguishes professionals from hobbyists by whether they are paid or at least attempt to find paying work. If you intend to write without pay, not only don’t you collect a paycheck to cover the bills but you won’t be able to take tax deductions either since you will be considered to be engaging in a hobby (ie: just messing around for fun).

Not long ago I posted a summary of comments on the cost of book production by Lee Child.

Here’s another source showing how little it actually costs to produce a physical paper-based book (just in terms of printing).

“Printing a 9-by-9-inch, 334-page hardcover book in China costs about 44 to 45 cents now, with another 3 cents for shipping, says Goodwin. The same book costs 65 to 68 cents to make in the U.S.” He goes on to explain that US printing obviates the need for an additional 30 days of shipping time- plus the extra 3 cents cost.

http://news.yahoo.com/s/ap/20100708/ap_on_bi_ge/as_china_cheap_no_more

Thus, the cheapest cost for China is 47 cents versus the most expensive cost for the US 68 cents. Will an extra 50 to 70 cents more or less  prevent anyone from buying a paper book (over say an e-book version)? Because that ‘s the real cost difference unless vendors artificially lower e-book prices by cutting pay for writers or publishers or sell at a loss to themselves. In fact, the difference is likely even less because there is still a cost for programming to develop and maintain software allowing e-books to be uploaded and viewed.

These numbers further demonstrate that most of the cost of a book is content development (ie: the writer sitting in the chair fingers to keyboard for months or years and the editor polishing the text up) plus some marketing/sales costs so that readers can find and obtain a copy of a new book and don’t have to hunt the Internet for obscure web sites to buy a poorly or non-promoted book. Thus, most costs do not change regardless of whether the book is delivered in electronic or print format.

E-books are a great option, but keep the price honest.

I just love my local library. Our librarians put together a fantastic slate of authors every year. This year, they wrapped up the lectures with a bang by inviting Lee Child to speak. The substantial auditorium was jam packed, spilling out into the hall, so clearly our librarians made a good choice.

He was witty during his lecture about his publishing career. During the numerous questions, of which I’m sure he’d heard a few many times, he came across as honest and patient, giving thoughtful answers.

One topic that interested me considerably was e-books. The publishing industry has been in an uproar over e-books for the past couple years. Lee Child gave the clearest answer I’ve heard yet about what price e-books should have and why. First, he said consider that his standard hardcover sells for about $28. The cost of printing and shipping the hardcover is about $5. That means the value of the story (content only) is about $23 for those receiving it first (hardcovers come before paperbacks if there are paperbacks).The $23 covers the cost of all the publishing staff (editors, marketers, etc) plus the very important author- everyone who helped create the story and make it visible to it’s audience (I’m adding this bit, Lee Child didn’t go into this detail).

E-books, contrary to popular perception Mr Child said, do have a cost for creation and delivery. After all, someone had to create the computer program used to format and deliver the book. Estimate that cost at $1 per book. That means the e-book cost is $23 + $1= $24 (or the cost of the story plus the electronic formatting and delivery). Obviously at the much bandied price point of $9.99, someone is losing money.

There were many questions about Reacher, but I’m not going to go into all of them here. I do recommend that if you have a chance to hear Lee Child speak, you should take it.

Summer is traditionally a time when people think of kicking back on warm sand under a blue sky with a great book. The Wall Street Journal (this past Friday) published the largest print runs of the season (which clearly indicate what the publishing industry believes large numbers of people will be reading).

Janet Evanovich’s upcoming novel, Sizzling Sixteen, came out on top with a print run of 2.5 million. When you consider that a successful book sells 5,000 copies, the print run for Sizzling Sixteen is astounding. Of course, the article goes on to mention that Janet’s summer 2009 novel in her Stephanie Plum series sold nearly a million copies. Clearly her track records suggests outstanding sales this summer.

I had the pleasure of hearing Janet speak at last year’s RWA National conference. She gave the audience snippets of her journey as a writer that were both witty and touching. She was passionate about writing, thrilled to have many fans, yet humbled by her view from the top. All this as she hobbled around the stage on a broken foot. Imagine what she’s like when not weighed down by an appendage encased in a cement-like block.

Janet’s new book comes out later this month.

As part of my current summer reading, I’ve finally gotten my hands on the third and last Stieg Larrson book. I will be happily devouring it, while despairing all the while that there will never be another one.

Spring has been here for several weeks now, with the usual crazy New England weather- shorts and tee-shirts one week then back to sweaters and coats the next.

Besides the changing but consistently wacky weather, the publishing industry continues as well, changing but expectedly so.  Publisher’s Weekly reported that e-books were up 177% for 2009 while sales of most other books were flat or slightly lower than the year before. All forms of entertainment have been moving digital for a number of years. Yet things rarely move entirely digital or, if they do, convert in their original form. I still listen to the radio periodically. I often listen to the radio online. It’s still the radio, just a different delivery system. I envision paper-based books sharing the world with digital books- reaching an even larger audience.

Spring is a great time for writing- full of energy and bursting with ideas! So now it’s back to a writer’s main job…writing.

The agency model for e-books is out of the gates and off and running as of yesterday. As many expected, there have been some bumps in the road. Some publishers are still working with Amazon. This is all to be expected given how quickly deals had to be put together.

My main concern is communication with customers. This morning I checked the Amazon Kindle blog and noticed a number of customers complaining about the price changes. Some felt that publishers were price-gouging, getting more because they could, etc. To quote one customer “I’m really tired of these publishers jerking me around. Ebooks are almost pure profit since they don’t have to pay anyone to print or ship…”

Very few customers posting recognized or understood that authors need to be paid fairly for their work. The focus was heavily on publishers and lawyers writing up contracts as well as the low costs of producing an e-book versus printing. The truth is that without authors sitting in a chair, fingers to keyboard for months or even years, pouring their heart and imagination out onto their hard drives, there would be no e-books (or any other form of books). The truth is that like other products (cars, jewelry, clothing) some products may have a higher intrinsic value than others.

I believe most people are willing to pay fairly for what they buy when they understand the value of what they’re buying. Few expect to buy a shiny new BMW car for the same price as a Kia.

Of course, why should readers realize or understand the monumental effort that goes into writing a book unless authors, publishers, agents and others in the community engage them in conversation? We are not explaining our side of the story. We’re letting Amazon and others put their side of the story out leaving readers feeling confused.

Yes, e-books are cheaper to produce. But they are part of the set of products an authors produces. In fact, an ever greater part. The pay (or salary, if you will) that an author receives in exchange for sitting at their computer for months and years is based on what all these products (e-books, hardcover, paperback, etc) earn. Artificially lowering the price of e-books to “one low price fits all” means that no matter how hard an author works, no matter how good they are in crafting a story, they’ll earn the same base amount.

Naturally, Amazon and other companies that make the hardware needed to read e-books want low priced content. They want to sell their hardware (e-book readers) for as much as they can. In order to do that, they need to offer customers a carrot. The carrot is low cost content. Their pitch to customers is, “yes, you’ll pay hundreds of dollars for this reader but after that you’ll hardly pay anything at all for using the device.” Fair valued-content brings up the total cost proposition of owning the e-reader. Some customers may then want to pay less for the reader.

E-readers and e-books need each other. Like any relationship, there are ups and downs as well as power-struggles. I believe the agency model is basically fair to both sides. Readers also win because they will keep getting fantastic stories to read in any format they like (print books or e-books).

A good marketer always wants to know the competition. For aspiring authors, how much competition is there? The numbers are closely held and hard to pin down. However, I decided to take a stab at it.

In 2004, one source gives the number of books published in the U.S. as 190,000. For 2006, another source (citing BEA statistics) gives the number of books published in the U.S. as 172,000. Sounds like stiff competition so far, right? In fact, out of the 172,000 books, 93% sell fewer than 1,000 copies. A successful book should sell at least 5,000 copies to earn out a modest advance.

More recently another source indicates that in 2007, about 62,000 fiction books were published. This seems to suggest that more than half the earlier totals were mostly nonfiction with some other categories.

The numbers suggest that the number of books published by traditional publishers probably hasn’t changed much or has even declined in the past 6 years.

Self-published books count for a large number of total books published. They haven’t been included in the above numbers, but offer some competition. Lulu claims it publishes 4,000 books a week, which comes to an astounding 208,000 books a year! That’s just for one self-publisher. The vast majority of self-published books only sell a hundred or two hundred copies to the author’s friends and family. For fiction, self-publishing is useful if all you want to do is see your name in print. Most people shouldn’t consider it a money making venture since self-publishing costs anywhere from $5,000 to $25,000 and up.

For more on self-publishing challenges, see http://reviews.cnet.com/self-publishing/

For new authors, these are sobering facts. I have seen estimates that between 700 and 1,000 people in the U.S. make their living as novelists. Some will write more than one novel per year. Let’s assume that 1,500 novels each year come from full-time novelists. That leaves 60,500 novels to be written by those not making their living as novelists. This is good news in that it means there’s some chance to break into the field. But not so good in terms of earnings or a long term career.

So where to go from here? I highly recommend any aspiring novelist join a writer’s association to learn about the industry. Also, think deeply on your writing goals.

The one issue I have with the Kindle is that it’s limited to reading black and white text primarily. I’ve been waiting for something to come along that will allow a top-notch reading experience but also provide a thrilling multi-media experience as well. The hints surrounding Apple’s secretive meeting with publishing industry giants has me intrigued. Will we finally see a device where authors can reach out to their audience with every tool at hand?

Imagine the possibilities….(no, don’t burst my bubble yet with reality like slow internet connections or dodgy Wi-Fi or faded colors- for now I’ll just dream…)