Behler Blog

This is something that authors may start saying when negotiating contract rights. After all, they’ve seen JA Konrath do well with his e-books, so why not keep a bigger piece of the pie? As I wrote in my blog post All Writers Were Not Created Equally I outline the reasons that what rocks for JA won’t necessarily rock for you.

But this post isn’t about authors who decide to forgo publishers altogether, but are negotiating with publishers for print/e-book rights. Here is a big thing to consider: This is a deal killer.

And here’s why:

It’s true that many things in contracts are negotiable – foreign rights, movie rights, royalties, sell-through break downs, audio book rights, etc. But with the e-book phenom, publishers are about as likely to negotiate e-book rights as I am to increase the beagle’s weekly tequila budget.

For publishers, doing an e-book is the natural extension to the print rights. We’ve already spent thousands on editing, cover design, interior design and layout, marketing and promotion, so it goes to reason that we will insist on the e-book rights.

Avoiding Confusion

Physical and e-books are the peanut butter and jelly sandwich of the publishing industry. They go together. There was a comment in my prior post about how authors in the near future might have two publishers; one who does physical book and the other who produces the e-book.

Who’s on first? I don’t see that happening for a single minute. Creating an e-book is very simple for us because we’ve already gone to the expense and done the hard part. If we went to a two-publisher system for a single title, who would take precedence? Would the e-publisher rush the book out to market, thus usurping the print publisher’s ability to splash onto the market first? Print publishers put a ton of energy into marketing books, and they aren’t likely to be thrilled at having their thunder stolen.

Editing: Then there is the matter of editing. If you have two editors for a single title, you could very well end up with two different books. How I edit a book is quite different from another editor, so the door would now be opened for “which book was best?” A print publisher, who has spent far more money on their books than an e-publisher, isn’t going to sit idly by and watch sales slip past them.

Control the timing

Print publishers want to control the timing between their various mediums. For instance, publishers who print hardbacks usually keep them out there for about a year before going into mass or trade paperback. The same thing goes for print to e-book. Many are only allowing the print version to be available for six months before releasing them in e-books. Others are releasing them at the same time.

If they don’t have the e-book rights, then they lose that control. Again, no publisher wants to spend gazonga bucks only to be scooped by the e-book.

So before you insist on negotiating your e-book rights [provided the publisher hasn't already prepared a voodoo doll in your honor], here are some things to think about:

File: You’ll have to create a whole new file since the publisher won’t release their file to you. Yes, you already have the version that you submitted, and probably the edited file from the publisher, but if the publisher has a brain in their head, they’ll have wording in the contract that prevents you from using that file. So, as I mentioned above, you’ll be putting out two different books – your publisher’s version and yours.

Cover design: What goes for the file also goes for cover design. They own the cover, and you won’t be allowed to use theirs. You need to submit cover art when putting your e-books on the online stores. Will buyers make the association between the physical and e-book if they have two different covers?

Linkability: With Amazon, for instance, the e-book automatically links to the physical book – as can be seen here with Donna Ballman’s brilliant The Writer’s Guide to the Courtroom. If the publisher doesn’t have those rights, there is no way…let me repeat that…NO WAY that they’ll allow your e-book to link with their physical book.

Remember, they’ve spent thousands on your book. This means they have a stronger marketing and promotion arm than you do [in general]. This means they will drive readers to the physical book. The only way people will find your e-book on Amazon is if they google your name or the title. Obviously you’ll put your book in all the other online bookstores, but you’ll do so without the backing of your publisher.

In a word; you’re working against each other.

ISBN: As I mentioned in my previous post, you’ll need to buy an ISBN for your book. It ain’t free.

As I said at the beginning, this is most likely going to be a deal breaker, so tread carefully and consider whether it’s worth it. You could very easily find yourself looking for another editor, or dealing with an agent who is ready to slice and dice you into a million little pieces for shark bait.

Brian Clegg – brilliant author extraordinaire and all around great gent, commented in a previous post:

What’s interesting is how does the cost of getting an ebook into the shops compare with the cost of physical book, including production, shipping and dealing with returns, on top of all the same costs as the ebook? And how does the net revenue then compare? So ultimately, taking all this into account, how does the ratio of earning per ebook to earning per physical book compare with the ratio of royalties on the two?

I thought it a great discussion, so I decided to make a separate post to discuss these issues. There is a lot of comparing apples and oranges with e-books and physical books in terms of who’s doing the publishing – authors or publishers. So for this post, I’m going to take the viewpoint of publisher and we’re trying to figure out how all e-books vs. physical royalties and advances will eventually wash out.

Of course, it comes down to cost.

Cost comparisons for the bookstores – physical vs. e-book

The eventual resting place with books is, of course, in readers’ hands. The easiest, most efficient way for that to happen is in bookstores. Brian asked how e-book costs compare to physical books in terms of getting them into the shops, using production, shipping, returns as our list of parameters. I’m adding discounting to the list as well.

Well, for starters, e-books aren’t yet being sold in physical shops [at least here in the US], so right off the bat, we’ve parted company in the comparison game. Powells.com is terribly clever in that they sell e-books on their online site. To my knowledge, they’re the only mainstream bookstore who does. I suspect that at some point physical bookstores will offer e-book sales.

Before I can break this down, I need to make a few assumptions. I’m not talking about the self-publisher, but a mainstream publisher who creates physical books and offers the e-book version as well.

Production: The production costs are established with the physical book and runs into the thousands when you consider all the elements I wrote about in my previous post about e-book costs. I’m talking about editing, cover design, ISBN, interior layout and design, distribution, marketing and promotion.

Print Runs: I’m separating this from the normal production costs in order to highlight the case that print runs vary depending on the book. For instance, we may print 2500 units for one title and 8,000 units for another because it has a wider audience potential. So our mileage varies depending on the title.

Shipping: Shipping costs are all a part of doing business with physical books. Everyone has UPS or FedEx accounts and gets discounting because we’re all shipping so much. Still, it’s an expense that rises with the number of books we’re shipping.

Discounting: Any distributor or national account like Borders, B&N, Powells, Waterstones, etc, buys publisher’s books at a discount. The normal range is between 45 -55% depending on the number of units being sold and the company doing the purchasing. So that book whose retail price is $15.95 is being sold to B&N for $7.975 per unit.

So remember, publishers are making money off that discount price, not the retail price. When you add up the production and printing costs, you can see why it’s vital to pick books we think will sell very well because while printing costs may vary depending on the units printed, the production costs are static.

Returns: Ach, the bane of every publisher’s existence and what very nearly killed many publishers a couple years ago and put thousands of editors out of work. We have to allow for the possibility that some books don’t sell within a bookstore’s sell window, and they’ll return them in order to make room for newer books. That’s why it’s so important to hit the deck running when your book comes out. If sales are tepid, they’re going to clear you out for someone else. And yes, publishers withhold a percentage of royalties in order to allow for the possible returns.

E-Books – they ain’t as free as you think

Ok, so here comes the comparison. E-books don’t have returns and they don’t have print runs or shipping costs, so the only things left are discounting – which is the same as physical books – and production. And here is where a lot of people find their biggest issue.

Production: Many people believe that the production costs are tied up in the physical books and that e-books are this marvelous freebie gift from the Great Cosmic Muffin. This is plain wrong thinking from where I sit. Yes, we expended the money to produce the physical book, but had we not done so, the e-book wouldn’t exist. E-books are simply another printing medium, so it goes to reason that our production costs bleed over as well.

E-book conversion: Almost not worth mentioning because it’s negligible PROVIDED the e-book version sells enough units to offset the costs.

Royalties: And this is where the big brouhaha rears its ugly head. Since so many people believe these e-books are free for us that they should have higher royalty rates. It wasn’t that long ago when the royalty split was 50-50, and that’s because e-book sales were negligible. But now with Kindle, Nook, Sony e-Reader, iPad, etc., e-books sales have dramatically increased and become an issue that publishers need to deal with head on.

Now you’re seeing more contracts that have a 80-20 split, and it has agents and authors howling. On one hand I can see why. Publishers were once willing to offer a 50-50 split because sales were weency, but now we’re getting all greedy like because e-books are making a much bigger impact on sales. In other words, publishers saw e-books as a throwaway, but now we want a bigger piece of the pie.

As a publisher, I can’t apologize for that. We fork out thousands in production costs for each title. E-books are quickly becoming a viable reading option, and it goes to reason that we will use those sales to recoup – and make money – from those sales.

Brian asked: So ultimately, taking all this into account, how does the ratio of earning per ebook to earning per physical book compare with the ratio of royalties on the two

Because publishers don’t have to worry about print runs, shipping, and returns [which are the only real costs that can't be tied to e-books], royalty rates are generally increased from 8-10% to 20% or higher for authors to reflect the decreased risk.

In the end, who knows where and how all this will shake out? We’re in a transitional stage where ideas are being tossed about. And just like the old argument of Beta or VHS? this, too, will have an ultimate winner. The important thing is to always keep the lines of communication open and understand there are always reasons why we do things the way we do.

I’ve been asked numerous times what it costs to publish an e-book. My answer is:

It depends.

Do you want to do it right, or do you want to do it fast?

Let’s assme [yah, yah, I know all about the ass-u-me, har har] that you want to do it right.

Editing

The big ticket item in the e-book endeavor is editing. Let’s just assume that you don’t have all the self-editing tools – because most of you don’t. Heckfire and Twinkie cream, I don’t trust myself with self-editing. This means that you need to hire yourself a good indie editor to edit you to within an inch of your life. Talent doesn’t come cheaply, so be prepared to stare down the gunbarrel of between $700-$1,000 – depending on the size of your manuscript and what all you want them to do.

Interior design and layout

So let’s say you want some cool graphics to head up each new chapter or other artistic additions. This comes under the heading of an interior designer, who can do that and properly format your manuscript. It’s a bit easier because the interior designer doesn’t have to worry about widowing/orphaning issues – which is a royal PITB – so this wouldn’t cost as much. I’m a bit out of practice on what people charge for this service because we do this in-house, but let’s say at least a$300, just to be safe.

Cover design

Just because your book isn’t going to be in print doesn’t mean you still don’t need cover art. When you upload to any e-book site, they ask for your cover design. Pricing is all over the map, but in order to get something good from a talented, experienced cover designer, be prepared to spend anywhere between $700 – $2500.

E-book conversion

Now that you have your file put together and put into a pdf format, you need someone to convert the file. You need to decide what files you’re going to convert: Kindle? eReader? Nook? iPhone?

All of those files requires a different conversion, so you’re paying for several different files. There are hundreds of companies who perform this service. We use a wonderful little company in India who gives us quality works for a very good price. They can do this because we’re giving them a lot of files. The onesie author needs to be prepared to pay a lot more.

Pricing can be anywhere between .35/page – $1.50/page – and on up.

Amazon used to have a freebie deal where they would convert your files for free. You know what they say about “you get what you pay for”? Yay, well there’s a reason they say that. Their file conversions are akin to the spin and rinse cycles of my son’s dirty laundry.

Authors also need to be mindful to request a sample of their files first. They should give you about three chapters. Go through them carefully so you can be certain they’ve done a quality job. Many Kindle files I’ve seen – from the big hooha publishers – have been abysmal. Extra carriage returns in between dialog passages, funky margin spacing. One of my David Baldacci Kindle books looked like it had been converted by grasshoppers hopped up on cough syrup.

ISBN

If you’re going to sell your book, you need to buy an ISBN from Bowker. This is the pricing I pulled off the Bowker website:

10 ISBNs:  $275.00
100 ISBNs:  $995.00
1000 ISBNs:  $1,750.00

Le Grand Total

So let’s add it up:

Editing = $1,000
Interior layout and formatting – $300
Editing = $1,000
Interior layout and formatting – $300
Cover design = $700
ISBN = $275
File conversion = 250 pg. Manuscript @ $1.00 = $250

Le grand total ~ 3 grand

Agreed, some of these figures are high or low. Obviously, you can save some bananas if you know how to properly format your manuscript, and if you spend less on your cover design. But if you think you can skip corners by doing your own editing – think again. Publishing a book without proper editing is like buying a car without doors.

So that’s it. The lowdown on e-book costs. Not as cheap as you thought, is it?

Edited to add:

In the light of day – and sobriety [kidding, kidding] – I vastly under estimated editing costs. I needed to say that your mileage may vary. Editing – a proper job – can easily start at $2500 on up.