Are you prepared to pay the same price for an ebook as for the print book?

[darryl]

Originally Posted by pwalker8

In general, not earning out is equal to losing money for the publisher. The term means that the author didn't sale enough books to earn the advance that the publisher paid him or her.

That's certainly not my understanding and it seems to be counter-intuitive. Perhaps there is someone here with more knowledge of the industry who can comment.

See, for instance:

http://www.macgregorliterary.com/blo...e-doesnt-earn/

[pwalker8]

Originally Posted by darryl

That's certainly not my understanding and it seems to be counter-intuitive. Perhaps there is someone here with more knowledge of the industry who can comment.

See, for instance:

http://www.macgregorliterary.com/blo...e-doesnt-earn/

Why do you think that it's counter intuitive?

Thanks for the link, but keep in mind that when MacGregor, a literary agent, talks about not earning out and the publisher still making a profit, he's talking about the big sellers. He's not talking about the average author who sells 3,000 books, or even the above average author who might sell 10,000 books. He's also talking hard back prices, rather than paper back prices. Do the math. If the overhead is $50,000 and he assigns $2 per book, he's assuming that the publisher will sell at least 25,000 copies. If you sell 3000 books, the the overhead is actually $16 per book, which is more than what the book sells for.

[pdurrant]

Originally Posted by pwalker8

Thanks for the link, but keep in mind that when MacGregor, a literary agent, talks about not earning out and the publisher still making a profit, he's talking about the big sellers. He's not talking about the average author who sells 3,000 books, or even the above average author who might sell 10,000 books. He's also talking hard back prices, rather than paper back prices. Do the math. If the overhead is $50,000 and he assigns $2 per book, he's assuming that the publisher will sell at least 25,000 copies. If you sell 3000 books, the the overhead is actually $16 per book, which is more than what the book sells for.

If the publisher has a print run of 50,000 hardback books and only sells 3,000 they will certainly make a loss.

But for an average author whose books sell around 3,000 in hardback, with an advance of $10,000, they would not. Because their print run would be around 4,000.

[Prestidigitweeze]

There should be a money-back guarantee for ebooks that prove to be spewed by publishers who scan or convert the originals without bothering to pay for proofreaders. The production costs of ebooks are nothing like those of printed tomes, so publishers can afford to ensure the content is accurate.

My bought e-copy of W.G. Sebald's The Emigrants began amputating the ends of words about halfway through. Having to stop reading felt like deprivation after a month of periodic immersion in plangent pasts.

[Cinisajoy]

Originally Posted by Prestidigitweeze

There should be a money-back guarantee for ebooks that prove to be spewed by publishers who scan or convert the originals without bothering to pay for proofreaders. The production costs of ebooks are nothing like those of printed tomes, so publishers can afford to ensure the content is accurate.

My bought e-copy of W.G. Sebald's The Emigrants began amputating the ends of words about halfway through. Having to stop reading felt like deprivation after a month of periodic immersion in plangent pasts.

Amazon has a 7 day return policy much to some authors* dismay.
Authors being used in the literal definition.

[shalym]

Originally Posted by Cinisajoy

Amazon has a 7 day return policy much to some authors* dismay.
Authors being used in the literal definition.

...and, if you contact them and complain about bad formatting, they will usually refund you even if it's long past the 7 days.

Shari

[pwalker8]

Originally Posted by pdurrant

If the publisher has a print run of 50,000 hardback books and only sells 3,000 they will certainly make a loss.

But for an average author whose books sell around 3,000 in hardback, with an advance of $10,000, they would not. Because their print run would be around 4,000.

But the $50,000 per title overhead is just that, a per title overhead, not a per book printed overhead. It represents the back office expense of keeping the doors open, not the actual expense of printing a specific number of books. You have the same overhead if you print 25,000 or 4,000. It pays for all the back office expenses require to run a large company.

Most businesses have this sort of thing. For example, I use to work for BellSouth, a large telecomunications company based in the US south east area. Each business unit was charged, in accounting terms, $6 per square foot of office space used as overhead (this was some time ago, I'm sure it would be more now).

[Cinisajoy]

Originally Posted by pwalker8

But the $50,000 per title overhead is just that, a per title overhead, not a per book printed overhead. It represents the back office expense of keeping the doors open, not the actual expense of printing a specific number of books. You have the same overhead if you print 25,000 or 4,000. It pays for all the back office expenses require to run a large company.

Most businesses have this sort of thing. For example, I use to work for BellSouth, a large telecomunications company based in the US south east area. Each business unit was charged, in accounting terms, $6 per square foot of office space used as overhead (this was some time ago, I'm sure it would be more now).

Were you bought out? Or was Bell South not in that buyout?

[pdurrant]

Originally Posted by pwalker8

But the $50,000 per title overhead is just that, a per title overhead, not a per book printed overhead. It represents the back office expense of keeping the doors open, not the actual expense of printing a specific number of books. You have the same overhead if you print 25,000 or 4,000. It pays for all the back office expenses require to run a large company.

Yes, overhead expenses are fixed. No, they are not $50,000 per title.

From the article: "At several publishing houses, they have a standard “overhead” charge of about $2 per book, or $50,000 per title."

The author of the article has the overhead right ("about $2 per book") but has then confused matters by adding "or $50,000 per title" without specifying whether that's a minimum or a maximim.

It clearly can't be a minimum. No publishing house could survive with a minimum overhead of $50,000 per title. It must be intended either as a maximum, or as the number from the example that follows.

[DMcCunney]

Originally Posted by darryl

That's certainly not my understanding and it seems to be counter-intuitive. Perhaps there is someone here with more knowledge of the industry who can comment.

I've been following publishing for 40 years, and know a number of folks in the industry.

It may seem counter intuitive, but it's true.

Book publishing is like movie production, TV production, or record albums. Most offerings tank, and the producers all hope enough will sell to cover the loses on the ones that don't.

You get the old retailer joke "We lose money on every sale, but we make it up on volume!" No you don't. You go belly up.

For something really counter intuitive, the amount of the normal book budget allocated to print/bind/warehouse/distribute is 10%-15% of the average book's budget. Dropping print editions entirely would not drop the costs enough to reach the price levels a lot of folks would like to see. Over 80% of the costs of publishing a book are incurred before the book reaches publication in any form.

Most books don't earn out, and are losses for the publisher. (And I've seen a claim elsewhere that a good agent tries to get an advance high enough the book won't earn out. Since the vast majority of books don't sell well enough to generate royalties, the advance is all the author [and agent] will see, so go for as much up front as possible.)

On the original question, two comments.

First, eBooks here are an additional format for books, and not a replacement for print editions. I have thousands of books in both formats, and some in both eBook and print editions.

Some books just aren't a good fit for eBooks. I was a graphic designer at one point, and retain an interest. I have books on art, art history, architecture, design, photography and typography. The problem with them is form factor - they need a much larger display area than a practical eBook viewer can have. (There's a reason such things are called "coffee table" books.)

And on a related note, an awful lot of books are issued as PDFs. Those are a poor fit on an eBook viewer screen. My normal eBook viewer is an Android tablet with a 7" screen. I get ePub by preference, and can configure things so I get the equivalent of a mass market PB page on a screen. ePubs reflow to fit display sizes. PDFs generally don't, and sideways scrolling to view a wide page is actively painful. I transfer books to my device with Calibre, and create a virtual library containing only ePubs to pick from to send to device.

Second, price is at best a secondary consideration in what books I buy. My scarce resource is my discretionary time to read the books. Reading is a foreground activity that demands my full attention. It competes with a lot of other things. The biggest competitor for reading for most is TV. It isn't for me, since I watch next to no TV, but there is plenty of other competition (like participating here...)

I have more books in both formats I already own than I have time to read now, and I tell people "The nice thing about eBooks is that you don't call the EMTs is my To Be Read stack topples over on me!" (Since the print titles I buy tend to be hardcovers, you might have to call the EMTs if they did.)

If I want to read the book badly enough, and it's a book I might want to keep and read again, I'll buy it. Price will likely not be an issue.

People say "I can't afford to buy all the books I want!" Neither can I. But a thing I learned as a small child was that I couldn't have what I wanted, when I wanted it, just because I wanted it. A thing I learned as an adult was that resources were finite, and I would need to prioritize and decide what was important to me, and what I could pass on. I do so.

And as mentioned time to read the books is the major limiting factor. I'm a fast reader, and can go through a book a day reading light fiction. The stuff I'm reading these days is deeper and weightier, and requires time and concentration. It's complicated by the fact I have broad interests, and spend a bit of time deciding which books to read, and which new books I likely will read.
______
Dennis

[darryl]

Originally Posted by DMcCunney

Most books don't earn out, and are losses for the publisher.
______
Dennis

Thanks for your comments. You are certainly closer to the industry than I am. However, it seems to me that not "earning out" is not synonymous with the publisher making a loss on the book. This is perhaps why agents try to negotiate an advance high enough that a book will never earn out. And also perhaps why publishers agree to this often enough that "the vast majority of books don't sell well enough to generate royalties",

[DMcCunney]

Originally Posted by darryl

Thanks for your comments. You are certainly closer to the industry than I am. However, it seems to me that not "earning out" is not synonymous with the publisher making a loss on the book. This is perhaps why agents try to negotiate an advance high enough that a book will never earn out. And also perhaps why publishers agree to this often enough that "the vast majority of books don't sell well enough to generate royalties",

Whether not earning out is synonymous with taking a loss depends on how you look at the numbers. Most folks who think books are priced too high either don't read or don't understand publisher's financial statements.

Every book has a budget that includes all the costs involved in publishing it. The advance paid to the author is only one of the many costs, and likely not the highest one. How much of the cost the advance will be will depend on the author and the author's track record. I heard pretty believable claims a while back from someone in a position to know that nobody made money publishing Stephen King. He was in a position to demand enough up front, and a high enough royalty rate, that what might have been profit for the publisher went to King. They published him for the prestige of doing do.

Agents trying to negotiate an advance that won't earn out is a rational response to a situation where the advance is usually all the author and agent will ever see. But that advance will not be the reason the book won't generate royalties.

An old friend was an editor at a trade house that was a unit of a diversified entertainment and media corporation, in the days when there were perceived synergies in having all forms of content under one roof. He recounted getting a visit from a guy on the movie production side of the company who pointed at the mid-list titles and said "Why did you publish those? Why not publish just the best sellers?" The question to ask back in those cases is "Why did you greenlight notable bombs A, B, and C, and instead just produce $100 million grosser D?"

The answer in both cases is that you have no idea what might become a hit until you offer it. You put it on the market and see what happens. You pray to $DEITY that enough of what you produce will be hits to cover your losses on what tanks. Sometime you lose the bet, and go out of business.

The problem publishing has faced for as long as I've been paying attention has been "Way too many books chasing too few readers". Back before the Internet Ate the World, and eBooks and self-publishing were even possible, I saw American Bookseller's Association stats saying that there were over 50,000 new traditionally published title releases in the US per year. That's a thousand new books a week. Who would buy and read them all?

The answer is, they weren't bought and read. The failed to reach an audience, died on the shelves, and got returned for credit. The advance was the only money the author would ever see.

Now we have self-publishing and indie-publishing, and it's more like a thousand new books a day It's the same question above, with the same answer only more so.

The vast majority of books won't generate royalties because the vast majority of books won't sell. There is too much competition. The size of the advance won't be a factor.
______
Dennis

[Prestidigitweeze]

Originally Posted by Cinisajoy

Amazon has a 7 day return policy much to some authors* dismay.

Yes, but that guarantee doesn't help if, as I mentioned, the scan errors appear after two hundred pages and the prose is designed to be savored in doses rather than binged at once.

Besides, not everyone reads a book just after they buy it.

[Cinisajoy]

Originally Posted by Prestidigitweeze

Yes, but that guarantee doesn't help if, as I mentioned, the scan errors appear after two hundred pages and the prose is designed to be savored in doses rather than binged at once.

Besides, not everyone reads a book just after they buy it.

And if you read the post below mine, you would see that they will do refunds long after the 7 days if the book is unreadable. 7 days is no questions asked.
I had one CS try to do a refund years later. (The book had been free.) I needed it pushed to a device.

[pwalker8]

Originally Posted by Cinisajoy

Were you bought out? Or was Bell South not in that buyout?

BellSouth got bought out by SouthWestern Bell, which also bought out AT&T and took over the name. So BellSouth is now part of AT&T. I got out sourced before that happened.