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Crime Writer Makes a Killing With 99 Cent E-Books
Hugh Pickens writes writes "Joe Konrath has an interesting interview with independent writer John Locke who currently holds the coveted #1 spot in the Amazon Top 100 and has sold just over 350,000 downloads on Kindle of his 99 cent books since January 1st of this year, which, with a royalty rate of 35%, is an annual income well over $500k. Locke says that 99 cents is the magic number and adds that when he lowered the price of his book The List from $2.99 to 99 cents, he started selling 20 times as many copies — about 800 a day, turning his loss lead into his biggest earner. 'These days the buying public looks at a $9.95 eBook and pauses. It's not an automatic sale,' says Locke. 'And the reason it's not is because the buyer knows when an eBook is priced ten times higher than it has to be. And so the buyer pauses. And it is in this pause—this golden, sweet-scented pause—that we independent authors gain the advantage, because we offer incredible value.' Kevin Kelly predicts that within 5 years all digital books will cost 99 cents. 'I don't think publishers are ready for how low book prices will go,' writes Kelly. 'It seems insane, dangerous, life threatening, but inevitable.'"
Considering the limitations of Electronic Books; can't give them to friends or family to read, can't resell them, can't return them, can have them pulled without notice, the price is way too high.
I've purchased a few novels at the too high price since I got my iPad but so far only the ones I already have in paperback and really love to read. I have picked up a few 99 cent books at recommendation from others and generally they're an ok read.
I've spent a lot more on gaming PDFs, especially the non-watermarked DRM'd ones (Shadowrun from the Battlecorps website).
[John]
Shit better not happen!
not only i told you, but many other people told this as well :
digital goods are easily distributable. make it something cheap that noone will hesitate to pay for, and A LOT of people will buy it - even people who think 'hey i may read/use this in future' may buy it if its 99 cents. same goes for games. a lot of people will buy games that they will never play, just to have them handy, or in their collection, or to have a more complete game arsenal. a lot of people will buy your software if its cheap, just to have it handy if they ever need it to do anything at some random point in time in future.
there is nothing barring you from doing that. the bandwidth costs are low, they are going down and down continually. you dont have to reproduce a digital good. all you need is :
- an easy to use website to buy from, and a short, easy checkout procedure
- a payment provider that is easy to use. (or a reliable credit card payment method)
- a digital download.
its THAT simple. no really, it is THAT simple. and the example is, in the article above.
Read radical news here
350k for Jan - Mar or 3 months. times 4 = 1.4M * 0.35 = 490k but of course March is only half way, so round up.
A fool throws a stone into a well and a thousand sages can not remove it.
Just like the music industry, the electronic distribution of books has the publishers running scared. Writers are finally waking up to the fact that without the need to actually print books, they have no need of monolithic publishing houses whatsoever. They can self-publish with little to no overhead and keep the profits for themselves. $9.95 (or more, oftentimes) is an abso-friggin-lutely ridiculous price to charge for an e-book.
"Tell me doctor, with all of your defenses, are there any provisions for an attack by killer bees?"
The race has already reached the bottom. Capitalism has reached its pathological limit: selling low priced crap to as many people as possible.
The way out is socialism. Readers will disagree because they're still on the winning end of having shafted their fellow man. But there's only so much people will take.
Let me understand this: if a book is sold at $0.99 that's capitalism, but if the same book is sold at $9.95 that's socialism?
Your point is that socialism is selling high priced crap?
That's $122K since January 1st, just ten weeks ago. If he were to keep up sales to that extent for a year, his annual income is indeed over half a million dollars.
You hear the name John Locke and you think of some TV show? Seriously?? Not the philosopher considered the founder of Liberalism, nor his theories of continuous consciousness or tabula rasa?
Our educational system has truly failed.
http://en.wikipedia.org/wiki/John_Locke
Why would anyone pay $9.95 for an Ebook when your average paperback novel costs the same (or less) at a brick + mortar store? I think the issue is that retailers still see Ebooks as an "upgrade" over a standard paperback, and prices them accordingly. While Ebooks certainly do have many advantages over a paperback, I think people realize that since printing and distribution costs of Ebooks are basicaly zero and should be reflected in a lower price.
--an unbreakable toy is useful for breaking other toys--
reminds me of when i first came to the US, parents had no money and my dad would say if you want to see a movie then think very hard about it to make sure you will like it since it's so expensive. same with buying a $25 book. with a $.99 you aren't going to think so hard about it since it costs less than coffee
I laughed, then realised I wasn't entirely sure this comment is satire.
"To any truly impartial person, it would be obvious that I am right."
http://www.guardian.co.uk/technology/2011/feb/27/kindle-ebooks-amazon-stephen-leather
It is wrong, it's 350 000 from January 1st to today, not for a 12 month period.
So it's 350 000 in 67 days or 5224 per day, so 1 906 716 per year
1 905 716 * 0.99 *0.35 = 660 677$
~Syberz
>>> has sold just over 350,000 downloads on Kindle of his 99 cent books since January 1st of this year, which, with a royalty rate of 35%, is an annual income well over $500k
Erm.... That doesn't seem right
Part of that is the old printed way of selling books would mean:
99 cents retail
33 cents to retailer
33 cents (roughly half of wholesale price) cost of printing
33 cents to publisher
Of the 33 cents to the publisher, on a good day an exceptional author might get a bit over 10% royalties. More likely we'll round down to 3 cents per copy.
So at 35% royalty at Amazon to make 1/2 mil he had to sell about 1.4 million copies total.
Given that he made about half a mill selling at Amazon, how much would he have made from a conventional publisher? Well. 1.4 million times 3 cents each, eh about 43 grand.
Hmm 500 grand at amazon vs 43 grand at a conventional publisher (if paperback books could somehow be sold in that business model at 99 cents a piece) Thats the part that probably doesn't seem right to you.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
The Econ101 theory of product pricing has always been "Pick the point on the demand curve where unit profit*units sold is the largest possible number(unless that number is always negative, or is never higher than fixed costs, in which case GTFO).
The trick, of course, is locating the price that puts you on that part of the demand curve... I suspect that, for behavioral economics reasons, there are probably weird little discontinuities(ie. 99 cents is an impulse buy, while $1.21 'feels' more significant, even though you might not pick up the difference between the two if you saw those coins scattered on the side of the road...); but, given that the cost of production of a ebook is dominated by the fixed cost of writing the thing, and getting it in some semblance of acceptably typeset order, I suspect that there is a lot to be said for the "stack 'em deep, sell 'em cheap" model.
This does not apply, of course, to low-readership specialty stuff; because you can be assured that you'll never sell more than a smallish number of copies no matter how cheap it is(as with specialist academic texts), nor does it apply to books that can command higher prices because of celebrity authorship or some sort of necessity(ie. Steven King's N+1th book, or a textbook)
The actual figure is (350000 * 0.99 * (365 / 67)) * 0.35 = $660k
I seriously doubt that the book will sell in the same numbers for the next 10 months.
Could happen but it seems a little too optimistic.
Well, if you watched the show, you would likely have had more exposure to John Locke the character than you ever had to John Locke the philosopher, which will change what you think of first when you see the name. When I see "John Locke", the character pops to mind, then the philosopher a second later, at which point I beat myself up for letting TV shuffle my associative memory around :(
If the name had anything to do with popularity, I'd wager the TV show is to thank. Nobody cares about philosophy, unfortunately.
Well.. consider for a moment what is 'more social':
Situation A: A single person - the author - becomes a semi-millionaire.
Situation B: A multitude of people - the author, the people working at the publisher, the people working at the printing press, the people working in distribution, and so forth and so on - receive a reasonable, but not stellar, income.
The pricing in itself is not the mechanism, of course - but it is the catalyst.
As the author points out, soon every book will be about $1. That's great, but are people going to buy 10 times as many books as a result? There's still limited time to actually read those books, which is generally the real barrier (do I think this book will be rewarding enough in the time that I need to read it?) the price is secondary to that, but obviously if there's two reasonably comparable products, the cheaper one would win. So let's say optimistically that 5 times as many books would be sold. A mediocre writer (of which there are plenty) that could still make a living on $10/book is now forced to compete with great authors (of which there are few) that are selling at $1/book. If people can have a great book for $1, then why purchase a mediocre one at $10? But even if the mediocre author lowered his price to $1, why buy a mediocre book for $1 when you can have a great one for $1?
Although I don't think it'll be quite such a killer to the industry as far as non-stellar authors goes (plenty of people still read novellas as it is), there's certainly a potential for consequence that will separate the wheat from the chaff - but what do we, as a society, do with that chaff?
The common answer is "Not my problem". But isn't it?
No. I don't have to buy your inferior product. Neither does the rest of society. If your income depends on your skills at a certain task, like writing in this instance, you need to do a good job in order to make money. If you can't, that's what not being a writer is for.
I would go out and get an eReader _today_ if all books were 99 cents. At that price, I would purchase on impulse any time I finished a book. Don't like the book I just got? Get another one from another author. I could buy a few and sample until I find the set I wanna go with. Maybe a few books for different moods, etc.
The problem with books as entertainment right now is that they are an investment. Maybe that's not necessarily a bad thing, but I don't even really read as a hobby, it's more of a time killer in the car, at work, or in bed if I can't sleep. Charging me $9.99 for a book is basically telling me not to bother unless I "know" I'm going to like it (friends/family reviews).
But again, make eBooks 99 cents and the investment aspect is gone and people like me who just want to kill time with them will start purchasing them.
There's still limited time to actually read those books, which is generally the real barrier (do I think this book will be rewarding enough in the time that I need to read it?)
That barrier goes away when the price is low enough. People like free or cheap stuff. Most people will take virtually anything they think they might have a use for if it's free (provided they don't perceive it as nothing more than junk or trash.) Heck, if they still have it in 5 years and still haven't used it, they can throw it away so it stops taking up space. After all, they got it for free, right?
The same thought process is basically what happens when you price something digital at 99 cents these days. It's low enough that people perceive it as costing basically nothing, or in other words "practically free". So they'll buy it on a whim, whether they think they'll have time to read it or not. After all, they have room for thousands of ebooks on their reader, and 5 years down the road, if they haven't read it and need the space, they'll delete it without a second thought.
So yes, it's entirely likely that most people will buy more ebooks than they'll ever have time to read, if they're priced low enough and convenient enough to find and get.
There is no -1 Disagree mod. Slashdot.org/faq defines mod options. USE IT.
Situation B: A multitude of people - the author, the people working at the publisher, the people working at the printing press, the people working in distribution, and so forth and so on - receive a reasonable, but not stellar, income. [...] there's certainly a potential for consequence that will separate the wheat from the chaff - but what do we, as a society, do with that chaff? The common answer is "Not my problem". But isn't it?
No, as a matter of fact it is not my duty to support pointless middlemen that increase the overall price. It is also not my fault that they are not providing value. It is refreshing to consider a possible future where leeches on a process would be recognized and removed.
...oh, wait, that's right, society survived just fine without them. As a matter of fact, systems perform better without parasitic loads. So, not only did society survive, but it is healthier without the buggy whip manufacturers. These dead-tree process middlemen need to evolve.
Allow me to spin your philosophy around on its head: if the author is creating the value (ie. the book), then why do these unrelated third parties deserve to extract money from the author's efforts? Fortunately, socialist insanity like yours didn't reach a fever pitch in the USA until after many of our institutions were in place. Otherwise, we would still be paying a 37% surtax on all new car purchases in order to "offset the harm" that automobiles were doing to the buggy whip industry. I mean, it's either that or "thus society dies", right?
I don't know that I would call John Locke a historical random. His philosophies have had a pretty significant impact on a lot of modern thinking.
And just so my opinion is clear, if people are allowed through an education system without knowledge and understanding of history then it's pretty clear that the education system failed. That would almost be the definition of a failed education system.
Situation A: A single person - the author - becomes a semi-millionaire.
Situation B: A multitude of people - the author, the people working at the publisher, the people working at the printing press, the people working in distribution, and so forth and so on - receive a reasonable, but not stellar, income.
But, in "Situation A", the electronic-distribution model, you have conveniently left out all the "support personnel" that are involved, from the IT people who maintain the distribution servers and network, to the web-apps developers who wrote the "bookstore" app, to the hundreds of hardware and software developers, marketing, manufacturing and distribution personnel that bring you e-readers like the Kindle, not to mention all the tens-of-thousands of people who maintain the underlying cellular distribution network.
So, as you can see, both "Situations" call for a LOT of support personnel, who, in addition to the author, are making a living due, at least in part, to the fact that the e-book is selling like the proverbial hotcakes.
And, unlike the dead-tree distribution chain, at least with the current e-book profit-sharing model, the AUTHOR actually has immense control over the pricing and marketing of his book; which has GOT to be a more equitable approach to the marketing of someone's brain-work than the old dead-tree sales and distribution model.
Capitalistic or Socialistic; who cares? There is absolutely no way that this is NOT an improvement over "The Way It Has Always Been(tm)".
Another thing that publishers are totally screwing up: the long tail. Ebooks give them the opportunity to get some last sales out of older books.
As an example: my kids are reading an old series that contains 20-odd books. These books are no longer in print, but you can easily find them in a used bookstore for about 50 cents each. The original cover prices were $3.00 to $3.50. I thought - hey, we have an ebook reader (Sony), let's see if the publisher has them, and we'll just get the ebooks. I would have happily paid $0.99 per ebook - twice the cost at the used bookstore, but hey, they do have to reformat the things.
Sure enough, the publisher has all of the books on offer as ebooks. Price: $9.99 each, and no extra charge for the DRM.
Is that insane or what? Charging 20 times the price I would have to pay for the physical book (and three times the original cover price). Meanwhile, their DRM is not compatible with our ebook reader. Yes, I could strip the DRM off, but I shouldn't have to.
Faced with such utter stupidity on the part of the publisher, most people will make the obvious choice: it takes only a few minutes to find a torrent containing all of the books - free and without DRM. The pointy-haired managers at the publisher will, of course, draw the wrong conclusion. They will say "piracy costs us sales." In fact, their idiotic pricing and DRM policies cost them sales.
Enjoy life! This is not a dress rehearsal.
I don't think that a light, slim device with great battery life & an e-ink screen & wifi for $140 (base kindle) is really overpriced. I just don't like that they won't support epub, which is why I haven't bought one yet. Sure I'd like them to be cheaper, but I'd also like a pony.
1000 x ($3.00 x 0.35) = $1,050.00
20,000 x ($0.99 x 0.35) = $6,930.00
Even if your increased volume is not 20-fold, you still stand to make a lot more by selling as few as five times more copies:
Amazon's royalties increase to 70% at $2.99. So you need to sell six times as many at $.99 to make the same amount of money.
And it is in this pause—this golden, sweet-scented pause—that we independent authors gain the advantage
Heck, I'd buy his books just for that sentence.
XML is a known as a key material required to create SMD: Software of Mass Destruction
Exactly. I know a writer. her books sell for $19.95 on the bookshelf.
She get's $0.50 a book sold. ALL THE REST goes to the middle men. She recently stopped writing dead tree books and started ebooks only after her contract ran out. She sells 1/4 the books now but makes 5X the profit per book, I sent her this article and she is considering testing the waters at the $0.99 price point on amazon.com when her next book comes out, lower the price of the previous ones. even at that price point she will be making close to what her dead tree publisher was giving her.
Who will lose is publishers, the middlemen that do nothing at all for content of the book. and honestly, every writer will say "good riddance"
Do not look at laser with remaining good eye.
no what you are talking about is usually called intellectual property, not socialism.
Publishing physical books and e-books are two different things. The market niches are complementary. If a company like Borders goes bankrupt it's because they've failed to comprehend the complete mix of markets they compete in, not because one part of the business cannibalized another.
There are reasons to be skeptical that paper books will become extinct any time soon. The great strengths of e-books are also their weaknesses - in particular the book is only as permanent as the battery in the e-book reader, and the reader is a fragile device. A fat paperback can even be ripped in half down the spine to improve portability without harming the reading "experience". Textbooks? Artbooks? Etc.
The success of the physical book business is only loosely tied to the satisfaction of the readers. It is much more tightly connected to the profitability of the publishing workflow. As soon as Amazon, etc., solved the mail order scalability problem - an issue related to physical books, not e-books - physical book stores quaked. Really, the readers are more product than customer here - their loyalty traded back and forth between vendors vying for their business.
The next step in dismantling the publishing industry is the printing workflow itself. Send a PDF to lulu.com and you can immediately order a very nice paperback with a single copy price of $5.77 (depending on page count, etc.) Chop a couple of bucks off of that for an order of a few hundred.
> Your point is that socialism is selling high priced crap?
As a former resident of the USSR, I can tell you that socialism is exactly that. Selling high priced crap, and buying high priced crap (when you can get it, that is)
"intellectual property" is a form of socialism.
It's the government meddling in the market and granting monopolies and creating cartels.
Any monopoly is really socialism in disguise.
A Pirate and a Puritan look the same on a balance sheet.
If you calculate in the payment that Amazon makes to the author, the break-point is actually $1.99. Books under $1.99 get 35% and books $1.99 and over get 70% profit to their authors. He should have read the terms and done the math a bit more carefully as he'd have made twice the money, even with half the sales.
350,000 X .99 X 0.35 = 121,275
175,000 X 1.99 X 0.70 = 243,775
If you are selling it for 99 cents, you're actually throwing away profit, because under $2 is the actual magic price-point where people impulse by almost anything these days. You'd probably see closer to 200,000 sales or more at that price, since due to inflation, most people would still buy something for $1.99 on a whim just as readily as they would for 99 cents.
The price floor won't be 99 cents, it'll be $1.99, or until Amazon changes its payment schedule.
There are four books I currently have on hold from the library. Some of them I am something like 145th in line. It will be many months, at least, before it is my turn for most of the books. But I'm willing to wait that long to borrow them from the library rather than buy them (in digital or analog format). But, if they were available for .99 right now I would buy all four in a heartbeat. I might even buy two of them at 1.99. But, at least for me, anything above that will see me waiting for them to come in at the library.
Everyone.. it's not 1.4M sales in a year.
As of March 9th, we've had a total of 67 full days in the year. (31 in jan, 28 in feb, 8 in march). This year we have 365 days. Our year is only 18.35616% over.
350k sales in 67 days translates to 1907k sales in 365 days.
1907k * $0.99 * (35%) = $660.8k
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And if publishers lose, we all lose, because quite honestly ebooks are a far inferior experience to real, dead tree books. I dread the day when real books become considered "obsolete" and are no longer published. That's the day I stop reading books.
Which "real, dead tree books"? There are the books made by publishers like Easton Press, which are made with high quality paper, leather-bound, and gilded edges; these books are very expensive but will last literally (all puns intended) generations. Then there are the usual hard-back mass produced books, which have the cardboard binding and fair quality paper; might get a few decades out of them, but at least they don't cost too much. Then there's the cheap paperback books; read 'em twice and they're starting to fall apart.
I used to think just like you: I love books, I want books, and to hell with these e-reader things. Then I got a Kindle (long story). And I realized I was not quite right; I do love the high-quality leather bound books AS books. But the cheap stuff are just delivery methods for what I really love: stories. I love stories. And e-readers give me the stories in a far better delivery method than a paperback.
The high-quality book publishers will still hang around and produce their specialty products. The mass publishers are finding that their delivery methods are being overtaken by technology, just like the music and movie delivery middlemen have had happen to them.
No, a monopoly is the opposite of socialism. In fact, in pure capitalism, monopolies are nearly unavoidable -- the company with the most success will annex all lesser companies in the same business until only one remains. Dissolving the monopoly and distributing to the masses would be socialism.
Who will lose is publishers, the middlemen that do nothing at all for content of the book. and honestly, every writer will say "good riddance"
Perhaps a bit harsh. I agree authors get a shockingly small cut, presently. But there are services publishers currently provide: editing, layout, distribution, marketing -- real stuff involved in making a book readable, or getting it to customers. Obviously Amazon is stepping up to be the distributor and essentially provides some of the marketing, and they still take a cut for that. Layout tends to be tossed out the window with ebooks right now, and that's mostly acceptable (though I suspect design will creep back in as a valuable service as readers improve). Editing is tough -- some authors can do a pretty decent job on their own (though most still have blind spots or need an outside perspective here and there), but others absolutely need serious help with major points like structure, plot, or coherence before they can have a final product that someone would rather read than set fire to.
The Quirkz Handbook of Self-Improvement for People Who Are Already Pretty Okay
I'm not sure where you're going with that. I said absolutely nothing about intellectual property. I was referring to the attitude that everyone should have a job whether they deserve it or not at the cost of advancement.
What's your friend do for editing with the ebooks? Does she edit her own? Hire a freelance editor? That seems to be one of the sticking points for DIY publishing, and I'm always curious how people get around those obstacles.
Generally hire their own. And for first-time authors, there are resources out there where people volunteer their time to edit.
Digital selling means that "Hollywood accounting" will start to decline. While you probably still won't be able to prove that they're screwing you, you will be able to pay others to do it piecemeal and see that they're keeping more money.
And if publishers lose, we all lose, because quite honestly ebooks are a far inferior experience to real, dead tree books.
You are conflating the issues. Publishers don't really provide much value anymore, and they engage in protectionist gatekeeping crap that squelches smaller authors or those who don't wish to "play ball". There are many analogues in other businesses. Take, for example, Ticketmaster... how the hell can they call it a "convenience fee" if I am buying the ticket at the venue's box office? But I digress...
I believe technology will also come to the rescue wrt your dead tree book concerns: Print on demand
As this technology evolves, there will be almost no overhead that the B&M's currently face, due to zero inventory. Just as digital photography hasn't killed the glossy print, I don't believe the popularity of e-books will kill the dead-tree market. Hell, a few years back Apple integrated into iPhoto a way to get your digital photos delivered as a printed book. The future could even be brighter than the present: what if you could inexpensively custom order your books to have leather binding, be a particular color, be in your favorite 'easy to read' font, etc? These value-adds would be fairly inexpensive to produce in a PoD scenario. Furthermore, "out of print" would become an obsolete concept: no more searching high and low, then paying an exorbitant price all for a thumbworn used book.
BTW, I have nothing against publishers if they evolve and actually provide value commensurate to their cost. Editing, "packaging" the book with cover art, marketing, etc, could all contribute value. However, "you have to use us or we will keep you from being able to sell your book because we have locked up the distribution channels" is the antithesis of value.