ON A BETTER DEAL FOR AUTHORS

HAPPY ENDINGS

Forbes takes a crack trying to imagine how the book industry could be changed by the internet, casting Amazon as the potential savior of the humble author.  This is an exercise long imagined by many internet and media observers, and the "what ifs" have been going on for almost two decades.  Forbes begins to set up the argument as follows:

"Archaic beyond belief, it's an industry that treats its most important asset--the author--badly. Can this go on?

The book market in the United States is worth about $32 billion a year; the rest of the world, an additional $36 billion. Who makes the money? Not the author.

Retailers take almost 50%. The agent takes 15% to 20%. The publisher gets squeezed--it's cause for huge celebration if they make 20%.

"On a book that costs $24.95, the author gets at most $1 to $1.50," says Eileen Gittins, chief executive of Blurb, an online print-on-demand publisher of photography books."

The article then goes on to posit how Amazon could change things in the author's favor:

"Amazon is poised to revolutionize the book printing business through vertical integration. Let’s look at the numbers. Assuming that Amazon already pockets 50% of the retail price of a book, it could directly engage with authors and cut out the middlemen: the agent and the publisher. That would free up 30% to 40% of the pie, which can easily be split between Amazon and the author.

Let’s say, in the new world, Amazon becomes the retailer, marketer, publisher and agent combined and takes 65% of the revenues, offering 35% to the author--we end up with a much better, fairer world."

The piece doesn't offer any particular reason why this should happen now and why it hasn't happened already given that Amazon has been a big player in book retailing for over a decade now.  Neither does it mention new channels of possible distribution via Amazon like it's fledgling Kindle electronic book reader.

But more to the point, there's no reason why the split to the author needs to stop at 35% via online distribution.

In a separate but related example, Apple is about to unleash an online distribution store for software applications via it's iTunes store for the new and improved 3G iPhone to be related in a few weeks.  The split in that case for third-party application developers would be 70/30, with the developer keeping 70% and Apple keeping the smaller 30%.

And of course the same potential has been long anticipated in the music business, where the artist today makes a much smaller piece of the revenue pie and online distribution has for now merely expanded their ability to make more selling not the music but concert tours and related goods off-line.

The authors/creators/artists in all these industries are waiting for the split to get much better in their favor.  And it's been a long wait for all for some online nirvana.

Comments

[Javed Alam]

She raised awareness of a very important area in her article that is ready for digital onslught.

There is more to the story beyond the Amazon's attempt to capitalize on the ebook the market.

A digital common is coming into existence on its own that have a huge pool of the books for free.

I listed some of them here

http://randomthougts101.blogspot.com/2008/05/cost-of-textbook.html

[greenskeptic]

I worked in the book publishing industry some 20 years ago and remember the concerns about new forms of media -- books on tape were just really starting to take off then. There were all sorts of wild stories about imagined media, of which the electronic book was one.

Much of that concern centered on loss of control by publishers, including the one for which I worked. There was a push to draft boilerplate contract language to ensure "we" got a significant cut of "any future media formats." I think the agents won out on that front, however, and authors were still left with the smallest portion.

I haven't experienced the Kindle -- and am still a purist when it comes to books; however, I am getting much more of my news from the web via my BlackBerry's browser these days. I'm not sure when it happened, but the magazines and newspapers in my hands have been replaced by my handheld device.

I've been involved in the online publishing world for the past decade (PBQ, Ducky, The Green Skeptic) and have seen the extended reach and readership afforded by online media. I believe it's only a matter of a few generations before the book as we know it becomes a cultural artifact.

Sad, but true. As the technology improves, the next few generations may shift entirely to electronic delivery of books, magazines, and newspapers. Until then, the growth of print-on-demand publishers may make eventually the traditional book publisher obsolete.

Good news for authors? Maybe. It means you need not settle for a 65-35 split for your "book." Theoretically, you could get 100% of the revenue, by posting a PDF on your site for a reasonable price, or by pulling a Radiohead and asking readers to pay what they want.

Bigger potential audience; larger share of the profits. Sounds like a pretty good deal.

Of course, the purist and poet in me wish that books and their publishers could tell a different story. They would be smart to pay attention to the changes at Amazon.com and companies like Blurb. Otherwise they'll go the way of the record companies.

[Rags]

I think it's nice in theory and that some authors will no doubt find more success going direct with Amazon but I'm skeptical that they'll dis-intermediate the agents and publishers as long as the latter are adding value. More at http://www.ragsgupta.com/weblog/2008/05/can-amazon-chan.html.

[Amadou M. Sall]

I sell my ebook (The Insider Guide to The Strategic Marketing of Translation Services) through Lulu.com/ at $18.75. I get $15 and Lulu gets $3.75. So I get an incredible 80% of the price. Ain't that a cool deal :-)

How does that compare with 4 to 6%? Haven't these authors heard about Lulu.com? Maybe they prefer to be published by "big" Publishing Houses?

And, I almost forgot, Lulu also does print publishing!