Thursday, July 2, 2009

John Green’s modest proposal

The inimitable John Green blogged about his vision for a different compensation model for authors, and now it’s been picked up by Cory Doctorow at BoingBoing, so I expect to find the revolution in full swing on Monday. Ought to be a good time.

Seriously, though, I think Cory and John are two of the most charismatic and thoughtful authors in the YA world, so this is exciting. I do have a few comments about how they’re approaching remaking publishing, though. I like that they’re doing it, but I think they might be starting in the wrong place when they focus on the author-publisher contractual/financial relationship. Here’s an example of why (my wise Esteemed Successor at Flux pointed out that the message is more important than the math here, and that’s true, but the math does matter a bit and is illuminating). John writes:

“I assume that everyone would rather make $300,000 in a career that contains 30 books than $300,000 in a career that contains three books.”

Sounds okay, right? Thinking about a career is something I always endorse. Problem is, if all you change about the book publishing world is the author-publisher relationship, John’s 30-book career simply can’t happen. Using John’s assumptions, this is what we’d get:

To earn to $300,000 at a 20% retail royalty on thirty  $20 books, you need an average of 2,500 units per title. Assuming a 50% discount from publisher to bookseller (pretty standard), that leaves $6 for the publisher after royalties ($4 per book). Then, let’s be very generous and assume the PP&B (paper, printing, and binding) is 2.00 per book (hardcover). All right, now we’re down to $4. (For those of you scoring at home, the book “cost” $20, but the retailer only paid $10, of which the author gets $4. Tack on another $2 for the cost of the physical materials).

So, each book, before any of the publisher’s costs are factored in, generated $10,000. (And all of this is based on $20.00 books, which don’t exist for YA, and by the time they do, PP&B will have increased at least proportionally). Does anyone else see the problem here? Hint: we haven’t covered any of the publisher's costs. This books is likely in the hole. (And I haven’t even factored in returns.)

(I’m no mathematician, so feel free to check me on this.)

What about the paperback, you say? Well, in the current system, it’s unlikely that there would even be a paperback of 2,500-selling hardcover because, in the current system, that would be a lot like continuing to dig after you’ve found yourself in a hole. You’re not going to get to do this 29 more times.

File:NagasakibombEdit.jpegI suspect John just picked 30 and $300,000 at random, but it is illuminating to see what happens when you plug those numbers into the whole system, not just the author-publisher relationship. Even if you double the earnings, it’s marginal.

John’s post is extremely important and I am all for the result he wants, but unfortunately you can’t tinker with only one relationship in a long chain of relationships and expect to have sustainable change. You’ve got to take on the whole system. I suspect the relationship that needs to revamped first is actually publisher-retailer (more akin to what happened in the music industry, but hopefully less bloody), which will then dictate changes in the publisher-author relationship (first against the wall will be retail royalties, I would be willing to bet. The publishers will stop printing retail prices on books and start paying authors on net amount received. Many houses already do this second thing, of course.)

(I would be remiss if I didn't point pout that others are working on these very problems. Even big houses care about this. Harper Studio is a prime example.)

1 comment:

John Green said...

You're right that 20% hardcover royalties don't make sense if you're selling 2,500 copies of the hardcover. You need to sell 10,000.

It seems to me the solution to that is a much more aggressive escalating royalty that we tend to see in contemporary book contracts:

e.g., 10% to 10,000 hcs; 15% to 25,000; and 20% thereafter. When I run the numbers, this makes sense for everybody.