The Cost of eBooks

The Cost of eBooks

There has been a lot of debate over the last few years over how much publishing houses should charge for their e-books. Some people are adamant that the e-books should be significantly less than the physical copies of the same book. Being an accountant (blah), I’ve sat back and tried to think of how much should a company (or an individual) charge for their electronic books. The days of an author writing a novel, submitting it to the publishing house and walking away are long gone along with the dodo. The advent of electronic publishing has helped to establish a new market for authors and companies to explore.

There has obviously been some difficulty in the formative years, as there will be in any new ventures or markets. I won’t bore you (or me) with a lengthy explanation of business practices or breakeven points which is important in any sort of business decision. As an author/business, you need to make a decision whether you want to publish for fun and maybe make some money out of the venture or if you want to take it seriously and want to make money. At this point, everyone is screaming at me that of course they want to make money. Am I retard? No, I am not. But that decision plays a key role in everything else which follows.

Skin in the game
If you want to produce a quality product, you are going to have to put some skin in the game. By skin in the game, I mean that you’re going to have invest something into the novel in order to give it the best chance out in the wild world of publishing. The first step is to obviously write the best damned book you can. But people can only do so much by themselves and you’re going to have the manuscript looked over by an editor or maybe two. Then you’re going to have to get someone to do the perfect cover for it. Some of us are gifted with the ability to this for ourselves, but the vast majority of us will need someone who can do it for us.

Then there is still the advertising you will have to do for it. Some of it, like virtual blog tours, will be for free but if you want to do any sort of marketing for it you’re going to have to fork out some cash to do it. All of this adds up to the capital investment in the project.

As below, so above
The same costs described above are all costs that are covered by the bigger publishing houses. But they also carry other costs which a self-published author won’t necessarily factor into their calculations of how much it costs to develop a book. Publishing companies have to pay things like rent and salaries, something which the average self-publisher won’t have to think about – unless they really want to go big with staff and a separate office to do all of their writing in.

Variable expenses
There are some variable expenses which can be eliminated when the transition is made to the electronic format which can be removed from the equation. But they are not the largest expenses in the whole process. I have worked out an example using “actual” figures. They’re actual so far as you can see their effect, they are by no means actually how much any publishing house pays for anything. If you assume it will cost $0.50 to ship a book and $3.50 to print a book, a company’s costs to produce a hundred thousand books will look as follows:

Office rental

$200 000.00

Salaries

$500 000.00

– Editors

$100 000.00

Other fixed expenses

$100 000.00

Shipping costs

$50 000.00

Paper costs

$350 000.00

Total costs

$1 300 000.00

 

I’ve highlighted the variable costs for ease of reference. If you look at the above figures, it works out that it will cost the company $13 to produce a single book. If they charge $15 per book, they will have to sell 86,667 just to cover their expenses. If you remove the variable expenses:

Office rental

$200 000.00

Salaries

$500 000.00

– Editors

$100 000.00

Other fixed expenses

$100 000.00

Total costs

$900 000.00

You can see that it will cost the company $9 for a hundred thousand books without any actual books being prepared. Therefore, if you look at electronic publishing there are a few additional expenses the company might have to expense before they produce electronic books. In the table below, I’ve only included the salaries for the additional employees who will be needed to set up the books in the electronic format. You could probably look at training some of your existing staff to do it, but then you’re going to have to pay them additional money because their job role has increased… along with their knowledge base. I have highlighted the additional cost.

Office rental

$200 000.00

Salaries

$500 000.00

– Typesetting

$100 000.00

– Editors

$100 000.00

Other fixed expenses

$100 000.00

Total costs

$1 000 000.00

In this example, it’s difficult to say that it costs the company x amount per book because electronic books don’t have to have a specific print run. It is their advantage.

However, it has to be assumed that you’re not going to sell any more copies simply because the book is in electronic format. The market for any book is only so big. So let us assume that the electronic book will also sell 100,000 units (that would mean the market for electronic books is as big as the demand for physical books, but let’s just assume). We’re also going to assume the company is going to sell either physical or electronic and it isn’t going to mix the types.

Taking that into account, it would cost the company $10 per electronic copy. That means that if it sells for $12 a copy, the company will have to sell 83,333 copies just to cover its costs. Admittedly, it is a little smaller. But in auditor’s parlance, it’s not material.

If you split out the costs for electronic and physical into separate streams but you assume that the TOTAL books sold will still be 100,000 but with 80,000 being physical and 20,000 being electronic. The total cost will be:

 

Total

Physical

Electronic

Office rental

$200 000.00

$160 000.00

$40 000.00

Salaries

$500 000.00

$400 000.00

$100 000.00

– Editors

$100 000.00

$80 000.00

$20 000.00

– Typesetting

$100 000.00

$0.00

$100 000.00

Other fixed expenses

$100 000.00

$80 000.00

$20 000.00

Shipping

$50 000.00

$50 000.00

$0.00

Printing costs

$350 000.00

$350 000.00

$0.00

Total costs

$1 400 000.00

$1 120 000.00

$280 000.00

       

Volume

 

80 000

20 000

       

Cost per unit

 

$14.00

$14.00

I’ve split the costs that can be allocated to both 80/20. Both costs per unit of expected sales is exactly the same.

I know I was as shocked.

 

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Picking up the pieces and Moving On


It’s been about a year since the memory stick where I had stored the book guide to my project ‘Spoil the Child’ disappeared. It means that to use a cliché, a lot of water has passed under the bridge and that a lot of other work and writing has been done. To use another cliché, there is no use crying over spilled milk, but there are days when I wonder what might have been different if that memory stick had not gone missing. I’d basically finished the whole outline, all the character summaries, the setting and history. The only thing which needed to be done was to sit down and write the actual first draft. It was going to be the project that I would plan everything meticulously before I even started and was going to be the complete opposite to Pecan Hill, which was my pantser novel.

I would probably have finished the first draft and maybe even finished going through it a few times as well to polish it as well as possible before I sent it out into the world to fend for itself. Would it have been self-published or gone down the traditional route? No idea. I never got far with planning the ultimate destiny of the novel. I just wanted to write it.

Do I still want to write it?

Yes, but that fire has cooled down a little. The story is still there in the back of my mind but there are other ideas waging a war for my attention and I’m more excited about these than my old story idea. Maybe one day I’ll write it, but for now I’m happy forging ahead with the first novel in my Lords of the Apocalypse duology, War’s Regret. I’ve taken Pecan Hill about as far as I can take it without another major rewrite and I just don’t think I can go through all of that again.

War’s Regret is my baby at the moment and I want to see it all grown up. It’s a fantasy novel, although I’m not sure if it will be a real epic fantasy. It’s scope is epic, but I’m not sure I want to scale it that high. I think I’ll be fine with it being seen as a heroic fantasy. It’s also my attempt to write a fantasy throwing all of the old tropes out the door. It isn’t in a medieval world, there are no dragons, no goblins, no knights or magical swords.

It’s going to be different.

Seat-of-the-pants vs Outliner


The past few months have been particularly difficult in a writing sense for me. I dipped into one of those writing slumps that I have heard so much about and to be honest, I’m not entirely sure I have been able to safely negotiate my way through it just yet. If anything, I can see the end ahead but I think I’m still pushing forward trying to get out. I haven’t had one of those days where I cracked out more than a thousand five hundred words in many a month. In fact, I haven’t had a day where I’ve broken a thousand words.

I suppose you could say that I took a little time out to just have a break and to focus on my day job (the boredom!!).

I believe my problem with not being able to get into that comfortable groove of writing is all dependent on the question of writing by the seat of the pants versus being a heavy outliner. Stephen King has always been a great proponent of writing without an outline and “extracting the fossil of the story from the ground”, while writers like Brandon Sanderson advocate a more structured process to writing by creating an outline first.

I’ve already finished two novel length manuscripts using the seat-of-the-pants approach (Pecan Hill and When Angels Fall) and wanted to use the outline approach when writing my next one, the first novel in a duology (a two book series). My thought was that because it was the start of a series, I would need the structure and stability brought on by the outline approach in order to be able to write a series. My only problem is that I absolutely HATE outlines. I’ve always thought that the best way to write to discover the story as I write it and it’s always been more interesting to me like that.

But Lords of the Apocalypse (the name of the series) has a huge mystery in it and I’ve been struggling with how to solve the mystery. I wanted to go into the novel and the series knowing the steps that the characters would have to take in order to crack the mystery. That way I wouldn’t have to go back and have so many new drafts at the end to try and get everything right. The problem is that the steps I take after I have finished a manuscript are pretty much the same steps as my outlining steps at the beginning of the project. Insane I know, but it’s the truth. It’s this step which actually robs me of any passion I have for a project.

I’ve been trying to do an outline for Lords of the Apocalypse before the devil climbs on my shoulder and whispers in my ear that I should just write the thing like I did with Pecan Hill. This means that I’ve been stuck between two approaches and it’s not working. I need to get more willpower to stay the course and finish the outline before I leap into the writing. I know it’ll help me otherwise I’ll reach the end of a chapter and a scene and then be stuck because I have to think of what will come next.

If I plan and outline before hand, I don’t need to stop at the end of a scene – I already know the next step and can carry on.

I just need that backbone.

Honorable Mention in Writers of the Future


Those of you who have been following this blog know that my writing group and I tried to put an anthology of our short stories together earlier in the year.  Unfortunately, due to some things which were really out of our control.

I suppose you could say that the project had a positive spin-off.  Writing the short story for the project changed a gear or something in my head and after finishing the first draft for the group project I wrote another short story which I called Necromancer as a way of taking a break from the other.  

In the end, it was the second short story which I enjoyed more than the first and after polishing the story I decided to take my chances and submitted to the Writers of the Future.  I thought nothing more of it and actually thought it had done nothing with the judges.

But this morning I got an email from the contest administrators saying that I had received an Honorable Mention for the story.  It feels strange but it's a little bit of validation telling me I'm on the right path.

Stuck between Drafts


Who would have thought that I would be stuck in the middle of spreadsheets while trying to finish my novel?

I certainly didn’t see this coming.

I have finally finished my reread of Pecan Hill and I can say that it is heinous. Maybe I should view it as a feather in my cap that I can recognise how bad the writing is, but it’s incredibly cringeworthy. You could say it was one of those situations where you’re trying to find what’s wrong with your project and the list of what is right is shorter.

The positive to take out of the situation is that I know what I have to do to fix the manuscript. I only have to work my way down the list, fixing everything as I go down and it should be presentable at the end of the day. Of course, when I’ve finished going down the list, it’ll be time to read through the manuscript again and find out what’s wrong with the new draft and then fix that. I wouldn’t say it’s a thankless task, because this is what I enjoy. Writing. Besides it’s supposed to be easier to fix a page than it is to fill a blank page.

My problem is that Pecan Hill was my discovery written manuscript. Now, after the dust has settled and I’ve pulled myself through the finished draft I can see that I’m going to have to sit down and make sure everything is there. I call it ‘planning on the backend’. And it’s at this point where I’m now “stuck” (I’m not really stuck I’m making progress but I’m not writing). I am going through the manuscript and making a detailed scene-by-scene outline of what’s already there. When I’m done with this little task I’m going to have to see what I’m missing in the manuscript and where it should go and then insert new scenes to make sure I cover all my bases.

Once I’ve finished with these spreadsheets I can finally go back and do some writing. Although the writing won’t be too much (hopefully). Then it’ll be the editing phase.

I can’t help but think it might have been easier if I had sat down before I had written the project and done a scene-by-scene outline. It would shorten my current phase by half. Not to mention, it would have cut out those times when I was wondering what should come next.

My next project (maybe all of them in my future) will have a HEAVY planning element in the beginning.

Pick up the pace


Life used to be so much simpler and the author had so much more time to grab a readers’ attention before they decided to put the book down and do something else (those who were literate anyway). There is always something threatening to grab our attention away from the book like the latest PS3 game, the latest movie starring that mother of orphans Angelina Jolie (or is that Jolie-Pitt?) or the latest great television series (the Files, Lost, etc.) and it’s becoming more important for the author to include snares and traps in his work to grab the unsuspecting reader.

I sometimes wonder whether the Lord of the Rings would have been as popular as it is if it had been published in the last few years rather than when it had been. Of course, such a change would have meant a huge change in the fabric of existence and the publishing landscape could look incredibly different. My point between the waffling is that The Lord of the Rings doesn’t start with a hook and the great important first line wasn’t something which blew our minds. The Fellowship of the Ring spent pages and pages and chapter upon chapter expanding on Bilbo’s eleventy-first birthday and the repercussions of it. But would it have enough to grab a reader’s attention?

I’m not so sure. I’m pretty sure that everything before Gandalf telling Frodo that the Ring is indeed the One Ring would have been excised and most of the preparations for Frodo to leave as well. Great scenes like the Meeting in Rivendell and the creation of the Fellowship would have been curtailed. Tom Bombadil, like the movie versions, might have been scrubbed out completely and chunks of the discussion with the ents would have been obliterated. The finished product would have been vastly different and the soul of the novel might have vanished.

The conclusion is that it would have been so different it might not have made as great an impact as it actually did.

Now, if you think of the limitations placed on a great like The Lord of the Rings above, what lengths would the modern author have to go in order to have such an effect? To be honest, I’m not entirely sure if there will be any work which can be as influential as Tolkien’s great work.

The only conclusion I can make is that we are writing under greater limitations in the current day to attract more readers. We would need to meld the great world-building of Tolkien voer chapters into a shorter period and layer the world-building with hooks to grab and hold the reader.

Not an easy task.

Inspirations: Stephen King


I’ve been thinking about doing a few short posts regarding the writers who have inspired me and motivated me the most in my writing career. There are several and while many of you might have believed the distinguished J.R.R. Tolkien would be the first writer on my list I couldn’t help but go for another writer who has had a profound effect on modern pop culture – Stephen King.

I came to Stephen King late or at least later than most of my friends who’d been reading him since the sixth grade. I’d always had the latest Dragonlance or Tom Clancy novel to read instead of picking up a Stephen King chiller. Ok, I’ll admit it, I was scared. I’d made several attempts to read his novel IT and could never guts out the prologue (or was it the first chapter) – I’ve got a thing for clowns. I always put it down and moved on to something less challenging. My motivation came while I was at varsity (college) and was finding myself getting scared at my future if I didn’t manage to pass my finals and needed something to distract me. I grabbed the same copy of IT which had been sitting in my room with Pennywise staring at me through the grate for years and opened it to page one. I couldn’t put the book down and found that the characters more than the story grabbed me and I forgot all about my troubles as Pennywise terrorised Derry.

I discovered something in IT which I had not been able to find in any of the other writing I had read to date; characters I could identify with. They weren’t Navy SEALS or Knights, they were only children and they were forced to face up to a terror which would have driven adults out of their mind.

“Remember the simplest thing of all – how it is to be children, secure in belief and this afraid of the dark.”
-Stephen King, IT-

After I finished IT, I grabbed the next SK novel I could get my hands on, From a Buick 8, another ripper although nowhere close to IT. For the longest time though I insisted that I would not be reading The Dark Tower series, SK had written it but it was a horror-western. I was not a fan of the Western genre (and still aren’t). But the inevitable day arrived when I finally ran out of other SK books and was forced to read The Gunslinger. I found it intriguing but didn’t think it was anywhere as close to the rest of his works. I thought my belief that the Dark Tower wasn’t as good as the rest of his novels was the truth. But fate has a funny way of pushing one in the right direction. I didn’t only buy The Gunslinger but bought the first three novels in a nice value pack (three for the price of one) and thought well I’ve come this far I may as well finish the books I’ve bought. The next two (The Drawing of the Three and The Wastelands) grabbed me and held me and as soon as I finished them I went out the same day and bought Wizard and Glass.

I was lucky in my timing in arriving at The Dark Tower series because SK had decided the time had come to finish the series off properly and I didn’t have to wait years for the anticipated end. I only had a few months to wait. It was the best series I have ever read.

There are many people who complain about how the story was finished off and it’s their right. They did no doubt wait years and years for King to decide to finish the series while I had only been waiting for months. The end of the series was the BEST ending I have ever read. The Dark Tower was all about Roland’s quest to reach the Tower and in the end, Kind demonstrated that we have become as obsessed with the Tower and what was inside as Roland. We were warned to turn back but we never did.

“Monsters are real, ghosts are real too. They live inside us, and sometimes, they win.”

– Stephen King –