An interesting discussion is bubbling all over the place based on the success of 37signals' Getting Real e-book. Jason Fried shares some numbers here. In 30 days they've sold 5800+ licenses, nearly 10% of which are 10 copy site licenses, and they've grossed like $120,000, with functionally zero expenses (completely discounting the labor of writing the book). Does this represent a tectonic shift in the tech publishing industry?
David Hansson wants us to think so, but I think Tim O'Reilly's masterful dissection of the inexorable powerlaws in publishing buried down in the comments of that post undo David's attempts at Shaking Up Tech Publishing, including this gem:
[from comment on Shaking up tech publishing by Tim O'Reilly]Normal royalty levels are not some plot by publishers to screw authors: they are a reflection of the real economics of the business.
Tim points out that the 37signals guys are superstars, and that the experience that are having with Getting Real is an anomaly: other authors, even good ones, should not expect the results they are having.
Still... there still seems to be a opportunity to cut out various intermediaries: if not the editorial side of publishing -- which Tim suggests is adding a vital function, since many knowledgeable geeks cannot string together grammatical English -- then perhaps the retail stores, since in the tech space the readership is very much online.
But self-publishing a la Getting Real may represent a great path for the top 5,000 bloggers out there -- those who have a well-defined community, who has honed their writing in the light of the blogoshere, and who have direct connections to a marketplace of readers -- but for the rest, I'd guess not.
As Tim puts it:
For many authors, a royalty advance of $8-10,000, plus royalty upside of another $10,000 is more than they'll see from a self-published book that sells 500 or 1000 copies at $20 or $30, after they deduct their manufacturing cost. And if a book really hits, the access to channels can lead to huge upside. I have quite a few authors to whom I've paid hundreds of thousands or even millions of dollars in royalties over the lifetimes of their books.
[Grig Gheorghiu has a good summary of these are other voices on the subject.]
Looking critically at the traditional publishing model vs grassroots ebooks, an important point is missed. O’Reilly (and any other dead tree publisher) will tell you that the big hits subsidize the low volume titles. Paul Samuelson indeed made millions with his classic Econ 101 text, and it allowed McGraw Hill to expand their list.
Most authors make less than minimum wage. I like how blithely you “discount” the labor involved, but that’s not how the folks at the GAO would look at it. The hours and months spent writing, particularly a first book, are a speculative venture at best. Sometimes that tiny $2,500 advance is enough to get someone writing instead of working for a living.
Danny Goodman has had some success with eBooks. I ran into him at Trader Joe’s not too long ago. The economics he outlined were very beneficial to him, particularly since his authorship is a “brand” in certain quarters. But if everyone starts self-publishing, what happens to the manuscripts that are subsidized? When McGraw-Hill was raking it in with Samuelson, they also published a five volume, leather bound, limited edition of Leonardo da Vinci’s Madrid Codicies. Call me old fashioned, but I’d hate to see things like that disappear.
Posted by: Mike McGrath | April 10, 2006 at 01:32 PM
Mike - I agree with the brand notion. A well-received business book -- even if the direct recompense from book sales is low relative to the time spent writing it -- can put you on the cushy lecture circuit. Although I don't know if I want to lecture the Lumbermen's Annual Convention, no matter what they pay.
I am fairly conservative, personally, about reading hard copy books and newspapers, but I think that's ephemeral. Some new format factor -- thinner tablet PCs, low cost projection, PC goggles -- will come along and that will be that.
Posted by: Stowe Boyd | April 12, 2006 at 06:33 AM