Jackie Barbosa

It can’t have escaped too many authors’ notice that most of the major publishers are opening digital-first/only romance lines. Harlequin was first out of the gate with Carina Press, but now we have Avon jumping into the game with Avon Impulse and Random House with Loveswept. I’m sure the other major houses can’t be far behind. There’s a lot to be said for the digital first/only publishing model in this age of shrinking shelf space and expanding digital book sales. Why shell out for a print run when orders for print books are declining and you may even take a bath on the book if one of the big boxes (Walmart or Target) decides not to stock it? Better to test the waters in digital first and, if the book does really well, cross the author over into print when you’re more certain of the return on investment. And romance readers have clearly been the early adopters on this front. Digital books and romance readers are a match made in heaven because we like to read a lot of books and we want them yesterday.

But there’s a catch, and it’s a big one, in my opinion. With the exception of Carina, it appears that these new digital lines being created by the major publishers are picking up books and authors for these new lines with no advances and a royalty rate of 25% of net. (The royalty rate sometimes steps up to as much as 50% of net after a certain number of sales, but these sales numbers are usually in the 10,000+ range.)

Now, 25% of net is pretty standard when you sign with a major publishing house, but usually, you’re getting that lower rate in exchange for print exposure AND an advance. The publisher is making a significant upfront investment and taking the lion’s share of the risk in traditional print deals, both because they’re giving the author a guaranteed minimum royalty payment in the form of the advance and investing in the print run and print distribution, not to mention the possibility of returns. From a business perspective, it’s reasonable for an author to take relatively low royalties in exchange for a guarantee that, even if the book tanks, he/she will never receive less in payment than the advance.

When digital publishing first started catching on, one of the things that made the no-advance model work was that, although there was no advance, the royalty rate was much higher. The publisher was taking much less risk by giving no advance, but there was no cost to the author to produce the book and the potential earnings if the book did well were much greater. Even so, back in the day, there was a LOT of skepticism about the no-advance digital model. RWA and many authors looked askance, viewing it as a too-risky proposition because there was absolutely no guarantee that the author would ever earn any money at all. For quite a while, RWA refused to “recognize” digital publishers like Samhain and Ellora’s Cave because there was so much uncertainty associated with earnings.

That uncertainty in digital publishing hasn’t gone away. There’s still no guarantee that a digital book will sell enough copies to earn the author a decent amount of money, even at the higher royalty rates offered by small digital presses. Which is why I’m baffled by the insistence of the major houses on maintaining that 25% of net on royalty rate for these digital-first lines. (Again, I’m not including Carina in this rant, as their rates have always been more on a par with the other digital presses, and from what I understand, they recently raised those rates.)

Let’s see if I have this straight, shall we? You are not going to pay me an advance for my book, so you are not going to guarantee me a minimum payment. In addition, you won’t be investing in a print run or physical distribution for my book, thereby significantly cutting your production costs. But, because you are (Insert Big 6 Publisher Name Here), I should be happy to accept the exact same royalty rate for my books as authors who are getting both of the benefits? Hmmmm, forgive me if I’m not impressed.

And here’s the real kicker–the way I see it, within five years, most romance will be published as digital first. If print is available, it will probably be POD. And this will be true of books put out by the Big 6 publishers. Unless a book is “big enough” to be stocked in Walmart/Target, it’s not going to HAVE a print run. That’s just the reality of what’s happening to the book market. With Borders gone, B&N committed to the Nook+Nookbooks as its primary source of revenue growth, and more and more people getting ereaders/tablets/smart phones, print is fast becoming an inefficient and not even particularly desirable method of delivering book content. If I want a print book now, I have to go to a store and buy it or buy it from an online retailer and have it shipped. If I want a digital book now, I can have it. NOW. (Well, unless it’s only available for pre-order, but details, details.)

So, what I foresee is that publishers will start pushing their current midlist authors into these digital lines in addition to attempting to acquire new authors for these lines. It remains to be seen whether they’ll be successful at keeping authors on, though, if they offer such poor royalty rates and no advance.

All I can say is that, if I were a Big 6 publishing house and I planned to launch a digital line, I’d be thinking about offering either a royalty rate to match the digital small presses or a modest advance. But I wouldn’t count on my big name to convince authors to take it on the chin when they have other options.

Before I launch into today’s post, a few quick words. I have been on vacation for almost two weeks. Although I got back early Monday, I’ve been playing catch-up in all aspects of my life (family, household, day job) and thus haven’t had much time for the writerly side. So, hi, here I am, and I’m glad to be back.

Among the things that apparently erupted while I was gone was a brouhaha over whether or not The Knight Agency is establishing a digital publishing arm. (See here for what I think is a comprehensive run-down of the story, albeit from the perspective a one author.) Courtney Milan also posted her thoughts on the question of agents becoming publishers and the potential ethical issues that raises.

I bring these things up not because I’m going to launch into a rant on the reasons I think agents shouldn’t become publishers (I’ve already been there and done that), but because I think it’s important that we define what a publisher actually is. Only when we determine what makes an entity a “publisher” can we decide whether or not any particular agent/agency has actually become one.

Now, maybe you are going to want to argue with my definition, and that’s fine, because I think there are a lot of disagreements over what a publisher is or isn’t (e.g., are “vanity” publishing companies like AuthorHouse “publishers”?), but the bottom line for me when it comes to deciding who “publishes” a book is simple–it’s whoever the retailer/distributor pays first when a copy of the book is sold.

In the case of traditional print publishing, the publishing house is first in line. It then distributes the author’s percentage either to the author (if unagented) or to the agent, who takes his/her 15% off the top and passes the remainder on to the author. The same holds true of digital small presses–they get paid first when copies of the book are sold, then pass the author’s percentage on either through the agent or directly. And when you are self-published, YOU get the money from the retailer/distributor; that’s what makes YOU the publisher.

So, when it comes to whether agents/agencies are publishers or not, the question is–are they first in line? If they are uploading the book to the distributors themselves and in charge of managing the account, and they are the ones who get paid when the distributor cuts the checks/EFT entries each month, then as far as I’m concerned, they are the publisher. It doesn’t matter whether they’re taking a smaller cut of the proceeds than other publishers would. It doesn’t matter that they would have been “before the author” in line if the book had been sold by another publisher. The bottom line is that they have control of the account with and are first in line for payment from the distributor, and that makes them the publisher. But if the author is first in line and pays the agent a cut for services rendered, then the author is the publisher.

I have no idea what The Knight Agency means by “assisted self-publishing.” But if they are not going to be in charge of the accounts and will be paid their cut by the publisher (in this case, also the author), then I have no problems whatsoever with their claims that they aren’t opening a digital publishing arm. Whether or not the services they are offering are worth 15% is entirely up to the authors they contract with to decide.

But if what an agency does when it “assists” an author to self-publish is to open an account with Amazon and the like and upload the books (with full control of pricing, cover art, book formatting, etc.) and then receive payment from Amazon, passing on the author’s percentage after taking its cut, then I say the agency is a publisher and is, in fact, not assisting the author to “self-publish” because in no way, shape, or form does this arrangement resemble the author acting as his or her own publisher.

Agree? Disagree? Tell me about it! (Said in my worst Brooklyn accent.)

I know some people are interested in seeing sales trends for self-published work, but if you aren’t interested, please feel free to click away, because this is going to be boring, boring, boring.

Here’s the sales chart for The Reiver through June:

If you’re looking at that line for Amazon sales and thinking “What the hell,” rest assured you’re not alone. I’m thinking the same thing .

There are a few explanations I can come up with, but once again, none of them is anything that was in my control:

1) Amazon sent out an email plugging six 99-cent books, including Courtney Milan’s Unlocked and Paula Quinn’s Laird of the Mist. Even though The Reiver was not mentioned in the email, it has strong “Also Bought” associations with Quinn’s book and less strong ones with others on the list. That led to a massive bump in sales that day and, although sales dropped off some since then, they are still running at about 100 a day compared to 40-60 a day earlier in the month.

2) The fact that my sales have been consistently steady for the last six weeks or so has kept its overall ranking in the Kindle store very solid (drifting between the high 300s to the high 500s after the boost from the Amazon marketing email), which has also kept it on the second page in the Historical Romance lists (both Kindle and Books) for over a week. Although I think being in a top 100 list is of less value than Also Bought lists in generating sales, I agree with Courtney, who said last month that she thought it depended where you were on the list (the higher up, the better). I also think which list you’re matters. For example, The Reiver has been on the Romance Anthologies list’s  first page for quite some time, but it doesn’t have as much value as being on the second page of the Romance Historicals list, because people are much more likely to pull up the Historicals list than the Anthologies list in the first place.

Finally, yesterday, RT Book Reviews featured The Reiver on its blog in a list of their “favorite” twelve bargain ebooks. Look at that placement! I was shocked (and many thanks to Elyssa Papa for the tweet about it, or I never would have known). So far, I don’t think I’m seeing any effect from this promotion, since their link goes to Smashwords and I haven’t sold a single copy on Smashwords since the first day the book was available for sale. (Twenty-two copies were downloaded using a coupon code, but I don’t count those as actual sales since there was no money involved.) Despite that, I’m thrilled that RT even knows I’m alive .

So, that’s all the sales news for this month. Things seem to be rolling along so far in July (26 copies at last count, less than 12 hours into the day) and even if they dropped into a black hole at this point, I’d be happier than a pig in slop.

Since last week, the online publishing world has been ablaze with the news that Harlequin is changing the royalty rates it pays its authors from 6% of cover for category romances and 8% of cover for single title books to 15% of net and 25% of net. This change is retroactive and applies to authors who are “actively writing for Harlequin.”¹ Authors do not need to sign an amended contract to accept the new rates; rather, they must contact Harlequin if they want to turn down the new rates.

There has been a LOT of angst about what this “means” to authors. Is 15%/25% of net more per copy than 6%/8% of cover? Less? About the same?

Harlequin’s stance in the letter is that for most authors, the new terms represent an increased royalty rate, but there’s some evidence that whether that’s true might depend on lot on when the contract in question was written/signed. Elaine English did an analysis for NINC of multiple Harlequin contracts and concluded that in some cases, the royalty paid under the new terms for some books would actually be only 2%-3% of the cover price. Clearly not an improvement. That said, Harlequin has responded via Angela James to some of these concerns on Dear Author this morning, and this analysis of how net is calculated supports the notion that the change is an increase, not a decrease. Even so, individual authors would be wise to review their contracts with their agents to determine whether the change is or is not to their benefit.

But here’s the real kicker in the whole story, at least as far as I’m concerned. Authors have been signing contracts for 25% of net on digital sales FOR YEARS. It’s pretty much the standard rate in the industry. Harlequin has been bagged on for years for offering “only” 8% of cover on single title works, but now that they’re moving to offer the “industry standard” rate, their authors are up in arms, wondering if Harlequin is trying to pull a fast one on them. It’s ironic, don’t you think?

In a post back in March on the Avon Impulse line, I said I thought 25% of net was a pretty terrible royalty rate for digital-first/only books, because it meant you were, at BEST, being paid 17.5% of the cover price. When you compare that to the royalty rates being offered by the digital-first small presses, which are typically around 35%-40% of either the sale price or of net (depending on whether the book is sold directly through the publisher’s website or through a third party), 25% of net starts to look pretty crummy.

However, when you get right down to it, the problem with being paid on “net” isn’t the percentage itself; it’s the fact that it’s typically not clear or disclosed how net is calculated or how much net will be. Angela James’ post on Dear Author (referenced above) seems to indicate that Harlequin’s “net” is calculated on 50% of the cover price, but I know from my own royalty statements from Kensington that my “net” is all over the map–it seems to depend not on the cover price of the book, but the the actual sale price less the distributor’s cut and who knoews what all else.

I’ve never understood, to be honest, why the prevailing terms for digital royalties seem to be based on the net receipts rather than the cover price. Print royalties have ALWAYS been based on the cover price. It doesn’t matter how much the retailer actually sells the book for; the author still gets a predictable royalty on every single copy sold. Why should digital books work differently, especially when the publisher in question is agency-pricing, which means the publisher is getting a predictable portion of every single sale? In theory, if the publisher is agency-pricing your digital books, 25% of net should mean a predictable royalty, but that’s only the case if you know for sure what’s getting netted out AND your publisher never puts a digital special on your books (as both Avon and Hachette did for some backlist titles earlier this month).

I don’t expect to be signing another contract with a publisher any time soon, but more and more, I truly dislike net calculations for royalties because they are so potentially fungible and unpredictable. If and when I’m in that position again, I may well try to negotiate either for digital royalties based on the cover price (although, obviously, I would not be asking for 25% of the cover, but more like 15%) or for a clear disclosure in the contract of exactly how net will be calculated. And that’s partly because, if the publisher later decides to change its terms, I don’t want to have to guess whether the new terms are more or less favorable to me. Which is the net many Harlequin authors feel caught in right now.

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¹From my perspective, the most puzzling thing in the whole announcement wasn’t the royalty change–it’s what the heck “actively writing for Harlequin” means! Are you only actively writing for them if you have an uncompleted manuscript under contract? Do revisions and copy edits consistute “actively writing”? If you’ve completed the last manuscript under your existing contract and have either not yet submitted an option book or don’t have an option clause, are you no longer active even though you have books that have yet to be released? Are you no longer active if you turned down a contract offer from them, even though you still have unreleased books? It’s really very puzzling, and a clear definition of that term would certainly have been helpful!

As of this morning, I reached an interesting milestone on sales of my self-published short story. I’ve now earned $1,000 from it. That amount is a net, including the $250 advance I was originally paid by the editor of the anthology it first appeared in, less the cost of the cover art.

The reason this is interesting is because the $1,000 threshold has meaning within Romance Writers of America. An author is considered “published” for the purposes of joining RWA’s Published Author Network (PAN) when he or she has earned a minimum of $1,000 from a single published title. There are a couple of caveats to this. The first is that the work must be novel (40k+) or novella (20k-40k) in length. The second is that it must be published by what RWA terms a non-vanity, non-subsidy publisher.

I met the minimum requirements to join PAN when I sold Behind the Red Door to Kensington for a $2,500 advance back in 2008. (I’ve since earned about $800 more in royalties from that book, mostly thanks to digital sales.) This means RWA considers me published pretty much forever. I never have to sell another book to a publishing house to remain in PAN or stay on the list of published authors on their website or get the “Published Author” moniker on my conference name tags.

But here’s the thing. It has long been a precept of the professional writers’ organizations (not just RWA, but also SFWA, MWA, and, I’m sure, others) that all monies in publishing should flow toward the author. This means that authors are cautioned from signing with agents or publishers who charge any fees (other than, of course, the percentage they take of the book’s earnings or the author’s royalties). For a long time, RWA and other organizations hewed to the notion that it was critical not only for the author not to pay anything upfront to publish a book, but also to receive an advance on royalties, thereby effectively ensuring that author was never paid less than that amount for the work.

Of course, the digital publishing model came along and threw that logic into a cocked hat as authors began to earn good money. Although the sales numbers were lower, the royalties were significantly higher, which led to more money in the author’s pockets. The digital publishers also paid more regularly, sometimes as often as monthly, which meant that although the author didn’t receive any money upfront, the actual payout of royalties beyond the amount that might have been advanced was much quicker. But the recognized digital publishers still followed the primary tenet of writers’ organizations–the author was never charged upfront for cover art, editing, or distribution. All monies still flowed toward the author, albeit at a different point in the publishing process.

Even so, digital publishing was viewed askance for quite a long while in writers’ organizations. Although it seemed some authors made a LOT of money at it, the majority of authors didn’t (and probably still don’t). Moreover, there persisted a persisted a perception of a “quality gap” between ebooks and print books (although that divide between digital and print has narrowed because pretty much every print book issued now has a digital counterpart). Notwithstanding, there’s still a certain “sniff test” factor out there, and I imagine a lot of us still suspect that if you submit to enough digital publishers, eventually you’ll find one that’s willing to publish even the crappiest manuscript.

Now, we have the new age of self-publishing. Digital self-publishing is so cheap and easy¹, everyone really can be published. And let’s face it–this fact, that everyone CAN be published, even the worthless hacks–is a huge bone in the craw of professional writers who’ve been at this a long time and feel they’ve “paid their dues” and shouldn’t have to share the status of “published” with authors who haven’t proven themselves through the gatekeeping structure of agents and editors. It just doesn’t seem “fair” somehow.

But it’s time for the writers’ organizations to get real. The fact that authors got published through the gatekeeping structure has never been an objective measure of quality or talent or skill. The fact that an author has earned at least $1,000 from a single title is no guarantee that the work isn’t a worthless piece of trash. The writers’ organizations like RWA have set up a system that is TRYING to control for quality by demanding the existence of a gatekeeper, but the reality is that this has never actually worked. When a relatively unknown author like me (I can’t even call myself midlist) can earn more money by self-publishing a short story than by selling a short story of twice that length to a major publisher (my advance from Harlequin for Grace Under Fire and Taking Liberties was $800 for each manuscript, and I will almost certainly never see another dime from them since the royalty rate is only 8% per copy sold) AND hit the Amazon top 100 with that self-published story, it’s difficult to see any reasonable rationale for steering authors (even previously unpublished ones) away from self-publishing.

Quite simply, RWA and other writers’ organizations have to stop pretending that the PUBLISHER matters. Authors who have published a book and earned the prescribed minimum from its sales should be treated as published authors, regardless of how the book was published. And yes, I’ll go so far as to say that even if there is a vanity/subsidy publisher involved (rather than the author acting as the publisher), that should be the case.² If there are upfront costs to the author involved in publishing the work, perhaps those figures should be netted from total revenue to ensure that authors aren’t earning $1,000 on a book they paid $5,000 to publish, which isn’t exactly a winning strategy for a career, but that should be the only real difference between the self-published and the publisher-published book.

“But, Jackie,” you’re saying, “what about the Ritas? What about the horrible books that for inexplicable reasons sell thousands and thousands of copies? And ONLY $1,000? Shouldn’t it be more?”

To which I say, read Part 2, which I imagine will be up sometime early next week. (I was going to try to do this all as a single post, but this one is already too damned long!)

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¹I am not saying it’s easy (or necessarily cheap) to create a high quality product through self-publishing. But if you don’t care about having great cover art and you think your critique parts are editors (hint: they aren’t), you can publish a book for an upfront investment of less than $100. Doing it right is going to cost you a lot more than that–I anticipate spending around $500 to publish The Lesson Plan, which I’m expecting to release toward the end of October. That’s because I paid for a professional cover design (although really, that was very inexpensive) and I expect to pay my content/copy editor a nice chunk of change for her efforts. I won’t put out a book that’s not professionally edited. I just won’t.

²Given that several well-respected epublishers, most notably Ellora’s Cave, started in large part to publish books written by their founders, the distinction between author and publisher becomes even sillier, doesn’t it?

Over the past few days, I’ve noticed a lot of hand-wringing over the 99-cent book. Yesterday, both the Huffington Post and Nathan Bransford waxed eloquent on the problems with the 99 cent price point. Bransford was, in my opinon, considerably closer to the mark than the HuffPo’s writer when it comes to explicating the long-term implications of the 99-cent price trend.

So, here’s the thing. If you put your book up a year ago (or even 6 months ago) and priced it 99 cents, the chances that you would move a LOT of units at that price were very high. It made sense to price in the bargain basement, even if you only made 34 cents per copy, if you could sell ten books at that price point to every one you could sell at $2.99. ($2.99 x 70% = $2.09, while $0.99 x 35% x 10 copies = $3.40).

But, as Bransford rightly notes, there’s now a glut of 99-cent ebooks. There are so many, in fact, that the price point is no longer much of an enticement to readers. Yes, it’s easier to get the casual browser to buy book at 99 cents than at $2.99, but it’s not as much easier as it used to be. When there are so many 99-cent options to choose from, readers become pickier about what they’re willing to pay even 99 cents for.

It used to be that the 99-cent price point helped browsers find you. Now, there are so many books at 99 cents, pricing at that point no longer makes your book stand out. Instead, it just leaves your book swimming in an ever-expanding pool of other books at that same price. So, unless you have something ELSE to distinguish your book from all the others (great cover art, title, concept, and most especially IMO, lots of reviews/ratings), the chances that you are going to make 10x as many sales at 99 cents as at $2.99 are simply not that great. And for the 99-cent price point to make sense financially, at least as a price for a novel-length book, you really have to to sell a lot more copies.

The fact that 99 cents is not a huge incentive for readers anymore was brought home to me by watching sales of my short story, THE REIVER. When I initially released it, I priced it at 99 cents (it’s a very short story, so more than that seemed like price-gouging). Sales were in the neighborhood of 5-6 per day on Barnes & Noble but no more than 1 per day on Amazon. On Amazon, the book was quite simply LOST in the sea of 99 cent slush and people just weren’t finding it. After a couple of months, I decided to raise the price to $1.29 on the theory that the 99 cent point wasn’t bringing me any eyes I wasn’t finding otherwise. Sales dropped precipitously, but then a funny thing happened. Because the Smashwords version hadn’t sold but two copies, I didn’t bother raising its price and Kobo (one of the retailers that gets books from Smashwords) discounted the 99-cent version to 89 cents. Amazon, being all about keeping up with the Joneses, discounted the story on their site from $1.29 to $0.89 and, lo and behold, I very quickly started selling almost 10 copies a day on Amazon.

So, are people really that price sensitive? We’re talking a 10-cent difference between the original price and the discounted price that attracted so many more sales. What are people buying with the 10 cents they’re saving? The answer, of course, is that it wasn’t the prospect of saving an extra 10 cents that boosted sales–it was the fact that the 89-cent price is so unusual that by itself, it made the book stand out in a way it hadn’t before. More eyes FINDING my book led to more sales.

I think the fear of a lot of authors and publishers is that 99 cents is becoming “the price” of a book, the way 99 cents has become the “price” of a song on iTunes (although, in fact, most new/popular songs are now priced at $1.29). I can understand that concern, and I’ve shared it to some degree, but I think in the long run, it’s not going to happen because of the convergence of these three things:

1. 99 cents is no longer a point of differentiation, and…
2. The total number of books you must “differentiate” yourself from to attract readers/buyers is growing exponentially, so…
3. You will have to differentiate your book by something other than price.

It’s #3 that’s the sticky wicket. When 99 cents was a “marketing” point in and of itself, it made a certain amount of sense to price your book there, especially when you initially released it. But now, it’s not enough (if it ever really was, which I doubt). Smart writers and publishers know they have a following and that the market can and will support prices of $2.99 (and more) for ebooks. The key is that, whatever the price point, your book has to be able to find its readers and vice versa. And that is going to cost authors and publishers too much for them to afford to sell their book for 99 cents indefinitely.

Despite the fact that I’m published primarily in digital form (only one of my books has ever been released in print), I’ve always considered myself someone who preferred paper books to digital. I have a particular preference (or so I thought) for mass-market paperbacks, not so much because they are cheap (although that weighs into the equation), but because they are lightweight and portable. As a result of my belief in my love for the mass-market paperback, I have an mmpb TBR pile several feet high.

And yet, I’m not reading those books. Instead, I’m reading the digital books I’ve downloaded onto my iTouch. What’s more, I tend to FINISH the digital books that I do start reading, whereas the print books are far more likely to be picked up, paged through, and put down, never to be revisited.

I’ve been puzzling over this phenomenon since I realized I have read several novels and novellas start to finish in the last month while I have not finished reading a single print book in twice that time. Why should this be so, I wondered, especially since reading on the tiny screen provided by the iTouch isn’t exactly the most aesthetically pleasing experience?

One reason is actually pretty easy to ferret out: the light on my side of the bed is burnt out and I can’t be arsed to replace it, which means I CAN’T read paper books in bed, but I can read digital books on the backlit iTouch without a hitch.

But that doesn’t explain why I’m more likely to FINISH reading them, even those I find to be flawed in ways that would likely have me giving up on a paper book within a few chapters. The answer finally dawned on me yesterday, though.

You see, I’m currently reading a historical romance on the iTouch that I suepect I would have set aside long ago in paperback. It’s not that it’s bad, mind you. There are just…issues with it. It’s one of those books that might pan out and might not. And if I had it in print form, I’d have already looked ahead in the book to see if it would be worth my while to finish it. (Yes, I’m THAT kind of reader. For shame, I know.)

But on the iTouch, skipping around in the book is a pain in the you-know-what. Oh, I know I could do it, but it’s more effort than it’s worth. And so, I keep on reading. Which means, eventually, I read through to the end, even if the book doesn’t wind up panning out.

I’ve said for a long time that I won’t pay mass-market paperback prices for digital books, which meant agency-priced romances were strictly off my list. For all the reasons others have explicated in the past, I have always felt that digital books should be priced lower than paperbacks, and if I couldn’t get the digital version of a book for around the $5 mark ($6 at the absolute most), I wouldn’t be buying.

But this morning, I went to Amazon and picked up Julie Anne Long’s What I Did for a Duke, a book I’ve been dying to read for a long time but haven’t run across in paperback yet, for the exorbitant (in my former mind) price of $7.99? And I suspect it’s going to be worth every penny, because if I’d bought it in paperback, there is a good chance I’d never have finished it. But I KNOW I’m going to finish it in digital, and that means it’s worth as much or more as the paperback. To me.

With the advent of Amanda Hocking and other authors’ successes in selling oodles and oodles of digital books on Amazon at the low, low price of 99 cents, there’s come to be a sort of common wisdom that pricing your book at 99 cents is the most reliable road to (almost) instant success and bestsellerdom. Of course, there are plenty of people who don’t agree with this strategy and complain that it devalues all digital books. I think both Courtney Milan and Tessa Dare have done a nice job of explaining why this is probably not true–people buy digital books all the time for more than 99 cents, even when there are plenty of 99 centers out there (and even in the face of the relative ease of getting the book for free from a torrent site). So I’m not here to argue about that. What I am here to point out is that 99 cents (or less than 99 cents) probably isn’t as much of a draw as some folks think.

As you know, I made my short story, The Reiver;, available on Amazon, Barnes and Noble, and Smashwords back in mid-January for the low, low price of 99 cents. I’ve said before that my sales of this digital short have exceeded my expectations (my sole goal being the earn back the amount I’d invested in the purchase of the cover art, which I did within a month), but that is not to suggest that the 99 cent price was an instant draw that garnered lots of sales. To the contrary, sales were pretty steadily around 5-6 per day between Amazon and B&N, with Smashwords to this day reporting only one sale. So much for 99 cents bringing on the buyers, eh?

Partly as an experiment and partly because I decided the 99-cent price point wasn’t exactly getting readers to knock down my door, I went ahead and raised the price of the story a few weeks ago to $1.29 on Amazon and B&N. I didn’t bother raising it at Smashwords, since it’s not selling there anyway. I figured anyone who was actually truly interested in the story based on the blurb and perhaps based on knowing something about me or having read the sample would buy it whether it was 99 cents or 30 cents more. Either one is less than the price of a medium soda at most fast food chains, and I figure I’m worth it.

What happened? Well, my sales did tail off, from 5-6 per day to about 2-4 per day. In other words, my higher pricing definitely drove some people away. But it didn’t drive them <i>all</i> away and even though I’m not earning as much overall, I’m getting a better payment per copy and I’d like to think there’s a better chance that those who are buying it will actually read it.

Fast forward to yesterday, when I hopped on Amazon to look at my current numbers/ranking and discovered, to my bemusement, that Amazon had discounted my book from $1.29 to 89 cents. I really scratched my head over this, as I couldn’t imagine what had possessed them to lower the price on my book (and I had never, ever seen a self-published book discounted by Amazon before, so it came as a real surprise). After posting to the Kindle Boards, I discovered that this is probably a case of Amazon matching the price on Kobo, which must be getting the file through Smashwords. (Since I didn’t even know Smashwords distributed to Kobo, this came as something of a surprise as well.)

So, what happened? Well, my sales did increase dramatically yesterday–so much that got into the top 10,000 in the Kindle store overall and actually hit the top 100 in the Anthologies sub-category. And today, sales are still brisker than they were–I believe I’m up to 6 copies on the day–but my ranking has dropped back to sub-10k levels and I’m no longer hitting that subcategory list.

Of course, there’s a possibility that the discounted price could eventually launch The Reiver into stardom. But my guess is, probably not. And let’s face it, if an 89 cent price isn’t enough to get people to buy your book in droves (because, let’s face it, everyone loves what they perceive to be a bargain and 89 cents is a rather unusual price for Amazon), then 99 cents probably isn’t going to do it, either. At least not in and of itself.

In the final analysis, what makes bestsellers ISN’T price–it’s the right combination of concept, price, and execution. In other words, to quote The Talking Heads, same as it ever was.

One of the perennial frustrations of being published by one of the traditional print publishers is that it takes forever to get any hard data on how your books are selling. The typical print publishers put out royalty statements twice a year–one in May covering the previous July to December’s sales and another in December covering January to June. True, you can look at your ranking numbers on Amazon and Barnes & Noble, and now that Amazon is giving authors Bookscan data, you can see how many print copies of your book are selling each week. What Amazon won’t do, however, is tell you how many DIGITAL copies you’re selling, either on their website or anyone else’s. This means that if a sizable percentage of your sales are digital, you don’t have any real idea of how many copies have sold until a year after the fact.

Most digital publishers have improved significantly on print publishers by disclosing sales figures and pay royalties on a monthly basis. This means you usually know by the end of February how your book sold in January and by the end of March how it sold in February and so on. You’re still about a month behind the curve, but at least you have data soon enough to have some sense of how things are going.

But now we have self-publishing through Amazon, Barnes & Noble, and Smashwords. If you are selling a book through THESE channels, you can find out EVERY SINGLE DAY how many copies of your book have sold. And let me tell you, checking your sales data can become an obsession.

When I put out the digital version of The Reiver back in January, I didn’t just look at my data once a day; I swear I looked at it every three hours. I’ve managed to control myself a little better in the past few weeks, and some days, I don’t even look at all. Still, it’s kind of amazing that I can say exactly how many copies of the book have sold at any given minute of any given day (as of this moment, it’s 319) when I have no clue how many total copies of anything else I’ve sold.

But there is a downside to all this knowledge. Aside from the fact that you can waste a LOT of time refreshing the page view to find out how many copies you’ve sold, there’s also the neverending need to compare yourself to other people. In the self-publishing world, there are a lot of authors reporting sales of hundreds of copies per month, if not hundreds per day. When you’re only selling 100 copies or so per month, it’s hard not to wonder WHY. Why are others selling so many books at 99 cents (or 2.99 or 3.99 or whatever), while I’m selling so few? What am I doing wrong? Why don’t people LOOOOOOOVE me more?

I’m not saying this happens to everyone who self-publishes. I do think it’s hard not to feel a little “jilted” as a writer when you aren’t selling as well as someone else. In fact, it’s pretty much exactly the same as the feeling of a writer who’s been passed over by New York time and again while watching all their friends/acquaintances get contract after contract. It’s just that now, instead of trying to get editors to buy your work, you’re trying to get readers to buy it and wondering where you’re going wrong.

For me, 319 sales in less than two months of a short story that is also published in a print anthology seems like THE BOMB. I never expected or even hoped to sell enough copies to hit a bestseller list or make thousands of dollars. I just wanted to give people who might like my writing another opportunity to discover me at a lower price point than they could otherwise. Given this, I’m not freaking out or trying to figure out what I’ve “done wrong.”

But I do worry about what will happen should I decide to self-publish something I have higher hopes for. I’m currently writing a category-length novel. It’s something I might end up self-publishing. And it’s a book I dearly love and want to see do well. Will having too much information drive me crazy? Will I be happy with a few hundred sales a month when I’m more invested? I really don’t know.

But I do know that it’s sometimes possible to know too much.

Today, Avon (the division of HarperCollins, not the makeup distributor) announced the launch of its new digital imprint, Avon Impulse. In addition to digital books, at least some of their titles will be available as print-on-demand.

This move comes as absolutely no surprise to me, as I suspect almost all of the traditional print presses are going to have digital-first imprints in the works, if not up and running, by the end of this year. The digital market is simply growing too quickly for publishers to overlook it as a source of revenue.

I know a lot of writers are very excited by the availability of this new market, particularly since it has Avon’s “brand” associated with it (unlike Carina Press which, though owned and operated by Harlequin, does not have the Harlequin brand in its name). Like most digital publishers, they are not paying an advance, but their website says they are paying 25% royalties on the first 9,999 copies sold, then 50% on every copy over 10,000. That sounds pretty decent (although it’s not very likely that a large percentage of titles will ever sell 10,000+ copies and achieve the 50% rate), but we have already found the catch–to wit, this percentage is on net, not either gross or list price.

In my humble opinion, this is not a good deal. Most of the digital publishers I’ve worked with or my friends have worked with pay their royalty percentages on gross or list price, at least when the book is sold through the epublishers’ own website. When the book is purchased through third party sites (like Amazon or B&N), the royalty rate is either reduced somewhat or the percentage is the same but paid on net. And in most cases, when digital publishers are paying on net, they are paying 30-45% from the first copy sold, not demanding that the author sell a buttload of copies before achieving a higher royalty rate.

My traditional publisher is paying royalties on my novella anthology at 25% of list price. I strongly suspect Avon is paying digital royalties to their traditional print authors on list price, as well, although I don’t know what the current percentages are. So why are they offering to pay LESS to authors who are foregoing an advance? The only way the no-advance digital model can work financially in the author’s favor is if the royalty rate is higher than it would be in the advance-paying print market.

How much of a difference is there going to be between 25% on net versus 25% on gross/list price? I can’t be sure, but my understanding is that most of the etailers take a cut of 30% or so from the list price of the book. (Depending on whether or not agency pricing is involved, they may or may not be taking that full 30%, since if they are discounting the book, they still have to pay the publisher 70% of list.) Then there is the question of what else the publisher will fold into the cost of producing and distributing the book. Net means “how much we made on each copy after paying all the costs associated with creating it,” so they could conceivably take a cut from each sale to cover the cost of the cover art, editing, etc. They might not, but until we see the contracts, we won’t know either way what all is included in the difference between list price and net.

Even assuming the only cost being skimmed from the list price is the 30% for the etailer, the effect of paying on net is that they’re really not paying 25%, but 17.5%. Only after the 10,000th copy do they start matching the typical epublisher royalty rate of around 35%.

All in all, I can’t say I’d recommend Avon Impulse at this point. I don’t have an issue with publishers paying on net, per se, but if they are going to pay on net, they have to pay at a MUCH higher rate (35-50%) and on EVERY copy they sell.

In other words, buyer beware!