Showing posts with label cost accounting. Show all posts
Showing posts with label cost accounting. Show all posts

Sunday, July 22, 2012

The truth is not a bad word

You know who you are.  I don't need to cite your names or post your book titles or link to your blogs.  Most of the rest of us know who you are, too.  Or at least we know who some of you are.

You're the authors of badly written books.  And you need to face that reality.  Oh, I'm sure you won't, but you need to.  For your own sakes if no one else's.

Some of you are new to this game, but others have been around for a long, long time.  I know this because I've seen your manuscripts before when they were entered in RWA contests.  My last RWA membership lapsed in 1998; some of the books that are being digitally self-published now, in 2012, were contest entries in the late 1980s.  They've been around.

These are the books that never won a major contest, never found a traditional print publisher.  Maybe they collected a lot of rejection slips, with or without suggestions for improvement.  Maybe you revised them based on critiques; maybe you didn't.

Then there are the books that have never been evaluated, never entered in a contest, never subjected to a critique group or any other analysis.  Never been sent to an agent or editor, and thus never rejected.

And there are probably some that fall in between:  They've been critiqued by friends or rejected by a couple of agents or. . . .something.

But old or new, experienced author or novice, you know the routine:  You've written a book or two, maybe more, and now that it's so easy to put your books into digital print, you do so.  You get some stock photo art and create a cover, then upload your MSWord file.  Presto!  You're published!  Woohoo!

You launch with greater or lesser private fanfare on Amazon or Smashwords or Nook or Kobo.  Friends and family, who think it's terrific that you've done this but who know nothing about writing or publishing, post five-star reviews.  Maybe you post a few yourself, under other account names or even under your own name on Goodreads.  (I saw one author the other day who had posted three separate five-star ratings for one of her own books on Goodreads.  Not reviews, just ratings.)  If you're ambitious enough, wealthy enough, and/or greedy enough, you buy a few more five-star reviews.  Or you swap reviews with other writers who are just as eager as you to get those ratings, because after all, ratings equal exposure and exposure equals sales and. . . .

Wow!  Look at all the people who think you've written a great book!  The royalties will come pouring in now, won't they!

Excuse me, honey, but none of those people count.  Not one of them.  If they're a friend or family member, they are automatically biased.  If they're you under another name, you're out and out lying.  If they're paid shills, they just plain don't count.

Even if you send your book to an "independent" review site, unless that site is recognized in the reading community as unbiased and fair, it doesn't count.  The awards and recommendations of a site that only gives five-star ratings don't count.

The only thing that counts is the truth.

And the truth is, your books suck.  They're bad.  They're really bad.

Oh, did that hurt your feelings?  I'm sorry your feelings are hurt, but as a reader, I'm not in charge of making sure you feel good.  My job is to read the book; your job was (past tense) to write one that I would enjoy.  You didn't do your job.

Now, let's back up here.  You can't defend yourself here, since it's my blog, and you're probably about to have a stroke at this point, but that's not my concern either.

There are books that a lot of people don't like which are not badly written books.  I for one can't stand anything written by Hemingway.  Nor do I like books that have depressing endings.  I will go out of my way to avoid horror stories, or those with graphic descriptions of violence.  And I'm invariably traumatized by a book in which an animal dies.  (This is one of the many reasons I absolutely can't stand and will never defend Judith McNaught's A Kingdom of Dreams: The heroine is such a spoiled twit she disregards common sense and is directly responsible for the death of the hero's beloved horse.  She never expresses remorse, never apologizes for it.  I hate that book with a passion.)

That's an entirely different kettle of fish -- a book can be very well written and still not be to the reader's personal taste.

I'm talking  about the badly written ones.  The badly published ones.

I'm talking about the books whose authors defend them on the basis of those five-star reviews, insisting that the reviews -- even though they are not legitimate reviews -- are necessary for sales and no critic has a right to deprive the author of potential sales. 

Say what?  Honey, your book has to earn its sales, and no one owes you anything.  No one owes you kindness in their reviews.  Hell, no one even owes you a review at all.  No one owes you a critique that will help you improve the book.  No one deserves your excuses or your protestations of hardship, your whines, your rants, your angry responses and sock puppet comments. 

And no reviewer ever, ever, ever deserves a personal threat from you.  Not ever, not under any circumstances whatsoever.

Bad books are just bad, and that's a simple truth.  Do some of them eventually sell a few copies?  Yeah, sure they do.  Some may even sell a lot of copies.  But that doesn't make them any less bad.

So, what qualifies a book to receive a "bad" rating?  The writing.  If the writing is bad, the book will have a very difficult time succeeding.  And if an author defends a bad book, or denies that it is bad, the author cannot improve.

1.  Bad technical skills -- spelling, grammar, syntax, word usage, punctuation.  These are as basically basic as you can get.  If you can't punctuate dialogue, how can you give your reader an accurate sense of what your characters are saying?  If you don't know how to use the right words, how will your reader know whether you mean demise or surmiseproceed or precedeFray as a noun has a similar meaning to struggle, but fray as a verb means something very very different from the verb struggle.  They cannot be used interchangeably.

2.  Bad story skills -- plots have to be consistent with an internal logic.  Do you know how to construct a cause and effect chain of events from opening to resolution?  Are your characters consistent?  Do they have sufficient internal and external motivation and conflict? 

3.  Bad research -- check your history. Check your geography.  Even if you are writing a paranormal or fantasy, you can't ignore facts unless you provide some logical explanation, either explicit or implicit.  Review your own personal anatomy and make sure human beings can do what you have them doing in your book, especially the love scenes, for the goddess's sake!

4.  Bad formatting -- how many times do we have to go over this?  Readers do not want to read badly formatted books.  You simply cannot expect readers to do your work for you.  You just can't.  And you have no right to complain when readers bitch because you didn't format your book properly.  That's your job.

Reviewers are going to leave negative reviews if you publish a badly written book.  The readers and reviewers don't know you and they don't care about your excuses -- or your precious feelings.  You published a badly written book, so now suck it up and either fix it or write a better one.  But don't you dare accuse the reviewer of anything other than telling you the truth.

Monday, May 14, 2012

The dollars and sense of the words and numbers, Part 1

One thing always leads to another.  Always.

And everything is connected.  Everything.

Some months ago, I blogged about an analysis I had done almost 20 years ago regarding how much it costs to produce a mass market paperback romance novel.  That analysis was a response to the numbers the publishers -- and most notably Steve Zacharius of Kensington/Zebra -- had been giving to RWA in justification of their low royalty rates and outrageous contract terms.

I have always contended that publishers were shafting the writers, but writers didn't have any valid options, and in the absence of any real advocacy from RWA on behalf of the writers, nothing would change.  Individual authors might achieve sufficient status that they'd have clout to get their own contract terms made more favorable, but the majority of romance writers were getting shafted left and right especially on discounted bulk sales and subscription sales for print books.  And it's worse today on digital sales.

The figures Courtney Milan is reporting from her royalty statements bear that out.

Now, allow me to qualify that, as indeed I believe Courtney does herself:  There are significant differences between the costs to manufacture a paper-and-ink book and the costs to upload a digital edition.  Those overhead costs -- editing, artwork, etc. -- are incurred simply to produce the product, regardless how many are produced or how many are sold and are going to be more or less the same for print as for digital.

Additional expenses involved in promotion, marketing, etc., are optional and separate.

So let's keep in mind that there are basically three types of expenditures to take into consideration when determining the total "cost" of a book:

1.  Pre-production overhead for editing, artwork, etc., and this includes all the stuff associated with office space and receptionist's salary and conference attendance.
2.  Manufacturing cost: the paper and ink and foil and embossing dies plus transportation and warehousing.
3.  Post-production advertising and promotion.

Remember -- keep those in mind at all times when examining any claims by anyone regarding the profitability of any given romance novel.

Now, read this statement from Simon & Schuster's Pocket Books imprint from last week, courtesy of Romantic Times online, in which the most important line is this:

Pocket’s executive vice president and publisher Louise Burke had this to say about the variety of authors that will be included in the line when these digital books land on e-shelves:
“Similar to how mass market has served as a platform to develop future hardcover authors, it is our mission to use Pocket Star’s new digital-only format to establish new voices in the marketplace. An eBook imprint is flexible, cost-effective, cutting-edge and makes sense in today’s marketplace.
Yes, dear readers of my little blog, a publisher's representative, in this case an executive vice president, is acknowledging that ebooks are cost-effective.  That's executive speak for "We make more money off these things than on our other products."





Saturday, March 17, 2012

Words as numbers, and making words count.

I want to reiterate some of the issues that started this blog, and started my return to writing, because not everyone is going to read all the old stuff and because the old stuff is relevant to the new.

The three items that prompted it all were:
1.  The report of the Dorchester boycott listed at AAR.
2.  The article about Connie Brockway's adventures into self-publishing, also on AAR.
3.  The obituary of Walter Zacharius that a friend showed me from the New York Times.

It actually began maybe a year before, when the same friend who told me about Walter's death had told me about Kate Duffy's.  That kind of prompted me to slide back toward a writing hobby -- not yet a career, if it ever really was one -- that I had been seriously, seriously away from for at least five years.  But it wasn't until last spring that the ideas started to coalesce again and I began surfing the review sites and so on to see what was going on in the industry.

On reading the Brockway tale, I discovered that self-publishing, which had for so long been considered anathema for "professional" authors, now offered a legitimate means for authors to by-pass the parasitic publishers who often did more harm than good, to the individual authors, to the readers, and to the various genres as classes.  And so I began to pursue my own self-publishing ventures.

When the issue with Dorchester arose last week, I spent considerable time locating the warning letter I had written to RWA in 1993, unaware during my search that that letter also contained the cost analysis of a mass market paperback.  The two are, of course, inextricably linked.  I'm not sure that this issue was ever examined after that 1993 analysis was printed in PANdora's Box.  I do know that I followed up briefly.

In a letter I wrote to PANdora's Box sometime after the publication of the original analysis -- my file is not dated and I do not yet know for sure if it was ever sent -- I brought out additional financial facts about royalties:

If indeed the publisher makes a profit of even a modest 10% on the sale of each and every paperback romance novel sold, and the authors of those same novels are paid the slave-wage royalty of only six, perhaps a paltry four, and all too frequently an insulting mere two per cent royalty, what I failed to see was that I was still comparing apples to Nerf basketballs. For the publishers' profit of 10% is a net profit, whereas the royalty to the author is a gross (!) income.

From that income one must further deduct all the costs and expenses already deducted from the publishers' receipts. Their ten percent is what they have left after paying taxes and insurance, printers and shippers, advertisers and distributors. Authors, out of their pittances, still must come up with agents' commissions, taxes (including the full social security contribution), postage and copying, bookmarks and RT ads, conference fees and mileage to those book signings at which we sign two or three copies.

We also have no control over our "wages." If the publisher wishes to give away 1500 free copies of our book at a conference, they chalk it up to promotional expense and we get -- nothing. Fifteen hundred fans have now saved the cost of the book, money which they will probably spend on someone else's novel. They will also share that book (just as they share their others, including the ones from the used book stores) with two or three friends. Or, if they don't happen to like the type of book we've written, it goes immediately to the used book store. Unlike the baker who supplies bread for the grocery store, we can't tell the publisher, "Hey, wait, guys! I worked my ass off for that book! What gives you the right to give it away for free?"
Why does this all this matter?  Because we as writers matter.  We are human beings.  For many of us, writing is our livelihood.  For others writing is an obsession, and I don't mean that in a bad way.  But it also matters because readers matter.  Because publishers have traditionally been the means for getting written material from the author's pen or typewriter or computer into the hands of the reader. 

We who are living in the 21st century take our technology pretty much for granted, especially printing because the printing press has been around for over 500 years.  But it hasn't been all that long ago that a musician had to perform live for anyone to hear him.  We cannot watch Edmund Kean's theatrical performances, we cannot hear Paganini on the violin, but we can read the words written about them.

The recording of a theatrical or musical performance requires the coordinated effort of a lot of people: It begins with the script writer or playwright or composer, progresses to cast/performers, crew, set designers, camera operators, and finally the distribution medium, whether that is Lionsgate Films or YouTube.  Computer technology has progressed over the past few years that allows some diminution of the process, but it hasn't completely eliminated the need for a coordinated effort involving a lot of people.

Writing, on the other hand, has always been primarily a solitary endeavor and it's only the distribution process that has required the input of others.  The writer writes, and was more or less done with the project until it landed in the hands of the publisher, when all production activity took over.  The publisher did all the work, granted the writer a small cut of the revenue, and walked away with the majority of the profits.

What digital self-publishing has done, however, is to make the publisher redundant.  Publishers, obviously, don't like this, and some writers are reluctant to take on the additional responsibility that self-publishing puts on them.  But let's look at the numbers, so that we, as writers, can at least make an informed decision.

Looking at the figures I posted originally -- based on a 1993 cover price of $4.99 (rounded to $5 for ease of calculation) -- on a sale of 25,000 copies, the author earns $7,500 in royalties.

If the author digitally publishes that novel on Amazon Kindle at $2.99 -- that's a major discount from a 20-year-old price, let alone from a 2012 price of $7.99 or $9.99 or $12.99! -- at a 70% royalty rate she earns approximately $50,000.  I say approximately because there is a download cost associated with Amazon's Kindle Direct Publishing program that's based on the size of the download file.  However, the comparison kind of makes you sick to your stomach, doesn't it?  Imagine paying for a little bit of online promotion out of that $50,000 compared to buying a print ad in Romantic Times  or having bookmarks make up to distribute at conferences?  How does $50,000 in royalties compare to $7,500?

Look at another financial scenario.  Even selling on Amazon for $.99 -- a 99-cent bargain for the reader -- and only 35% royalty, that 35-cent royalty per copy is still -- STILL -- higher than a 4% royalty on a $4.99 book, and lots higher than a 2% cut on foreign sales.

Financially, digital self-publishing is a no-brainer.  Added just to the raw numbers are the considerations that digital self-publishing can be done in a matter of days and payment usually arrives in 90 days or less after sales.  Traditional print publishing requires at least six months and often as much as 18 to 24 months before a print edition is released, and royalties are paid long after that.  While the "advance against royalties" may be paid sooner than that, it is increasingly industry standard that advances are paid in more chunks and not until the completed manuscript is delivered and approved.

There are, of course, non-financial considerations.  With a traditional publisher, along with that up-front advance, the author gets cover art (which she may or may not like), proofreading and editing services (which may or may not make the book any better), and status (like membership in a "professional" writers' organization).  Oh, yes, and the delight of actually autographing print copies.

But what if the publisher, whose primary concern is the bottom line, their profit and not yours, indulges in activities that hurt your bottom line?  Looking at those 1993 Leisure/BMI editions again, they carried a UPC bar code for a cover price of $4.99 -- or even $5.99, as on the copy I found buried in my stash last night -- but I don't know what they actually sold for.  Did they reach a discount place in Kansas, as Jaye Manus reported, to be sold for 99 cents?  How did the "cover price" affect what, if any, royalties were paid to the authors?  At least I know the "cover price" on my 27,780 copies of Touchstone was actually $1.00.

As I went through some of those old issues of PANdora's Box and read comments of published romance writers who lamented over and over the eagerness of new writers to accept any terms just so they could be published and who further lamented the acquiescence of RWA on the really shitty terms and shabby treatment offered to new writers, I was quite literally moved to tears.  It's been almost 20 years since we tried to get that stopped.  By "we" I mean those of us who advocated for a stronger, more professional RWA: Margaret Brownley, Jaye Manus, Susan Wiggs, Betty Duran, among so many others whose complaints were voiced only by "Name Withheld."

I refuse to withhold my name any longer.

Thursday, March 15, 2012

Wait a minute! Who wrote those words?

Given all the discussions relating to the business and financial aspects of writing, it's not surprising that writers are urged to adopt a more business-like attitude toward publishing.  What this usually means, of course, is they need to learn the legalese that comprises their contracts so they can avoid literary slavery.  That's all well and good, but understanding the fine print gobbledygook and being able to do anything about it are two different things.

For instance, if your standard contract with a standard publisher says your royalty rate is 2% of the publisher's net on special bulk sales, understanding it isn't all that difficult.  But how much you wanta bet that when you tell the acquiring editor you don't like those terms and you don't want any of those special sales made of your book, the acquiring editor is gonna tell you, "Honey, sign it, 'cause if you don't, I got twenty more who will."

As I've documented previously, publishers routinely tell the authors that whatever format pays the low royalty rate, whether it's mail-order subscription sales or digital backlist, the reason is the higher cost and lower profit.  I've already shown that as recently as 2004, Pocket Books was able to print, bind, and ship 27,780 copies of Touchstone for ~47 cents each.  I mean, that's not difficult to figure out, because they put it right on the royalty statement.

The problem is that authors aren't cost accountants, and it's easy for the publishers to pull out the numbers and convince the authors that money is lost on bulk sales that cost more but sell for less and therefore authors don't get as big a cut.

Imagine my shock this evening then, reading through more of those old PANdora's Box newsletters, to come across an article from September 1993 titled "Question: Do book clubs screw authors?" written by/attributed to A Romantic Bean Counter.  A quick skim of the page told me it was a cost analysis of a hypothetical mass market paperback print run, and I thought, "See, someone in RWA knew about this way back when. . . ." and then of course I realized I was that Romantic Bean Counter

I actually do have a degree in accounting and cost accounting was my specialty.

The figures I used for the Box article were nothing new or surprising, and in a day or two I'll transcribe the whole article for everyone's benefit.  Even though today's trend into digital publishing can make these numbers for ink and paper somewhat irrelevant, I believe skewing the numbers in favor of the publishers is par for the course.

Ah, but there was one other little gem tucked into this article which has helped me on part of my other quest.

The cost analysis is based on a print run of 50,000 copies and a 50% sell-thru that leaves the publisher with 25,000 unsold copies in a warehouse somewhere.  All of the publisher's costs were completely recouped from the sale of 25,000 copies with a profit of ~$10,000.  However. . . .
The publisher can sell those leftover 25,000 copies at $1 each to some discount broker -- like Book Margins, Inc, if BMI were legitimate -- and make another $25,000 profit.  [emphasis in the original]
This was published in PANdora's Box in September 1993.  I'm sure I wrote it at least a month earlier.  BMI -- the phantom distributor for Dorchester/Leisure -- was known about in RWA circles at least as early as summer 1993, which would have been the St. Louis conference Jaye Manus referenced here.