How Much Does an Ebook Cost a Traditional Publisher?

I was talking to my husband about publishing over dinner the other night, trying to explain to him why I’m not going to be pursuing a traditional publisher any time soon and what it would take for me to do so. He listened to my description of the rights grabs and the eternal shelf-life of digital and the low royalty rates, and said, “Well, when a business is failing from being outcompeted, sometimes it trims the fat and fixes the problem and sometimes it just grabs everything it can before it goes under.”  Obviously big publishing is doing the latter.

I told him that what I would require to even consider a publisher is a 50% split on cover price for digital, and that even then the publisher would have to work to convince me they are worth 50% of my book forever.  If they really focus on “distribution and promotion” as he called it, then maybe. 

Anyway, I thought it might be fun to think about what the actual cost to a publisher would be to put an ebook together, therefore how many copies they would need to sell in order for the book to become profitable.

The lowness of the number shocked me.

I may be way off base here (and I’d love it if someone with publishing-house experience weighed in), but I think i’m being pretty realistic–and possibly even over-generous–with my numbers. *

A few key assumptions:

  • There is no editorial tinkering involved–the editor acquired the manuscript as-is with just a few polishing and tightening edits.
  • The author is a careful writer who has good grammar, a readable prose style, and didn’t leave a ton of typos.
  • The book is 80-90K, so it will take an editor about four hours to read if they just read it.
  • I am working with a no advance, 50% of cover price split for digital royalties.
  • The entire cost of production is being put on the ebook, because the print book has become the ancillary format.

I know from my own editing work that I need about three passes after the initial read-through to make a substantive macro- and line-edit. We’ll double the amount of time to allow for marking up and making notes. So…4 hours for base read + 3 passes x 4 reading hours x 2 double the reading time for editing = 28 hours of editing before it gets sent back to me.

The next round of edits only needs 2 passes, so 2 x 4 x 2 = 16 hours.

Then a round with the copyeditor, 2 x 4 x 2 = 16 hours.

Then a round with a proofreader, 2 x 4 x 2 = 16 hours.

Then it goes to the formatter. For a novel-length ebook that will take about four hours (basing this on my experience of two hours for a novella, but only some of that time would be increased by a longer work) = 4 hours.

The copywriter spends an hour coming up with the back matter = 1 hour.

Upload to various sales channels = 1 hour.

That is 82 staff hours. We’ll assume they get $20 per hour on average (obviously the big editor gets more, but I bet the copyeditor, proofreader, and formatter all get less, so it averages out). I am using $40 as my multiplier to account for business taxes.  The total cost in staff time needed to get my manuscript converted to an ebook and uploaded is therefore 82 x $40 = $3280.

The only other fixed expense is the cover art, which can probably be gotten for $300, but we’ll say they are really concerned and pay more. We’ll make it an even $1000 to add in the five minutes it takes somone to slap on the title and author. 

Total bill is $4280.

Let’s round it up to an even $5000 for easy math and to throw some money toward their office space and equipement for those 82 hours they were working on my book, as well as a few hours of a publicist’s time to send the book to review sites and tweet about it once a day for a couple weeks. 

We’ll assume the publisher uses the mmpb price of $7.99 as their cover price.

Retailers take 30% of that, leaving $5.59 per copy coming back to the publisher. If they pay me 50% of net royalty on every copy sold ($2.79), then we need to sell 1790 for the publisher to break even. If I get 50% of cover ($3.99) then they need to sell 3125 to break even.

If a publisher doesn’t think they can sell more than 3100 copies of my book, they’re not going to buy it. Period. 

That’s why I would not take a deal for less than 50% of digital cover–not net, but cover. The publisher’s monetary investment is not that significant for an ebook (and it would not be extended by a whole lot more to add a print book, essentially just the time it would take someone to format it as a book, which I’ve done via LuLu and would take no more than one day, and probably significantly less for someone who did nothing else all day every day and had a dedicated book layout program versus hinking Word around to get a properly formatted .pdf.  The cost of printing, warehousing, and shipping the books would come out of the publisher/author take per copy. But notice that I am letting the full cost of editorial and artistic acquisition fall onto the accounting for the ebook, with the print being the afterthought.)

Let me repeat that.  Their investment is not that significant. If they didn’t think they could sell 4000 copies and make a nice tidy profit on my book, they wouldn’t waste their time acquiring it. 

And guess what? $2.79 a copy for 1790 copies lands me $4994, and $3.99 of nets me $12,468–or about the range of advance I could expect with a traditional deal as they currently stand ($5000-$15,000). So let me think about this. I could take an advance that comes out of the sales it takes the publisher to break even, and then get something like 25% or 8% (depending on the accounting shenanigans) for the rest of my life on my book…or keep getting 50% of cover price (or 35% if I have to settle for net, AKA half of the 70% of cover left after retail). 

I think I’ll take my formula if I felt a need to go traditional instead of self-publishign. It seems less exploitive, and much more venture capitalistic. They’re fronting production costs and promotion costs, as well as levying their distribution channels and access to legitimizing venues (print book stores, Named Review Sites, etc.), and that probably would be enough of a boost to get me those sales numbers right away instead of four years and eight ebooks from now. That might be worth it to me.

My prediction is: this kind of split is how publishing houses have to go in order to survive the digital revolution. If they can add a legitimizing value to consumers who don’t want to have to vet for quality, only content, and can get immediate access to promotion avenues a self-publisher can’t or has to be very lucky to hit, then they might remain worthwhile business partners.  But right now, an author demanding 50% of cover on digital would get laughed out the door, unless their last name is Rowling or Meyer or King or McCarthy…and possibly even then.

_______________________

*For some alternative perspectives: 

I have heard from a couple people, including someone who freelances as a copyeditor for traditional publishers, that my times and rates on the editing are low. Way, way, way low. Transparency: I haven’t worked that job. I don’t know how long it takes others to copyedit and proofread; I only know how long it takes me. The rates I used were also a guess, and low according to the EFA. Thanks to those who offered their perspetives on the matter, here and via email and over at the Passive Voice Blog when Passive Guy linked to this article.

For a different breakdown of cost Kristine Kathryn Rusch has an essay which ends in a very different figure.

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9 Comments

Filed under Digital Revolution, Publishing

9 responses to “How Much Does an Ebook Cost a Traditional Publisher?

  1. Or you could just go through a press like Lucky Bat Books, pay less than what you’ve outlined up front and keep all your sales money (and not have to license any of your rights either). There are a lot of businesses popping up to fill the niche between self-publishing and traditional publishing. I don’t think it’s just either/or anymore. Writers have an opportunity to be the ones picking and choosing now. It’s a great time to be a writer!

    • An excellent point that there are business opening to provide authors who don’t want to do anything but write, while still bypassing traditional publishing avenues the means to do so. But the numbers I am using above do no in any way reflect what the cost of self-publishing an ebook is or should be. I am estimating the cost to a publishing house with their set protocols and expenses. If you’re self-publishing and outsource editing and cover, I think the cost should be more like $1000. The cost does not have to be anything, though, if you have the right group of beta readers and a friend (or yourself) familiar with Photoshop…or the willingness to learn.

  2. I can’t speak to editing and layout (eBooks have dreadful, designer-spiting lack of typography), but a k-buck buys you a poor cover. Good design requires the designer to think about the design, do some research, hire an illustrator or arrange a photo shoot, find the right font and layout for the text, etc. There almost certainly is an art director involved who works with the designer to make sure everything is perfect.

    (An example of a book with what I think is perfect cover art is Ian McEwan’s Atonement. The photo is perfect. http://www.ianmcewan.com/bib/books/ All of his covers from The Innocent on are great. The earlier ones are dated, but were good design at the time. And I love the Antonioni reference on the cover of The Innocent—Wow!)

    No design is going to come out of a major press without the design team producing multiple iterations to explore different possible design paths. Just like writing, good design takes a lot of thought. There’s also working with the writer, the agent and the editor, making sure that the people who know the content ensure the design conveys the feel for the novel, while diplomatically working around ideas that might work in theory, but not in practice.

    While I don’t write back matter, I don’t think a good copy writer is going to whip out such important text in an hour. It’s as long as the typical opening paragraph. How long do you spend on that? And they have to condense a huge amount of information into a little nugget that reaches the reader.

    I doubt the other people in the process are rushing through as quickly as you imagine them, either. If self-publishing gives you what you want (more reader, more money, more control, or whatever), that’s great. I’m happy that option is there. But I fear what it will mean for the overall quality of books when the professionals are maginalized.

    The cost of books is rarely a barrier for most readers (they can go to the library and get books for free!): they’re limited by time. If self-and digital- publishing drives the people who most love books; who have developed the skills to edit, guide and coax acceptable plots and prose into great novels; who know how to create a cover that speaks to readers; if they all disappear, all readers will be poorer for it.

    • You are kind of spotlighting the inefficiencies of the trad pub model.

      $1000 buys a damn fine cover if you think outside the box of “accepted because we have worked with them before” cover artists–get on Deviantart for an hour, you’ll have several digital amateur artists who would be more than happy to license you an image for that, or less, or do one on commission. And there is also an element of “perfect being the enemy of the good” at play. Is the cover good enough? Good. That’s good enough. Anyway the theory that hours and hours and hours went into every cover is actually quite laughable when you see some of the covers out there, especially in romance (which is what I write). An entire art team spent days on this cover? http://www.amazon.com/Exposing-Casey-Deanna-Lee/dp/0758214871/ref=sr_1_1?s=books&ie=UTF8&qid=1328073340&sr=1-1
      What were they doing–calculating the precise percentage of crack to show to keep it naughty but not off-putting?

      Back matter is like…250 words, and they follow a formula. I could write three different versions in half an hour, spend five minutes with the head editor to choose the best direction, and have 25 minutes to tighten and polish. It is not a process that takes days, and if it is then you are making it way too complicated.

      Same with editing. If an 80K book needs more than 40 hours of editing (before going to copyeditor and proofreader) then you are acting as a book doctor not an editor. 72 hours of editing is not a rush job. That is nearly two weeks’ time spent on one book that was almost there to begin with.

      “If self-and digital- publishing drives the people who most love books; who have developed the skills to edit, guide and coax acceptable plots and prose into great novels; who know how to create a cover that speaks to readers…”

      You mean writers with talent, dedication to their craft, and perseverence? Because self- and digital publishing are GREAT for those writers.

      • “‘If self-and digital- publishing drives the people who most love books; who have developed the skills to edit, guide and coax acceptable plots and prose into great novels; who know how to create a cover that speaks to readers…’

        You mean writers with talent, dedication to their craft, and perseverence? Because self- and digital publishing are GREAT for those writers.”

        Having talent, dedication and perseverance as a writer doesn’t mean you know anything about copywriting, marketing and design. Those are all distinct skill sets. Since I work in the design field, I know how many people THINK they know about design, or even what they want. They largely don’t, and after they’ve paid a lot of money to get what they didn’t ask for, are damn happy that somebody who did have that skill set and the talent, dedication and perseverance to arrive at an answer they never could have arrived at themselves.

        As I said, I’m happy to see more options for writers who have the particular skills necessary to self-publish and succeed at it (although I fear the economics of $0.99 and free books may make writing an even less viable career for novelists). But I also value the skills of the people who have been in the industry and know what they’re doing. They aren’t the executives; they’re the tradespeople who have done a huge amount for readers.

      • First, let me point out that not everyone who writes and decides to self-publish doesn’t have a background in any of these skills. Marketing was a sexy major when I was in college–plenty of 30-ish writers could have studied it back then…creativity tends to draw like to like, so plenty of writers could have taken visual art classes and extrapolated visual composition techniques useful in cover design…if a writer went through an English program with no creative writing and had to take a lot of rhetoric & comp classes to learn they would come out grounded in how to self-edit.

        I am not trying to say there aren’t different skill sets involved, or that attaining a professional level is as easy as simply trying it. The same with writing itself, learning skills like cover design, interior design, copywriting, proofreading takes study and practice, and to get to the professional grade requires a lot of practice and training in techniques.

        That being said, though, attaining a competency in any/all of them is very possible by reading some theory and practicing. I mean, I get that the philosophy of “good enough” is kind of stomping on professional standards, but the fact is the average reader can’t tell the difference, and if you’re writing something aimed more at entertainment than any sort of high-brow Art, the difference matters even less. I write romance, which gets read voraciously and in high volume, and only the special books get re-read. I would love to have a book people re-read, but to me the way to get there is to write a great book and then get out of the reader’s way. That (the getting out the way…they can decide about the book, lol), I can do. :)

  3. P.S., how do you pay less than a $1,000 for your cover images? When I investigated using old paintings for my cover, the minimum I could license them for was $500, and that assumed a short-run of print-books. Are licenses for eBooks that cheap? If you’ve got a license to publish 10k books, I’d expect that to top $1,000 alone.

  4. Aloha. Your blog and the ensuing discussion are quite revealing. If anyone wants to know what the mood is out there about the greatest shift in publishing since Gutenberg invented movable type, this is the stuff to read. Gutenberg brought about a technical revolution. He didn’t initiate, I think, a substantive change in the relationship between an author and the public or between the business of publishing and the public. The dynamics involved are human ones: some authors try to do the best they can; others are hacks. Some publishers care about providing well-made and well-edited books for the public; others care only about the bottom line.
    The digital revolution we find ourselves in hasn’t changed any of that. What it has done, for a brief moment, is allow the author to think that he or she is in control. I say ‘brief moment’ because it won’t be long before someone comes up with a viable business model for making books in the 21st century. When that happens, authors and illustrators, who aren’t business people and who possibly hate dealing with the details of bookmaking, will flock to these revamped publishing houses. Right now, it is power to the author. Down with the publisher. For years, publishers have been getting away with murder. Their contracts have become less and less favorable to authors. Their marketing divisions downsized. And now that brick-and-mortar stores are disappearing, the publishers have no where to sell their books and thus less of a lure with which to reel authors in. So, I, a children’s book writer and illustrator, who can also design books, find myself, like you and your readers, in the midst of this revolution. Man, so many opportunities! So many possibilities! So much that doesn’t make sense. Unfortunately, unlike those who write for adults, this revolution hasn’t yet transformed children’s picture books. The technology, whether in the quality of print-on-demand books or or in those displayed on the various devices is just not good enough. Double-page illustrations, which are an essential element of children’s picture books, are divided by a distracting white line in POD books. They are impossible to maintain in Kindle and Nook. Only iBook seems to be sensitive to the problem with its higher functionality. So, for me, this revolution is not complete. Even so, it is absolutely necessary that I embrace it. The publishing industry has contracted so much that publishers are very reluctant to sign contracts or offer the advances they once did for picture books. My next book (published through an imprint of Macmillian) is a picture book about Gutenberg and fifteenth-century bookmaking. How ironic!—for it may well be my last through a legacy publisher. From here on out, I may have to go it alone. Fortunately, I have the skills to do so. Unfortunately, no one’s directing a flashlight on the road ahead. Aloha, James Rumford

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