So You Want To Earn A Living Writing Fiction
Published By Joe Solari
What you're about to learn;
- Why more writers are able to earn a full time living.
- How do you separate yourself from the pack and become one of those authors
- Why Treating Your Writing Like a Business makes the difference?
This guide will explain what is behind a successful publishing business and how treating your writing like a business creates significant competitive advantage. This is a portion of the material I've compiled through research and my work with six and seven figure authors.
Do you imagine one day you'll produce all your income from writing fiction?
I would like to help you understand the changes over time and the pros and cons of traditional and independent publishing.
To do this, we need to get into the Wayback Machine and revisit the 1990s…
It’s 1993, and you're running Windows NT on a new Pentium processor and doing Altavista web searches on your new broadband connection. You find a news story that Barnes and Noble have gone public.
Back then when a Barnes and Noble opened near you, it was awesome.
If you were like me, you met friends there and browse the stacks, building up a pile of books to thumb through while you drank coffee in the cafe.
Barnes and Noble overgrew the market, and as quick as their big-box book stores were popping up, so were the disputes and stories of the end of an era.
Articles announced the death of the independent book store.
That B&N would do what Blockbuster did to the local video store. These stories were driven mainly by big publishers that were in disputes with the retailer because of its demands around placement fees.
Let me introduce a significant point, one that we will revisit and is critical for any author to understand.
All revenue is derived from the reader.
The entire publishing industry is predicated on the revenues that can come from readers.
After the point of sale, it's just a matter of who gets what cut.
Back to the Story...
At this point, nothing has changed for authors. Your path to making a living from your writing was the same. You needed to get a publishing deal. That meant submitting your work to agents in a hope to land an agent.
A determined writer wrote a lot of words. The actual product and then submission letters.
Acceptance by an agent did not secure a book deal. The agent had to convince an acquisition editor that the manuscript fit the editor's publishing portfolio.
Any publisher that operates as a for-profit business, looks to deliver a return to investors.
The publisher's only obligation is to find and publish books that sell. Not find the most artistic or diverse work. They want to identify all the books they can publish profitably.
One limitation of the business is how many books they can review and edit.
The gatekeepers (a somewhat dirty term) were people reviewing and making decisions as to what they thought would sell.
Added pressure was on the acquisition team because the publishing companies were also consolidating through the process of leveraged buyouts. This meant that a portion of their profits would need to go to debt service in the future.
Banks, mezzanine debt and private equity funds were now at the table looking for a portion of the reader revenue pie.
So here is where we are are in the story so far:
- The number of retail locations are shrinking.
- Publishers are fighting with retailers over how much of the pie each should get.
- Authors have to find agents then the agents need to convince editors to buy a book.
Around the same time...
Now imagine you’re a wealthy individual looking to invest in technology companies.
You agree to take a meeting with a man looking to raise one million dollars for twenty percent of his startup.
Back then, this guy couldn’t go on Shark Tank to raise the money. He had to call on friends and family.
Here is the pitch…
“My company will sell books online. We will sell them at a discount because we will not have any retail locations. We will operate as a warehouse. We will use this new search technology like Altavista (the google guys are still in school) to help customers find the book they want.
You see, there are three million books in print, but the average big-box book store only carries 175,000 titles. We will have a competitive advantage because we will have a lower cost structure and a more comprehensive selection. We don’t have to stock every book everywhere. We will have only a few locations and ship media mail or drop ship from the publisher.”
You look him up and down. He is passionate and driven, maybe a bit crazy.
You think to yourself, Why would anyone buy online, and how the hell does this guy think he has a chance against a well-capitalized competitor like Barnes and Noble?
“No, thank you,” you answer.
The following year Jeff Bezos formed the company that would be known as Amazon.
In October of 2004, Wired published Chris Anderson’s Long Tail Article. The article points out that at the time, more than half of Amazon’s book sales came from outside the top 130,000 titles. Validation of the Amazon Bookstore model.
Amazon Website Circa 1998
From a competitive standpoint, Amazon was making a dent in the market share for the top 130,000 titles where competitors were getting 100% of their sales. At the same time, Amazon was getting added sales from a new surplus market (the long tail) where there was no competition.
Amazon wasn’t the only example at the time. Netflix was doing the same, getting one-fifth of its revenue from outside the top 3,000 movie titles.
Erik Brynjolfsson et al. (2010) researched Amazon’s long tail in the book market. They came to a conclusion that “niche books account for 36.7% of Amazon’s sales, and the consumer surplus generated by niche books has increased at least fivefold from 2000 to 2008.”
The profitability in the niche and lower volume markets got even better through the successful launch of eReaders. With a subsidized reader and the Kindle Direct publishing platform in November of 2007, the publishing world had all the parts in place for a massive paradigm shift.
Again the stories were coming out that another large retailer was the source of a publishing apocalypse. Amazon was now the villain, and it was going to be the cause of death of the local book store and quite possibly the written word.
Subtext; This was the same issue as before, publishing conglomerates fighting over pie slices with the retailer.
Not because Amazon held all the power, but the combination of the three Ds.
Democratization Disintermediation Discovery
These forces would unlock a market based selection of winners and losers and tap into the enormous unmet customer demand for genre fiction.
The importance should not be underestimated. The act of democratizing the publishing market opened up the supply side of the market. By providing direct access to authors, there was nothing to stop anyone from publishing their work.
Did this mean anyone could publish any Sh*t the wanted?
And the public would vote with their hard earned dollars as to what was worthy of their attention.
It meant that works that previously couldn’t get to market could, and if there was the demand for that supply, more value was created.
The allowance of the market to determine winners and losers created new genres, allowed authors to serve underserved genres, and meant authors could react to consumer choice faster.
This is when the narrative sometime spins to how traditional publishing should get the L for missing this opportunity. This isn’t a fair assessment.
It’s like saying, “Why didn’t the Roman Legion ride bicycles? Come on, everything was in place for them to invent the bike, why didn’t they?”
At this point, Amazon hadn’t done anything new. None of the business model was novel. One could even argue that the reason behind the addition of democratization was to deal with publisher's resistance to the digitization of books.
Why it was added doesn't matter as much as it was now a component of the marketplace, and that created a nearly perfect market.
Disintermediation is the removal of middlemen.
I refer to middlemen as friction between the reader-writer relationship.
Disintermediation has been an enormous value creator for consumers and producers.
With fewer people looking for a piece of the pie, the pie can be smaller, and this mini pie still satisfies.
Disintermediation does have its drawbacks - Without a publisher, the author becomes the publisher.
The extensive work to get a book ready for the market and to market the book to an audience falls to the author.
The flip side is without others doing that work for you, they don’t need to make a profit. So all of that associated profit becomes surplus for the author and reader to split.
This one shift lowered the floor for the number of books an author needed to sell to support themselves.
Discovery becomes essential because as the tail gets longer, meaning more sub-genres and niche interests, the harder it will be for a customer to find their ideal product.
Keyword search along with product association (sometimes called also boughts) are some of the current tools to help solve the discovery problem.
Discovery will be one of the most significant issues for new authors as they fight the forces of increasing titles, increasing categories, and increasing the cumulative advantage of other authors.
I have no doubt that new technologies will develop to help connect a consumer with the right product.
Democratization allowed more potential authors to enter the market.
Disintermediation lowered the threshold for the number of copies that needed to be sold to make a living as an author.
Discovery helps writers and readers to connect.
The Efficient Market Theory (Fama 1960) asserts that in the a market at any given time, that price reflects all the known information.
The Iowa Electronic Markets have predicted the winners of presidential elections through the use of predictive markets.
Market-based solutions provide the most efficient methods of consumers and suppliers to connect and transact.
Who knows what the future holds, but for the foreseeable future, Amazon is where the market for books (digital, print, and audio) will be made.
The marketplace has,
- The largest selection of in-print titles.
- Amazon ranks books by sales and popularity in a hierarchy.
- The ranking is reevaluated on an hourly basis.
- Amazon provides a category system and then ranks books within those specific categories.
- Amazon similarly provides Author ranking as books.
- Amazon has limited criteria for what products can not be published.
This market will determine winners and losers not the method of publishing.
What should an author choose as a method of publishing?
- They share costs.
- They share in the profits.
- They can access markets that may not be as big as the Amazon space, but when added together are significant.
- You need to be selected by the publisher as a worthwhile investment.
- If you’re an author that doesn’t want to do all the publishing work, then having a publisher makes sense.
- Smaller imprints may have genre expertise that others don’t.
Don’t forget there is an icky group of vanity publishers that still exist. If anyone requires you to buy copies of your book or pay them - Run!
If you think your product merits a place in the market, then prove it. The costs to get into the market are negligible.
- You have to do all the work
- You bear all the financial risk
- You reap all the financial reward
- You improve your chance of getting offered a publishing deal and a better deal as you have proved yourself in the market.
Traditional and indie publishing are paths to market NOT the market.
You need to evaluate what path gets to market has the least obstacles.
If you feel you’re not getting a fair shot with publishers, then prove them wrong and publish independently. It is absurd to expect others to risk their capital on your ideas if you’re not prepared to put your own skin in the game.