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The Math on Self-Publishing: A Response to Laura Miller

In her thoughtful response to my feature in Wired on the book business, Laura Miller challenges my prediction that a big-ticket author will soon self-publish by arguing that, as the sub-headline of her piece puts it, “Big authors want to be in print—and bookstores.” But embedded in this argument are some questionable assumptions and interpretations.

Miller points out that there is some evidence that independent booksellers are seeing a resurgence and writes that the growth of ebooks “appears to be leveling off.” These are accurate statements and I’m glad she’s added them to the discussion, but they lack important context that puts a damper on their significance. As for bookstores, look at what has happened in the last three years.

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Physical bookstores are in dramatic decline, and Amazon and other online sellers are (still) dramatically on the rise. If we were to look back a couple of decades, we would see a big decline for independent booksellers—which I too lament, by the way—but they have clawed back a bit of market share since 2010, going from 2.4 percent to 3.7 percent. That is not anywhere near enough, however, to counter the decline in sales from chain stores.

As for the slowing of the growth in ebooks, I would note that according to the latest numbers the yearly gain in ebook share is “only” 20.7 percent, while the overall market for publishers’ books is down. Adult hardcovers are down 21.5 percent. What direction are books headed in, then, print or digital? Given that it is true that ebook growth is not what it was, perhaps at some point ebooks will hit a plateau, as Miller and others have suggested. But we are not there yet. And even if a plateau comes, whether it will be at 30 or 50 or 70 percent matters a great deal in the calculus over whether prominent authors will decide to self-publish, which is ultimately what Miller is disputing.

Let’s look closely at that calculus. First, Miller states as fact that “to switch to Amazon-style self-publishing would mean getting shut out of bookstores.” I am not sure what she means by “Amazon-style self-publishing,” but whether a self-published book by a major author would be boycotted by physical stores like Barnes & Noble is an open question. Some self-published books are already sold in stores (as Hugh Howey’s was, before he signed with a publisher). On what principle would a best-selling author be blacklisted, at a significant cost to the store? Barnes & Noble’s stated reason for refusing to carry Amazon Publishing titles—not self-published books, but books published by Amazon—is that Amazon Publishing sometimes insists on ebook exclusivity, shutting out B&N. That objection would not hold if a self-published author were publishing on a variety of platforms (Nook, iBooks, Kobo, etc.), and any self-published author has that right even if he or she publishes on Amazon. (If the author chooses Amazon’s KDP Select program, she agrees to ebook exclusivity for a window of time in exchange for a higher royalty rate and other benefits, but that is only an option.)

OK, but what if I stop nit-picking and just grant that a self-published author would sacrifice all physical-store sales. It is still not clear to me that no major author would make a move to self-publishing, as Tim Ferriss allowed to me that he might. Miller heavily emphasizes the fact that print books still account for about 75 percent of sales. But online stores sell print books, a ton of them and a growing share. What’s more, the ebook piece of the pie varies significantly by genre. 

Let’s take the example of Gillian Flynn, author of the hugely successful, traditionally published Gone Girl. In what ought to be something of an eye-opener, the book sold more ebooks than print copies in 2012. This despite the fact that the ebook and the hardcover cost about the same on Amazon, $12.99 and $13.75 respectively. Now that Flynn has an established reputation, she might well think about this: she could self-publish her next book at a lower price, boosting sales, and still make a lot more money per book. If she agreed to Amazon’s KDP Select program, she would make $7 for an ebook priced at $10. Currently, if her contract is standard (as it likely is), she makes $3.75 per hardcover book and less than that per ebook. Furthermore, she currently stands to make much less per copy on the paperback edition, again assuming a standard contract—probably $1.27 at a theoretical $17 cover price.

Would the financial advantages of self-publishing be enough to counteract Flynn’s losses on physical stores and the price of a crack editor and publicist? Maybe not, but it’s hard to say because physical stores overall are in precipitous decline—and it will get harder to say as ebooks continue to gain market share. You see where I’m going with this, and I think authors and publishers see it too.

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Update: I’m told by Sarah Weinman that Gillian Flynn is already under contract with Gone Girl's publisher for her next several books. But she was merely an example. The first major author to self-publish would likely come either from the highly tech-savvy world (where Ferriss for instance is a native) or from the romance or thriller genres, where ebooks are particularly popular. I don't know the contractual statuses of these authors, either, but other possible examples would be Barry Eisler, who already nearly self-published, Nora Roberts, Janet Evanovich, and David Baldacci.

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