Pay\’in For It: How should writers pay for help with self-publishing?

In the wake of Barry Eisler and Joe Konrath\’s discussion of Eisler\’s move to self publishing (turning down a $500,000 contract in the process), Dean Wesley Smith has posted some thoughts that he disagreed with their views on how to get help in those bits of publishing a writer wasn\’t able to do, or didn\’t want to do: things like covers, formatting, and uploading the books.
Today Dean, Joe, and Barry all posted a chat they had where they discussed these different opinions. Dean insisted that these services were \”day labor\” and that authors should resist paying a percent. Joe was adamant that they were worth a 15% fee to agents-turned-book-packagers who would take your book, edit it, slap on a cover, format it, and put it up online, managing the book and sending you a check when sales came in. Barry sort of took a middle road.

I am firmly on Dean\’s side in this issue. There\’s so many holes in the percentage idea that it would quickly turn into a nightmare, I think. Let me hit some of the major points here.

Two Models Enter – One Model Leaves

Right now there are two models for author service companies out there. One model is represented by places like Telemachus Press. These companies take the manuscript, and for a set fee that the company and author agree on, they edit the ms., create a cover, format it for print and ebook, and then give all that finalized work to the author. In some cases, I understand they have helped authors set up accounts for uploading those materials, or even uploaded them – but in the author\’s name, not the company\’s name. So income flows directly to the writer with no middle man. The writer retains full control of the work. And the company gets a nice fee for their work on producing the book.

On the flip side of the coin is the subsidy press. This is exemplified by places like Abbott Press, Westbow, iUniverse, and others. They take a hefty up front fee from the author, AND 50%+ of the earnings from the books as well. This is pretty obviously not as good a deal for writers, since they pay on both ends. But this, or something very close to this, is what agents are looking to move toward. They aren\’t looking at taking 15% for doing a full package, Joe. They\’re looking at 50%. Every time I\’ve seen an agent blog about this and mention a number, it\’s been about 50%.

This IS the model a lot of agents want to move toward. They see the writing on the wall. They know that agenting as it existed in 2008 is a dead man walking. Some old style agents will survive to help manage deals with legacy publishers, but most will be losing their jobs soon. Being able to take those self published books that are costing them their old jobs, and earn 50% of the profits, would put them back into a good way to make a living from author\’s work again.

It isn\’t about 15%. Nobody is offering that.

But these models are mutually exclusive. If enough writers refuse to use the 50% packagers, then the one time fee companies will thrive and that will become the dominant model. If enough writers get sucked in by agents using their current pedestal placement to take 50% of a writer\’s profits, then eventually the one time fee companies will get in line too – they\’d earn a lot more using the 50% model, so if it\’s working, why not?

And that\’s why it bothers me when well known writers like Joe espouse a percentage model. Because Joe, like Amanda, Dean, Kris, Zoe, and a number of other folks out there, influence hundreds of other writers and would be writers. What Joe thinks is OK will have impact on the future of publishing in general, because of all the other writers who will listen to him and follow his advice.

The percentage deal would leave us all worse off than the old traditional publishing model.


I Trust My Agent

I almost spat Coke all over my laptop when I read this. Direct quote from Joe. \”I trust my agent.\” Also a direct quote from Dean – in one of his \”Killing the Sacred Cows of Publishing\” essays, where he debunks that myth. You don\’t trust someone in business, not if you want to stay in business. You build contracts, and you build ways to ensure both parties are following the contracts into those contracts. Without this, a business arrangement becomes a way for one side to take advantage of the other. It won\’t happen every time, of course; some people are ethical enough to avoid taking advantage even if they can. But it will happen, and often, if the deal is not evenly balanced.

If you go with a legacy publisher, you have the ability to audit them. You can check their accounts, make sure that they\’re paying you what they\’re supposed to. This has historically been somewhat more difficult when dealing with agents. Agents taking up the mantle of packager/publisher would have to open themselves to the high level of scrutiny by their partners, the writers. I\’m just not convinced I see them doing that. Why should they? It\’s not part of their business model now, and \”trust the agent\” is so ingrained in writers today that I doubt there would be a huge call for it, not until major problems surfaced.


A Percent For Day Labor

Dean and Mike Stackpole have both talked about this quite a bit. Dean likens paying a book packager a percent to giving someone a percentage of your house to trim the hedges. I think that analogy breaks down a little, so let\’s use one that is closer to the point:

It\’s like a movie production company paying a percent of their gross receipts to the company making the posters that hang in theaters, or to the guy who drew the movie\’s logo. It\’s like an artist paying a percentage of auction sales to the person who made the frame for a painting.

But in a way, it\’s worse than those things, too. Because the artist would only pay the percentage once, when the painting sold. And when the movie left theaters, the percentage to the poster company would dry up. But an author who pays a percentage for book packaging pays it forever – for the life of the book, which could be decades, or could extend past the author\’s life. A writer\’s kids or grandkids could be dealing with that packager and whatever problems have occurred over the intervening years. Especially with so many of these places being small businesses, this is a potential nightmare in the making.


More Time to Write

My jaw pretty much dropped when I read this, too. Joe, you really need to go read Dean\’s Sacred Cows essays. (grin) They\’re good stuff, and you might find some eye openers there. Joe is a smart, canny guy – but I kept seeing him parrot Myths that Dean has been busting in his essays for a while now.

Joe\’s math is wrong.

He says that each project takes him 10-15 hours to get cover, formatting, descriptions, uploading, and corrections of problems done. He also said he\’d done 13 original properties in the last year, and that packaging those had cost him time, enough time that at his writing rate (750 words per hour) he could have written an additional 97,000 words of fresh material in the last twelve months.

So Joe wants to give out 15% of his income for earning back 130 hours of work.

That only makes sense if 130 hours is more than 15% of your total annual work hours, though. Which is only true if someone is working 867 hours a year or less. That\’s 16.6 hours a week of work.

So if you\’re working more than three hours a day, five days a week? Then 15% is too much.

And let\’s not forget, these agents are the ones who want to charge 50%, not 15%.


Employee or Percentage?

Dean suggests hiring an employee to handle the tasks you want to delegate. Joe suggests paying an agent a percentage. Joe asks \”What is the difference between hiring a fulltime employee (who you will need forever) or paying someone 15% forever?\”

The difference is, the employee is not forever.

If you have a disagreement with an employee, you can fire that employee. If you dislike a book packager, depending upon the contract you might not be able to withdraw your book. Places which charge up front fees (subsidy presses I mentioned above) let you withdraw the book whenever you want (but generally bar you from using their packaging, formatting, and cover). They can do that because they charged an up front fee, so they are carrying no risk.

But a packager who is not charging up front fees will demand a contract of a certain minimum duration, or minimum sales number. By not charging up front for packaging, they take on risk, and therefore must have some way to ensure they get their money back on each book they do.

So no backing out if you have issues with them. You\’re stuck, just like in legacy publishing.

Suppose you decide to retire in twenty years, or thirty years, and not write anymore? You can lay off the employee. That cost vanishes, and your royalties continue coming in, unencumbered. But with the percentage model, the packager collects those fees even after you retire. They continue collecting their share even after you die. They continue collecting, potentially, for a very, very long time.


Packager as Brand Label

Joe says: \”There’s a concern that the ebook market will become glutted with poorly written crap. A savvy estributor, who only releases edited, formatted, polished material, could very well become a brand label. Much like a publishing imprint. A book released by ESTRIBUTOR X could have a logo which automatically signifies to readers that this ebook has been vetted and is quality. I believe, in the upcoming years, such a stamp of approval could become very valuable.\”

And he\’s right. There\’s plenty of things out there which could cause the market to swing in bad ways for indie writers. But if you\’re going to a packager because you want to be seen as \”vetted\”, then you aren\’t really indie publishing anymore, are you? You\’re back to a new legacy publisher again, with all the trimmings. Once begun down that dark road you have, forever will it dominate your destiny, and all that jazz. (grin) Once you hand packagers that level of control because you believe you need them to get readers, you hand them power over you, and lose your ability to confront them as equals.

It\’s possible Amazon will be forced to \”stem the tide\” of bad novels someday. I mean, YouTube hasn\’t needed to, but it could happen. I always thought that if that happened, Joe would gather \’round him a bunch of other bright people and found a collective of indie writers who produced books together, forming a sort of \”indie collective\”, vetting new members for quality, and using the collective name as a brand that gave that set of indies stability, reputation, and power.

It\’s what I\’d be looking at.

Anything less is simply clipping on a fresh collar and handing the chain to a new master.


Bottom Line?

The bottom line is that publishing is changing. Indie publishing opens new doors and new opportunities for writers. Not the least of those opportunities is that because there are now alternate options for publishing a book, writers have a better potential bargaining position with legacy publishers than they have had in decades. We have the ability to write and publish what we want, and the power to help guide the sweeping changes taking place in the industry today.

But when we pay a percentage to someone, we lose some of that control. We take a step back from that power. I\’m not saying that there is no time for a percentage deal. Suppose you were making a multi-media book, with music, special programming, and video elements. Is it reasonable to pay the other creative artists a percent for a shared creative effort? Much like a co-written book, it certainly could be. And of course, you\’re sharing royalties with legacy publishers if you use them – which can be incredibly beneficial under the right circumstances.

But as a general rule, for your short stories, novellas, and novels? Why would you pay a percent for something you can get for a flat fee? And just as important, if you start paying a percent now – will the places who offer a flat fee still be around in five years, or will the entire industry have moved back to a percentage model, where only those writers who submit and are accepted by agent-packagers or legacy publishers can see their books in print?

We have the ability to shape these changes. So do legacy publishers, and even more so do agents (because of their position of trust with so many authors, and because they already tend to understand business much better than writers). If writers today are not wary about which changes they accept, the future could easily be one where writers have merely traded one boss for another.

14 thoughts on “Pay\’in For It: How should writers pay for help with self-publishing?”

  1. Fantastic post, Kevin. I saw and read it on Dean Smith’s blog, and I just had to come here and tell you how highly I thought of it. Your blog is now going to become an official part of my “must-read” list.

  2. I agree, though I do wonder about percentages for a limited term.
    Say there were a company that could help an author with any of the things that a book needs to be ready for self-publishing, piecemeal or everything. Then they figure their total cost to provide all of the services the author wants and add on a percentage to create a profit margin.

    That amount is then charged as a fee, but that fee is not paid up front. Instead, the company takes half of the author’s royalties until the fee is paid. Because there is some risk that the fee would never be paid, the company would have to do some vetting, which would also provide that “seal of approval”, if possibly to a lesser extent.

    The authors who choose this “assisted self-publishing” wouldn’t have to give up any rights or control. If they want more help with certain things, then they can buy more services. If they only need help getting a good cover, for example, then of course that’s cheaper and less risky for the company.

    Maybe the author could buy more services later, like a new cover or get some banner ads made or something.

    This model could work for either authors who want some help with the “business end” or who just don’t have the funds up front to pay for everything. It’s a theory.

    1. Ed, I agree that a percent with a cap would be great for writers. Even if the going rate on editing and packaging was say, $3000, and the percent til cap was 50% of your earnings til they made back $6000, it might be a good deal. It would cost more, but the expense would be over time, instead of up front.
      The problem is, I’m not sure you’d get anyone offering that deal. At that point, the company is taking on high levels of risk (what if your book only sells 100 copies ever?) with no guarantee of reward. The cap would have to be fairly high to make it worth their while. I think most folks would rather have cash on the barrel.

      The other problem is, it’s hard to make it work right. If the company is going to take a percentage off the top until the cap is reached, the book needs to be uploaded in the company’s name (not the writer’s). What happens when the cap is reached? Do you take the book down and re-upload it in the writer’s name, losing your ranking, star rating, and all reviews?

      Probably not. Which is why the company would end up with some form of “take care of me” for those writers – probably forever – and most likely with fingers in the pie for some share of profits as well.

      1. Great post, Ed, but I disagree with your distribution approach to capped percentages in your comment. I don’t see any reason why a book would need to be reissued once a cap was reached or why it would need to be under the company’s name in the first place. The author is still the publisher, he pays the estributor and tracks sales/payouts until the target is hit. That’s something all publishers do now with royalty payments, so it’s just a matter of an author sitting in that chair.
        That isn’t to say it’s a desirable arrangement. Service providers like working on spec little enough. If they have to then expect to deal with a “flaky author” rather than an accounts payable department to make sure they get their recurring checks, I can’t imagine they’ll be happy. It also means the author, as the publisher, has to either be or hire the royalties management service. Managing royalties is, to put it mildly, a pain.

        For simplicity and sustainability, doing a flat fee as a work for hire is unquestionably the best route. Then the author (as publisher) owns everything, and they get what they get.

        The hurdle of financial risk is significant, though. Getting other people to take on your financial risk in a highly unpredictable market is tough to do without offering high potential upside. The 50% deal you discuss, after author up-front payments, is unreasonable, particularly because the author gains little/nothing vs. traditional publishing and loses money. 15%, though, may be too low. It is absolutely a great emotional number from an author’s perspective. I’d expect an actuary would say it’s low.

        1. One thing to remember, though: the person or company to whom the money flows from the retailer is the publisher.
          If the money is flowing to the packager, because the packager uploaded the book, then the packager is the publisher, and is paying the writer a royalty on the book. At that point, you might be getting better terms, but you’re just dealing with another legacy publisher, with all the potential long term issues of control again.

  3. Hi 🙂 Your post is very interesting.
    I posted this response on Dean’s website:

    I can understand Dean’s point of view regarding the percentage. And I tend to agree up to some point with him.

    However, Joe and Barry have some arguments in place which should be taken into consideration too.

    I tried to put myself into the formula, as a former financial auditor and a business consultant.
    1. No matter how savvy and do-it-yourself someone is, there is now way that a person could do or last for long doing everything on his own. At some point he/she has to seek help. I’m the same and also somewhat a control freak. But over the years I had to admit that I must delegate work to other persons too and just keep the final approval. It’s the way of a company to function properly. Delegation of work and authority is a golden rule in business success.

    2. Additionally, no matter how many seminars they take, many people do not have what it takes to be business savvy. Up to some point, it can be learned, but from that point it’s a matter of inclination. So not many people can be as you three are.

    3. There is a good point in Barry’s and Joe’s opinions, the aspect of motivation. Magicians were named by Barry. Those magicians need incentives and motivation, and that is translated into percentages. Moreover, many authors do not have at start the amounts to invest in flat fees.
    Additionally, Barry has a very good point, with the material value of the house. Gardening is not a capitalized expense. But organizing and promoting an intellectual property will be capitalized, as being an improvement to the asset and thus its value.

    The main conclusion from all the discussion should be that many authors should assign part of the whole business of self-publishing to other persons. Even those who can do it themselves, should delegate some of the work, if for nothing else, to have some time to rest or do other things. At some point, one person would not have the time or the energy to do everything.

    As for the payment, I agree with Dean, but with a difference. Percentage should be given by those who consider it a better alternative, but not for life. Contracts have clauses and an adequate clause should be made for the duration or amount of the percentage. So the percentage can be used as an incentive or a necessary alternative, but within limits.

    Thus I agree with you, but not 100%. Sorry for the long comment. 🙂

    1. Jacqvern,
      I agree that not all – not even most! – writers have strong business skills. I’d suggest they start working on them, because writers without business skills are going to find themselves with “prey” signs hung around their necks pretty soon, I think. A lot of new businesses are springing up to take advantage of those writers, and it’s going to get really ugly for them, I think.

      But it really doesn’t require a lot of business savvy. Some, but not a lot. You take your manuscript. You go to a company that offers to edit, draw a cover, and format the book. You pay them a one time fee. Then you take the files they provide, and spend perhaps as much as an hour uploading them. And – you’re done.

      These things are virtually fire and forget. 😉

      Once your book is up, get back to writing the next book. You might do some marketing, but if so you’re going to do that no matter who publishes it. Giving over control of the upload – and thus, control of the book itself, of the revenue stream – isn’t saving you much time. And giving a percent when there are companies willing to do it for a flat fee just makes no sense to me.

  4. Kevin:

    …because writers without business skills are going to find themselves with “prey” signs hung around their necks pretty soon, I think. …

    LOL, what a picture…The thing is what will be hanging over their heads…:D

    I liked your phrase very much

  5. Your Hollywood analogy got me thinking.
    Well, not thinking, but maybe almost thinking. No conclusions yet, just associations.

    We shouldn’t emulate Hollywood’s rather infamous shady accounting; but one thing they are famous for is the art of the deal. Any decent-sized Hollywood film or TV show involves deals so complex, our concerns don’t even register by comparison. Percentages of gross, percentages of net, flat fees, scale rates… Those are just the more commonly known elements in a Hollywood contract. Maybe if we look at some of those deals, we’ll come up with a new approach radically different from our traditional models.

    And here’s one: residuals. I don’t know how it’s done now; but I know back in Star Trek days, the actor contracts included residuals: a certain additional payment they got for reruns, but only up to a certain limited number of reruns. Past that number, they got no more residual payments.

    This sounds similar to the capped percentages described above. Maybe we should study some Hollywood residual contracts and see how they were structured; and perhaps more important, see how they were pitched so that all parties thought it was a good deal.

    Random thoughts, late at night, too little sleep…

  6. Let me see: Choice one: Turn over ownership of something to which you gave birth, and then accept in return a small percentage (possibly with part of that small percentage being given to you in advance, to be taken back through their keeping those small percentages until they think the scales are balanced) with this arrangement continuing for the rest of your novel’s economic life. OR – – -Choice Two: Retain ownership and all rights to your novel for its economic life, subject to your selling segments of those rights in the open market as you choose to, and pay a flat fee to someone like Telemachus Press (mentioned in the article) for their provided the skills you lack.
    And this hasn’t mentioned getting your novel to market in two months rather than two years.
    Now let me see? Choice one or choice two?
    Folks, for most of the history of noveldom we had only choice one. Now we have alternatives to dining only off the scraps tossed out by a benevolent dictator. We now have a seat at the table where decision are made and we make the final decisions.
    The downside is that for now, and some length of time into the future we may not get the big rainbow, but we can get a decent pot of gold, and maybe eventually the rainbow itself.
    How people get their mail has changed. How people get their music has changed. How people get their home movies have changed. And how people get their novels is well into that kind of sea change.
    Hard decision? Duh! Right. Sure.

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