Saturday, January 8, 2011

Harsh Truths About Your Favorite Books

I love books. I love to read them. I love to talk about them. I love to collect them. I love to sit and stare at them. Most of all, I love to write them.

However, I don't love people who obtain them without paying for them. I'm not talking about lending a book to your friend or checking out a book from the library. By all means, support your local library. Borrow from your friend. No, I'm talking about theft in the form of electronic file sharing, or e-piracy.

Karen Dionne, author of FREEZING POINT and BOILING POINT, wrote an article for DailyFinance about the high costs of e-piracy and what it means to authors. In her article, she makes the following statements:

"At one file-sharing website, users have uploaded 1,830 copies of three books by a popular young adult author. Just one of those copies has had 4,208 downloads. On the same site, 7,130 copies of the late Michael Crichton's novels have been uploaded, and the first 10 copies have been downloaded 15,174 times.

Even if only a fraction of the downloads from this and dozens of other file-sharing websites represent actual lost sales, they still translate into a staggering amount of royalties that have been stolen from authors." Click here to read the full article.

To say it's "a staggering amount" is an understatement. Let's examine the potential impact of even one of these examples.

Let's take the 4,208 downloads of one book from a popular YA author. Let's assume the book is available in mass market paperback and e-book formats for identical cover prices of $7.99. (E-books are often a little cheaper, but for our purposes we'll assume an equal sale price.) Those 4,208 downloads represent $33,621.92 in lost sales, excluding tax.

We now come to the sticky bit, the harsh truth that most people don't know about your favorite books. That $33,621.92 I mentioned? That isn't the author's money. We actually only see a small fraction of it. The majority goes to the publisher to cover costs of printing the book (or in this case, formatting the book to display correctly on a variety of e-readers), paying the cover artists and designers, paying the editor and copyeditor, and a host of other expenses.

So, how much of that $33,621.92 does the author see? Well, assuming again that the book originated in mass market paperback and the author had a cracking good agent who worked a really sweet deal, the author can count on seeing anywhere from 5% to 8% of the cover price. Most contract are actually written for less, but 5% is a good estimate. In other words, the author should receive roughly $1681.10 for those 4,208 e-copies, or approximately $0.40 per copy.

Now here comes the second harsh truth of your favorite books. Authors aren't actually paid that $1681.10 by the publisher until we've earned out the advance monies the publisher pays us when they buy the rights to our work. Advances are earned out at a rate equal to the percentage of the cover price stated in our contracts. So an advance of $5000 (considered an industry "standard") must be earned back at $0.40 per copy, which means roughly 12,500 copies of the book must be sold before the author sees a royalty check.

The third harsh reality of your favorite books is this: Until our advances are earned out and authors start drawing royalty checks, we aren't drawing any money from the publisher. Zip. Zilch. Nada. Zero. This is why so many authors keep a 40-hours-a-week day job. Very few authors actually earn a living by writing alone.

What's the fourth harsh truth? An author must pay his or her agent a percentage of their advance and royalties as well as income tax. The standard amount paid to an agent is 15%. So that $5000 advance from the publisher actually becomes $4250 ($750 goes to the agent) but we must still earn back the full $5000 paid by the publisher. Also the $1681.10 the author in our example would've received for 4,208 e-copies of her book if they were actually sold and not stolen (and assuming she'd earned out her advance already and was drawing royalty checks) would actually be $1428.93 (another $252.17 goes to the agent). The author must then pay income taxes at the self-employment of 15.3%...which means her grand take home pay is roughly $1210.30. Oh, and this doesn't include whatever taxes are required by the state in which she
lives. The 15.3% self-employment tax is federal.

Here's the fifth harsh truth... When you see an author at an event such as a convention, they've usually paid all travel expenses out of their own pocket. Registration fees, hotel, gas, plane or train tickets, food -- all of it comes from our pocket.

Let's assume our popular YA author, after paying her agent and taxes, has $1210.30 to attend a conference. Some of the larger conventions can have huge registration fees. Let's say she wants to attend a national-level conference and registration cost $400 -- that's a huge chunk of her $1210.30. Now she wants to stay in the "host hotel" and has to pay an estimated at $200 per night at the conference rate and the conference last 4 days. She arrives the day before it starts and leaves the day after it ends for a grand total of 5 nights -- that's another $1000, which is $200 more than she has available. Add in travel expenses and food and our author is now in the red and losing money. Plus any promotional material she wants to take with her to advertise her book, such as book marks, pens, flyers, and all that other cool freebie stuff readers pick up by the handfuls, cost money to produce and the author is responsible for about 90% of it.

Good thing she has a day job and has saved a little extra money to supplement the cost of her writing.

Of course, we haven't even covered the issue of how low sales for any reason can cause a publisher to not renew an author's contract and affect the author's ability to get a new contract with another publishing house. Lost contracts equal lost jobs for writers.

It also means the potential loss of your favorite books.

So go ahead and download that "free" e-copy and believe it's not harming anyone, that "authors can afford it" because we all "get the big bucks." Go ahead. Do it.

The final harsh truth is that we, as authors, can't afford for you to want to save a few bucks and download a "free" copy of our work. It's stealing. When you do it, you're stealing our ideas, our time, and our ability to support our families.

The truth is no writer writes to get rich. We write because we love telling a story, because we love books, and because we want people to read the books we write.

We only ask that we be compensated for the time we so willingly give to creating the stories you love to read.


P.S. -- I haven't forgotten about the "Writing Urban Fantasy" blog series I started, but I've been busy, well, writing and will return to it soon.

4 comments:

Delilah said...

Excellent blog!

Sabrina @ about happy books said...

Great post.

As a book lover I enjoy buying books and supporting the authors I enjoy reading.
There's no reason or excuse for illegal downloads.
I guess all of the people who do this still want to be paid for their own work so why should it be ok to not pay authors?

This issue makes me so angry and frustrated :(

Rhianna said...

Funny you bring this up now Jeannie! Just the other night I was talking to my husband about this. A friend of his offered me some "free" ebook copies of some well known UF/PNR titles he in turn had gotten from a friend. While none of the people involved meant to be doing wrong I said no thank you I prefer to buy my books. Then I went on further to explain to my husband everything you just pointed out is WHY I would have felt very wrong accepting pirated books.

Now maybe the friend of the friend had purchased their ebook copies and was just "loaning" them with my husband's friend (and from what I understand ebook lending works differently so that is illegal as far as I know--and one of the main reasons I was hesitant to get an ereader) but I want an author to get paid!

I'm going to point out this post in a post of my own sometime soon because this is an excellent breakdown of why book piracy is not just illegal but morally wrong. Thanks Jeannie!

Melissa said...

I love books! I love books by good authors. I always purchase my books from the book store or online. People who love books would never get them illegally or they shouldn't. I want my fav authors to continue to write my fav books. I also don't purchase bootleg movies for the same reason.