Most people discussing this article seem to assume that Locke's bogus reviews were a fraud against his readers, and since many people believe they can sniff out bogus reviewers, some readers haven't expressed much concern. As many people point out, the trustworthy reviews stand out when you read them. But Locke didn't care about the content of his reviews. He was interested in having a high star rating across a large number of reviews. He wasn't trying to fool readers; he was trying to fool Amazon's computers.
Over a period of many years, Amazon has collected a great deal of customer purchase information, and used that to construct a powerful sales apparatus. There are a bunch of "Recommended for you" books on the front page of the site, and there are lots of "people who bought x also bought y" lists it shows you as you peruse the site. Books that get onto those lists get more sales, and then they get onto various genre bestseller lists, which drives more traffic to the books and boosts the sales further.
Amazon wants to show you stuff it thinks you'll want to buy, including stuff you might not already know about. However, since it sells over 8 million books and millions of other products, its human employees can't put their eyes on every product in its store and decide which ones to recommend, the way a bookseller in your local bookstore might. Instead, Amazon's computers make predictions about what books or other products might interest you based, in large part, on what other people are buying or talking about (particularly other people whose past sales have demonstrated taste similar to yours).
If Amazon's computers catch a product becoming a nascent trend or a book breaking out, they're designed to recognize that and amplify the sales by showing the book to people who are likely to buy it. In an environment in which thousands of books are trying to break out of obscurity, that kind of exposure is priceless. So a great way for a self-published author to become popular is to trick Amazon into thinking that he's already popular.
Obviously, if people knew how to do this, everyone would be doing it, so the operation of Amazon's recommendation algorithms is a closely held secret. But Locke made an expensive bet that he could influence Amazon by buying lots of customer reviews and that bet paid off. None of the safeguards Amazon had in place thwarted Locke and Rutherford. The fake reviews came from all over the country, because Rutherford was farming the review work out to freelancers. The reviewers were all "verified purchasers" because Locke's books only cost $0.99, so he could easily pay an extra buck to each reviewer to buy his e-book (which also spiked his ranking).
Locke had many other mechanisms of self-promotion; he's unquestionably talented at getting his name and his books in front of readers. If buying fake reviews was what got him favorable placement on the Amazon website, it was probably a much more effective investment of money, in terms of traffic to his book page and overall sales, than purchasing Facebook or Google ads to promote a book.
Phony Amazon reviews are now as cheap as $5 on sites like Fiver. According to the NYT, Locke paid $20 for each of the 300 he bought from Rutherford. The good news is that, as fake reviews have proliferated, Amazon has changed its recommendation algorithms to reduce the benefit authors can gain from spamming the site with fake reviews. A hundred purchased reviews will no longer boost an author's standing in the recommendation system the way they did for Locke.
As long as I'm sharing writing and publishing advice, I thought I'd show off my successful query letter for DON'T EVER GET OLD. I sent this out as unsolicited slush, and that's how I found my literary agent, Victoria Skurnick at Levine Greenberg:
Ninety year-old Baruch “Buck” Schatz remembers a time when the only “portable handheld device” anybody needed was a .357, “Google” was the sound a guy made when you punched him in the throat, and “social networking functionality” came out of a bottle. These days, though, this retired detective is extremely frail and frequently confused. But when he learns the SS officer who tortured him in a POW camp may have escaped Germany with a fortune in stolen gold, Buck decides to hunt down the fugitive and claim the loot. He’s got nothing better to do, and keeping his mind occupied is supposed to ward off dementia.
Assisted by his grandson, a law student who knows how to find information using a computer and is allowed to drive at night, Buck finds a lead down the Nazi’s long-cold trail. But lots of people want a piece of that treasure, and Buck’s investigation quickly attracts unfriendly attention from a Mississippi loan shark, a seven-foot tall Hasidic Jew, a preacher on the take, a cop with a grudge and a bloodthirsty maniac hell-bent on rubbing out everybody who knows anything about Nazi gold.
“Don’t Ever Get Old” is a 76,000 word mystery/thriller about a hard-boiled man in a world gone soft, confronting the existential reality of his inevitable decline and death while trying to get rich quick.
We've been hearing a lot of narratives over the last few years about self-published bestsellers, but it remains true that almost everyone who has the option to publish with a commercial publisher chooses to do so.
Literary agent Rachelle Gardner had a post a while back about why authors still want deals with trade publishers. I'm going to point out a few other things that come with traditional publishing that are unavailable to self-published authors, and which translate into real benefits:
1. (Perceived) Legitimacy
A lot of authors say they want to publish commercially because they want "validation" from a trade publisher. This may sound like a vanity concern, but reviewers and readers also perceive a validity inherent to trade-published books that is not automatically assumed of self-publishers.
All writers think they're talented, and that their books are good. Most of them are wrong. Readers want to see some endorsement of a book's quality other than the author's high opinion of himself. When a publishing house puts a book out, there's an expectation that it will at least meet a certain standard of competence.
There's nobody standing behind a self-published book except the author. For new self-published authors, it can be very difficult to get anyone else to look at the book, even if it's actually good. Many readers -- perhaps most -- won't read self-published books at all. Many online reader forums, including Amazon's customer discussions, have made rules excluding authors from participating in forum threads because readers don't want to interact with self-published authors or have their discussions spammed with self-promotion.
In 2011, Bowker counted 211,000 new ISBN numbers for self-published books. That's a huge number of people competing for readers' attention. Even bloggers and reader-reviewer communities who are dedicated to spreading the word about self-published books can't possibly sift all that slush.
The solution to this problem has been for self-published authors to give away a ton of e-books. The hope is that, by giving away 5000 downloads, maybe a couple of hundred people will actually read the book and five or ten will review it on Amazon or on their blogs, or recommend it to friends. But with so many authors giving away books, even the audience for free e-books is swamped.
All the things that might have helped a book stand out eighteen months ago, like buying professionally designed covers, running large-scale giveaways, and pursuing pricing strategies to manage Amazon's internal recommendation system are becoming standard practice across a much larger chunk of the market, so it's getting harder for self-published authors to gain traction.
A survey of self-published authors by Taleist found that the median self-published author earns $500 per year. In fact, that number is probably high; the survey uses self-reported data, so unsuccessful authors may have lied about their sales or may have been less likely to respond to the survey. And since Taleist found self-published romance authors make twice as much as other self-published authors, if you're writing in any other genre, your results will probably be even worse.
If the median self-published author pays a freelance editor for copy-editing and hires a freelance jacket designer, the cost of these services will likely exceed the royalties from the author's book.
2. Trade Reviews
There are four major trade publications that review books ahead of their release: Publishers Weekly, Kirkus, Booklist and Library Journal. Each of these magazines reviews about 7500 trade-published books a year, so if your novel is published by a big publisher, there's a good chance you'll be reviewed by a trade. If your novel is published in hardcover by a Big-6 house, you're likely to be reviewed by all of them.
For traditionally published books, these reviews are free if your publisher sends galleys for the trades to review. But the booksellers and librarians who subscribe to the trades don't stock self-published books and aren't interested in reading about them. The freelance critics who review galleys for the trades don't especially want to read self-published books. The only people who want to see self-published books reviewed in trades are the authors, and that means self-published authors have to pay the trades to review their books.
If your book is self-published, you can pay a fee for a listing in Publishers' Weekly's quarterly supplement about self-pubbed titles. They also select some titles for review, but buying a listing does not guarantee a review. Kirkus charges a significant fee to review self-published books, and they post these reviews in a segregated part of the Kirkus website. Kirkus calls prides itself on employing "the world's toughest book critics;" so even if you pay them, they may not say nice things about you. If you don't like your review, Kirkus won't post it, but they'll keep your money. Booklist and Library Journal do not review self-published books.
A positive review from a trade gives you a good pull-quote to use for promotional purposes, and earns you notice from booksellers in librarians. Fewer than 10% of the books reviewed by any given trade will earn a starred review. DON'T EVER GET OLD was starred by all four trades, which is very rare, and really jump-started my sales.
3. Libraries
Libraries are a major revenue stream for the publishing industry and for trade-published authors, and they're almost entirely inaccessible for self-published authors.
There are 9200 public library systems in the US and nearly 17,000 library facilities. They buy a lot of books. Many hardcover releases from Big-6 publishers sell thousands of copies into libraries. To put this in perspective: if you sell about 20 self-published e-books a day, you'll maintain a Kindle store rank of around 5,000, which is very good. That moves about 600 copies a month, so it takes you 5 months at that rank to sell 3000 copies. If only 1 out of every 5 library branches buys just a single copy of a traditionally published author's book, he's matched your 5 months of Amazon self-published success before he sells his first retail hardcover or e-book.
DON'T EVER GET OLD sold very well into libraries, likely on the strength of the starred trade reviews. Librarians have also been very enthusiastic promoters of the book to their readers and on their blogs.
4. Foreign/Subsidiary Rights
Some self-published authors have secured foreign rights sales, but it's uncommon, and your self-published sales have to be extremely strong to generate international interest.
Translation and other rights are often very lucrative for traditionally published authors. DON'T EVER GET OLD has sold Portuguese, Japanese and French translation rights, as well as large print, audio and film rights.
5. Events/Speaking Engagements
There are literary festivals all around the country, and a number of famous and bestselling authors spend a lot of time traveling among them. These trips offer great opportunities to attract new readers, and the costs are often partly defrayed by event organizers or publishers.
I've been invited to the Decatur Book Festival outside Atlanta over Labor Day weekend, and the Southern Festival of Books in Nashville in October.
While some of these events do include self-published authors, the indies are often put in a separate tent or have their readings scheduled on a separate stage, and they may have to pay the festival for space to exhibit their books.
I believe that legislation and litigation are absolutely useless at deterring piracy. The Internet always finds a way around these things. Online media piracy has been around for nearly as long as the Internet. Industry groups like the RIAA and the MPAA classify downloading as theft, and disseminate marketing material urging this viewpoint onto the public.
But, despite their efforts, piracy continues relatively unchecked. Years of efforts to convince the public that downloading is wrong have failed; in 2008, 95% of music downloads were illegal. The results of this activity for the music industry have been devastating. Sales volume has dropped by more than half over the last decade, because a huge percentage of the consumers who used to pay for music now get it for free.
People pirate media online when the pirate copies are easy to get and function identically to legal copies. Efforts to make pirated media difficult to obtain always fail. Therefore, the best way to deter piracy is to make pirated media less functional by excluding it from popular devices.
You can see the difference between a protected media format and an unprotected media format by looking at a single device, the iPhone.
Apple's music devices, dating back to the original iPod, have always been very welcoming to pirated music. You can download a song and drop it right into your device through the iTunes software, and it plays.
This function was something of an unavoidable necessity for music. Listeners had extensive collections of high-quality digital recordings on CD when the iPod devices first came out, and they had a reasonable expectation that they'd be able to move their CD music collections onto the new devices. And since the CD format was developed before anyone knew about the Internet or digital piracy, CDs had minimal protections against getting ripped into unprotected MP3 formats and distributed online. iTunes and Apple have no way of telling the difference between a file you've ripped from CDs you bought and a file you downloaded.
By contrast, it is extremely difficult to use pirated software applications on iOS devices. There is only one point of access for software, and that is Apple's App Store. If you download some illegal software for the iPhone, it's very difficult to make your phone run it. If you have tech-savvy friends, you'll find that many of them download music illegally, but regularly pay for apps.
People don't feel that supporting app developers is a moral duty, while supporting musicians is not. People don't feel that the apps contain more value than the music. If you could load your iPhone with pirate apps as easily as you could load it with pirate music, nobody would pay for apps. But it's easy to pirate music and hard to pirate apps.
The same rule holds true with video game consoles; getting them to play pirate software is very difficult and often requires physical modifications to the hardware. So most gamers buy their software legally.
Publishers need to be talking to e-reader vendors and tablet makers about how these devices will deal with e-book files that originate from places other than the stores affiliated with the apps. Right now it's possible to read pirate books on a Kindle, but it's much more involved than loading a song onto an iPod. It's important that these devices not be allowed, in the future, to read PDF files or other pirate formats like e-books, and that measures are kept in place to prevent purchased e-book files of being downloaded from the devices, stripped of DRM and shared online.
DBW compared the average price of a bestselling e-book last Christmas to the average price of Amazon's current top 100 e-books, and noted that the average price has declined over the last year, and that the price of bestselling e-books is significantly lower than the average price of the top 100 print books.
But averaging prices is a perfectly useless piece of data. There is no interpretation or analysis performed to give this number any meaning. In fact, the way this discourse is framed by both of these outlets is like a case study in how useless and misleading data points such as averages can be.
What is happening with e-book pricing is several separate, distinct phenomena, and by averaging them, you come up with a number that fails to tell you anything about any of them. It's like mixing up the audiences for HBO premium series, Bravo reality and ESPN sports, and then drawing blanket conclusions.
As a reader, the averaging of e-book prices tells you nothing about what you might expect to pay for books, or how that's changed since last year. Instead, averaging prices obscures what's actually going on. The numbers don't show a downward trend in e-book prices, as DBW suggests but, rather, the segregation of two discrete e-book audiences, which are served at two distinct price points.
The important numbers to take out of the DBW survey are these: last year, there were 22 titles in the top 100 priced above $10. This year, there are 32. Meanwhile, last year, 17 titles on the Amazon top 100 cost $2.99 or less. This year, there are 35.
A USA Today article that talks about how self-publishing has changing the world notes that author Michael Prescott had 5 books in the USA Today bestseller list for 42 weeks, and earned $300,000 in a year by selling 800,000 books. Once again, that's a lot of money, but on a per-reader basis, authors have never had such poor compensation. Prescott he is one of only 30 self-published authors to sell more than 100,000 books. Remember, if you sell 100,000 books at $0.99, you earn $35,000.
In 2009 and 2010, J A Konrath and Amanda Hocking made real money selling e-books for $2.99 at a 70% royalty rate, but those days are over. Market competition has pushed the price-point for "indie" books by unknown authors down to $0.99. You cannot sell these books at a price that yields a respectable per-copy royalty.
In the USA Today article, Konrath notes that it's tough to find an audience for self-published e-books, but he argues that it's also tough for traditionally published books to find their audience. But the legitimacy of being backed by a publisher and stocked in bookstores is a big help toward reaching the audience, and there's a better chance to get noticed among the few thousand books in the bookstore than there is to be noticed among the 133,000 books that were self-published in 2011. Further, the audience a traditionally-published novel has to reach in order to be remunerative is much smaller than the audience an "indie" author must find.
If you sell 25,000 copies in hardcover, you earn a hundred thousand dollars. Is it easier to find 300,000 people willing to pay $1 than it is to find 25,000 willing to pay $16? The dearth of authors who have actually found a mass audience selling self-pubbed books suggests that it is not.
Under the current traditional publishing model, you can earn real money writing a book for 10,000 people. If you self-publish a book that reaches the same audience, you get $3,000. Anyone who says that e-publishing is reinvigorating the midlist must necessarily be relying on false assumptions, such as the common misperception that unknown, self-published authors can sell their books for $2.99.
In light of that data, the success of Darcy Chan, whose self-published "Mill River Recluse" has sold 400,000 copies should properly be deemed an anomaly, rather than evidence of a trend. And this anomaly isn't especially lucrative. As the article points out, Chan's book, like most successful self-published titles in the last two years, sells for $0.99. Amazon pays a 35% royalty on books sold at that price, or about 35 cents per copy, so Chan's earnings on her 400,000 sales total about $130,000.
That's a lot of money, and, as the WSJ notes, it's much more than an average debut author would get paid for a traditionally published novel. But this is an extraordinary self-published novel; Chan is one of only twelve self-published authors to sell more than 200,000 copies. When compared to extraordinary advances for traditionally published books, Chan's earnings seem less princely: author Erin Morgenstern got a "high six-figure" advance for her "Night Circus," Chad Harbach got $665,000 for his debut novel "The Art of Fielding," Stephenie Meyer got $750,000 for "Twilight" and Reif Larsen got a reported $900,000 for his "Selected Works of T.S. Spivet."
Traditional publishers also pick up the cost of professional editing, proofreading, formatting, typesetting, jacket design and marketing, while self-published authors like Chan must bear these costs themselves. According to the WSJ article, Chan paid $575 for a review from Kirkus and an additional $1000 for online advertising. And traditionally published authors also get bookstore distribution which is still a huge advantage. Nearly two thirds of books are sold in bookstores, and, despite exponential growth, e-books only represent 20% of book sales.
A traditionally-published author would need to reach fewer than fifteen percent of Chan's audience in hardcover, or fewer than one-fifth in paperback to earn the same royalties. The self-published e-book would have the benefit of a much lower price-point, but the traditional book would have access to the 80% of the market that e-books don't reach.
A self-published $0.99 book that sells 100,000 copies (remember, only 30 authors have done this in the last five years) earns $35,000 in royalties. That's a great windfall, but it is not extravagant compensation for producing a book-length work of literature, nor is it particularly spectacular when compared to advance payments for traditionally-published books.
By comparison, an author who sells 100,000 copies in hardcover earns more than $350,000 in royalties (assuming a $25 SRP and a 10% royalty with an escalator to 15% after 10k sales).
Self-publishing for e-readers has been very lucrative for a small a small group of authors in the last few months. However, for the vast majority of authors trying to sell books, self-publishing won't bring much exposure and it won't earn them much money.
The case-studies for self-publishing success are J.A. Konrath and Amanda Hocking. These two authors have been very good at self-promotion and their books are better than virtually all their self-published competition. These authors distinguish themselves from commercially-published authors on the basis of price; their books cost $3 or less.
Amazon pays a 70% royalty to authors who self-publish on Kindle and sell their books for between $2.99 and $9.99. By contrast, a hardcover royalty is usually 10-15% of the cover price and a mass-market royalty is usually 6-8% of the cover price. That means a royalty on a $3 e-book is close to the same as an author earns selling a $15 hardcover (which has a $25 cover price).
$2.99 was a great opportunity when very few people were selling books in that price range. This high royalty made it very easy for self-published authors to undercut the price of commercially-published books, because these authors were able to keep a much larger percentage of their readers' money. This arrangement was also very beneficial for Amazon and BN because it attracted a huge cadre of value-conscious consumers to e-reader platforms. However, Amanda Hocking's success story is now common knowledge, and everyone with an unpublished novel believes they can replicate that success.
These authors don't have the imprimatur of New York publishers. They don't have authoritative praise from critics or famous authors. They don't even have professionally-designed book covers. So they use price to compete.
That means it's very hard for an unknown self-published author to price a book at $2.99 right now; most other self-published books that are ranked high in Kindle sales are priced at $0.99. But if you sell a book at $0.99, you get only a 30% royalty, or 33 cents per copy. It's very difficult to earn a substantial amount of money at that price, with that royalty, and the 70% royalty is no longer the game changer it seemed to be six months ago because most authors can't earn it.
E-book growth has been huge in the past few years, but we shouldn't overstate its market-share. For a published author, bookstores are still roughly 70% of the market, and e-books are only about half of online sales.
That means that, while a $.99 cent self-published John Locke title may be selling as many e-books as the new Michael Connelly, the Connelly book is selling the same number in hardcover as it is in e-books on Amazon. And brick and mortar bookstores represent nearly triple the total online sales.
Meanwhile, the attractive 70% royalty rate doesn't benefit Locke, because that rate only applies to books priced between $2.99 and $9.99. An author of a bestselling hardcover like Connelly makes ten times Locke's per-copy royalty, and sells five times as many copies.
Locke claims he sells an e-book every ten seconds. If that's true, he'll sell about three million copies in a year and he'll earn a million dollars. That's ten times as many copies as a commercially published author has to sell to make the same money.
Self-publishing on Kindle, for most authors of fiction, is likely to become a stepping-stone to real publication rather than a viable business in its own right. The model going forward will most likely force authors to price at $0.99, in hopes of garnering significant sales that will attract an agent and publishers, and then a real book deal.
Nearly everyone who can publish with a commercial publisher goes that route, especially in fiction. And there are good reasons why this is the case.
The Washington Post has a blog entry breaking down the costs associated with e-books. The argument is that "the costs of creating an e-book and a hardcover edition are similar."
While the writer here is correct that the material costs of a book are a small percentage of the price the reader pays at the register, he's wrong to conclude that this means an e-book isn't cheaper than a conventional book.
There are two kinds of costs associated with selling a product: fixed costs and marginal costs. Fixed costs are the costs that are necessary to create the product, and that do not rise with the volume of units created; as volume rises, the fixed costs diminish on a per unit basis because they are distributed over more units. Marginal costs are the costs associated with producing each additional unit.
So, for example, the cost of building an auto factory is a fixed cost of making cars, and the materials that are used to construct the car are marginal costs. Similarly, editorial costs and publisher overhead are the fixed cost of producing a book. Author royalties are marginal costs, because they're costs that are incurred per-book, but the advance before earn-out might be considered a fixed cost.
The costs associated with making a book into a physical object; printing, binding, shipping, are marginal costs. So, even if that's only two bucks per hardcover, that means an e-book should either be two bucks cheaper or two bucks more profitable.
Selling books through bookstores is also costly. Bookstores have to rent spaces. They have to hire staff to handle retail transactions. In order to sell you a book, people at the bookstore have to take it out of the box, enter it into inventory, put it on the shelf, help you find it, and ring up your transaction. What you pay at a bookstore tends to be four or five dollars more than the wholesale price, and that covers the store's costs and profit.
So, in addition to having zero marginal cost of production, the marginal cost of selling an e-book drops to zero as well; if listing a book on Amazon's site and running the back-end functions necessary to get the file to your Kindle were costly, then Amazon's robust offerings of free or very cheap e-book content would be a giant money-losing operation. If listing products on Amazon was costly, then it would be extremely burdensome for the site to list tens of thousands of self-published and vanity published books that sell nearly zero copies.
So Amazon has no cost or risk that justifies the $3.30 profit that's built into the Post blogger's analysis. With no marginal cost and minimal costs associated with listing an item, Amazon can profitably sell books at a very small markup, or by taking a small cut to act as the conduit for books sold on the agency-model by publishers.
It's not unreasonable to think that publishers could sell an e-book for $5-6 less than the hardcover price and still make the same profit.
We have never published any version of Monica Gaudio’s article “As American As Apple Pie – Isn’t.” Indeed, after a careful review of our archives, we can safely say that we have never published any article dealing with or touching upon the subject of pie, because our magazine is not about food or cooking. We are, like, a whole different thing.
For those people, previously unfamiliar with our work, who have found us because of our erroneous conflation with the Judith Griggs Internet scandal, we’d like to introduce ourselves: we are Cocks Source Magazine, an enthusiast’s publication dedicated exclusively to the subject of cocks. Our content is one-hundred percent original, and we obtain all rights and permissions for our freelance articles and photographs. Our contributors are compensated for their work.
We’ve won numerous awards for our incisive coverage on a wide range of subjects such as: “The Thicker, The Better?” “Kinks and Bends: Coming At You From Odd Angles” “Foreskin? More Skin!” and “Veiny Denizens of the Himalayas.” Our diversity issue “Many Cocks, One World” won praise from various organizations for raising multicultural awareness of cocks.
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