Professional services guru David Maister has announced that his next book is going to be self-published. He says:
Ask any business author who has published a book what the experience was like: for the vast majority, the horror stories are endless.
Basically, publishers don’t actually add any value. Yes, they can edit a manuscript and get a book typeset, but both of those things are freely available as stand-alone services to anyone.
Publishers, like record companies, would be incredibly valuable if they marketed your book for you – most authors can use all the marketing help they can get. But just like the record business, the truth is that publishers don’t do any marketing for you unless you’re already a star. Since so few books succeed, it’s not worth them spending anything on an individual book: they put a portfolio of product out there and wait to see what succeeds.
In my book Living Networks I proposed a basic “Creative Career” trajectory, illustrated below.
In the book I described the key issues:
Until recently, self-publishing was often rightly called vanity publishing—it was about spending money to look good. Connectivity is rapidly changing the situation. You can now distribute content directly online, and often fairly easily access major distributors. As such, the most important strategic issue for content creators is choosing when to distribute direct, and when to go through publishers or distributors. This is largely an issue of managing your creative lifecycle, using publishers for the specific value they can offer, and distributing direct the rest of the time, either to gain awareness or take a larger share of the rewards.
A publisher can offer three main things: credibility, broad distribution, and risk transfer. Whether you’re a writer, musician, or software coder, having your work distributed by a major firm is an important seal of approval. It’s possible to do well working solo, but it’s far easier when you’re backed by a recognized name. In addition, major firms can always access better distribution possibilities than an individual can. If you distribute direct, you may get all the profits, but at the same time you take all the risk. Any worthwhile publisher commits capital to creating and promoting its products, and often offers a non-refundable advance payment to the content creator. The major downside of working with a publisher is that in return for its credibility, distribution, and taking on the risk, it takes the majority of the rewards.
The most basic career strategy for content creators is quite simple. In the early stages, use the free flow of the networks to distribute direct, demonstrate that you can tap an attractive market, and attract the interest of a publisher. New York reggae and ska band The Pilfers sold 10,000 CDs at its concerts and on its website, using the leverage to secure a favorable record deal with Universal Music Group. Many others have signed contracts with record labels on the basis of the success of their freely distributed MP3s. In the next stage, you work with the publishers for as long as it is worthwhile, getting them to take much of the risk, and commit capital to advances and promotion. Finally, hopefully with reputation well established, you can once again distribute direct, taking all the profits. Many rock stars later in their career, like David Bowie, Todd Rundgren, or the estate of Frank Zappa, sell directly to their fans. Scott Adams, the creator of the Dilbert cartoon, chose to publish his first non-Dilbert book, God’s Debris, directly as an ebook, later also selling a hardcopy version. He had full creative control, and could reap all the profits. This generic creative career strategy is illustrated above.
David Maister’s step fits exactly into this analysis. Having used publishers to help gain credibility and a strong audience for his work, it no longer makes sense for him to sell through a publisher. He can self-publish, and take all the value for himself, instead of giving the bulk to a publisher for little value.
As a business author myself, I’ve have not yet reached the stage at which I will choose to self-publish. I still need the credibility and distribution clout of a publisher for my next few books. After that, I may make the same choice as David.
Let’s pull a few numbers out of the air. Let’s say that David could sell 100,000 copies of his book through a publisher, and 50,000 if he self-publishes. In the latter case, he may choose to price it at $29.95 – a standard price for this kind of book, though he could certainly charge more given that the audience is probably not too price-sensitive. Wholesale book prices averages around 50% of cover price. The costs of producing a hardcover book are around $3 per copy. This will give David 50,000 x $12 = $600,000. This is far more than David could earn from a publisher, either in an advance, or in royalties. Of course the other side of that is the hassle and risk of self-publishing, but given the confidence he can rightly have in selling a sufficient quantity of his book, that is not too important a factor.
Many more established authors and creative people are going to start making the same choices as David. Since much of the profitability of publishers comes from their big sellers, this is going to prove a problem. There is absolutely a lot of value that publishers can create, but it is primarily for those early or in the middle of their creative careers. After that, the power and choice shifts to the author, now that it is so easy to self-publish, and the stigma is quickly disappearing.