The Billion-Dollar Book

Today, I’m taking a break from answering questions so I can post the Marketing column that I wrote for this month’s Advanced Fiction Writing E-zine. As I’ve said several times this summer, we are in an epochal year. 2010 may be considered by future historians as the biggest change in publishing since the invention of the alphabet in 18th century BC Egypt. Yes, bigger than that Gutenberg guy and his movable type.

Here’s my article, which I hope you’ll find interesting. I think it would be great if one my Loyal Blog Readers became the author of the first Billion-Dollar Book:

The Billion-Dollar Book

I think it’s plausible that in the next five years, some author somewhere will write a book that earns him or her a billion dollars. I call that a “B-book.”

Who will that lucky author be?

Let’s not be silly. Luck will have nothing to do with it. Great writing and great marketing will have everything to do with it.

If I had to hazard a guess on who will be first to publish a B-book, I’d say J.K. Rowling has the best shot. The 7-book Harry Potter series has reputedly earned her a billion dollars, so a B-book is quite possibly in her future.

If not JKR, then James Patterson is my bet for the next likeliest candidate. If not him, possibly one of the other heavy hitters in the publishing world.

Truth to tell, however, I wouldn’t bet even money on any one of these candidates.

In my view, the most likely author of that first B-book will be some unknown author who comes out of nowhere with great writing and an A+ marketing game.

While I can’t guess who will be the first B-book author, I am reasonably confident that the B-book itself will earn most of its revenue in electronic formats.

Prediction #1: The first B-book will be an e-book.

The reason is that you can’t have great sales without great distribution. There are roughly a billion computers on the planet connected to the internet and all of them can read e-books in numerous formats using free software. There are roughly four billion mobile devices, and most of those will soon be able to read e-books.

The sales channel for e-books is growing rapidly and has global reach. That’s why the first B-book will be in e-format.

What about the price of the first B-book? The higher the price, the fewer the number of copies you have to sell to earn a billion dollars, but the fewer the number of people willing to pay the price.

If your royalties are $1 per book, you could earn a billion dollars by selling a billion copies. Or you could get there by earning $10 royalties per book on 100 million copies.

Nobody knows the sweet spot, but my guess is that it’s somewhere between those extremes. If I had to guess, I’d say that a $2 royalty on half a billion copies is the best way to get your B-book. I can’t prove this. It’s a hunch based on incomplete information.

The reason I think this is plausible is because if you price an e-book at $2.99 on Amazon, then you earn a 70% royalty, which translates to $2.09. That means you’d need to sell about 478 million copies.

(Note that Amazon charges you a small amount for delivery costs when it sells your e-book. For a typical novel, this amounts to a few cents per copy, so things aren’t quite as rosy as I’ve painted them, but it’s a close approximation.)

I’d say that a large fraction of the 4 billion people who can afford a mobile device can afford a $2.99 e-book. And the vast majority of the one billion computer owners with internet access can buy that book.

It’s possible that the sweet spot price is $3.99 instead. At a 70% royalty, you’d only have to sell 358 million copies. Great news, eh?

If you try running these numbers with typical royalties paid on hardcover, trade paper, or mass market paperback, you see right away how much harder it is to get your B-book. Most of the money charged for these formats is going to somebody who isn’t you. That means the retail price has to go a lot higher or you have to sell many more copies. And delivery costs are much higher for a physical book than for an e-book.

This leads immediately to my next prediction.

Prediction #2: The first B-book will be self-published.

Self-publishing is the best way to get the royalty rate high enough and the retail price low enough to make the B-book a reality.

The fact is that most publishers aren’t going to price your e-book at $2.99 or $3.99. They’ll want it at $9.99 or $12.99, which is probably too high for the market. And they’ll pay you only 25% royalties on the wholesale price, which is too low. If you want an aggressively priced e-book and a high royalty rate, you’ll almost certainly need to publish it yourself.

Of course it may be that all of the above is just my wishful fantasy, but if you’re with me so far, let’s ask how you’re going to market a few hundred million copies of a self-published e-book.

You can’t do that alone. You need what Seth Godin calls a “tribe.” In the context of book publishing, your tribe is your set of committed fans. They’re the people you lead.

You don’t have the marketing oomph to reach hundreds of millions of people on your own. You do have the marketing oomph to reach thousands or tens of thousands of people. If you can energize them so that they love what you’ve got and if they’re willing to spread the word, then they can reach those hundreds of millions.

Want proof on that? I don’t have absolute proof, but I have three words that ought to be persuasive if you were awake two years ago:

Barack Obama 2008.

President Obama raised an estimated $656 million in individual contributions for his presidential campaign. He raised that by tapping into the social networks. In a word, he built a powerful tribe of committed followers.

Now it’s true that Obama didn’t hit quite a billion dollars, but he came close and he had an end-point for his marketing campaign. Presidential campaigns end with the election. Books stay on the market as long as they’re selling.

Let me sketch out how I foresee the first B-book will happen. I’ll probably be wrong on some details, but the general picture is plausible:

  • First write a great book. There is no substitute for excellent writing. I define that to be, “Writing which provides a Powerful Emotional Experience.” Style is less important here than raw emotive force. See any current best-seller list for proof of that.
  • Self-publish the book as an e-book and put it up for sale on all the usual sales channels: Amazon, B&N, etc.
  • While you’re at it, create your own online store where you can sell your e-book in all the common formats: text, PDF, RTF, Mobi, ePub, etc. Don’t count on this bringing in a billion bucks on its own, but you can’t beat the royalty rate, and there’s just no reason not to do this.
  • Post a large fraction of your book on your web site. I’d recommend at least half the book. Enough so that your readers can really get hooked on the story. Include links to your sales channels, along with incentives to buy. (Access to online “Director’s Cut” material would make a nice incentive. Don’t be offended, but a date with you would probably make a bad incentive.)
  • Early on, you might jump-start sales with a special low price. Publishers can do “free Kindle” campaigns that seed the market with early fans by setting the price of the e-book to zero for a short time. (Don’t try that with a paper book!) You probably can’t do this if you self-publish your book, but you can set the price to $.99, which is almost free.
  • Focus your marketing efforts on your tribe. Who is most likely to love your story? Build your web presence to appeal to them.
  • Communicate to your tribe. Treat them as special, because they are. These are the people most like you. These are the folks who read your blog and subscribe to your e-mail list.
  • Enable your tribe to communicate to you. They can do that through comments on your blog and by sending you personal e-mails. You can and should automate part of this by using online surveys — this will let you go broad. But don’t forget to go deep too — your tribe deserves personal responses from you. These are your people. Do right by them.
  • Empower your tribe to communicate to each other. Your tribe is excited about your great writing. Naturally, they want to talk to like-minded people. Make that easy by giving them an online place to gather and talk — a forum is ideal for this. Join them when you can, but give them the space to be leaders. A large tribe needs many sub-chiefs. Foster those leaders. If you can, give them the ability to add content to your fan site.
  • Encourage your tribe to communicate to the world. Give them buttons on your web site to Twitter or Facebook about you to their circles of influence. Collectively, your tribe knows a lot more people than you do. Your tribe can sell your book better than you can.
  • Team up with similar authors who have similar tribes. Your fans will love these authors and their fans will love you. If I can switch metaphors here, remember that “the bigger the hive, the bigger the buzz.”
  • That’s it. Don’t do things that sap your energy or drain your money or monopolize your time. You are finite. That’s OK.

You may be saying, “But what about book-signings? Speaking engagements? Giving away free copies in drawings on your blogs? Library visits? Yada yada screama?”

What about them? Those may move a few copies or a few dozen or a few hundred. They may be fine things to do once in a while for your tribe. They aren’t going to make a B-book for you.

Think about it. How many book-signings would you have to do to sell a hundred million copies? You will never book-sign your way to a B-book.

There isn’t any magic bean you can eat that will make you a B-book author. You need outstanding writing and a marketing campaign that you can automate as much as possible, so it doesn’t require ten times as much work to get ten times the results. You need strong, loyal fans who brag about your great writing to their friends.

Very few authors will ever write a B-book. It’s a lot easier (but still Xtremely difficult) to write an M-book — earning a million dollars. It’s vastly easier to write a K-book — one that earns a thousand dollars.

Most authors will fall somewhere on that spectrum. Now here’s the good news. No matter where you fall on the range, from B-book to M-book to K-book, the principles above can help you market your work more effectively.

That’s good news for all of us.

13 Comments

  1. Jenni September 10, 2010 at 11:31 am #

    Wow…

    I definitely do not see the ebook publishing industry taking off until they lower the price. I have considered buying ebooks, but for $10 apiece on a book I don’t even know if I’ll like… nope, not going to do that! Now, $3, I can spend $3 on a book and not feel bad if I only read it once. Just like renting a movie.

    Your marketing ideas make so much sense. I look forward to see how the ebook industry plays out after reading this! 🙂

  2. T.N. Tobias September 10, 2010 at 11:32 am #

    I think this is a stretch. While it’s technically possible to sell 500 million people the same thing, it’s not likely. Even less likely with something as personal as a book. Personalities are like fingerprints, the strategic mission of a book that sells to 500 million people would have to triangulate the interests of 1/8th of the world’s population in order sell enough copies. To do that as a self-published author would be like winning the lottery over and over and over again.

    Maybe if JK Rowling wrote a vampire romance that criticized the policies of Barack Obama while tattooed girl hackers told the story of their family lives in St. Paul, Minnesota….

    Randy sez: Of course it’s not likely. So far as I know, nobody has ever come close. There are millions of books that have been published. Obviously, the odds are low. But the odds are rising. If I’ve understood the numbers right, some of JKR’s books have sold close to 100 million copies apiece. Hard to know the exact numbers. Now imagine if the books were an order of magnitude cheaper. Instead of list prices in the $10 to $30 range, what if they were priced at $2.99? Or $4.99? And imagine you could get it instantly with no delivery costs. Think she’d sell more copies? I suspect she would. The real question is what price point would maximize revenue for her. Nobody really knows. In five years, we’ll have a lot more data and that question will be answerable. A B-book is a stretch, but it’s at least technically feasible. Sooner or later, somebody will do it. Barack outclassed his competitors in fundraising by at least a factor of 3, if I remember right. Imagine what he could have done if there were no time limit on the fundraising.

  3. Judith Robl September 11, 2010 at 4:28 am #

    Randy, Glad to know all your books will be available. But hurry, please! Next question. How do I get them autographed?

  4. S.J. Owens September 11, 2010 at 5:45 am #

    I’m with you Randy, the feasibility and possibility of a B-book is there. I’m already a fan of e books. Why? I don’t have to get in my car and run to my favorite bookstore. My book/books are constantly with me. Neat, no crumbled pages from being in my purse, compact, loaded on my phone and portability, my books are always with me.
    As in any business, marketing is the key to selling your product. With the internet, the feasibility and the ‘possibility’ are there and I believe that is what you were pointing out.

  5. Melinda Evaul September 11, 2010 at 7:14 am #

    This post gave me wonderful ideas. I’m planning my marketing strategy for a series of novels. I think I’ll follow your advice and see where it leads. I should at least sell a few books and build a tribe in the process.

  6. RevTrev September 11, 2010 at 8:51 am #

    Looks like I’m on track for my upcoming launch…don’t know if I’ll hit the B with this one, but I like challenges beyond the conceivable.

  7. Marilyn Walker September 11, 2010 at 11:55 am #

    Right or wrong, this is an intriguing idea. OK, yes, it disturbs me and makes me uncomfortable. I have very mixed feelings about this idea of self-published books becoming mainstream like this. One question that comes to mind is foreign language versions. At this juncture, I’d imagine a writer has no easy way to control this. And that would be necessary to push something into the billions. I just hope we don’t fall into a world where all we have is people trying to sort through so much junk they can’t find the good stuff. I mean, youtube is fun, but I still watch mainstream media for the good stuff.

  8. -dd- September 12, 2010 at 2:03 pm #

    First, color me confused. It seems Robert Sawyer does not recommend that authors publish their work themselves. He suggest that we pay our dues just like other authors before us and come up through the ranks by writing short stories for periodical magazines that take un-agented submissions; for science fiction this is places like Asimov and Analog. Then there is this collected response, http://sfwriter.com/blog/?p=2221 , that again says “don’t self-publish”, but seems to say that Sawyer is a supporter of e-books. So, I don’t get it.

    Is my confusion due to interpreting Randy’s “self-publish” term the same as Sawyer’s, when, in fact, they mean different things?

    And why would Sawyer say “don’t” when Randy says “do”?

    Randy sez: The industry is changing rapidly, so advice that was true even six months ago may no longer apply. I’ve changed my mind in the months since Apple announced the iPad. This was a game-changer, not because the iPad is the only good e-reader device (it’s not, there are many good ones) and not because the iBookStore will capture all the market share for e-books (Amazon has that locked up at the moment). The reason the iPad is a game-changer is because it lit a fire under Amazon’s feet. Soon after the iPad announcement, Amazon switched to an “agency” model where they pay the publisher a fixed percentage of the retail sale. The publisher now sets the price. These changes made it possible for authors acting as publishers to control their game, and it let them earn a fair return. It makes self-publishing the smart thing to do for many (but not all) authors. Everyone is confused right now. It’s a time to experiment, learn, and keep what works.

  9. AlexOngNYC September 14, 2010 at 7:21 am #

    Amazing advice and insight.

    Alex

  10. Melissa September 14, 2010 at 9:43 am #

    This is an interesting post. I’m not very familiar with the intricacies of e-books though. I understand you can purchase them on many different formats, including .pdf. Can anyone enlighten me on what is there to prevent people from just e-mailing the .pdf file of your book to a friend (which would cut into sales)? Or is it similar to music on .mp3 – anyone can conceivably just send the file to anyone they want and risk the consequences, and the only thing that keeps people purchasing the original files is convenience and fear of getting caught breaking the law? Thanks.

  11. Karen Cioffi October 3, 2010 at 1:02 pm #

    Great article. I just watched an Oprah interview with JKR. She was rejected 12 times before she hit pay dirt.
    She also said she believed in the book; she knew if she could get it published, it’d take off.

    And, I agree, I think e-books are the way to go.

  12. C.J. Ellisson October 26, 2010 at 12:21 pm #

    I’m a newbie writer on the scene trying to hawk her first book. Thanks so much for this terrific blog article. It assured me I’ve done loads right and helped steer me in the right direction to do even more. Bravo!

    Will my book be the first b-book? I doubt it, it has too much sex in it. But it’s always smart to take the first steps and do things right when marketing on your own.

    Thanks again for your efforts in putting this piece together. Writer’s around the world salute you!

  13. Rachel Rawlings October 31, 2010 at 3:40 am #

    Great article! Reassuring to know as an author trying to sell my first novel that I am doing a lot of this already. I think you are spot on with your theory of self publishing and would offer this to authors worried about taking the leap:

    Our industry is changing and possibly not for the better beacuse the world is changing. People are seeing their expendable incomes shrink rapidly. Publishers and agents know that books sales are decining while less expensive e-formatted books sales are on the rise. They are less and less likely to take on new authors. They’ll stay with the branded and established author who cranks out the same material because it sells to their fan base. JKR may have been rejected 12 times and LKH may have been rejected 20 or so time but those numbers will increase for todays authors. If you believe in your work and know that given the right opportunity your book would be successful, self publishing is what you’ve been looking for. Think this hurts your chance of getting picked up? If you can do it on your own, produce the material, build the fans and do the marketing on your own an agent and a publisher are more likely to sign you. You’ve saved them a lot of time and money.

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