Aside from being the most driven person you’ll ever meet, Liz is at the top of every author’s bff list. Her dedication to helping writers is as impressive as it is inspirational.
There are a lot of doomsayers out there who believe the publishing industry is in a backslide. Why start a new publishing house now?
Personally, I don’t feel the publishing industry is in a “backslide,” but rather a transitional state. Book sales increased 3.6% last year to $11.6 billion, while e-book sales tripled to $441 million. This explosive growth—combined with Amazon offering a tempting 70% royalty on self-published books, and delays in royalty payments from traditional houses of a year and longer—has more and more traditionally published authors considering self-publishing. Self-publishing comes with its own set of responsibilities, of which, the most daunting can be self-promotion. But let’s face it, most authors are dividing their time between writing and self-promotion already.
To first understand how we’re different, let me take a moment and break down traditional versus e-publishing versus self-publishing (or “indie-publishing”, as it’s now referred to) in publishing terms…
Traditional publishers have a huge infrastructure, thus their break-even point on a book by book basis is quite high. Since paying the % to the bookseller and author (who also must pay the agent, if applicable) still leaves a significant investment, they are more interested in recouping their money and carving a profit margin than creating a bestseller. If you factor out the possibility of a breakout book, what you’re left with is a break-even point: the number of books they must sell at x price to recoup y investment.
Which explains why traditional publishers can’t compete with e-pub or indie-pub prices. If a traditional publisher has a break-even point of $10,000 per book, and ebook prices are set at $0.99 per book, it would likely take 20,000 copies sold to just break even!! (70% of cover price from Amazon minus 30% of net to author) That’s an enormous volume of books to move for a product you weren’t counting would be a bestseller. Therefore, the need to keep the cover price high, at least until they reach the break-even point, is crucial to corporate stability and risk minimization.
E-publishers, on the other hand, are able to take more chances with the pricing to find the sweet spot simply because their infrastructure is less demanding due in part to infinitely smaller advances, if any, and using the agency model for their editors. They don’t need to pay an editor $50k a year but instead dangle the possibility of a huge payout if they edit a breakout book at a 1-10% royalty rate (depending upon the publisher).
The problem with this model is the lack of a true marketing push behind every book. Many E-publishers are not focused on selling a large quantity of one book, but on selling a smaller quantity of every book in a large catalogue. Since an epub’s break-even point is typically less than 300 books, if you factor in friends and family purchasing many of these copies, authors need only promote themselves on author loops and other guaranteed reader-rich areas to meet that number and continue to exceed it every month. If you ask any successful epub author they’ll tell you: the money is in the backlist. Small checks coming in per title every month. Once you build up your backlist, this can be a nice monthly income!
And then along came a few self-published authors who hit it big on 70% royalties from Amazon. Authors are jumping in with both feet, hoping they can become the next Amanda Hocking, who even warns authors that the odds of this happening again are slim. Very slim. She also nearly killed herself in self-promotion. She went through something like twelve different editors, never really finding the right one, according to her blog post on March 7th.
But still, for many traditionally published authors who are tired of waiting the 12+ months to earn out their advance, a quick paycheck of any sort is very attractive. Many more are considering the “indie pub” route, but are leery of taking on more promo, wrestling with the edits themselves, and then playing art director and marketing specialist as they design their own all-important cover. It’s a lot of responsibility that could backfire and even dilute an author’s brand, if the product is substandard.
So how is Entangled different from those models?
We’re focused on selling as many copies of every book we contract as we can. In that sense, we’re like a traditional publisher. We put a lot of time and energy into every cover, content editing, and copy editing. We need every book to be as attractive on the outside and compelling on the inside as we can possibly manage. In addition, we assign a publicist to every book, who works with the Marketing Director to get their project into the right reviewers’ hands prior to release date, procuring advertising spots, ensuring book club inclusion, and handling the administrative duties of an author’s promotional campaign.
How can we afford such a large staff without creating an overhead to rival a traditional publisher? By melding the traditional publishing business plan with the successful percentage-of-sales e-publishing agency model across the entire company. Everyone from the copy editor to the Marketing Director has a financial stake in every book. We only make money if our author makes money.
Since we aren’t strangling ourselves with huge overhead costs, there is no need to force a high cover price until we reach a break-even point. Our pricing can be agile in a quickly changing market, allowing us to position each title for maximum sales. And, unlike a typical e-publisher, while we certainly hope to one day reap the benefits of a backlist, our model doesn’t require an author to wait until she is bleary-eyed from writing all night long, and promoting herself during lunch breaks and every evening while still working her day job until she has enough titles each bringing in a small income. In addition, to remain attractive to those authors still considering self-publishing, we pay the highest royalties in the industry with a nice escalation clause: the more books sold the higher the royalty for the author. It’s a win-win for everyone!
What can authors expect from the Entangled team in terms of service and promotion?
Entangled is dedicated to providing the highest quality content editing, copy editing, cover design, and marketing opportunities possible for each of our books. Our Marketing Director ensures books are in the hands of reviewers two months prior to release and assigns a personal publicist to each author who will organize book signings, blog tours, and advertising campaigns. In addition, we have an advertising budget set aside for each book.
Why should established authors go this route instead of self-publish?
Self-publishing requires an author to wear many different hats, and wear them all effectively. Any slip can result in reduced sales, or dilution of their author brand. Imagine if one of your favorite NY authors self-pubbed a book with major plot holes or riddled with typos or a very unflattering cover? And then what about the time invested by the author to fulfill all of these various functions? Most self-employed individuals have difficulty relating time they spend doing a task as having a value, but it does. If you spend 40 hours working on a cover, formatting your book so you can post it on CreateSpace, then emailing all of your writing loops and tweeting your book… That’s 40 hours that you could have spent writing 40,000 words. That’s half a book!
How does this business model impact your employees?
All of our employees are contracted and receive a percentage of every book they work on. This means everyone at Entangled has a stake in making your book the best it can be, sell the most copies possible. Our income is tied to your success, so we all want you to succeed!
Who is your ideal Entangled author?
Hmm. That’s a hard question to answer as I am currently in love with two kinds of authors. One is a NY pubbed author with an established platform who has an idea for a new series or a book of their heart on their hard drive that they’ve been thinking of self-pubbing. The other is a debut author who has an amazing, fresh story they’d previously only considered subbing to NY but have a pile of rejections lined up due to the shrinkage of offers there. But really, any author with a great book that our marketing department is eager to get behind thrills me.
What would you like to see in the submission box?
Interesting stories with a fresh voice. Vampires, space operas, adventures, thrillers, fantasy worlds, gritty urban settings, quirky contemporaries. Really just about anything with an exciting new voice.
What will the Entangled launch look like?
We’re launching our website with our first ten pre-released titles in July 2011 to generate pre-release buzz and unveil our amazing new covers. Those titles will be on sale in August. We’ll be offering 2-5 new titles per month thereafter and already have books lined up for 2012.
Our marketing and editorial department plan to host several launch events, so stay tuned for more information!
Any final words?
For several years, I’ve been bothered by the increasing amount of self-promotion authors are required to do just to make a pittance for their hard work and creativity. This is not the fault of traditional publishers or e-publishers, simply a reflection of our economy and the prevalence of social networking. I see authors feverishly dividing their time between writing their next book and trying to sell their last book, doing neither as effectively as they should.
From serving on the board of directors for various RWA chapters to the creation of Savvy Authors, everything I’ve done in this community has been the core of my personal philosophy: I care more about authors succeeding than profit margins. That same philosophy is the foundation for Entangled Publishing, where I’ve carved up corporate profits to create a model that benefits everyone.
I hope the success of Entangled inspires other publishers to adopt a similar approach and help their authors do what they do best… write.
Liz Pelletier is co-founder and managing partner of Savvy Media Services, which owns Savvy Authors, Savvy Readers, and Entangled Publishing. In addition to running a successful online writing community, Liz is an award-winning author, a workshop instructor, and a freelance editor. She has also held board positions for other writing associations.
You can find Liz on Twitter and Facebook.
Great post. Nice to meetcha. You so had me at “space opera”. I snorted in my tea. Ah…good times.