Misc,  On Writing

Killing the Sacred Cows of Publishing: Can’t Make Money in Fiction

This myth “You can’t make a living writing fiction” is so clearly hogwash, I shouldn’t have to include it as a chapter in this book. All anyone has to do is look at a certain fantasy writer in England being richer than the Queen. And the number of fiction writers on the Forbes List every year. But, alas, new writers hear this all the time, constantly, from every direction, and sometimes from longer term professional writers.

So, it’s worth a long post I guess. It shouldn’t be a myth at all, but it is.

First up, where does this myth come from?

We have all seen the stupid studies that an “average” fiction writer makes something like $2,345 per year. And, of course, people look at that and think “Oh, my, no one can make any money writing fiction.” Of course, those who say that don’t know how studies are taken, or what a number like that really means.

Most of the big studies ask every person who has a dream of someday writing a novel. The writers asked maybe have finished a few short stories, maybe even mailed a couple. They go to a writer’s group regularly, and call themselves writers, because they are in the early days of learning their craft. They make no money. There are hundreds of thousands of this type of writer, all in the early days of learning. Then, of course there are the writers who will never sell, a person with the best intentions, but no real drive to actually sell anything. Or if they do sell, it’s to a small press that pays in copies or worse yet these days, they give their story away free to an online press and don’t even get a copy.

The studies ask all those writers how much they make, and the answer is almost always zero. Millions of “nothing” answers.

Then these studies include writers in organizations like SFWA, who lets a writer with three sales in the door. And Romance Writers, which has a huge chunk of membership that has never made a sale. All these thousands and thousands of unpublished or slightly published writers are included.

It’s stunning to me that the average is so high, actually. But the truth is, a lot of people have to be making a lot of money with their fiction writing to pull up all the beginning writers to above two thousand average.

Writing, to my knowledge, is the only profession that takes studies this way. It would be exactly like trying to figure out what an average lawyer makes by also including every undergraduate who is thinking of going to law school and every law student in the study about what they made working the law. Lawyers, in that type of study, would make less than two thousand average I’m betting.

So, where else does this myth come from? Duh? The answer is simple. It comes from all the people who are, for one reason or another, simply too afraid to try mailing out their fiction regularly to places who buy it. Or poor writers trapped in the agent myth, rewriting book after book for an employee. For those writers, it would be impossible to make a living at writing fiction. And thus, when you talk to them, they are telling you the truth. From their viewpoint.

How about a writer who has sold three novels and for the first time understands how the money flows? Those early novelists are saying the same thing, of course. Selling one genre book a year is not enough to make a living writing. Unless, you are fantastically lucky. But most of us aren’t that lucky, so a writer with one book a year, who has bought in to the writing slow myth can’t make a living, and they are telling other writers the truth as well. From their viewpoint.

So what about when you hear this myth spouted by a big name bestseller? I heard a New York Times bestseller in a keynote speech once tell 500 people there were only two hundred people in the nation making a living at fiction. Kris and I almost fell out of our chairs laughing, but we were just about the only people in the room laughing. Everyone else thought he was right. As it happens, I’m sitting next to him on a panel the very next hour, so as we were talking, I turned to him and said, “You know that 200 number is totally wrong.”

He look sort of stunned and said, “That’s what I had always heard.” (The myth hits again and is repeated by big name writer.)

I said, “If that’s the case, then don’t you find it pretty amazing that there are seven of the two hundred on this one panel?”

He looked down the panel at the seven of us, all full-time fiction writers, sitting on the panel, and then I asked the 100 people in the room how many were writers making at least $80,000 per year with their fiction writing. Five more people, two of whom I recognized, raised their hands. Twelve of us in the same room at a writer’s convention. That stunned the keynote speaker, let me tell you, and we ended up spending the entire panel talking about this myth. And where that 200 number came from in the myth.

Turns out, there are about 200 NEW NAMES on the major bestseller lists every year. (There are 780 yearly slots on the New York Times list alone, not counting the same number on Publishers Weekly lists, same number on the Wall Street Journal lists, and the 2,600 spots on the USA Today Bestseller list in a year.) So there are about 200 NEW NAMES in fiction hit the bestseller lists every year that have never been there before. That’s just the top spots. I’m not talking extended lists.

And notice, I’m not even counting all the major bestsellers who hit those lists all the time. They are writers as well, people as well, and they count as well. But you get an idea where the silly idea of only 200 came from.

What’s worse, this myth is so bad, that at the master class every year, first night, we ask the professional writers attending, how many writers in the United States they think make a living with their fiction. Many of them say five or ten or twenty. We never have anyone go much past a few hundred. This myth is very, very deep it seems.

So, how many writers in the United States do make a living writing only fiction? Well, that depends on how you define “living.” That’s another shocker for me from information every year from master class students. For the longest time, I figured over six figures gross per year was a living. At that level, there are thousands and thousands of fiction writers making that much and a lot more.

But lately, I’ve been forced by discussions with students to look at reality a little bit more when it comes to “making a living.” A $2,000 mortgage, $1,000 for various insurance, $1,000 for various utilities, and $2,000 more for food and other details, like clothing, trips and such. $6,000 per month after taxes needed to survive. $72,000 per year, but if you are married and your spouse works, cut that number in half. Your half, to say you are making a living writing fiction only needs to be $38,000 per year. Slightly over $3,000 per month.

And many, many people I know make nice livings on less than that. A bunch less. So my number was way high when it came to “making a living” so I have no idea how many thousands and thousands and thousands of writers make a living. It’s a lot more than I even thought it was, to be honest.

First off, how do fiction writers make money?

Numbers First: The common knowledge out there is that we make an advance against sales for our books. Now, if that’s where the income stopped, many of us would have a hard time making a living, to be honest. For those who have never had an advance, let me break this down quickly.

Say you get a $20,000 genre book advance, two book deal. Total $40,000. Not bad money at all. Advances can be much, much lower than that these days in genre, down to less than $5,000 per book without an issue. But for the math, let’s play with a decent book deal.

Each book is divided out into signing payment, acceptance payment, and publication payment. So $17,000 (after agent fee) divided by three equals three payments per book of $5,666.

Say you sell this book on January 1st, 2010. You get the contract in March, (if lucky after negotiations) sign it, get it back, and get the first payments on signing in June, 2010. First payment would be signing on book #1 and #2, for a total of $11,333. Not a bad check. I always like checks with more than one number to the left of the comma.

Your book was done when it was bought, but you and your editor in May have a conference for the rewrite, you get a letter, and you get the book back to your editor in June. They accept the book in September, (if lucky) and in November, you get your second check of $5,666. Your total income for the year about $20,000. Not bad, but unless you have some very tiny expenses and a great spouse, you’re not making a living yet.

Publication comes in the fall the following year and you’ll be lucky to get the check a month later. How about book #2? You were writing it during the spring, turned it in during the summer, and the editor got back rewrites in the fall, and you got an acceptance check in early 2011. Publication for the fall of 2012. So your income from the two books in 2011 is $11,333, and only $5,666 in 2012.

Royalties (again, if you are lucky) wouldn’t even think of coming in until 2013 at the earliest, if the book is doing fantastic and earning out quickly, and you weren’t basket accounted and other details in the contract.

Do the math on this if your advance is $5,000 instead of $20,000. See why the myth gets spread so quickly and easily, even by early published novelists?

For that one contract to ever make you enough to live on for a few years, you are going to have to get very, very lucky and have the book take off big.

So, I seemed to have just made the case for the myth. Right? So how do so many writers make a living? Best way to describe this is a metaphor.

The Magic Bakery Metaphor

Think of us (every writer) as a huge bakery and all we make is pies. Magic pies, that seem to just reform after we sell off pieces of the pie to customers. And each pie can be divided into thousands of pieces if we want.

The Magic Pie secret ingredient is called “Copyright.”

Every story we write, every novel we write, is a magic pie full of copyright.

We can sell parts of it to one publisher, other parts to another publisher, some parts to overseas markets, other parts to audio, or eBooks, or game companies, or Hollywood, or web publishers, and on and on and on. One professional writer I knew sold over 100 different gaming rights to different places on one novel. He had a very sharp knife cutting that magic pie.

So each professional writer has this Magic Bakery, making magic pies that can be cut into as many pieces as we want and many of the pieces can return as if never taken, even after being sold off. (You must learn copyright to really understand this.)

Each piece of the pie is a cash stream.

And extending this metaphor just a little bit farther, you don’t even have to have the same flavor of pie. Kris has Kristine Kathryn Rusch, Kris Nelscott, Kristine Grayson, Kris Rusch, and others, not counting combining with me every-so-often for Kathryn Wesley or Sandy Schofield.

Each story, each novel is a pie. If you spread them out over a number of names (flavors) you have a pretty consistent cash flow stream because you have so many cash flow streams working. (Assuming you are mailing them to people who will buy them.)

Advances on novels is only one cash flow stream for a few pieces of a pie. (Right now, in the news, publishers and big name writers are fighting over Kindle rights and who owns the rights to books published under contract before the mid 1990’s. They are fighting over the cash stream from a tiny slice of the pie and it is a very big and important fight.)

Repeat: Each piece of the pie is a cash stream.

Let me try to explain this using just one piece of the pie. Say you sold the tiny piece of the pie called French Translation Rights, and your contract with the French publisher limited your book to trade paper only. (You could have also sold the piece of the pie that had French hardback rights, or French audio rights, or French mass market rights, or French film rights. You still have those in the pie and can sell them at any point as well. Get the idea?) Your French publisher will have advances like your American publisher, and there will be royalties and so on. In other words, your French piece of the pie will flow money into your accounts just as your English novel sale does.

And your German sale. Your Russian. Your Italian. And so on and so on. Thousands and thousands of pieces of the magic pie can be sold.

One more time: Each piece of the pie is a cash stream.

Say you sold English Language audio rights to a story. Does selling this one piece of the pie stop you from selling any other piece of the pie? No. And when the audio contract goes out of force, the audio rights piece of the pie suddenly appears back in your pie and you can resell it again.

You create the inventory, the pie, just once, but can sell it for your entire life, having pieces you sold keep coming back to the pie over and over, and your estate can keep selling that pie for seventy years past your death. Nifty, huh?

So, one more extension: A Magic Bakery owner who opens a shop and has only one new pie per year, only one flavor, has little chance of making enough money to make a living and keep his business open. Just imagine as a customer walking into that place. A huge empty bakery with only one pie on the shelf. Customer turns and leaves.

But someone like me, who has shelves and shelves and shelves full of pies, twenty flavors, willing to do new flavors at any moment to customer demand, willing to sell off small slices of any pie at any time, has a lot more chance of having a lot of customers and making a living. Sort of basic business. I have inventory. I have a crowded store and am making more inventory all the time.

Each piece of the pie is a cash stream. (If I have four hundred pies in my shop, each with a thousand possible pieces, I have a huge inventory to make money from.)

Go back and look at my myth posts about writing fast, about rewriting, about agents. I put links to them in the post right below this one. See how it’s all starting to fall together? At least I hope you see?

Let me give you an example of how a magic pie works in real life.

I wrote a short story one afternoon while at a writer’s retreat called “In the Shade of the Slowboat Man.” Took me about five hours to create that pie. It was rejected at the market I wrote it for, so I sold it to F&SF Magazine. Decent money. Then sold another slice to the Nebula Awards Anthology, another small slice (nonexclusive anthology right) sold and then returned to the pie. Then I sold it to another reprint anthology (same right again), another small slice sold and returned to the pie magically for another person to buy, then I sold the rights to an audio play made from the story, making more off of that slice than the other three before, and then I was hired with Kris to write the script from my story, so more money yet again. Now I have that story on Kindle and Scribd selling, and have sold it one more time to yet another anthology. Well over $10,000 income from one short story, and I still have the pie on my shelf in my Magic Bakery, still there for sale.

I’m thinking of making a novel pie out of the story. Short story pie will remain, novel pie will be created and both have thousands of slices to be sold.

I had Hollywood once give me $1,000 every six months for three years simply to give them the chance to buy a slice of one pie(story) on my shelf. That’s right, I never SOLD anything from the pie. I simply said “Give me a thousand bucks every six months and I won’t let anyone else buy that one small slice of that pie.” They never touched the pie and I made six thousand bucks off of that option.

I love this business.

Now, let me do one more bit of math.

No hardback ever hits a major bestseller list by selling under 50,000 copies. Might get an extended list, but never actually hits a list (unless a real fluke of velocity and timing happens). (Don’t believe me, read Publisher’s Weekly in the late winter, their article about the top sellers and the hundreds and hundreds of books that sold above 100,000 copies in hardback. Many of them never hit a list.)

Do the math.

Example #1: 10% Royalty rate. $25.00 price. Which means the author’s share is $2.50 per book. 50,000 copies sold is $125,000 author’s share. For just the hardback edition (one slice).

Example #2: The $20,000 advance from earlier. What are the sales numbers the publisher is hoping for? Say this is a genre hardback. Do the math. $20,0000 divided by $2.50 author share of the $25.00 hardback. Publisher would be beyond happy if this book sold 8,000 copies. More than likely they would be happy with 3,000 copies, a decent paperback sale, and some overseas sales bought in the contract, with e-book sales, to make the author’s advance back.

It doesn’t take a lot of sales to make some really, really nice money in this business. I have published over 90 novels and hundreds of short stories. I have over 8 million copies of my books sold. Many of you reading this have never read a single word of any book I have written, yet I have been making a living with my fiction for over 20 years now.

Why? Because I have a very full Magic Bakery, with a large number of pies to sell pieces from. I am not a brand name, I am not a New York Times bestseller. You haven’t read any of my fiction. Yet here I am, making a living with my Magic Bakery.

I sell one slice here, another slice there, a bunch of slices over here, and I keep selling them and the new stuff as well, over and over and over. I understand copyright completely, and I use that knowledge.

Can you make a living after writing only one or two novels and a few short stories? The answer is no, of course. You have a bakery with no inventory.

But once you fill that Magic Bakery, once you have customers who know where to buy, know that your product is good, quality product, then the money will come. Each piece of the pie is a cash stream. And a writer with a good inventory and the ability to sell the inventory to customers can make a large amount of money with fiction writing.

If I can do it, if I am one of the thousands and thousands of fiction writers making a living with our fiction writing, you can do it as well. Just write, finish what you write, mail what you write to someone who can buy it. You know, Heinlein’s Rules will build you one very nice Magic Bakery. In a very short amount of time, actually.

Oh, yeah, it’s also a lot of fun.

Copyright 2009 Dean Wesley Smith.


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