Think Like a Publisher: 2015… Chapter 5: Return on Investment
Return on Investment
As a professional writer, when I am asked by another writer what they would be better off writing, my standard and correct answer is “Anything you are passionate about. Any story that motivates you. Any topic that scares hell out of you or excites you.”
And when asked “What’s the best length in this new world?” my answer has been “Whatever length the story demands.”
Those are my writer-to-writer answers and they are correct. No second thoughts at all. Those answers come from the art of writing. Those answers come into play for all writers and should be followed where possible by all writers. Those answers will help a writer find their best work, their best art.
That is my opinion, my answers, and I am sticking with them as a writer.
Now… let’s switch hats and think like a publisher. Or better yet, the accountant working for a publisher. And that’s where this chapter is going to be a problem for some people.
This chapter is my attempt to answer all the questions I keep getting about what length is better because my writer answer sure doesn’t seem to satisfy some people.
Indie publishers are, for the most part, writers first and foremost. So back to the advice I always give above. It is the right advice, the best advice to turn out the best stories, and that’s what matters.
But… let’s pretend for a second here to help you learn how to figure “return on investment” as if you are not a writer.
Some of my background here as a writer.
Can I write to length? Oh, heaven’s yes. You must have that skill if you work for any time in media of any sort. If a novel needs to be seventy thousand words to fit a contract, it better darned well be within a thousand or so of seventy thousand words. Period. Every time. No exceptions.
If I need to write a short story under six thousand words to fit a certain topic of an anthology, can I do it? Of course. Easily.
Would a book be better if I let it go to its natural conclusion as a writer? Most of the time I would say yes. But often when working with traditional publishing I didn’t have that wonderful freedom to do that. I had to hit word count within a certain time and at a certain quality.
That’s called being a professional commercial fiction writer. It’s a good job. And not a job that most writers can do, actually.
Being a professional commercial fiction writer takes the ability to mimic a voice in words so the readers hear the character’s voice. (Think trying to write the cadence and syntax of Kirk, Spock, McCoy, Picard, Janeway and so on in a way that readers hear the actor’s voices in their heads as they read your words.)
Being a commercial fiction writer takes the ability to spend long hours doing nothing but being creative. It takes the skill of being able to understand author voices and even mimic another author’s voice if you get hired to ghost write, which I did a lot as well.
Most writers are lucky to get to the end of a novel with anything more than a gut sense of what they did. Commercial fiction writers have to know exactly what we did, and why, and we do that to length, and on demand.
And the demand is usually for a very short deadline. Commercial fiction writers must learn extreme control of most aspects of fiction writing skill. (Which is why I can teach craft and help other writers.)
But all that said about my writing life, I still tell other indie writers to just let a story go its natural length to create the best art possible.
Granted, sometimes you can create art within the constraints of being a commercial fiction writer hitting deadlines to length. Not often, but sometimes.
Art is better left free to roam where it wants to go and for how long. And as an indie writer, you have that option. I now have that option, where I didn’t as a commercial traditional fiction writer.
And I love that freedom.
So what do you do as a publisher when you put on the publisher hat?
Can you pretend that because math says one way is better than another, one length of story is better than another, one genre sells better than another, should you push to write that way? Oh, heavens, NO!
But you must understand the business. As Kris and I have shouted over and over for decades now, writers are business people. Writing is a business. And an art.
We all must keep working on the art AND the business. Learning both.
So I am going to try here (for just a short moment) to pretend I am just a publisher, not a writer, and work out some expected return on investments. In a vacuum. Without any thought of being a writer. A publisher talking to other publishers who are not writers.
In other words, I’m going to pretend to look at this business like an accountant in a publishing company would look at it. (In very, very, VERY simple terms.) And again, remember, I am doing this chapter in direct response to hundreds of questions on this topic from writers who might think they are in control of their writing enough to write to length and to topic in a quality fashion. Chances are they are not, but at least I have given an answer.
If you have any fear that this post will change your writing in any way, just skip this one. Please.
What is Investment in Indie Publishing?
We covered all that in the first chapters. It’s expenses, overhead, and time. Time is the critical element here, since the rest are pretty set per project. So I’m going to just assume all of the overhead and expenses are wrapped into the total and focus only on time from here on out in for this post.
The time it takes to write a story or a novel.
(Publisher/accountant hat firmly on.)
Let’s say a product can be produced at a rate of 1,000 words per hour. Each hour is valued at $50.00. (Set your own.)
So it takes 10 hours for a 5,000 word short story to produce and post to sales channels .
Short story has a cost of $500.00. (10 hours)
A 50,000 word novel is 10 times as long, so $5,000 cost. (100 hours to produce and put out)
A 100,000 word novel is 20 times as long, so $10,000 cost. (200 hours to produce and put out)
(I said I was going to be simple, didn’t I? So don’t quibble on the small stuff, follow the logic and then do your own math for your own work and time and value of hours and add in all the factors you want.)
Before we go any farther, I need to lay out what I use as minimum sales numbers for this kind of mind game we are playing here with this chapter.
As I have said in the past and many writers’ numbers seem to back this up, the following sales figures apply if you have 50 or more titles up under the same name. (And yes, I know, genre and series help a lot.)
Assumptions of Sales for this chapter. (Again, this comes into play when you have a lot of titles under one name.)
Short stories average over all titles about 5 sales per month total through all sites around the world. (Average)
Collections average over all collections about 5 sales per month total through all sites around the world.
Short novels and novels tend to average about 25 sales per month total through all sites around the world.
Now I’m going to ignore all the details of pricing and percentages (again, I’m being simple here) and just assign a figure for gross income per sale per item. (Again, I have talked about this a great deal in other posts on my blog.)
Short story $2.00 per sale gross.
Five-Story Collection $4.00 per sale gross. (Say $.75 per story per sale for a five story collection.)
Novel $5.00 per sale gross.
So to the math.
Short story: $2.00 x 5 sales = $10.00.
Then add in the amount per story from sales of collections. $.75 x 5 = $3.75.
So that means you would get $13.75 gross income per short story per month total.
Novel: $5.00 x 25 sales = $125.00 gross income per novel per month total.
Say the novel is 50,000 words long and took 100 hours to write and produce. Each short story took 10 hours to write and produce.
So to equate the two you would take the short story and multiply by 10 to get the same amount of time used on the novel.
Ten short stories = $137.50 per month gross income. (36 months to recoup the $5,000 investment in time on those ten short stories.)
One 50,000 word novel = $125.00 per month gross income. (40 months to recoup the $5,000 investment in time to write the short novel.)
If your novel is 100,000 words, it would take 200 hours to write.
Twenty short stories = $275.00 per month gross income. (36 months to recoup the $10,000 investment in time on those twenty short stories.)
One 100,000 word novel = $125.00 per month gross income. (80 months to recoup the $10,000 investment in time to write the novel.)
Summary of rough math.
If you take the writing side out for an indie publisher, it is clear from the math that writing shorter novels is better than longer novels and writing short fiction is the best when looking at only income.
36 months to recoup investment on short fiction
40 months to recoup investment on a 50,000 word novel
80 months to recoup investment on a 100,000 word novel.
— It has been proven that writing in series helps increase sales.
— It has been proven that some genres sell better in some forms than others.
— It has also been proven that new product out helps sell older stuff. (Which goes back to writing shorter novels and short fiction because you have more product on a regular basis.)
— Novels have better outlets in paper than short fiction.
— Novels can sometimes take off.
— Short stories can make you money selling first to good magazines and also will be great promotion for your other work.
So if you are mercenary and are only thinking like an accountant, writing short novels (40-50 thousand words) and a ton of short fiction in certain genres in series is the best way to go. You get the best of both sides.
That means turning yourself into someone like me who can write to length, in any genre, and quickly and knows story and fiction at such a deep level that you can mimic anything with words.
Yeah, that’s going to happen.
Considering your stories as an actual investment.
Understand, in the first part of this, I looked at your story as a form of inventory that costs will be returned at a certain point. That is how 99.9% of all writers think about their writing. “When will I break even?”
That, of course, forgets about the next 100 plus years of the story’s existence. But writers are always short-sighted and looking only to the next year, at best.
So that’s cost of inventory thinking, the “when will I get my money back.”
So what would happen if you actually considered your finished work an actual investment, like socking money into the stock market or some other retirement plan???
After all, in this new indie world, you retain all rights and those rights last for 70 years past your death.
So for fun, let’s go back to those numbers above and look at them as investment capital.
Take the short novel at $50 per hour and 100 hours of time. You have an investment in the novel of $5,000.
And over a year’s time, on average sales, you are going to make about $125.00 per month or about $1,500 per year on that novel at 25 sales per month. That’s a 30% annual return on investment. Wow.
And yet indie writers I know think a book is failing at those numbers. (It won’t make Amazon bestseller lists… Oh, no! Dean shaking head and moving on.)
So kick the sales down to only 10 books per month on the novel across all sales platforms (Average over a year). Making $5.00 per sale gets you $50 per month or about $600 per year. (Most new writers would think that a failure of a book. And it will never, ever make an Amazon bestseller list)
But what percentage of return is that on your $5,000 investment???
12% annual return.
Investors would kill for a regular 12% return on investment. Given enough investment, you can live on 12% return on investment.
Traditional publishers take a book and look at how fast it can return its costs of production so they can forget it, toss it away. Indie writers learned that from traditional publishers.
Smart writers (indie publishers) look at a book lasting far past their death and think of each story, each book as an investment in the future.
Now back to reality.
Most indie publishers are writers first and the best way to produce good stories is write what we care about, what we love, what we are passionate about. If your novels go long, let them. If you hate short stories, don’t write them.
And the truth of the matter is that if you write great stories and novels from your passion and keep learning how to tell better and better stories, they also sell better. No math needed there. It’s a fact.
So this chapter was to answer a bunch of questions I keep getting about which is the best length to write in indie publishing.
Short fiction and short novels are the best.
But even better is to write what you want and say to hell with the accountants.
And have fun.
Copyright © 2014 Dean Wesley Smith