Lifetime Value of an Author

On my first (and now defunct) blog, One Writer’s Voice, I wrote about the dynamics of making money as a traditional author. With the rise of self-publishing as an increasingly viable way for authors to bring their content to readers, I thought it might be helpful to reexamine that notion.

Let’s consider the writing industry, a term I prefer to “the publishing industry” because it puts the emphasis on those creating content and implies a shift in the balance of control amongst writers, influencers, publishers and agents. One statistic from a 2008 case study on the industry is: 20% of a publisher’s titles generate 80% of its sales and profits. In other words, publishers lose money on a significant percentage of their books. Without doubt, authors whose books continue to lose money are either swiftly, or not-so-swiftly, dropped by the publishers who took them on. Of course, many authors go on to earn money for their publishers over time as illustrated below.

Author profitability

Costs represented in red include editing, new author support, advances and royalties, advertising and promotion, production and distribution. Revenues (in green) include book sales, foreign rights, subsidiary rights and so on. One could argue with the exact size of each bar on the chart, however, the point is subsequent books create synergies, sparking sales of earlier books and reaching wider audiences. In theory, publishers along with authors and agents gradually earn a return on their investments.

Costs are changing with adjusted publishing, distribution and marketing channels. Authors are taking on different tasks – some might argue to the detriment of their primary purpose of content creation. Revenues might increase if authors can reach readers more easily and create demand through other than the traditional mechanisms. I’m sure all this has been said before.

What does the equation look like in the self-publishing world or in a blended world of traditional and self-published authors?

Life time Value Self-Pub


A number of self-published authors are subsequently taken on by traditional publishing houses. Is this a different way to share risks between authors and publishers? Will it result in better choices on the part of publishers?

Lifetime value blendedAgain, the diagrams are conceptual, don’t pay too much attention to the size of each bar on the charts.

Questions to consider: Which costs should authors bear? How can authors participate more effectively in advertising and promotion? How will the ever-changing dynamic of technology affect the costs of publishing? Who should benefit from a different cost to revenue equation? What responsibility do readers have?

And … what can authors do to manage costs? Reach more readers? Work effectively with publishers? Write productively?

The charts make the process look simple and we know that it is anything but. Self-published authors struggle to break even despite writing more books. Self-published authors may be taken on by a traditional publisher and still not break through to better sales.

What seems clear is authors must write many books in order to have a hope of earning an income from their writing. Unless, of course, they are very lucky 🙂



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The historical fiction author behind A Writer of History...

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10 Responses

  1. Interesting post, Mary. A couple of observations from a successful, trad-published, non-fiction author now dipping his toes into self-published fiction…

    1. Virtually all authors, whether trad- or self-published, had/have to do most of the promotion of their books. Unless they’re in the top-tier with King, Grisham, Mantel, McCullough, et al., of course. If anything, authors will need to do even more of that, even if with a trad publisher. That marketing cost/need will only increase. What put my 2003-2005 trad-published books over the top was MY time spent on mkting and promo; the publisher—the largest in the world at the time—did virtually nothing in that area. So the author-doing-marketing curve will only bend up. And authors will need to deal with it and learn about marketing. Whether they like it or not (and most don’t).

    2. I agree that most authors will need to write many books to have a career in writing. It’s all about “cross-promotion,” which, again, is all about marketing.

    3. Self-published Indies are now in the Publishing business as well as in the Writing business. So cost control is important. And one of the crucial costs is: book covers. There are now LOTS of options for buying covers (custom, premade, etc.), but many authors who have a visual bent are making their own covers. In the long run, that can be more cost effective. But those authors MUST understand the basics of good cover design. I know a lot about this area (I created the design template of my NF books, and the publisher rolled it out for an entire sub-imprint of related books), and I see the obvious mistakes in cover creation all the time, even from freelance designers who are supposed to be “professionals” (most are newbies jumping into this field because of the insatiable demand for their services by the growing crowd of self-pubbed Indies). Even if an Indie author jobs out their covers, they must be cognizant of the Best Practices of book cover design and how crucial that is to book sales. In an era of 2-second attention spans, a bad cover can kill a book fast. At least with Indies, covers can be changed quickly. Good luck trying that with a traditional publisher!

    Harald Johnson
    author, “Mastering Digital Printing” series
    art/creative director

      1. Hope Mary T. is OK with me responding. Mary SB: Search around online. Lots of blog posts and articles. And I’ve started a “Book Cover Reviews” group on Goodreads (search for it); you can pose questions (and upload cover concepts) there. I like HM Ward’s ideas about covers: that they are “stop signs”—they need to quickly reveal as much info about the book to the reader as possible, especially at small thumbnail size. I call this: “At-a-Glance-ability” and it involves knowing how to balance and contrast the three main cover elements: (1) main title, (2) author name, (3) main image. There’s a lot more involved, but that should get you on your way. Good luck!

      2. I hope you saw Harald’s suggestion, Mary Sue. I found a cover designer who does wonderful work. Email me mktod via the contact me info and I will put you in touch with her.

  2. I am always surprised by how few S.P. authors start out without a financial plan. I have always found that essential and I am sure I would not have become self sufficient without it. Even early thoughts on comings-in and goings-out help to indicate priorities in marketing and out-sourcing. A carefully thought through set of figures at the start stops you throwing money down the drain, cheers you up when things go quiet and ….. makes sure you get of your seat and do something!

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