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 🙂