Steve Jobs thrilled some people and infuriated others when he announced that Apple’s new eBook app will use the agency model for pricing.

Translation: publishers can set the price of their eBooks, and Apple will take a standard 35% discount, or commission.

Amazon was up in arms, because it believes eBooks should be a low-cost alternative to paper books.

Translation: keeping all Kindle prices under $9.95 would help push Amazon’s Kindle—which requires a unique format unusable on any other eBook reader—into the top spot in the eBook-reader market.

In Amazon’s business model, Amazon sets all eBook prices and pays publishers a commission—negotiable for larger publishers, non-negotiable for smaller and independent houses. Traditional publishers have been grousing about this policy for some time. When Amazon grudgingly agreed to accept agency-model pricing —with the stated emphasis on “grudgingly”—they managed to get into such a fracas with Macmillan that they killed the “Buy” buttons on most Macmillan titles. While this situation lasted hours, not months or weeks, it received damn-near minute-by-minute press thanks to the flurry of IMs, text messages, twitters, blog postings, and comments scurrying around the web.

Once consumers found out about the Apple/Amazon/Macmillion/agency model/Random House situation (a good 7.32 seconds after the industry found out) …

Translation: Random House took their sweet time making a deal with Apple and so were not included in the otherwise all-encompassing list of publishers who had signed up to play with Apple and thus caused a minor ripple about preferential treatment that didn’t even have a chance to spread very far before it was squashed with another announcement.

… more blogs and IMs and twitters and text messages and comments flooded the Ethernet as people expressed their outrage at the cost of eBooks to the reader and the unfairness of DRM.

Translation: Digital Rights Management (DRM) is the technology that lets eBook manufacturers, publishers, copyright holders, and booksellers control the electronic material the consumer buys. Examples of DRM that really push consumers’ buttons include the seller’s ability to yank paid-for material off an eBook reader and the inability to lend or sell eBooks by transferring them from one person’s reader to another.

Part 2

All of which logically leads to the question: just how much does it cost to produce an eBook, anyway?

I’m a ghostwriter, not an accountant, so we’re going to work with round numbers pulled out of the air in an extremely simplified example. Let’s start when a manuscript lands at the publisher’s door. We’ll stipulate that it’s a good book, that the agent called ahead, that the acquisition editor expects it to show up on (arbitrarily) her desk, and that a contract will ensue. We’ll include man-hours and cash outlays and keeping a running balance on the side.

Start the dollar countdown:

Getting the “Requested Material” physically from the mailroom or electronically from the editor’s inbox costs, let’s say, a single man-hour arbitrarily valued at $10 per. Cheap labor is good to find.

$10

The editor has to read the manuscript. Since much of the brouhaha is over fiction, we’ll make it a standard 350-page novel, and we’ll value the editor’s at, oh, $25/hour. Let’s say it takes her ten hours to read and fall in love with the manuscript. That’s pretty fast—I would take longer—but we’re working with round numbers and I have a limited number of fingers, even using both hands.

$260

We’ll dispose of the in-house decision-making meetings, discussions, push-and-shove, etc. in another ten man-hours—that includes all the people with whom the editor has to meet, some of whom make more than her and some of whom make less. Again, probably low, but I don’t want to have to take my shoes off. We’ll average them all out to earning $30/hour.

$560

Not too expensive so far. Now let’s negotiate the contract. No one is really disputing the cost of Jane Doe’s eBook—they’re disputing the cost of Stephen King’s new eBook, or Sue Grafton’s new eBook, or Elmore Leonard’s new eBook—but let’s make ours from an author whose reputation is rising but not yet star-level. We can probably get away with offering $60,000.

$60,560

Nice try, but the agent has other ideas. Another round of meetings, this time between the editor and maybe even the publisher with the marketing and legal departments. We can stick to another ten man-hours (low, low, low), but the average cost is now closer to $60/hour, and the final negotiated deal is $75,000. Agents are worthy of their hire.

$76,160

Huzzah! We own the book! Now things start pricey. The editor is going to spend at least 80-160 hours doing what editors do best (and most): editing. We’ll average it out to 100 man-hours at $25/hour. You’re right—that’s not much, but publishers expect the heavy editorial to be completed by the time they look at the manuscript. Chalk up another $2,500, minimum.

$78,660

Interior design really, really, low-ball: 40 hours @ $20/hour.

$79,460

Cover design: 80 hours @ $35/hour.

$82,260

ISBN, LCCN, CIP paperwork & follow-up: 5 man-hours @ $15/hour.

$82,335

Marketing. The industry rule of thumb is to spend the same amount marketing and advertising a title as it cost to buy the title—in this case, $75,000.

$157,335

We’d be fools to try to recoup over $150,000 on eBooks alone, especially since only about 6% of the population have readers and digital still only account for about 4% of total sales. Ergo, we have to print. If we print 25,000 copies—a gamble—our production cost should run approx. $.75/copy or $18,750

$176,085

We’ve got that $75,000 worth of advertising supporting our sales, so we need to get those books out to our distributors, wholesalers, and booksellers. The average distributor takes a 60% discount; wholesalers take 50. We’ve priced the title at $12.95, so we get $5.18 through our distributors and $6.47 from our wholesalers, for an average of $5.82 per book. If we sell out our initial 25,000 copies at an average return of $5.82/book, we recoup $145,500.

$30,585

We’re still in the red, but we’re getting close to breaking even—not making a profit to boost our budget for buying another book, just barely covering the costs of publishing this one. But hey—what about those eBooks? That cost is minimal at best: say, 10 hours of technical man-hours at, oh, $20/hour. That’s  $200, barely raising our nut.

$30,785

Let’s say the eBook sells for an average retail price of $9.95, Amazon’s comfort number, that we net 35% of that $9.95, or $6.47, and that 1,000 people—about 4%—buy it. Cool! We’ve made $6,470.

$24,315

We’re still over 10% in the red even without taking myriad other costs into account: bookkeeping, troubleshooting, production overruns, flat covers, and so on and so forth, and scooby-dooby-do. A lower advance won’t make any real difference because we’ll just go with a smaller print run and smaller marketing budget.

If we sell out that initial print run in a week or so, we’ll do another immediately. If we don’t run out for six weeks, we’ll calculate the potential against the cost—after all, we don’t have any more marketing/advertising dollars to spend. If we’ve still got books in the warehouse after six months, we’re not going back to the printer unless the author does something newsworthy to make demand shoot up. As far as eBooks are concerned, any additional sales will be trickles since we’ve already factored in the expected 4%.

Part 3

“But wait!” I hear you cry.

“I’m not going with a traditional publisher. I’m going with a nifty ePublisher whose web site promises to that all I have to do is pay $99 and we’re in business!”

Good for you! Since you have 10,000 Facebook friends and all the time in the world to promote your book because you don’t have a day job, the public will probably flock en masse to buy your eBook.

Approximately 5.8% of the reading public, that is, because that’s about how many people own an eBook reader. Let’s add another 1% percent who will read it on their computer. Oh, heck, let’s make your potential eBook audience an even 10%. The publisher has priced your title at a tempting $4.99 and you only have to recoup $99—hey, you didn’t waste your money paying for their phony extras. Figure you get 50% of that $4.99, or $2.495, so when 10% of your 10,000 Facebook friends buy your eBook—an inflated number, sure, but we’re going for the gold here—you’ll net $2,396, because you don’t count your own man-hours or value. Of course, unless all those people buy at the same time, your income will trickle in at a couple bucks per month, but hey—you’ve got an eBook!

Are these figures accurate?  Nope. I pulled them out of the air, remember? But the concept is solid. As authors, it’s easy to forget that books are business, and business is all about moving units.

Warning! Shameless Self-Promotion Ahead

If you had spent $25,000 to hire a professional to get your manuscript viable in the traditional-publishing world and had captured that $75,000 advance—or even a $40,000 advance—you’d have made at least $15,000, maybe $50,000, all at one time, with the potential to make a lot more since, after all, you have all the time in the world to promote your book. And having that money all at one time would have given you the funds to do a lot of specialty marketing and promotion, so yeah—more people would know about your book and want to buy it.

Just something to think about.

And may God bless us all.

I did not write the 5th Edition of THIS BUSINESS OF BOOKS.

So I’m doing that one now. This January, 2010. Really. I mean it. Absolutely for reals. I may have to buy an interest in Mars Candy Company to recoup my investment in M&Ms to get through it, but I’m doing it. Right now. Seriously.

For six years now—six years?!  What’s the matter with you? Just write the damn thing!—I’ve promised myself to slam-dunk this revision in a matter of ten to fourteen days. A month at the outside. Six, eight weeks, tops. Definitely within a fiscal quarter.

And for six years—six years?!—I’ve found good reason to not even crack the thing open. I had clients’ work to do. I was backed up on my bookkeeping. It was still selling as is. I had other stuff to write. I didn’t want to self-publish again and I didn’t want to create a proposal. I’d gotten two negative reviews (out of about forty-five or fifty, the rest all positive —so sue me, I’m an author, just like you). Other books had taken its place. I didn’t know what I wanted to change.

I didn’t want to do all that work.

But this year—this glorious 2010 year, this tenth year since we stopped saying “nineteen” and started saying “two thousand” and now say “twenty,” this fantabulous year wherein my husband goes forth with his reinvigorated career, my daughter and her fiancée move to Boston, I sell SECRETS OF A GHOSTWRITER and even find a new agent for HIRED BODIES—this year I’m knuckling down and doing the 5th Edition.

In fact, I’ve already started. Mostly by pretty much catching up on everything else so I have no excuse left, but also by making notes in the margins of my desk copy. I’ve created a new file with a new file name that I can fold, spindle, and mutilate. I’ve collected articles and URLs with important albeit already outdated information. I’ve figured out exactly what I want to change and how I’m going to adjust the cover. I’ve determined the best BISAC Subject heading. I’ve even seriously thought about maybe starting a possible book proposal!

Whew! Is it time to take a break yet?

But no—I slog on. Neither rain nor sleet nor beckoning dirty toilets shall stay me from actually rewriting the obsolete stuff, editing the perennial stuff, updating the transient stuff, and throwing out the rest. The revision-needy text and its accompanying diagrams, tables, and sheaf of amendments sits right here before me, slightly right of my monitor, on the very top of the manuscript pile, obvious, relentless, demanding. I shall persevere. I shall overcome. I shall write the 5th edition.

But as Harry Truman would say: don’t quote me, that’s strictly off the record.

Yup, here we are again at the end of another tough year. But since it wasn’t as tough as 2008, making that list of things I did right is going to be a lot easier, right?

Of course. Because, as I wrote last year, it’s far too easy to look back and come up with everything you did wrong over the past twelve months–besides, where does that get you? Maudlin on NYE, and making a lot of ridiculous promises to not do this and absolutely do that to compensate for everything you messed up or didn’t do in the past.  Forget it.

I’d rather focus on the things I did right. That way I can start the new year feeling good about myself, and let any resolutions reinforce that forward motion. I’ve been doing this for years–about seventeen, come to think of it! I just wish I’d remember to make the list as I go through the months. But I never do, so memory must serve…

First and above all else, I hung in with my husband as he bounced from good to bad to worse and finally, to getting his life under real, permanent control thanks to a tiny little pill and a highly intuitive doctor. Thank you, and you’re welcome. (And a thank you to him for hanging in with me.)

I supported my daughter’s decision to leave school again while the others kept going. She’s waiting for them to catch up to her, credits-wise, and trying to figure out her life. I can’t really help, but I can get out of her way. Which I did. And that’s a good thing.

I nailed the structure and requisites for Ghostwriter Certification Training, and got eight people through the entire course while editing and tweaking the textbook’s contents. I think that counts as two good things. Maybe three. Whatever, I’ve helped change people’s lives for the better, and that counts for the list.

I helped a fellow writer figure out how to get her book into colleges. A BIG good thing.

I helped a wonderful new writer strengthen her novel and her skills. Yes, I know that’s my job, but she was a special case, and it took a degree of sacrifice to get  through the entire book. Both were definitely worth it. A good, good thing.

I accepted help. A lot of help. I even accepted the bizarre notion that I’m not Wonder Woman and can’t do it all myself. Very tough; very, very tough. But I did it. I even asked for it. I’m counting that as two, because the level of difficulty should affect the degree of goodness.

My list, my rules. Make your own list if you don’t like it.

What else? I gave away a lot of vital information to a lot of people. Not sold; gave away. The business people in my life don’t think that’s such a good thing, but I do. Oh, wait! I also charged for some advice! Asked upfront, “Will this would be Mastercard or Visa?” just like I’m suppose to do. So I’m counting that as two.

Yeah, I take it both ways.

What else, what else…? Ah ha! I started reading my “quirky/difficult” novel at my critique group. They’d asked me to bring something in, so I finally did. Most are sorry they asked, but a couple people are enjoying it. This book has been a touchstone in my life for a long time. No matter what else I write, my soul is wrapped up in HIRED BODIES. After two agents couldn’t sell it, I’d decided to put it in a drawer. Now that I’ve taken it back out, I find I still love it, and have even begun looking for another agent to try, try again. Absolutely, that’s a good thing.

Which leads to a bad thing linked to a good: I left my old agent and signed with a new one to sell SECRETS OF A GHOSTWRITER. Why was such a sad parting a good thing? I needed to infuse my author career with some energy. My old agent and I had gotten too complacent with each other. Another tough, painful step, but I did it. Doing tough stuff I’ve put off facing for years is absolutely a painfully good thing.

Where am I so far? Ten or thirteen, depending on how you count. My criteria; agree to thirteen.

Hmmm… anything else? Marilyn! I accepted Marilyn Jenett’s friendship and guidance into my life, which doesn’t sound like a good thing to have done, just a good thing to have happened. But since I am so resistant to close to new people, and since it took a conscious act, not to mention a leap of faith, I’m counting it as doing a good thing. No, make that a GREAT thing, because Marilyn has made a remarkable difference in my life, and I cannot recommend her FEEL FREE TO PROSPER  program enough. And no, I don’t get paid to say that. So that’s fourteen.

Oh, I bought Marilyn’s program for my sweet, wonderful, life-in-tandem sister -by-love. Definitely a good, good number fifteen.

I listened to my daughter’s ideas about how to commercialize SECRETS OF A  GHOSTWRITER. No, we haven’t made it happen yet, but the concept is wonderful and I listened instead of simply saying no. Absolutely, that was a good thing. Sixteen.

I reconnected with a friend without making undue demands on her. Another toughie. I’m counting it. Seventeen.

Finally, I made a major financial mistake this year. Major. Not bright. Easily avoided. Felt like an idiot for doing what I did. What a dumb thing to have done. But I’m going to flip it around, like a poorly constructed piece of writing, and see the good in it: I will never do anything like that ever again. I promise me. And if learning from an expensive lesson isn’t a good thing, I don’t know what is.

I think that’s it. Looking back, it’s been a remarkably healthy, growing year. I anticipate 2010 will be even more so, and I close the year with this blessing:

May you enjoy health, prosperity, rich friendships, and abundant good fortune through the coming year, and may you find yourself writing out a twenty item “Good Things I Did” list twelve months from today.

Happy New Year!

Certification training gives you an edge not only in the marketplace, but in doing the actual job of ghostwriting. It takes you out of the league of “just another writer” and elevates you to top-professional status.

Scads of people call themselves ghostwriters today, but the sad truth is many are not prepared to deal with their clients’ Pride of Authorship or stream-of-consciousness structuring or sequence-of-events plotting. They don’t know how to establish their authority and command $35,000 or more per project. They don’t understand the psychology of doing an A&R or the differences between the author’s process and the ghostwriter’s process.

Certified Ghostwriters know all this and lots, lots more. If you or someone you know is struggling to make a living as a freelance writer, Ghostwriter Certification Training may be the best way to launch a prosperous 2010!

Want more information? Go to http://claudiasuzanne.com/gct

Please.

Signing up with a self-publishing service doth not make thee a self-publisher.

Actual self-publishers get LCCNs and P-CIPs so their books can be sold to libraries.

Actual self-publishers do, indeed, have imprints and business addresses and business licenses and resale licenses and their own block of ISBNs purchased directly from www.bowker.com.

Actual self-publishers are members of Amazon’s Advantage program and Independent Book Publishers Association and Small Presses of North America  and have book-rep and wholesaler and distributor agreements; they use traditional book manufacturers or industry-connected printers  and go to great lengths to ensure editorial accountability, find credible internal and cover designers, and pay for warehouse and fulfillment facilities.

Actual self-publishers only use POD (Print, not Publish, on Demand–it’s a type of printing, not a type of publishing) to send out advance galleys for reviews, because short-run POD printing tells the book industry you only intend to sell a few dozen copies.

Self-publishing is a full-time business that requires editorial accountability, industry registrations, and multiple-avenue distribution supported by marketing and promotion. Whether you’re releasing your own titles or someone else’s, the enterprise requires business formalities, serious time, and significant financial investment.

I’m sorry–and I know I’m fighting a losing battle along with all the other people in the traditional-publishing world–but “self-publishing” through a “service” is just another euphemism for subsidy publishing, pure and simple.

(To download PLOT Y OUR NOVEL IN 15 MINUTES OR LESS, just fill in your name and email address under SUBSCRIBE in the right column and hit submit.)

Got another free eBook coming soon: HOW GHOSTS GET THEIR GIGS. This will be a compilation of stories by actual, working ghostwriters. The eBook should be ready around the time the next Ghostwriter Certification Training (GCT) classes start in January, and will be free to all GCT students, past and present (and possibly available for a small fee to you aspiring ghosts…)

Why a HOW GHOSTS GET THEIR GIGS eBook? Because if you don’t take the training but still want to break in to the business, you’re going to need a helping hand. As one recent student said, ghostwriting isn’t  easy. But it is one of the fastest growing and most in-demand freelance-writer opportunities available.

Also–and take heed, shameless self-promotion ahead–check out the new Press page in the left column to see what people (only one is a student) are saying about ghostwriting and GCT. That’s it: shameless self-promotion officially over.

There are only two absolutes in the book industry: 1) all publishers edit according to Chicago Manual of Style (except those that don’t) and 2) all publishers expect authors to use MS Word (except those that don’t).

The Pirates of the Caribbean movies said it best: all those “rules” are really just guidelines. When it comes to writing, editing, submitting, and publishing,  there are really no absolutes, no hard-and-fast rules, no by-the-book regulations. Instead, the business is very firmly based on what this person wants, what that person remembers has sometimes worked in the past, or what some guy in marketing believes will work next quarter. It’s quite hit-or-miss, very trial-and error, extremely whatever works for a particular individual at a given moment on their one, specific project.

So if it works, you did it right. If it doesn’t, you didn’t. If it worked last time, you did. If it doesn’t work now even though it worked last time, you did then but not this time. If it works again next time, you did. If it works for you but not for him, you did, he didn’t.

Have I made myself fairly clear?

Once upon a time, a really smokin’ ghost lost her groove. No, she didn’t collide with some old man while dancing down the hall, and she didn’t go to Jamaica and hook up with an underage cutie, either. She just got smacked in the face with that most famous of all movie devices, “undeserved misfortune.”

Aka “life.”

“Think positive,” said her favorite authors. “Get rid of your negativity,” intoned her best friends. “Keep a stiff upper lip,” insisted the positive-reinforcement tapes in the back of her head. “Pay us!” cried her creditors, drowning out all the others.

But “life” had other ideas. The smokin’ ghost’s income plummeted while her debt skyrocketed. And her self-confidence evaporated along with all the clients who used to seek out her help.

Her smokin’ days were over.

Or so she thought.

One afternoon, just as she was about to crawl off into that watery cave with Puff, the discarded Dragon, a real-life avatar came into the formerly smokin’ ghost’s life.

Synchronistically. From out of nowhere.

“You’re going to tell me to think positive, aren’t you?” the wispy thin phantom groaned plaintively.

“Tish tosh. What good would that do?” the avatar said. “Only set you up for failure. That won’t get you smokin’ again.”

“Then … what?” asked the now curious but still undeniably doused ghost.

“I want to show you how to live Today,” said the avatar. “How to gently reprogram your subconscious so you don’t have to work at being positive. How to get smokin’ results again, easier and bigger and better than ever before.”

“Are you for real?” queried the previously positive poltergeist.

“What—you’ve got a better idea for turning your life around?” responded the avatar with distinctly Jewish-mother overtones.

So the formerly smokin’ ghost read the avatar’s eBook. And then took her program’s lesson instructions and material. And she did the homework and, when it was time, listened to the audio files.

And pretty soon—like about two, three weeks—the formerly quenched spirit was back to smokin’ and ghostin’.

So she snuck onto the avatar’s website and bought a program for her sister, a smokin’ naturopath who had always smoked in tandem with her until they both lost their smolder. In tandem.

And her sister read the avatar’s eBook. And then took her program with the lesson instructions and material. And she did the homework and, when it was time, listened to the audio files.

And pretty soon, the smokin’ ghost’s sister was smokin’ again herself. And the reignited specter knew it hadn’t been just a fluke—it was real.

And she had to spread the word.

And so the smokin’ ghost (it’s me! did you guess?) will be hosting a teleclass with her real-life avatar on Monday, Nov. 9 at 4:00 PM Pacific Time. If you want to get smokin’ again in your life—or even for the first time—sign up NOW so you have time to read the program’s lesson instructions and material and do the homework for at least week before the teleclass.

But then, instead of listening to audio files, you’ll participate in a live two-hour session—real-time, person-to-person, ask questions/get answers—teleclass with my avatar, Marilyn Jenett.

The program is called Feel Free to Prosper. (And I do.) The cost is $197 for the whole thing. CLICK HERE to register. All monies go to the care and feeding of the avatar, so she can continue to reignite the doused and ember-dying, wherever they may be.

Synchronistically.

MARILYN’S GUARANTEE

After applying the lessons and participating in the teleclass, if you don’t find the program to be of great value as promised, I will refund your payment completely.

For the record, I get no financial remuneration from this teleclass. It’s my gift to you: the writers I work with, teach, read with, have come to love—and, especially, the writers who ask, “Yeah, but how do you find clients?”

Honest to God, this is how I do it.

Always have, even when I didn’t know what I was doing and couldn’t direct it. Now, thanks to Marilyn, I do and I can. In the few months since I started Feel Free to Prosper, I’ve landed a high-fee client, contracted a standard-fee client, fulfilled a scattering of fast-buck projects, filled my classes, found a new agent, been called upon to do a handful of public appearances, lost some weight (yeah!), and shed an incredible amount of stress.

Best investment I ever made.