Tuesday, February 27, 2007

A Meandering Post on Money

I was wondering how to inaugurate this blog, kicking around a few ideas in my head, and then I found this post from Scalzi (actually, I found it via Uncertain Principles, but who's counting, right?) detailing the amount of money he made during 2006 from his writing income. (If you don't know, Scalzi is a fairly prominent blogger who has written several well-received and award-winning science fiction novels, among them The Android's Dream, which I really enjoyed, and Old Man's War which I plan on reading very soon.) It's a long and interesting post, but the upshot is that Scalzi made about $67,000 from his science fiction writing/editing last year.

What's more is this:
2006 was an interesting year for me in this regard, primarily because it's the first year that, frankly, I've gotten any substantial amount of income from science fiction. To bracket this, allow me to note that I've been making income off of science fiction since 1999, which is the year that I first offered Agent to the Stars online as "shareware." So from 1999 through 2006, here's how the income came down. Note that I'm breaking down the income as to when it was actually received, ie., when I had cash in my hot little hands:

1999: About $400, from Agent readers
2000: About $1000, from Agent readers
2001: About $1100, from Agent readers and a short story sale at Strange Horizons
2002: About $1000, from Agent readers
2003: About $6000, from Agent readers and from first part of advance for Old Man's War
2004: About $5000, from Agent readers and from first part of advance for The Android's Dream
2005: About $15,000, from second part of OMW advance, first part of The Ghost Brigades advance, advance for Agent to the Stars hardcover, and short story sale to Subterranean Press.
2006: About $67,000.

As you can see, there's quite a jump from 2006 from the rest of the years; I made more than four times as much in science fiction than the year before, and about twice what I made for all the years previous. So what happened? Lots of things:

And then he goes on to discuss what kinds of things made this year so big for him.

Which, to any aspiring writer, is pretty depressing: Scalzi's having the kind of career right now that dreams are made of. He's been nominated twice for the Hugo, has three books selling well (at least two of which are "Sci Fi Essentials" with that nifty little Sci-Fi channel logo), and maintains a loyal fanbase. Sure, he's just getting started, really, but the dreams of a lot of aspiring authors include quitting the day job and writing full-time as soon as that first book sells, living off of the fat royalty checks. The reality is that Scalzi's now doing better than about ninety percent of published authors, working full-time as a writer and making a decent living at it. Most published authors don't make a living at it, at least not until they've published a number of books. (In Asimov's two-volume autobiography, he talks about how at the end of a decade or so of writing science fiction, that he has reached what he thought was his financial maximum from his writing career, which as I recall was about ten grand in 1950s dollars. He couldn't imagine how anyone could make a career at this writing thing, until a few years later when his back catalogue got large enough that the really large royalty checks started coming in.)

In short: writing is a career that is only for those able to do the long haul. Writing a single book won't set you up for life -- writing a dozen or more books is really the only way to make it in the industry. (Unless you're one of those very select few with a major runaway bestseller under your belt, in which case you can pretty much name your price.) Which explains why so many popular, bestselling authors have so many books in print, and the most financially successful authors tend to be those that write series (like Nora Roberts, Janet Evanovich, et cetera).

At the risk of making this way overlong (which I may have inadvertently done already) I'd like to discuss a somewhat related issue: where exactly does the money you and I pay for books go? Does anyone (aside from someone like Stephen King) actually get rich in the book publishing game? In the movie world, for instance, stars make huge amounts of money and have very short careers, whereas directors, writers, producers, et cetera make less money on a per-picture basis, but tend to have much longer active worklives -- this is even more true for the "technical" persons in the movie world, such as cinematographers and editors and grips and caterers and such. Perhaps authors are more like the "technical" persons on a movie set, dedicated craftsmen who make a decent living at what they do, but tend not to make the millions that the real superstars do. (In this case, someone like Thomas Harris or Stephen King or John Grisham would be the superstar.)

I can certainly say that at the local level, at the bookstore where the books are being bought, there's not a lot of money being made. Of course hourly retail people are paid poorly (I make less at my current job than at the old job selling office supplies, by a considerable margin, and from what I know of management salaries there's an even greater disparity between the two different types of companies), but it seems that sales volumes tend to be quite low in general. One of the things that really shocked me when I started selling books was how fly-by-night even bestseller sales were: Micheal Crichton's Next was released, but at a 30% discount, and for a week I personally sold a handful copies a day (just through my own register, not counting all that I saw sold). Call it fifty copies in that first week, and that's being generous. Not exactly like the publishing phenom of J.K. Rowling (and, as a more direct comparison, when the last Series of Unfortunate Events book came out, we sold a whole bunch of copies that first day and hardly any afterwards), but a decent seller, considering there are thousands of stores similar to mine in North America.

But if that's near the tippy-top of the publishing game, consider the many books that are "big releases" that are more difficult, or have less of a built-in audience. Aside from my own copy of Pynchon's latest Against the Day, I never saw a single copy sell. In the six months or so I've been selling books, I might have sold one or two of John Scalzi's books (way to bring it back around, huh?), even in a town as tech- and science-fiction-friendly as Huntsville. I'm hesitant to start discussing hard numbers (insofar as I have them -- I'm a lowly employee and don't have ready access to long-term sales numbers), but storewide we do maybe ten or fifteen grand in a day's sales, more during busy times of year like Christmas, maybe less during slow periods.

If you assume that each book costs about ten bucks (fair enough, given how many mass-market paperbacks and low-costs magazines we sell, versus hardcovers and such), then we do maybe a thousand individual book sales a day. Divide that by the number of hours we're open, and it averages out to about a book a minute. Which feels about right, at least averaged out over a full day (there are busy periods and slow periods).

So let's take that ten grand and multiply it by thirty days, then take half of that (since bookstores make about fifty percent profit on the items they sell), which gives us something like $150,000 per month in gross income. According to some rough numbers I found here and here, annual rent on a store like mine has about fifteen dollars a square foot (link gives 13.5, but I'm rounding up a bit since the best link I could find was in a more rural area than mine) and the store's around forty thousand square feet. Multiply all that and divide it into a monthly rental number, and we're talking something like $50,000 per month rent. I've heard that utilities usage is about three thousand a month (don't have a link handy, but I've heard the number a couple of times at the old job, and it gives us a nice order of magnitude) and salaries will probably run another ten grand per month. (That one's hard to estimate, since number of employees and amount of experience will be very variable, as well as total number of hours. If I were a manager I'd have an actual payroll budget, but probably couldn't discuss it publicly, so let's just call it ten grand to be general about it.) So:

$150,000 gross income
minus $50,000 rent
minus $3000 utilities
minus $10,000 payroll

and the company makes something like $87,000 per month off of our store, before overhead costs, things like shipping costs (substantial given the weight and bulk of books), general upkeep, various supplies, et cetera. I have no idea how much shipping costs might run to, but if we assume that half of that is taken out in these miscellaneous costs, then there's something like forty to forty-five thosand a year of pure profit coming from the store.

Which means that it's really good to be on the top of this pyramid. I'm sure the publisher's side is similar, given the way that writer's contracts are generally worded, and the way that royalty and fee structures work (go back to that Scalzi article for details). A few people at the very top making loads of money, while those of us who don't own any part of the chain (including the authors) get screwed. No doubt that writing (and for that matter, selling books) can be pretty rewarding, but this is just one more reason to support local businesses whenever possible: at least then the profit stays in your locale.

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