The Billion-Dollar Book

Today, I’m taking a break from answering questions so I can post the Marketing column that I wrote for this month’s Advanced Fiction Writing E-zine. As I’ve said several times this summer, we are in an epochal year. 2010 may be considered by future historians as the biggest change in publishing since the invention of the alphabet in 18th century BC Egypt. Yes, bigger than that Gutenberg guy and his movable type.

Here’s my article, which I hope you’ll find interesting. I think it would be great if one my Loyal Blog Readers became the author of the first Billion-Dollar Book:

The Billion-Dollar Book

I think it’s plausible that in the next five years, some author somewhere will write a book that earns him or her a billion dollars. I call that a “B-book.”

Who will that lucky author be?

Let’s not be silly. Luck will have nothing to do with it. Great writing and great marketing will have everything to do with it.

If I had to hazard a guess on who will be first to publish a B-book, I’d say J.K. Rowling has the best shot. The 7-book Harry Potter series has reputedly earned her a billion dollars, so a B-book is quite possibly in her future.

If not JKR, then James Patterson is my bet for the next likeliest candidate. If not him, possibly one of the other heavy hitters in the publishing world.

Truth to tell, however, I wouldn’t bet even money on any one of these candidates.

In my view, the most likely author of that first B-book will be some unknown author who comes out of nowhere with great writing and an A+ marketing game.

While I can’t guess who will be the first B-book author, I am reasonably confident that the B-book itself will earn most of its revenue in electronic formats.

Prediction #1: The first B-book will be an e-book.

The reason is that you can’t have great sales without great distribution. There are roughly a billion computers on the planet connected to the internet and all of them can read e-books in numerous formats using free software. There are roughly four billion mobile devices, and most of those will soon be able to read e-books.

The sales channel for e-books is growing rapidly and has global reach. That’s why the first B-book will be in e-format.

What about the price of the first B-book? The higher the price, the fewer the number of copies you have to sell to earn a billion dollars, but the fewer the number of people willing to pay the price.

If your royalties are $1 per book, you could earn a billion dollars by selling a billion copies. Or you could get there by earning $10 royalties per book on 100 million copies.

Nobody knows the sweet spot, but my guess is that it’s somewhere between those extremes. If I had to guess, I’d say that a $2 royalty on half a billion copies is the best way to get your B-book. I can’t prove this. It’s a hunch based on incomplete information.

The reason I think this is plausible is because if you price an e-book at $2.99 on Amazon, then you earn a 70% royalty, which translates to $2.09. That means you’d need to sell about 478 million copies.

(Note that Amazon charges you a small amount for delivery costs when it sells your e-book. For a typical novel, this amounts to a few cents per copy, so things aren’t quite as rosy as I’ve painted them, but it’s a close approximation.)

I’d say that a large fraction of the 4 billion people who can afford a mobile device can afford a $2.99 e-book. And the vast majority of the one billion computer owners with internet access can buy that book.

It’s possible that the sweet spot price is $3.99 instead. At a 70% royalty, you’d only have to sell 358 million copies. Great news, eh?

If you try running these numbers with typical royalties paid on hardcover, trade paper, or mass market paperback, you see right away how much harder it is to get your B-book. Most of the money charged for these formats is going to somebody who isn’t you. That means the retail price has to go a lot higher or you have to sell many more copies. And delivery costs are much higher for a physical book than for an e-book.

This leads immediately to my next prediction.

Prediction #2: The first B-book will be self-published.

Self-publishing is the best way to get the royalty rate high enough and the retail price low enough to make the B-book a reality.

The fact is that most publishers aren’t going to price your e-book at $2.99 or $3.99. They’ll want it at $9.99 or $12.99, which is probably too high for the market. And they’ll pay you only 25% royalties on the wholesale price, which is too low. If you want an aggressively priced e-book and a high royalty rate, you’ll almost certainly need to publish it yourself.

Of course it may be that all of the above is just my wishful fantasy, but if you’re with me so far, let’s ask how you’re going to market a few hundred million copies of a self-published e-book.

You can’t do that alone. You need what Seth Godin calls a “tribe.” In the context of book publishing, your tribe is your set of committed fans. They’re the people you lead.

You don’t have the marketing oomph to reach hundreds of millions of people on your own. You do have the marketing oomph to reach thousands or tens of thousands of people. If you can energize them so that they love what you’ve got and if they’re willing to spread the word, then they can reach those hundreds of millions.

Want proof on that? I don’t have absolute proof, but I have three words that ought to be persuasive if you were awake two years ago:

Barack Obama 2008.

President Obama raised an estimated $656 million in individual contributions for his presidential campaign. He raised that by tapping into the social networks. In a word, he built a powerful tribe of committed followers.

Now it’s true that Obama didn’t hit quite a billion dollars, but he came close and he had an end-point for his marketing campaign. Presidential campaigns end with the election. Books stay on the market as long as they’re selling.

Let me sketch out how I foresee the first B-book will happen. I’ll probably be wrong on some details, but the general picture is plausible:

• First write a great book. There is no substitute for excellent writing. I define that to be, “Writing which provides a Powerful Emotional Experience.” Style is less important here than raw emotive force. See any current best-seller list for proof of that.
• Self-publish the book as an e-book and put it up for sale on all the usual sales channels: Amazon, B&N, etc.
• While you’re at it, create your own online store where you can sell your e-book in all the common formats: text, PDF, RTF, Mobi, ePub, etc. Don’t count on this bringing in a billion bucks on its own, but you can’t beat the royalty rate, and there’s just no reason not to do this.
• Post a large fraction of your book on your web site. I’d recommend at least half the book. Enough so that your readers can really get hooked on the story. Include links to your sales channels, along with incentives to buy. (Access to online “Director’s Cut” material would make a nice incentive. Don’t be offended, but a date with you would probably make a bad incentive.)
• Early on, you might jump-start sales with a special low price. Publishers can do “free Kindle” campaigns that seed the market with early fans by setting the price of the e-book to zero for a short time. (Don’t try that with a paper book!) You probably can’t do this if you self-publish your book, but you can set the price to $.99, which is almost free.
• Focus your marketing efforts on your tribe. Who is most likely to love your story? Build your web presence to appeal to them.
• Communicate to your tribe. Treat them as special, because they are. These are the people most like you. These are the folks who read your blog and subscribe to your e-mail list.
• Enable your tribe to communicate to you. They can do that through comments on your blog and by sending you personal e-mails. You can and should automate part of this by using online surveys — this will let you go broad. But don’t forget to go deep too — your tribe deserves personal responses from you. These are your people. Do right by them.
• Empower your tribe to communicate to each other. Your tribe is excited about your great writing. Naturally, they want to talk to like-minded people. Make that easy by giving them an online place to gather and talk — a forum is ideal for this. Join them when you can, but give them the space to be leaders. A large tribe needs many sub-chiefs. Foster those leaders. If you can, give them the ability to add content to your fan site.
• Encourage your tribe to communicate to the world. Give them buttons on your web site to Twitter or Facebook about you to their circles of influence. Collectively, your tribe knows a lot more people than you do. Your tribe can sell your book better than you can.
• Team up with similar authors who have similar tribes. Your fans will love these authors and their fans will love you. If I can switch metaphors here, remember that “the bigger the hive, the bigger the buzz.”
• That’s it. Don’t do things that sap your energy or drain your money or monopolize your time. You are finite. That’s OK.

You may be saying, “But what about book-signings? Speaking engagements? Giving away free copies in drawings on your blogs? Library visits? Yada yada screama?”

What about them? Those may move a few copies or a few dozen or a few hundred. They may be fine things to do once in a while for your tribe. They aren’t going to make a B-book for you.

Think about it. How many book-signings would you have to do to sell a hundred million copies? You will never book-sign your way to a B-book.

There isn’t any magic bean you can eat that will make you a B-book author. You need outstanding writing and a marketing campaign that you can automate as much as possible, so it doesn’t require ten times as much work to get ten times the results. You need strong, loyal fans who brag about your great writing to their friends.

Very few authors will ever write a B-book. It’s a lot easier (but still Xtremely difficult) to write an M-book — earning a million dollars. It’s vastly easier to write a K-book — one that earns a thousand dollars.

Most authors will fall somewhere on that spectrum. Now here’s the good news. No matter where you fall on the range, from B-book to M-book to K-book, the principles above can help you market your work more effectively.

That’s good news for all of us.