Business Models for Authors

Orna Ross, Director of ALLi

Updated 19th January 2023

This post outlines the principle business models used by independent authors today, as devised by the Alliance of Independent Authors (ALLi), together with the most popular income streams for self-publishing authors. 

In the past, authorship was a profession, with most authors licensing all their publishing rights exclusively to one publisher. Though that model is still used by a dwindling band of authors, receiving dwindling income, today authorship for most writers is a business not a profession.

A business based on self-publishing books–and, for increasing numbers of authors, other products and income streams too. The Alliance of Independent Authors is currently conducting research into author income, based on the business models and income streams outlined below.

Earning A Living from Writing

To run any successful creative enterprise, you need to shape your skills, talents, and expertise into a saleable product or service. What independent authors sell, obviously, is books and, for some, that is enough to create a viable business. Other authors, out of commercial need or creative impulse, go beyond the book to sell other products and services too.

Earning a living from book sales only has always been rare, outside of particular high-sales genres like romance and crime (fiction), self-help and how-to (non-fiction), light-verse or inspirational (poetry). Traditionally, given the limitations of shelf space and sale-or-return policies in physical bookstores, even authors writing in such genres found it difficult to sell enough books to make a living. Except for outlier exceptions, authors in more niche genres, or multi-genre authors, were doomed to low incomes.

That changed when global readership and infinite shelf-life became available through digital publishing. Every genre now offers enough readers to support a skilled author-publisher, one who knows how to write well and publish well.

That said, it is still easiest for those who write in genres that attract “whale readers”, readers who consume a lot of books quickly. For authors in less consumption-driven genres, setting up for success often means seeing your books as part of a bigger picture. By incorporating other products, it becomes easier to create an author business that lasts over the long term, and is capable of ongoing growth and expansion. A publishing enterprise that is, in business lingo, sustainable and scalable.

If your books have a teaching element, for example, you can set up a course that positions you as an expert, an authority, a thought leader in your field. If you write fiction or poetry, your value to the reader may be amusement or inspiration. When thinking about business models, consider what sort of experiences you can create for the reader that align with your books. This is different from being a freelancer or employee, doing work for others to meet the bills. This is integrating activities that support your mission as a writer, your passion as a person, into your author business.

For the entrepreneurial author who gets this right, such models can offer a significant income.

Five Publishing Business Models for Authors

There are five publishing business models for authors, built on the bedrock of publishing books

1. Exclusive Self-Publishing Model – you publish books exclusively with one self-publishing platform e.g. Amazon
2. Wide Self-Publishing Model  – you publish books non-exclusively with a range of self-publishing platforms and aggregators e.g. Kobo Writing Life, PublishDrive
3. Creator Model – As well as publishing books through third-party self-publishing platforms, you also sell books and other products directly to readers and other customers through your own website and/or other outlets e.g. Shopify store, Kickstarter and have other income sources e.g YouTube, Patreon, courses.
4. Rights Licensing Model – as well as using self-publishing platforms and/or selling direct, you earn 50+ of your income from licensing rights to third-party publishers, producers, and other rights buyers.
5. Publisher Model – you publish other authors' books as well as your own, for business purposes

Let's look a little more closely at each, so we can see where the different income streams available to authors today fit in.

Publishing Business Models for Authors 1: Exclusive Self-Publishing Model

You publish books exclusively with one self-publishing platform. Authors who employ this model often write in a popular genre and for many authors employing this model, their favoured outlet is Amazon—Amazon KDP for ebooks and print, often in Kindle Unlimited for ebooks, and using Amazon ACX for audiobooks. The author focuses on publishing fast and often, and always with a close eye on the Amazon algorithm and on the marketing methods that send a book up the charts on Amazon, harnessing the power of the Amazon algorithms to find new readers.

Some authors employing this model publish only in e-book and do not buy their own ISBNs, relying on Amazon’s internal book numbering method (the ASIN, Amazon Standard Identification Number).

This model has delivered excellent sales for authors in genres with whale readers. In fiction, that's romance, crime, and science fiction/fantasy. In non-fiction, it's self-help and business books. And in poetry, it's love poetry, self-help and inspirational.  Writers who do well in these genres can find it impossible to keep up with their readers, which is why several are now commissioning other authors to write in their fictional world, or for their publishing companies.

Non-Amazon authors who choose to go exclusive include those who only use one aggregator, like Draft2Digital, PublishDrive or StreetLib, or one publishing service, to handles their distribution. And, a growing group, those who publish only through their own websites.

And of course, those who sign publishing contracts are exclusive to a third-party publisher for that title, for the duration of the contract.

The advantage of the exclusive model is its simplicity. The disadvantage is that you are likely losing sales on alternative platforms and you are very vulnerable if your exclusive outlet changes its  terms of trading or goes out of business.

Publishing Business Models for Authors 2: Wide Self-Publishing Model 

You publish books non-exclusively with a range of self-publishing platforms and aggregators. The indie author community refers to this model as “going wide”: using a books-only model but publishing through multiple outlets.

The wide publisher aims to reach as many readers as possible, by being available not just through as many distributors as possible, but also in as many formats as possible, and across as many territories as possible.

The most common kind of wide publishing is directly uploading to Apple Books, Google Play, IngramSpark and Kobo in addition to Amazon KDP and ACX, then using aggregator distributors like Draft2Digital, PublishDrive and StreetLib to reach hundreds of other outlets around the world.

The advantage of this model is its diversity and stability, allowing the author to grow a consistent readership steadily, over time. The disadvantage is that it can be time-consuming and complex.

Two popular community Facebook group focus on this business model: Wide for the Win, run by three authors using this model, Erin Wright, Suzie O'Connell and Skye MacKinnon, and for audiobooks, Marketing Audiobooks Wide, run by audiobook author Rebecca Hefner.

Publishing Business Models for Authors 3: Creator Economy Model 

As well as publishing books through third-party self-publishing platforms, you also sell books and other products directly through your own website and/or other outlets.

The creator model is the fastest growing sector in publishing and throughout the creative industries. For authors, it means selling directly to readers and including various products and services in your business, alongside books. This allows authors to offer a range of products at different price points e.g. premium digital content (including NFTs on a choice of blockchains), subscriptions, memberships, and reader clubs, paid video and audio, as well as books, crowdfunders, and patronage.

The advantage for the author is you can rely on more dependable income from many readers and fans. You can mould your publishing business around your interests and talents and the needs of your readers. The downside is that reader expectations need to be managed if they are not to interfere with your creative process and you need a more complex structure of tools and team to manage your business.

An author employing the creator model needs a transactional website–not just a brochure site that displays book covers with links to third-party retailers, but an author-hosted shop where readers can buy books and other products directly from you.

There are a long list of income stream options for authors who want to work a creator model (See Below)

1. Reader memberships or subscriptions
2. Kickstarter or similar crowdfunding
3. Sponsorship or other influencer income
4. Merchandise linked to your publications
5. Teaching linked to writing e.g. workshops on elements of the craft of writing
6. Speaking e.g. at festivals, school visits, etc.
7. Affiliate marketing
8. Theatre or radio plays
9. Journalism (print, radio, TV)

Authors need to have a clear idea of their writing identity and publishing framework before deciding on which income streams to pursue. A balanced ecosystem of products generally delivers the best income.

Publishing Business Models for Authors 4: Rights Licensing / Hybrid Author Model

In this model, in addition to selling your own books and products, you licence your publishing rights to third-party rights buyers.

The advantages of this model is that your licensing partners bring expertise and new opportunities which expand the reach of your book. The disadvantage is the need to be constantly pitching and vigilant about all contracts and agreements, as the independent author will always seek to limit format, term and territory and sell a variety of rights to maximise income.

Publishing Business Models for Authors 5: Publisher Model.

Authors employing this model not only publish their own books but other authors too, becoming a third-party publisher yourself, on a traditional publishing (license authors’ rights and pay royalties) or hybrid publishing (charge for publishing services) model.

The upside of this is the ability to trade in more work that you can ever produce yourself, making your publishing business more sustainable and stable. The downside is the management and responsibility of other writers’ careers.

Income Streams for Authors

Products 

1. • Books – Ebooks
   • Books – Audiobooks 
   • Books – Print POD
   • Books – Volume / Consignment Print
   • Book Box sets – digital or print
   • Book series
   • Crowdfunded products
   • Memberships or subscriptions for readers — own website
   • Memberships or subscriptions for readers — patron platforms e.g. Patreon 
   • Merchandise linked to your publications (self-commissioned)
   • Translations (self-commissioned)

Services

• Freelance Writing / Copywriting
• Freelance Work (other)
• Journalism — print, podcasting/radio, video/TV
• Publishing Services (Editing, formatting, design etc.)
• Referrals / affiliate marketing
• Speaking and appearances
• Sponsorship or other influencer income
•  Teaching writing or publishing craft

Licensing

• Book publishing rights (English), at home or overseas
• Broadcasting rights (TV / film)
• Dramatic Rights (Theatre or radio plays)
• Merchandising Rights
• Translation rights

Popular Author Income Streams

Events:

You supplement your book income with speaker or performance income. Offline, there is a fee with back-of-the-room book sales at a physical, paid performance. Online events try to mirror the physical experience and have also added some new income stream possibilities. For nonfiction authors, free or paid online video webinars lead people to buy books and often upsell to other premium products like online courses. This is a popular strategy in our own self-publishing space, especially around book marketing and promotion. For poets or other author-performers, paid online performances, sometimes called laptop concerts or web revues or internet events, where they air their work for a fee as audio or video content.

Events can be reader-directed, making the show available online for a small fee or suggested ticket price or donation, and reaching audiences who can’t physically attend a performance. They are hosted on platforms such as Stageit, or more informally using social media tools like Facebook or Instagram Live. Or events can be venue-directed, whereby authors stream a series of paid online events through the platform of a venue that typically tickets for live performances, sometimes with the cost of e-book included as part of the pricing. Libraries, arts centers, museums, historical societies, schools, universities and retirement homes are all good venue-directed outlets for authors.

Teaching:

Digital courses, mentoring, coaching and consultancy. The difference in this model is that it's not take it or leave it webinars, but active teaching in a learning-supported environment. The author sets assignments, which are monitored and graded, along with class chat sessions and other feedback opportunities. There may or may not be accreditation, but this model aims to give students a full, pedagogically structured, classroom experience.

An example is Dan Blank. For more than a decade, Dan has worked full-time with thousands of writers and creators to develop a human-centered approach to marketing and reaching readers through his company We Grow Media. “Human-centered marketing is what I am here to help students to accomplish–so yes, they get direct one-on-one feedback and assistance from me. I answer questions directly, I brainstorm ideas, and I ensure they have a clear strategy to reach their goals.”

Affiliate income:

Authors supplement their book income by recommending products or services to other authors. They often recommend products and services to their readership that they have used and believe in. The products are often linked to the author’s subject matter, theme or world, and the author promotes them through blog posts, articles, videos and podcasts with affiliate links to the products. Readers win because they get curated, experienced, balanced recommendations on products and services they need, saving time and frustration and reducing risk, without paying any premium. Writers win because they fulfill their mission to help their readers, and make passive income at the same time. Recommending resources gives them subjects to blog about that are of interest to their and also creates a perfect environment for content marketing, where their writing guides interest towards the affiliate product or service. Affiliate marketing can raise ethical questions and the secret to having a positive and ethical affiliate business is to only recommend products, services, and people that you have used or thoroughly vetted, and that you wouldn’t hesitate to pay for yourself. Authors can also create their own affiliate programs, having an educated and connected sales force—their affiliates—out in the field marketing for them, magnifying their marketing. The Alliance of Independent Authors runs an affiliate program for its members, whereby any member who brings another author on board receives 30% of their friend's joining fee. This allows us to turn word-of-mouth into a positive benefit for our members and ambassadors.

Membership or Subscription:

keen readers to subscribe monthly or annually to a membership program that offers various benefits for these close readers. This model abounds in non-fiction circles. Indeed non-fiction authors who haven't adopted it are seen to be missing a trick. Some fiction authors and poets have also achieved great success with this model.

There are effectively three membership models for authors: how-to, motivation, and access.

• The how-to membership sites solve a distinct problem e.g. how to acquire a skill, how to fix a problem. Joseph Alexander's
• Motivational memberships offer encouragement and support towards achieving a goal. Members share their struggles and successes.
• The connection model, also known as the community model, offers people a place to connect and belong. Members are often united towards a common cause. ALLi itself would fall into this category.

Sponsorship and Patronage:

Some authors have a following that is attractive to brands. They might sponsor an aspect of an author’s work in return for exposure to the author’s followers and fans. Individual books can also be sponsored or carry advertising. The Bulgari Connection by Fay Weldon (2000), for example, was sponsored by the eponymous Italian jewellery company.  Under the deal, Weldon was required to mention Bulgari at least 12 times but was happy to mention them 34 times. Sponsorship and advertising in books is controversial, and can raise ethical questions.

Many literary novels and deeply researched nonfiction books begin with a thank-you to a grant body or award that “made the book possible.” A grant can be a boon to a writer and there are many stories from the 19th and early 20th century of writers who could not have kept going without their benefactors e.g. WB Yeats and Lady Gregory, James Joyce and Sylvia Beach.

Wealthy patrons have never been as generous to writers as they have been to fine artists. These days, those offering patronage to an author are less likely to be a wealthy ruler or merchant than an arts council or literary organization. Most patronage, these days, however comes from readers, through direct donations on authors' websites or through Patreon or similar platforms.

Indie author and creative business coach Jason Zook raised significant money for his first book through crowdsourced sponsorship. Starting on page 1 at $600 and decreasing the price per page by $3 ($597, $594, $591, etc) down to page 200 priced at $3 brought in a total of  $60,000 for the inner page, plus inside cover flaps at $5000 each, and front and back covers at a five-figure sum each, before selling a single copy of the appropriately named Creativity for Sale.

Which Business Model for Authors is right for you?

Some of these models might be anathema to you, others more appealing. The important thing is to know which model you are working, or want to work, and set your publishing business up around that.

You choose how you run your business. If something doesn’t work, or stops working, you can experiment and iterate until you get it right.

Whatever model you choose, the benefit of being an independent author is that you get to choose how you run your business. If something doesn't work, you get to change it.

These business models for indie authors represent what's working now, but with our changeable industry the future might hold other possibilities. (See ALLi's Self-Publishing 3.0 Campaign for more on this.

OVER TO YOU

Which one of the business models for authors do you use? Is there another model we haven't yet identified? 

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