On the Creative Self-Publishing Podcast, we'll talk about the different kinds of business models for indie authors. As we know, if you're an indie author, you're also a businessperson, whether you want to be or not. But, don't panic, there are many ways to run an indie author business depending on what you want to get out of it. And here to guide us along are ALLi Director Orna Ross and News and Podcast Producer Howard Lovy.
The Creative Self-Publishing podcast stream is sponsored by Orna Ross’s guidebook: Creative Self-Publishing. You can purchase the book at selfpublishingAdvice.org/creative. ALLI members receive the ebook edition, and all ALLi guidebooks, free.
Find more author advice, tips, and tools at our self-publishing advice center. And, if you haven’t already, we invite you to join our organization and become a self-publishing ally. You can do that at allianceindependentauthors.org.
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About the Hosts
Orna Ross launched the Alliance of Independent Authors at the London Book Fair in 2012. Her work for ALLi has seen her named as one of The Bookseller’s “100 top people in publishing”. She also publishes poetry, fiction and nonfiction, and is greatly excited by the democratising, empowering potential of author-publishing. For more information about Orna, visit her website: http://www.ornaross.com
Howard Lovy has been a journalist for more than 35 years, and now amplifies the voices of independent author-publishers and works with authors as a developmental editor. Howard is also a freelance writer specializing in Jewish issues whose work appears regularly in Publishers Weekly, the Jewish Daily Forward, the Jewish Telegraphic Agency, and Longreads. Find Howard at howardlovy.com, LinkedIn and Twitter.
Read the Transcripts: Business Models for Indie Authors
Howard Lovy: In today's episode, we're going to talk about the different kinds of business models for authors, and here to guide us along is ALLi director, Orna Ross.
Hello, Orna. How are you?
Orna Ross: Hi Howard. Very well, thank you, and you?
Howard Lovy: Oh good. I always learn something new with every episode of the Creative Self-Publishing podcast, and I think this one might hit home for a lot of indie authors who may be nervous about being a businessperson in addition to being a writer. So, talk us through this.
Orna Ross: Some indie authors are born that way, they just take to business very easily, and some have it thrust upon us. So, we set off to write books and then we either decide or we give into the fact that we are going to publish them ourselves. And we don't necessarily really understand that, that means we're becoming a publisher, and becoming a publisher means you're becoming a business owner, and there's a lot that comes along with that.
So, either you know it and you get stuck in at the beginning, but what I see with a lot of indie authors is a slow, gradual dawning, oh gosh, yeah, this is what this means, and I need to get to grips with this.
So, for us, an author is a writer who has published one or more books, and an indie author is a writer who's also a publisher. So, I just thought I'd get those definitions out of the way.
So, as you so rightly said, a publisher is a business owner and you can sell books, of course, that's your core product, but as an indie author, your publishing enterprise might also include other products. That's what I wanted to talk about today, the different models that authors are operating at the moment, because the whole self-publishing scene and the whole publishing scene has changed a lot in the last 10 years since digital publishing became widespread.
And we're seeing authors doing really interesting things and setting up very interesting and creative business models. So, I wanted to go through the different options because we've classified, really only five models for authors at this point in time, that may change in the future.
Howard Lovy: Oh good, yeah, I've noticed that in some of my interviews on my other podcast, on my Inspirational Indie Authors podcast, they're not just writing books. They're also teaching classes. They also have products. Some of them have games as part of their offering. So, it's not just, here's my book, buy my book, anymore.
Orna Ross: Yes. I mean, it can be, and I suppose that's the thing, it can be. But if you're only going to sell books, books are a small ticket item, there's not a lot of profit on a book considering the amount of time it takes to put it together.
So, the first two models for authors actually are book-only models, but you're absolutely right, lots and lots of authors are incorporating other products because it's much easier to create a sustainable author business that lasts over the long-term and is capable of ongoing growth. You can scale it more easily if you've got higher ticket items, and the whole thing about doing this in the most creative way possible is that you align your mission as an author with the extra products that you're introducing into your business model.
I'll explain a bit more about what I mean about that as we go through the different models, but This isn't the old way which was, get a day job that sustains you, gives you enough money to buy the time, if you like, to do your writing and get it out there.
This is actually revisiting your original mission/passion as an author, your sense of purpose in your books and in your life, so that you integrate it into your business. So, the products that you would sell in addition to your books might be very connected to your books.
So, in other words you might even bundle your book in as a product within a larger product. For example, if you have a teaching element to what you do as a writer. Or it might be some other interest that you have that's very far removed from the actual topic that you cover in your writing, but you incorporate it into your business in some way. So, I think what I'm talking about here will become clearer as we go through the models. So, should we do that?
Howard Lovy: Yes, definitely, and I think it's getting to the point, with some of these business models, where the book itself is almost like your business card; here's an introduction to who I am, now here are all these other ways you can get a piece of who I am.
Orna Ross: Yes, indeed. So much depends on your genre here, I think. That's less likely to be the case, say, if you write poetry or literary, well maybe not poetry actually, because I have seen that a little bit there too, but say fiction, commercial fiction, or contemporary fiction, literary fiction, don't lend themselves as well to that model. But a lot of say, business non-fiction authors, the book is almost secondary. It is, as you say, it's their business card, it's their calling card. It's how they get clients. It's how they explain what they're about. It's how they show their authority. So, the book is almost secondary.
For most of our members though, they're writers first, and they want to make a living from their writing. So, the book is very central to what they do.
Howard Lovy: Okay. I guess I'm being too non-fiction centric in my thinking sometimes.
Orna Ross: Yeah, I mean, I think it's a very important point that you're bringing up, because I don't think this is something that used to happen before when the only option was a third-party publisher. Businesspeople weren't really able to do that, so in, in those days your book was more like a status symbol, but now that self-publishing, you know, when we talk about self-publishing, we think very much about the individual author, but organizations are now getting into self-publishing.
The Economist is now publishing its own books. Lots of institutions, like libraries and so on, are also publishing their own work. So, self-publishing is much more now than the individual, say, novelist, you know, in their little room in the back of their house or whatever.
Howard Lovy: Right, or your local historical society publishing books of local interest.
So, tell me about the different business models that go beyond just the book.
Orna Ross: Yeah. So, the first one is exclusive self-publishing. So, you pick one platform and you run with that. For most authors who employ this model it's Amazon KDP, because Amazon KDP reaches most readers. So, when we see authors pursuing this exclusive self-publishing model, they are almost always Amazon authors.
Of course, authors who sell their rights to a third-party publisher are also using this model, but they're not self-publishers. If you exclusively license all your rights to one publisher, then that's not what I'm talking about here. We're talking about the self-publishing platform. So, usually, as I said, Amazon KDP for eBooks and print, and usually the author who employs this model is in KU, in Kind Unlimited for their eBooks, and they're using Amazon AXC for their audiobooks, and they are usually in what's sometimes called “whale genre” where there are lots of very hungry readers who can't get enough, and they notice authors who publish fast and publish often. So, if you're going to go exclusive, generally that is the kind of genre you need to be in.
The author who's employing this model will be keeping a very close eye on the algorithm of their publishing platform, again, usually Amazon, and the marketing methods that send a book up the charts there. So, you're always looking at the algorithm and thinking, well, what gives me a little bit of edge over my competitors, what makes me noticeable on bestseller lists, category lists, and so on. So, some of the authors who use this model, they don't use ISBNs, they just rely on Amazon's internal book numbering system, and it's a very good model for certain authors, without a doubt, in terms of a good return on their time investment.
It is a simple model, that's another thing that's an advantage to it. So, just one dashboard to get grips with, which is not to be sneezed at. But as I said, it tends to be romance, crime, science-fiction, and fantasy in the fiction world, and in non-fiction, it tends to be self-help or business. In poetry, it's love poetry, and again, self-help. So, authors outside of those genres are unlikely to do as well with this model.
Howard Lovy: Right, yeah. So, just crank out the romances, crank out the love poetry, you're in the mood.
Orna Ross: That's not very romantic, Howard, “crank out.”
Howard Lovy: No, but like you say, it's a good business model. But that's not for everybody, obviously. Some of us can't quite crank out books at that kind of speed.
Orna Ross: That's one reason to not go there. Another is that you're not in those genres that will reward you for going there.
We do occasionally see authors who use this one-platform model using an aggregator. Like, they'll use Draft2Digital only, or PublishDrive only, or StreetLib only, and they let them upload to everybody, including Amazon. So, there are some authors who use that model, and again, they're choosing it for its simplicity, but that actually allows them to go wide, but from their point of view, they're just using one platform. So, they're kind of a hybrid there.
And then the other people who go exclusive, and we didn't use to see this at all, but we have seen a few of late, are writers who only publish on their own websites, and they don't make their books available anywhere else. If you want my book, you come to me.
So, the advantage, as we said, is the simplicity, the disadvantages, as you so rightly said, not everybody is able to sustain this model, but also you are very vulnerable if you are just on one platform, and we have seen this with authors where Amazon has questioned their rights, shut down their account, changed their pricing in ways that they're not happy about. All your publishing eggs are in one basket, and if they change their terms of trading, if they were to drastically reduce the commission rates that they pay to authors, for example, or if, I mean it seems so unlikely that it's ridiculous to even say it, but if they were to go out of business. So, that vulnerability means that it might be right for some authors, and of course everybody makes their own choices, but it's hard for us as an organization to recommend that model because it does leave you very vulnerable.
Howard Lovy: And these days, as we know, it's not exactly farfetched for a giant tech company to go out of business, but that's beyond the purview of this podcast.
Orna Ross: Definitely, it does happen, and I don't see Amazon going out of business anytime soon, but the point is that exclusivity generally is not a great look in publishing. The more widely spread you are, generally speaking, and there are exceptions always, and each author is the expert in their own business and knows what's best for them, but for most authors, the model number two works out better in the long run. So, you can get the short-term hit on Amazon, definitely, by going in that direction, you get more income more quickly.
The second publishing model is referred to in the community as wide self-publishing, generally. So, that essentially means publishing through multiple outlets, still books-only. Your model is still, I just sell books, that's all I do, but I publish through a variety of distributors rather than going exclusive.
So, the best way to do that in terms of maximizing your return is to directly upload to Amazon KDP and ACX, but on a non-exclusive basis. Also, direct upload to Apple, Google, Kobo and IngramSpark. Sorry, IngramSpark for print, not so much recommended as an eBook distributor.
Then use an aggregator like Draft2Digital, PublishDrive, or StreetLib, as we were talking about earlier, to reach all the other outlets around the world.
Howard Lovy: Now, Amazon kind of penalizes you for not being exclusive, right? They give you less of a cut of the profits?
Orna Ross: Yeah. Or they think of it as giving you a bonus for just being with them. Yes, so you won't earn as much per book, and you also won't be eligible for lots of their promotional programs. You won't be eligible if you're not exclusive and you won't be in KDP Select, which is their exclusivity program, which means you won't be eligible for KU, and reads and downloads. So, you are making the decision that lost revenue on Amazon is going to be picked up on the other platforms, and the thing that happens a lot when authors make the switch is that they find, so if they start off exclusively on Amazon and then they want to go wide, they often find that they don't make up the money quickly on the other platforms, so they feel like, oh, I'm losing money here, and they go back to the exclusive model.
But generally speaking, authors who are wide publishing for a longer time absolutely do, and particularly as they start to add more territories, and focus on different countries outside of their domestic territory. So, it's a model that's less simple, obviously, it's a more complex model, but Amazon is in very few countries in the world actually, and there's so many territories that you're not eligible to enter if you're going to be Amazon-only.
And there are lots of good reasons to go wide. The stability thing is huge, in comparison to the vulnerability that we were talking about, and so you grow a more consistent readership over time.
So, you know, if you're going Amazon-only, it basically means readers who read on their iPads and their iPhones and so on, yes, you can use the Kindle app, of course, on those. But in terms of native Apple Books, Google Play, Kobo, all of these outlets, if you upload directly to them, you become eligible for their promotions.
Generally speaking, it takes longer to get a good income on the wide model, but it's generally more sustainable.
What doesn't really work, and I hear authors saying, oh I'll give it a go, I'll give it a try. You know, what doesn't really work is weaving in and out of one or the other.
Authors say, well, I'll put my book on Amazon KDP Select just for three months, because I can come out after three months. But if you do, and you're building a readership there, and you come out of that, then you are losing your readership there and you have to start all over again, which is why people don't do so well when they make the switch.
So, weaving in and out is really not recommended. It's best to pick one model and stick with it, and be very successful there, and then as you add more books, you might want to go wide and then begin to switch around. But do remember that if you are exclusive to Amazon, and people are getting their books on Kobo or wherever, then you're not available there.
Our recommendation would be wherever readers are, be in as many territories, on as many platforms as widely available as possible, and it's not a huge job. The distribution tools that we have means that it isn't a huge job.
Howard Lovy: Oh, okay. I was going to ask; you're not piloting different dashboards and spending all your time on different interfaces?
Orna Ross: Well, it depends on how many books you have, and it depends on how often you need to update. So again, it's genre specific. If you have a book that needs to be updated, a series of books say, and you've got 20 books in the series, and you update that series every year, then yes, you're going to spend a lot of time running around the dashboards.
But it depends. You can, of course, get assistance to do your uploads and this is what happens when authors get to a certain level is that they no longer do that task, and it's a task that lots of authors assistants are very clued-in to doing.
I would recommend to anyone who's thinking of going wide, there are two fantastic Facebook groups that focus particularly on wide. One is for eBooks called Wide for the Win. Erin and Susie and Sky McKinnon are all ALLi members, and it's a fantastic outlet, and a really good forum for discussing wide issues, in particular eBooks, so going wide with your eBooks.
And of course, you can also go wide with your audiobook. So again, lots of authors who choose to just use ACX and go exclusive, but we saw with AudibleGate the very many problems that can cause. So, going wide with your audiobooks is also recommended, and Rebecca Heffner runs Marketing Audiobooks Wide, a really good Facebook forum again for answering all the questions for authors who decide to go with that model.
So, you're absolutely right. It's more complex, it's more time-consuming, but as a steady building over time, sustainable model, it's got a lot to recommend it.
Howard Lovy: Moving along there, there's still a few other models to choose from depending on how complex you want, and one of them, and maybe I'm pushing ahead here, is you actually being a publisher yourself.
Orna Ross: Yeah, so we see this happening quite a bit, surprisingly often. I mean, it's a tiny proportion of our membership, but is still a lot of people. So, what these authors do is they become a third-party publisher themselves. So, some of them on a traditional publishing model where they license author's rights and pay royalties to the authors, or some on a hybrid publishing where, having become an expert on self-publishing themselves, then they charge for various publishing services to other authors.
So, obviously there is the advantage there that you're maximizing your skills, and you're making your publishing business more sustainable and stable, you've got more product going through, but of course, it's a job, it's a lot of management, a lot of responsibility to be looking after other authors. But as I say, we have a number of members who are doing it really well and are very happy with it. That's the fourth publishing model, I think, in our list on our blog post.
Model number three, I'm going to go over very quickly because, so few authors use it, but again, there are a few, and that is the rights licensing model. So, in addition to publishing your own books in certain formats, you license publishing rights to third-party rights buyers in other formats.
So, subsidiary rights, like overseas, sorry, translation rights. Maybe TV, film, or to other publishers. You might license your print, and again, it can be done on a traditional publishing sort of model or also other kinds of rights buyers. So, this model is only for people who really understand the rights licensing arena, which is not a lot of authors.
So, usually authors who sell their rights, I mean, lots of indie authors are now licensing their rights, but it's a few books and if it happens, it's great, and you might put a bit of effort into it, or have an assistant who works on that aspect of your business, or have your books on PubMatch or DropCap or somewhere, but you're not taking it all that seriously, and anything that comes in is jam. That's the typical indie author experience.
But just a few authors have gone all out on the right licensing model, and this works best, again, in certain genres. So, if you have a particularly desirable non-fiction niche, for example, you may find that there are people who are really happy to license your book and perhaps rebrand it themselves for their own organization or whatever.
So, the disadvantage of this model is you need to do a lot of pitching, and you need to be very vigilant, and you've got all your contracts and agreements, and there's a lot of paperwork and a lot of administration, but your licensing partners are bringing you in new opportunities and you're certainly expanding the reach of your book in a way that's difficult for you to do as an individual.
So, you're working with other organizations and licensing partners, and they can really get your book out there. The typical thing we see is somebody who licenses TV rights or film rights, it's an instant hit, an instant win for the book, but also other organizations have access to lots and lots of readers.
So, if your book has an educational dimension, for example, and it is licensed to an educational institution who have new students every year, your book is getting the sort of exposure that it's very difficult for you to make happen with typical indie author marketing.
Howard Lovy: And again, this is very much expert level, not for newbies. So, do your research before you launch this.
Orna Ross: Yeah, absolutely. That's a really good point. The publisher model, the rights licensing model, and the last one we're going to talk about in a moment, the creator model, these are for when you have mastered model one or model two.
So, you're either really good at doing your own self-publishing, publishing your own eBooks and audiobooks at a minimum, and your pod. You've really nailed all that, and you have a number of books under your belt before you start thinking about these other models. Absolutely.
Howard Lovy: So, let's talk about the fifth model, which is the creator model.
Orna Ross: Yes, and this is becoming more and more popular, and I think more and more exciting. So, this is the model that you and I started off talking about at the top of the show, which is where you bring in other things to supplement your book income, and you're offering, maybe products, maybe premium product services, other premium digital content, perhaps going onto blockchain with NFTs, it could be subscriptions, it could be memberships and reader clubs, it could be paid video or audio, it could be a paid newsletter, it could be crowdfunding, it could be patronage.
There are so many different ways in which you can take advantage of what is now being called the Creator Economy, and the creator economy is quite simply, where the creator sells directly to the consumer. So, in our world, where you, the indie author, sell your books and products directly to the readers.
So, some income streams, to just talk about what we're seeing going really well, we're watching a lot of authors use events in really exciting and interesting ways. So, online events as well as live events, and there are new platforms coming up all around us to help us to reach our readers. So, Stage It is a good platform for events. We're seeing Facebook and Instagram, obviously providing live, but also allowing creators to charge for things and keep a good percentage of the income that we're making on the social media platforms.
Events also work really well when authors work directly with libraries, or art centres, or museums, or historical societies, even retirement homes. We're seeing people doing really good stuff, and hybrid events whereby you do the live event, but you make sure you also put it out online. And charging for these events, not doing them just as getting notice for my book, you can get notice for your book and also charge for your event.
Teaching is another thing. Oh, sorry, yeah, were you going add something?
Howard Lovy: No, I'm just saying there's a whole ecosystem being built around this, so you don't need to necessarily invent these things yourself, you know, platforms like Stage It or Facebook or Instagram live.
Orna Ross: Correct. They're all realizing that creators are a way for them to make money, and so they're making it easier for us to do that.
Teaching is the obvious one. Loads of our members run digital courses, do mentoring, do coaching, do consultancy. Again, the difference is that it's not just webinars that are take it or leave it, but it's actually structured, active teaching in a learning-supported environment.
Affiliate income is another really good, for some people, I'm not talking about tiny affiliate income on Amazon books or something, but again, writers who are using services and products that are very associated with either the topic of their book, the theme of their book, or in some way match in with the book, it can provide a really good level of income for some authors.
Again, these are all genre specific, so what works well in one genre, with one set of readers and for one author, does not necessarily work for another at all. So, the creative bit is where you analyse what's going on, look at what's possible, don't just do things the way they've always been done. Don't just assume that an author who's talking about, this has gone well for me, that's also going to go well for you. Really thinking about your reader, really thinking about how you attract them, captivate them, charm them, so they become more than just someone who read a book and moved on, but moves in closer to you.
Subscription models are becoming more popular through Patron and other places. Crowdfunding, particularly on Kickstarter, but in other places too.
So, there are lots and lots of options in the creator model, and I think you need to, with all of these models, experiment a little bit, see what's working. If something isn't working or stops working, then you iterate until you get it right.
Also, when you see a successful author, look very closely and ask yourself, okay, which model are they using and what are their revenue streams? Get used to thinking about your comparable authors in those terms, that can spark ideas for yourself.
Howard Lovy: Right. A buzzword these days is community building, and I think it's a matter of finding your own community, and that's different for every writer.
Orna Ross: Absolutely, and that's key to the creator model. So, you are much more in touch with your community when using the creator model than you are when you're just selling books on platforms where you are one or two steps removed from the reader.
Howard Lovy: Well, that's all the time we have for now, Orna. Thank you, as always, for your insights into the creative self-publishing process, and in this case the business process. You've given us all a lot to think about.
Orna Ross: That's great. Next time we'll take a look at profitability, how you become more profitable. So, we'll stay with business for the next show.
Howard Lovy: Excellent. Thank you, Orna.
Orna Ross: Thank you Howard.