Friday, April 19, 2019

Pay to Play versus Traditional Royalties

Pay to Play versus Traditional Royalties

My definition of traditional royalties is where you build the product once and continue to make money from it far into the future. However, pay to play is becoming the norm in the author community. The secret to writing success is becoming "marketing". The secret to marketing is to find small ways to earn more than you spend. However, these small ways keep changing, which requires you to keep changing your marketing. It is at this point, that those secret revealers say that being an author is about running a business, not just writing.

Here is a sample thought from a Reddit forum post:

Amazon Ads would be your best bang for your buck (and book!) but depending on the price of your paperback they may not make financial sense. An awesome click to buy ratio is 1 sale for every 10 clicks, and clicks in popular categories can cost $0.25 or more, so unless you're making more than $2.50 profit on your paperback it might not work. Note that 1 in 10 is very good, something like 1 in 30 is more common.
A lot of advertising only works if the books are part of a series, in which case the read through will end up covering the cost of the ads.
It is worth experimenting with cheaper bids to see if you can get any traction.

That's helpful, but also disheartening. The dream of everyone who builds royalties is not to continue to pour work into their effort for everything they want to make. They want to make it once and be done. The sad truth is that's not always the case.

In a recent Podcast of the Sell More Books Show, they say [paraphrased]: The Amazon indie book market mirrors what happens to YouTube content creators. The difference is that it happens to YouTube content creators several years in advance.

So, what is happening with YouTube? Looking at a recent Entrepreneur article, we know new YouTube creators will need 4000 hours of watch time every year and at least 1000 subscribers in order to earn money from their content. This means that lower level content creators don't see a dime. If that's coming down the pipeline to Amazon, that could be huge. Why? Because according to this Guardian article, many indie authors make less than $500/year. If those authors are cut off from any compensation at all, will they still write?

Here is where pay to play (purchase marketing) and traditional royalties being to take different paths. I suppose it's sad in a way. So many authors write books hoping for a trickle of money throughout their lifetimes. If Amazon makes this change, that author dream will die for so many people. I find that very sad. 

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