Originally Published on Techdirt.
Recently, we highlighted the success of the first Humble Ebook Bundle by noting that with over 84,000 bundles sold, all those authors should be on best seller lists. That is fine and dandy on its own, but what does that mean in terms of money for the authors? With the bundle bringing in over $1 million in sales, what do the authors get out of that?
In response to that very question, one Humble author, John Scalzi, wrote up his back-of-the-envelope calculation of how much his book, Old Man’s War, could earn him.
Let’s say for the sake of easy math that when all is said an done my default amount of the bundle was something like 6.5%. That would mean that my default gross cut of the Bundle would be something on the order of $78,000.
Keep in mind that this is a gross earnings. He then factors in a number of other variables, including his publisher Tor’s cut, and comes to a much smaller net amount.
When all is said and done, if I end up with $20,000 (before taxes) then I figure I will have done well.
He goes on to explain what he would likely make selling the number of copies he estimates he sold during the bundle, if those copies were sold at full price.
…let’s say OMW was in 42,110 of those bundles. For electronic books, I make 25% of the net to the publisher, and Old Man’s War currently sells as an eBook at $7.99. Unless I’m doing my math incorrectly, my cut is about $1.40 per eBook for OMW (no, $1.40 is not 25% of $7.99; remember, I’m working off of net). If those 42,110 copies were sold straight up, I would gross $58,000.
So, basically, if I gross what I expect to gross from the Humble Bundle, I’ll be taking a roughly two thirds cut in my income per unit than what I usually do.
That’s quite the difference. However, he is very happy with what he will make from this bundle for four reasons.
- The volume sold may compensate for the reduced price.
- Old Man’s War is the first book in a series and will likely bring in new readers who will buy the sequels at full price.
- He went in to the bundle knowing full well that he could make as little as $0.
- Whatever bundles were sold because of his book were benefiting some important non-profits.
He then closes out his comments with some advice for authors considering getting involved in a bundle. All of it is great advice and I will let you delve into it yourself.
Looking at this whole thing, John makes some very important points that we have highlighted many times in the past. For instance, we have argued many times, with Paulo Coelho as a recent example, that selling in volume at a lower price has the potential to make far more money in a shorter span of time. Additionally, selling at a discount, or even giving it away, is a great way to provide publicity in order to sell other products or scarcities tangential to the product.
What is most impressive is John’s understanding and attitude about this whole promotion. He knew full well that this promotion was not an end in and of itself, but a way to expand his audience and reach. By taking this risk, he will potentially see a lot more success in the future. This is an attitude that we praise on a seemingly daily basis–an attitude that too many people in the legacy industries deride and belittle. Hopefully, more creators will learn from this and embrace, as John did, the power of tools and promotions such as the Humble Bundle.