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Why Authors Skip Hardback, Too

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Behind one novelist's decision to go straight to paperback.

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In December 2008, at the height -- or nadir -- of the financial crisis, and at a time of massive bloodletting in the publishing industry, I got lucky and sold my first novel, Kapitoil, to HarperCollins (NWS).

Perhaps I owed something, ironically, to the very recession that made selling novels so difficult: The story is set in the New York financial industry in 1999, revolving around a computer program that predicts oil futures and a Muslim protagonist who narrates in a hybridized American business-jargon voice. All anyone could talk about then -- and now, for that matter -- was the economy. Kapitoil was suddenly hotly topical.

Yet HarperCollins wanted to publish it under its Harper Perennial imprint, which releases original trade paperbacks -- no hardcovers. My agent received offers from other houses, too, at least one of which said it would not rule out a hardcover publication, as the book should appeal to men in finance, to whom $25 is a pittance (unless they'd worked for Bear Stearns, or Lehman Brothers, or…). Nevertheless, we went with Perennial and a paperback release.

Had I written the book in 1999, it almost surely would have been published as a hardcover, historically the more prestigious medium and a potentially far more lucrative one. But how readers consume books has changed, and paperbacks now make most sense for many books, especially debut novels like mine -- and they're likely the future of publishing.

Hardcover list prices are usually $22 to $27, whereas paperbacks tend to be $13 to $15. The royalty rates for the authors, however, are where the greatest discrepancies are found. For hardcovers, the standard royalty percentage paid to authors is 10% on the first 5,000 copies, 12.5% to 10,000, and 15% after. (This full-price rate, by the way, holds true even if Walmart (WMT) decides to deeply discount the hardcover.) For paperbacks, which are usually published one year after the hardcover release, it's typically a flat 6% to 8%.

So let's say a $25 novel sells 5,000 copies in hardcover -- strong sales for most debut novels that don't have the words "Twilight" or "Harry" emblazoned across their covers. This comes out to $12,500 in royalties paid against the author's advance. Tack on another 2,500 in eventual $14 paperback sales at a 7% royalty, and it comes out to $14,950. An original paperback release, then, would have to sell 15,256 copies to match the hardcover-plus-paperback royalties -- a 2.03-to-1 ratio.
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Copyright © Teddy Wayne 2010

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