The Economic Death Spiral for Writers

By Urs Waechli, ex-senior partner of Banque Gaumet et cie and Owner of Villa Traxler.

I hadn’t seen Alexander since receiving a copy of his book. I must confess I had been very impressed with the writing, the plot and the way he had captured the atmosphere of the locations, including my hotel, and the trading floor. I was keen to know how sales were going so we met for sushi next time I was in London.

“Well, as you know, it wasn’t meant to be a commercial venture,” he reminded me, “but feedback has been good and we’re about to do a third reprint.”

He paused for a second. “As a finance guy, though, I have to say I’m quite embarrassed about it. The economics of this business are shocking!”

He must have seen my raised eyebrow, so he continued.

“It took me a few thousand pounds to get the thing out there – the edits, the cover, the proofread, etcetera, that’s fine – I wasn’t so keen on the agent route – but I did think that perhaps after that upfront outlay, I’d see some return on the sales… and maybe, start to recoup something if it started to sell.”

“And?” I interjected as he took a sip of water.

“So, the price is set by the market, £10.99, here in London, for this genre. That’s advised by the publishers. If you’re a debut writer, maybe you want to start by printing a few hundred copies – that, by the way, is way more than most books sell. In my case each book cost just short of five quid to print, but here’s the thing - after all the clips that the bookshop, the distributer and the publisher make, you’re lucky if your return per book breaks even! Most likely you’re down a quid on each book.”

“And then if you go on the digital platform, and there’s not really a choice not to, you’re funding Mr Bezos’ space adventures from your bank account,” he smiled wryly, “and the more you sell, the worse it gets. Is there any other industry like it?”

“So how does it work for others?” I asked.

“It doesn’t,” he continued, “or it does either if you limit yourself to Mr Bezos’ platform – you can make a small clip on each sale. Or you’re one of the big boys and are printing a hundred thousand in Asia and getting scale.

“Look I don’t blame Bezos, or anyone else on the chain, I’m sure the book sellers have a tough time – it’s a commercial world, but it’s a creativity death spiral for new writers.”