The Writers Block

The Random Musings of Martin Freddy Hansen. Author, Screenwriter, Actor, Producer. Champagne Drinker.
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99c Ebooks. Market shift or just bad business sense?

Democratic freedom is a great thing. If one thing the internet has done its democratised creative freedom, unfortunately free market forces have a habit of being irrational.

For many years while the publishers were the curators of the literary world we had book standard pricing, it was actually a good system. If you wanted to own a book you paid a standard price for it, if you couldn’t afford to buy books you went to your local library and borrowed it free of charge. 

It worked for a number of reasons. By setting a standard across the board price for paperbacks and hardbacks authors success was entirely based on their literary talents and not product pricing. Publishers, Authors and bookshops all got a fair cut of the product revenue and the business sustained on a even footing for many years.

Then came the supermarkets. Not content with selling you milk and potatoes they decided to get in on a number of verticals to try and control your entire spend. Discretionary purchases - Music CD’s, Books & Video Games were such discretionary purchases. But with billions in food revenues to profit from they weren’t interested in just selling the product on equal terms to their specialist retailer competition, they reasoned they were good loss leaders, by using their large buying power they discounted these items to the bone reasoning that you would buy a bottle of coke, popcorn and other sundry snacks they would profit from. Thus Entertainment became a loss leading commodity. With the convenience of picking up your music, books, video games alongside your weekly shop at 40-50 percent off retail the mass market abandoned the specialist outlets. Initially the money men at the publishers were happy with the supermarkets, keen to grow market share these huge (albeit discounted orders) helped them shift volume. Unfortunately it soon became apparent they were doing so at the expense of selling full margin books to traditional retailers, pretty soon retailers got fed up and demanded the same discounts the supermarkets were getting and so began the erosion of book standard pricing and the advent of deeper and deeper discounts. This had a lot of side effects.

Firstly books become a commodity, their shelf life was cut from years to weeks, bookstores would no longer sit on their full price stock to ensure readers had a good back catalogue of their discovered authors knowing full well the publishers would dump remaindered stock onto the 99p shelves of supermarkets.

Then came the internet.

Bricks and Mortar stores add value. They give you a physically pleasurable retail experience of choosing your product and engaging with a storeowner. The internet is anonymous, the only USP they have is price and convenience. in order to compensate for the fact you can’t get the instant gratification of walking away with your purchase they had to tempt you with a bigger discount. Since discounts were already hitting the high street the discounts had to constantly be even bigger and thus Amazons price model was based on a standard Silicon Valley metric of using vast swathes of venture capital to run their business at a loss until they had gained a large enough market share to control pricing.

This isn’t a criticism of Amazon, the supermarkets or others. This is standard MBA business thinking - to generate profit you either discount or add value.

The problem with discounting as many discount retailers have learnt, once you give someone something cheap, then the next guy is forced to give it cheaper and so the death spiral of price wars descend into a last man standing arms race of discounting, this wholesale destruction of value is arguably why our western economies are in such a mess. Cosumers gorging on highly discounted chinese imports were no longer willing to pay a premium for domestic goods that the market costs demanded. 

Discounting, and deflation and general is in fact destructive capitalist. Eventually you destroy so much value there is no point in generating further production since doing so incurs no reward and often a loss.

'if you are good at something, why do it for free' as the joker famously said.

Mercedes Benz won’t sell you a new C63 AMG for the price of a Kia. Just because you can buy a cheap car doesn’t mean Mercedes should sell you one. they argue the quality and investment in their product demands a higher price, and while they have consumers prepared to pay it they sustain a very profitable business. They probably make 10 times the margin on one car the koreans do. 

Luckily for Mercedes their product is controlled by franchised dealers not wholesale internet retailers like Amazon.

'always make one less than the market demands' Enzo Ferrari.

Demand controls price, Ferrari can charge 200K+ for a car because they make less cars than the market wants to buy, the product has a high value based on a combination of good marketing, investment and production value to the end user.

So exactly what is so different about books? what makes so many people believe books have no intrinsic value and therefore should be free or negligible cost?


The rot started in Silicon Valley. For anyone who hasn’t been involved in a startup or dealt with venture capitalists its hard to understand why so many businesses seemingly give away their product or service for free or at a loss.

'Theres no such thing as free. someone always pays'

in the startup world its the VC’s who pay. 

This is what is known as disruptive business models. If you are a traditional bricks and mortars bookshop you would typically go out, use your own capital or get a bank loan, open a retail store, employ staff and buy your books for stock and expect to make enough money to pay all your bills and repay the capital cost of your business.

Internet businesses don’t work that way.

They are interested in disrupting a traditional market and gaining market share. The VC’s end game is not making 2 bucks profit per book, they want to control upwards of 50% of the market and get a big market cap listing. To do that they throw money at companies like Amazon to get there.

They do this because the opportunity cost is much lower than physical business. Open a Website, back office and fulfilment partners then throw money at marketing and affiliate schemes to gain market share. There is no need (and often they avoid at all costs) making a profit, they run at huge losses often running into hundreds of millions by constantly reselling equity at higher prices to offset the losses.

The problem of 2800% growth a year.

Internet businesses relie on outperforming the market and then some. VC’s and Wall Street don’t want to see stable 7 percent growth, they want 10x growth a year.

The problem with this is their is a finite market size no matter how tricksy your business model. there is only so many book readers in the world with only so many hours to read books, if you are gaining huge market share someone is losing huge market share, as we all know that was the bookstores.

The problem is the growth curve.

At some point every internet business tops out their model and reaches a peak growth after which their growth falls off a cliff. Usually this gives them a ‘usual size’ business cap that would be comfortable alongside a traditional business.

The problem with VC fuelled business is they are the ultimate ‘empire builders’, justifying their ‘risk’ means they have to own a complete market. thus amazon started out selling books, then started selling washing machines, TV’s, pet products et al. Just as the supermarkets weren’t content with selling just food, Amazon wants to sell you everything you could possibly buy.

Then they start on the value chain. They look at the middlemen. they look at who else’s pot of money they can get a bigger slice of to grow again, thus they take on publishing, whats next? i have no doubt like some crazed willy wonka experiment somewhere in Amazon labs they are writing programs to generate Novels without authors, 1000’s of algorithm’s automatically plugged into Dramatica software to churn genre fiction out from boilerplate components. 

Sounds madness? look at 1984. The way Silicon valley works it would not surprise me that they simply view authors as inefficient and costly parts of book production.

That is not to say I think Amazon is evil. They are a business, they are their to make a profit as the businesses that went before them, if they are able to shift entire market dynamics in their favour that is natural evolution, and by all measures they are succeeding.

So wheres the problem with Amazon?

The problem isn’t with Amazon any more than it was with the big six publishers. They are in business to make a profit, I have no problem with that. I work to make a profit too.

The problem is that generally free markets are not rational - we only have to look at the banking industry to realise if you give people enough rope they will hang themselves.

So we come to the crunch.

Writers by and large are very bad at business, this isn’t just indies, some of the writers I know who are bestsellers couldn’t do a business plan to save their life. They haven’t even mastered the basic notions of profit and loss.

This is normal. Writers are Artists, same as musicians, actors, composers and others. Generally artistic people are controlled by emotion not logic, their desire to see their work accepted and successful always comes before any notion of actually profiting from it. Its actually why i love being a part of the creative community. Business people from experience are mostly nasty, selfish and self absorbed individuals who would stab you for the last biscuit. Artists generally are lovely, warm, open and fun to be around. Given a choice i would rather capitalism died on its artist and the world was full of artists. 

But, artists need to eat. Its a time consuming affair creating great art and it doesn’t happen over night, therefore a certain amount of protection from our own business is a requirement to ensure we don’t starve to death.

The traditional guardians of our self interest were our agents first then Publishers. Agents made sure we didn’t get shafted by the publishers, and the publishers ensured we didn’t get shafted by joe public and the retailers. Who protected us from our agents? well we were still stuck with that one but it was far preferable than going lambs to the slaughter against everyone.

Agents & publishers removed from the emotional attachment to our work could price its value in the cold, hard light of day. They didn’t have the ‘i love my readers’ attitude that makes authors feel bad about charging a reasonable living wage for the entertainment they provided. They protected us from the negotiation and complaints of readers, a percentage of which always want everything for free.

It was actually a talent driven democracy.

The internet is a great soapbox, and there are plenty of tales of authors victim of evil doing publishers. but the fact is if your talent resulted in success then your publisher and agent would roll out the red carpet for you, unfortunately you can count on one hand the writers who are THAT GOOD that they deserve entire publishing teams to sate their creative output, they are the A Listers - the bankable commodities that will turn out a million copy best seller without fuss or delay.

Many authors hate the A listers, our own creative vanity means we have to justify their success based on the publisher/agent/whoever liking them more than us. but in reality we all start out on the slush pile and the market ultimately determines our mass market success so its pointless throwing sticks at the few lucky authors in the 7 figure advance camp any more than it is complaining that Al Pacino gets paid 10 million a film, if you were a A lister your would be there, for the vast majority of us being a mid-lister is the best we hope for.

That said, the advantage of publishers & agents as curators of talent is they ware at least able to use their MBA prowess and publishing experience to try and figure out the runners from the fallers. Now obviously they don’t get this right all the time, Hollywood doesn’t get it right all the time. but statistically experience beats luck which is why the big 6 still own the vast share of the market - they have a lot of first rate authors.

And assuming your first book outperformed expectations Publishers and Agents were exceptionally good at pushing your career choices and ensuring your longevity. The fact they have become more single book commodity driven is a result of the market shift and not through choice. Some very big authors wrote some very bad books but their publishers stuck the course.

The E-Book problem.

Back in the pre digital age self publishing was the literary equivalent of claiming you had a successful relationship with a prostitute. The notion you had to pay to publish your own work was seen as a vanity - since nobody was prepared to pay you to do it then your work was clearly worthless.

Fact is there is 2 sides to this argument. Publishers have finite resources, out of the 1000 manuscripts on the slush pile they maybe have resources to take 10-20 at most, like most businesses they have a stable of good bankable authors they support every time they publish new work and generally only take on new authors as others careers fall off or retire, that meant there were probably a good chunk of their slush pile that was actually very marketable material that would never see the light of day, since the publishing houses only took the top 5-10% of quality there was easily another 25% underneath them that would make very credible mid-listers.

This frustrated a lot of authors understandably. Nobody likes to be told no. you spend god knows how long crafting your work to have it rejected only to see something of worse quality get a 6 figure advance and hit the NYT bestseller list.  It stinks, but thats competition for you, everyone from actors, footballers and musicians suffer the same indignity - however much we all work hard, a lot of peoples success is sheer bloody good luck.

Amazon had their own disruptive game plan for E books. the publishers understandably didn’t see the difference between a e-book and a printed copy. the freetard argument that has reigned the internet and damaged all digital content is that computer bytes are free forgets that the people who propagated this model - Google, Huff Post, Facebook, YouTube earn billions in advertising revenue off displaying the content to their audience.

Publishers being a traditional business model don’t want to sell you a book that stops at the end of every chapter to sell you viagra and penis extensions, for all the soapboxes demanding free books or 99c books need to consider if Google, Facebook et al were the publisher you would have to sit through probably 1 hour of pointless adverts every time you read a book, it works the same as CInema vs TV - you pay a premium to sit through the entire film at the cinema or you watch it later on TV and it stops every 15 minutes for 3 minutes of soap powder adverts.

Publishers understand this, there is a traditional tried and tested MBA level business model that works on almost all products, namely that every new product has a pricing lifespan.  You start at full price and get the maximum profit from your loyal audience and early adopters, then once sales fall off you discount by 30%, 50% and 70% on a gradual curve until you have eventually exhausted the market opportunity for that product. Almost every retailer has used this model in recent time until:

The internet.

The internet (like Groupon) need a big USP to disrupt, so rather than following a physical retail model that maximises profitability lifespan they start out with a 50-70% discount and rely on volume. 

The problem with this if you start with a 70% discount you have nowhere to go but down, in order to therefore offer even more value the pricing pressure goes down to below actually what it costs to produce the product.

The reality of publishing is paper is the cheapest commodity in the chain. People misunderstand the costs of EBooks simply because they have learnt from Facebook, Google and others that digital consumption is free - without realising the delivery costs - those terabytes of data farms, Gigabit switches and T1 cable connections cost millions to operate and that cost is paid by advertising revenue. 

To deliver a iBook apple take around 30% margin, Amazon anything from 30% to 75%+ plus the costs of delivery per item.

Thats just their cut. To get the product their you have to factor in the cost of preparing the product for their format and submitting and managing it.

Publishers have a good grasp of publishing economics, they have lots and lots of data to work with to understand the cost of actually producing and marketing a book. When they set a price its a combination of the cost of production with profit based on what the market will stand - if it wasn’t profitable to do they would invest their capital elsewhere.

The problem of the EBook pricing argument.

Amazon are arguing price points on behalf of the consumer. thats normal, retailers want pricing that helps them sell volume and maximises THEIR retail margin.

Publishers are the product producers, like farmers they want a reasonable price for their product that makes it profitable for them to stay in business while creating a quality product.

usual market dynamics ensure that at some point retailers and producers find a price that the market will bear without destroying the profitability of production.


Amazon being a very talented .com disruptive business not satisfied with the outcome of the above negotiations has done what it does best and disrupted the e-book model, by throwing away the traditional publishing chain.

Amazon (quite fairly) reasoned that if they provided the published tools and means and business opportunity (Via retail) they could allow writers to go direct, cut out the publishing middleman and deliver their product straight to customer.

in the digital era this is logical. Just as the supermarkets cut out wholesalers to go direct to product producers Amazon reason that if you don’t need the middleman you don’t need to pay them.

This (however publishers protest) in the context of EBooks was a positive step.

For traditional print books publishers serve a unique purpose, they take your word document or pdf, typeset it and send it to a factory to be printed onto paper, box the books, send them to retailers and get the returns. This is a huge amount of work. Before print on demand the logistics were quite substantial and costly not to mention the costs of carrying enough stock for a bestseller to rise the lists. The resources needed were out of those available to the majority of writers.

The ebook however is a special case. For sure you still need a talented cover artist, editor, and digital typesetter to format your book into the right digital format but thats it, looked at logically Amazons direct approach makes perfect sense.

But here comes the fly in the ointment.

Quality Control & Sensible Business Practices.

People view the big six publishers as being monopolistic and deliberately price rigging unfairly against the reader. But if you broke down the cost of a book readers would realise publishing is actually not especially profitable compared to many industries, fashion is example were clothes mark-ups can run into 100’s of percent for luxury labels.

while the big A list authors get attention for earning 7 figure advances, and rightly so - anyone who can command a audience of millions deserves that reward but compared to A list movie stars (with the exception of JK Rowling) authors are still the poor relation of the entertainment industry - the vast majority of authors could not even break a minimum wage from a book that sold 100K copies due to the way royalties work.

Authors are their own worst enemy.

The problem is that for many people, writing is a hobby. A whole industry has sprung up from creative writing courses to print on demand to cater for the hobbyist who likes to spend their sunday afternoon bashing out a tale or two.

Thats perfectly fine, not everyone dreams of being a full time writer. Perhaps people have at most 1 or 2 books in them, but don’t have the time, inclination or creativity to consistently bash out a bestseller every 6 months.

What has helped EBooks and Amazons model is that there are a LOT of people in this camp. its almost a standing joke that ‘everyone is writing a book’. We all have a story to tell, but just as everyone can ‘act a bit’ not everyone is going to be Al Pacino. Does that mean Al Pacino should get paid the same rate as a Actor who does am-dram on a sunday at the church hall? no!

But the argument seems to stand that PROFESSIONAL authors - the ones who actually have chosen to carve a living from their work as opposed to do it as a hobby should accept the same renumeration as those that have other sources of income.

Very few of the hobbyist writers who churn out 99c books are doing so to pay their mortgage. Most of them i would wager have incredibly comfortable middle class and up lifestyles or supporting spouses, drive BMW’s or live comfortable existances.

Why do i say that?

Well if i was in financial hardship the last thing i would want to do would be spend a vast chunk of my time producing something that had no financial benefit to my life.

its that simple. Good writing is hard, emotional, stressful and takes a lot of your free time to do well. If you look at how much your time is worth, if you have no money spending hundreds of hours writing a book vs doing some paid work is a fools errand, if you can’t at least earn back what you would have earnt from paid work then you have written your book for purely your own entertainment and not for business reasons.

I’ve read all the arguments - if i price my book at 99c i’ll get a readership etc. And they are mostly all rubbish because the reality is all that has happened is you have devalued your product to such a low level the type of consumer you are attracting is not the person who will ever pay a premium for your work.

Simple fact: if you buy a bottle of 99c wine you will probably throw half of it away without thinking about it, spend 50-60 USD on a bottle of Bollinger you will drink the bottle dry.

The simple reality is whatever price point you go in at, thats what the market will tag you as. Kia and other value car makers are never going to be able to sell a Ferrari competitors. Ferrari could easily sell a kia competitor - you can go down the value chain but you can rarely if ever go up it.

the 99c ebook is the modern equivalent of the slush bin at the supermarket, yes they sell, but people just don’t value them. they are throwaway reads - buy 5, read the first ten pages and throw away the four you don’t like.

The problem is that without the guiding hand of a agent or publisher a lot of amateur and hobbyist writers have very little conception of how to market their work to readers beyond price, they have become highly hung up on the endless write a bestseller articles and ABC how to make a million on kindle articles they have missed the single most important point of being an author.


Dan Brown, Frederick Forsyth - they all set the tone for their genre for everyone else to follow, they command premium prices because they are giving the reader something new, original or exciting not churning out pulp fiction.

If you write the next Da Vinci Code then your book will sell at 25 bucks regardless, if you write a me-too clone of the Da Vinci Code then your book is probably a 99c clone.

As a writer your VALUE is in your originality. The 99c list is bloated because its predominately filled with paint by numbers fiction cloning other leading fiction. Its never going to get a MAN Booker and its never going to get a publishers attention.

For all the 1000’s of articles on how to get your book into the top 100 using 99c price manipulation, social media et al I see less than a handful of articles that give you the single most important factor

- write a good original book, believe it in and price it for what its worth and let your readership who values your work find you.

There has been a lot of internet noise from marketeers who have made millions from banging out pulp fiction at 99c a copy, good for them. They have figured out a way to use the system to achieve their goals, but for me this is one step up from the theoretical idea that Amazon could engineer a novel writing software that removes the writer entirely.


The great books tell a story that has depth. Great writers don’t churn out 20 books a year then spend all their time fiddling with keyword listings to maximise buck a book sales. Orwell spend months in the shetlands in isolation to craft 1984 - a story that cut to the heart of the post war socio-political era. Tolkein created an entire world of backstory that supported the Hobbit and LOTR Trilogy while at Stoneyhurst college. Forsyth and other A list spy writers spent 20 or more years in clandestine worlds before penning their first novel and every work drew deeply on decades of life experience with real situations and people.

I wrote my first books when i was 17, and they were utter rubbish and languish in a draw. I’d never left home and had nothing to write about of any substance. I spent the next decade travelling the world and experiencing life, when i sat down this year to pen Toxic Debt i started with a pile of more than 20-30 story ideas, some of them never made it past a treatment, others got to 10, 20 - 30 K words before I settled on a story that i felt had enough resonance and depth to be worthy of completion.

I currently have a slate of 4 projects out of more than 40, i’m sure if i wrote the entire 40 i could make a good chunk of cash out of selling them at 99c a pop but its not why i write, don’t get me wrong I have a commercial need to make my work pay, but quality is what counts and just because there is a open domain slush pile to publish your work doesn’t mean you should add to it.

The simple problem for me is 99c does not tell me you have a quality book. As a film producer I’m never even going to read it let alone option it and spend 2 years raising a multi-million budget to get it made into a film.


Because you don’t value your work, you don’t believe it has a intrinsic value to your readership and therefore they aren’t willing to pay a premium for the entertainment it provides, even if you sell 1 million copies you have done so to an audience that is never going to pay 10 or more dollars to see it at the cinema.

 The hard reality is that the 99c book is the modern pulp fiction slush pile. I’m sure there must be a few nuggets of literary gold but they are so weighed down by the million bland, generic or dull works that its almost impossible to find them and not worth the effort when there is such a well curated selection from traditional publishers, imagine walking into a bookshop with 1 million books? you would have a nervous breakdown.

So is Traditional Publishing Dead?

I’m going to say a resounding no.

and heres why:

the 99c Kindle ebook market Amazon created is a market distortion, an anomaly in literary publishing. Its being fuelled by a large enough army of hobbyist writers who are happy just to have their work read and a large enough army of consumers who have grown up on a diet of Google free content. While it will sustain I don’t believe it will EVER become mainstream because the types of readership it attracts is not actually as large as the market would believe.

The sales figures are distorted by the 5 for 1 rule, people who used to trawl the remainder discount warehouses buying remaindered books would by 5 at a buck a piece in the hope that one would be a good read. most of them they never got 10 pages in. the reality is you could achieve the same success with that readership by simply giving them 2-3 chapters as a taster that if they have a strong enough hook will encourage them to pay full retail to read the rest of the book, the people that don’t - they were never going to be your readership anyway. if you sell a copy of a book for 99c and they read 10 pages then never read you again you haven’t gained anything.

Just as the app market imploded on itself with a raft of 99c fart app clones and people refused to develop proper commercial apps since the consumer became unwilling to pay for the costs to develop them, there is a price point at which good authors will simply decide the pricing is not worth the effort to publish their work, if there is no margin for the publishers then they will simply not publish their work to that format no matter how much the market demands it, and the e-book readers will end up a cultural desert of a large slush pile of generic fiction - the equivalent of a free view channel that is mostly adverts and cheaply made programs that nobody wants to watch.

As per my previous post on traditional vs self publishing, one of the reasons Vanity publishing had such a bad name was the lack of curation and quality control. The self publish digital market is the publisher nightmare scenario x10 where the audience is deluged with such a large quantity of low priced content they become unwilling to invest in the high production value work.

so is 99c ebooks really vanity publishing?

for the vast majority yes, for a few exceptions who make millions i would suggest it was the literary equivalent of a marketing scheme.

heres my justification:

Cost of product.

A professional author knows how much their work costs. Log the costs of your Computer, Software, printing costs, postage and most importantly time and you will get to a figure for a typical mainstream commercial genre fiction of anywhere between 12 and 50,000+ USD depending on where you live and how much time you spend on your book.

strap on 3,000 USD for a professional cover artist, 5-10,000 for a professional editor, another 5-10,000 for proper typesetting. 5,000+ for a marketing and PR campaign and before a single print is done you are looking at 50,000 USD plus just as a basic cost to produce your book.

at 99c with a 34c royalty rate (around 20c after taxes) you are going to be looking at 250,000 copies to break even on the cost of your work.

its a simple profit / loss, if you deduct the cost of producing your work from the revenue of sales and you are negative you are basically paying your audience to read your work. 

Given most published first authors will expect a first print run of 5,000 - 15,000 copies for the publisher to break even its not difficult to see why the 99c argument just doesn’t work.

Unfortunately many writers do not calculate their costs, they set prices to chase volume to increase listings and therefore volume, whereas what they should be doing is promoting and marketing their book to a readership that will follow them at a conventional price. 

there is a good reason for this:

the handful of breakaway successes did so at the early adopter stage when the platform was starved of content, the tactics they now promote have been widely adopted by thousands of authors completely negating the effect of using them. once everyone starts the same pricing strategy you end up in the traditional price war model until everyone is giving everything away from free which unless you are selling advertising space means you are basically paying your readership to read your book by virtue of not recouping your costs, thats great for a hobbyist but not if you ever intend to make a living penning literature.

By promoting your book at a reasonable price (even at cost of sales) you are attaching a value to the work you produce and attracting the RIGHT audience who are prepared to pay for that.  if your work despite your best marketing efforts fails to attract a paying audience then unfortunately its time to bite the bullet and accept you just don’t have what it takes to be a commercial author - i know i can’t sing so i’m never going to cut a record. there is no point in making a record then giving it away for free, its better to find what I can be paid to do and do well.

And this is the great irony of creative production - for many people they attach little to no value to the work they produce which is truly bizarre.

How many of us would work at walmart for 45 hours a week for free? or work as a doctor, lawyer or get a taxi and drive people around for free?

if you turn up at LAX and there is 100 taxi’s there isn’t a bunch of drivers offering to take you anywhere you want to go for 99c simply to get the business is there?

Yet we seem happy as creators to let Amazon, Apple and others make billions in profit from distributing our work while paying to do so.

Personally speaking if 99c becomes the future price of books then I will never write another book, anyone who places so little value on the entertainment a good book provides and isn’t prepared to pay a reasonable price to renumerate the creator for the effort, ideas, originality and voice they put into that work doesn’t really deserve to benefit from the value they gain from reading it.

That is unless those readers are prepared to clean my house, drive me around, fix my washing machine and do the countless other things they charge me a premium for their time to do.