Recently went through my project P&L documents, looking at the various profit and loss figures for the numerous side projects.
I don’t track the P&L information for all my work. Certain projects like the ‘major’ books, I know without a doubt will turn a profit. Quite often, those projects turn a profit in the first month, or at the least, breakeven.
Mind you, I’m defining profit here as directly related production cost which means Editing, Covers, Audiobook Narration, Copyright Registration and Advertising cost. It doesn’t include my writing time (or my salary or any of my employees during that time).
Still, with something like A Thousand Li, I know the thousands I pour into producing the book will be paid back soon after I release the latest book.
Things get tricky though with other projects.
Side Projects
Many of you know I write a lot of side projects. Whether it’s my superhero series of novelletes or my Vampire VR LitRPG, these works don’t take a lot of time on my side. However, they are often rather unprofitable.
The eagle eyed might notice, half the reason why we run losses are the audiobook narration side of the equation. Our cost for copy editing and proofing are often low for shorts (we often do a lot of it in-house and/or produce covers in-house for them, though not always); but we pay full rates for audiobook narration including proofing and mastering.
AMS ad costs are a bit of a wash, we mostly do them as tests for other projects, so while we do slot them in as cost here (because that’s what we advertise), it’s often useful for other reasons.
Still, as you can tell, the ROI on many of these side projects are literally in the years range. For many, we sell maybe… $5 a month. Which, assuming our Advertising costs zeroes out again, we’d expect to breakeven in somewhere around 100 months for some. That’s 8 years.
Now, there are plans for ways to make it more profitable. Some of it might be writing more in the worlds, then bundling them together into a larger work, which works well for audiobooks. Storybundles and Humblebundles are also useful.
But the ROI on these shorts are often in the negative, sadly enough.
Translations
Translation projects are another weird loss leader for me. In most cases, my ebook translation cost never actually covers the cost of translation (at least not in the short term).
My experience has shown that it takes between 6-12 months with good series for the initial translation cost in German to be covered. Sometimes, it can take up to a year before we breakeven on just the cost of translation.
When we first started, producing an audiobook was how we managed to achieve profitability faster. Within 3 months, we often saw breakeven happen for our audiobooks.
However, that’s changed in recent months as more publishers arrive in the market. Now, the timeframe for profitability has increased to around 6 months for standalone works (i.e. my own works).
Co-author projects are even longer, easily doubling the timeframe before we can make money back.
Co-Authors
Talking about Co-Authors, we also often track our cost for co-author projects. Because all revenue is split but costs aren’t, profitability on co-author projects is often trickier and needs to be kept a close eye upon.
English is a non-issue mostly. We often see breakeven occur in a few months, though that’s not always the case (Looking at you Leveled Up Love). But as noted above, translations are much trickier. Most translations are well into the future and are a year or two away from breakeven.
Production Cost
So why discuss all this? Well, partly to give a glimpse into the backend, but also to discsuss a few ideas.
Firstly, there’s the issue of sunk cost and cashflow. Yes, the novelletes and shorts and the translations all aren’t profitable in of themselves. However, assuming one has the funds to deal with the expense now, producing more work is an investment in the future.
For example, I make around $5 a month from a novellete or short. Not really anything to write home about. However, it’s worth noting I have around 30+ shorts and novelletes now. That’s $150 or so in cash flow (give or take. Fun thing about having some of this revenue coming from ‘wide’ retailers, that portion of the income is often consistent-ish).
Now, look again at the cost of producing one of those novelletes. Assuming the cost is around $500, that’s 3 months worth of the income. If I actually chose to exclude audiobooks (or reduced the cost of production); I’d actually be able to produce a new short every month just off this income, building up a consistent income this way.
The money spent on production is gone. It’s sunk cost. The income it can generate in the future though, for years, is certainly enticing.
The other side of this discussion is to talk about controlling production cost. Anyone looking at my novellete cost can easily point out that I’m overspending on covers at times and definitely overspending on audiobooks ALL the time.
Sadly, there’s no money to be made in short audiobooks. When your audiobook is price at $3.99 and you get 25% of the income, you are earning $1 an audiobook. You have to sell a ton to just breakeven at professional narration cost. And that’s not including how little you get if your audiobook is listened to on a library service ($0.25-0.30 per listen).
And while I don’t use AI narrators, you can’t help but look at such numbers and go ‘maybe?’. After all, a prudent businessmen wouldn’t even bother making them. Not when you can earn as little as $7.20.
Like the business blog post? Want to support me writing more of them? Want to read ahead (2 weeks) of others? Become a Patron and choose the $2-tier to be able to read the business posts only and ask questions about the business side of writing.
Recent Comments