Tuesday, August 19, 2008

Cutting Out the Middleman

Sylvia finds some numbers:

Besides being a long-held goal, another reason I decided to pursue writing a textbook is for the financial reward. Although I have published a few journal articles, (none of which are of any consequence), I have never received much psychic reward from doing so. And, at Southern Utah University for many years psychic reward was the principle reward to writing journal articles. But, textbook writing can be financially rewarding. For example, there are approximately 250,000 books sold each year in the Intermediate Accounting market with each book selling for approximately $100. Author royalties begin at 15% of the selling price, and through negotiation may be higher than that after certain sales targets are met. So, an author who has a 10% share of the market will earn $375,000 in the first year of a new edition of a textbook. The royalties in the second and third years of a three-year edition book decline to about 60% of the previous year, or $225,000 and $135,000, respectively, because of buy-backs. That is a total of $735,000 for the edition. Yes, writing a textbook can be very financially rewarding. (Currently, the leading Intermediate Accounting textbook has 60% of the market.)

OK. But if this is true, 85% of the cost of the textbook is not going to the author. We can figure out a way to give the author a fair shake, but it is really the textbook publishers who are offering very little in return for a huge markup. They are long overdue for a little creative destruction.