Session: Author Business Models: Concepts, Caveats and Collaborations
Michael’s presentation focuses on the business models often used in indie publishing, with a specific look at advanced collaboration business models LMBPN is presently rolling out.
In this session you’ll learn:
- Types of common business models in Indie publishing
- The Collaboration business model and the benefits and pitfalls to look out for
- The concepts behind the advanced Distributed Collaboration business model
- Some caveats when we started building our ZOO collaboration universe
- An interview with Draft2Digital regarding their Universes offer.
This post is part of London Book Fair Self-Publishing Advice Conference (#SelfPubCon2019), an online author conference that showcases the best self-publishing advice and education for authors across the world — harnessing the global reach of the Alliance of Independent Authors’ network. Our self-publishing conference features well-known indie authors and advisors, for 24 sessions over 24-hours, in a one-day extravaganza of self-publishing expertise straight to your email inbox. We hope you enjoy this session. Let us know if you have any questions or input on this self-publishing topic. Visit our Facebook Group and join in the conversation there, or leave your questions and feedback in the comments section below.
Dan: Everybody. My name is Michael Anderle. I’m the CEO and president of LMBPN Publishing. I’ve been asked and honored by ALLi to talk about business models and an advanced business model, which I will do. A little bit of a background about myself. I put out three books in November of 2015 called The Kurtherian Gambit and continued moving forward in that series and it became a best selling series. And from there we were able to do collaborations in the universe and we’ve done multiple different ways and styles of doing publishing since then. We have over 400 titles right now on Amazon itself. We have over 150 audio book titles and we’re on track to do three to 400 new titles in 2019 as well. I created the 20 Books to 50k group in 2016. And that particular group has a little over 28,000 members at the moment, which is totally focused really on business.
Dan: It has nothing to do with how to write better or any other subjects whatsoever. So one of the things that I think that I can speak to is because as a publisher, which has been my focus ever since I was the only writer for LMBPN, we do try different business models and I’d like to discuss not only what is a business model in the context of this discussion right now, but also what are some of the different business models that most people understand and realize what’s going on with indie publishing. So specifically what is a business model and it’s comprised of four parts. The first one is what is your revenue source? And for us, that actually comes down to a little bit of a different clarification of which I’ll get into in a minute, but you know, who’s going to pay you and how are you going to get paid?
Dan: Who is your customer base? You know, for us that’s going to be who, what are the genres you’re writing your books for? And that helps narrow it. And then you might have a better understanding. For instance, if you say who’s your customer base and you write horror, well typically it’s going to be those that like Stephen King or other famous authors who have written in the horror genre would allow you to find, at least narrow your customer base down. If you happen to say that your customer base is anyone who reads, you probably don’t have an easy road to hoe from there. The third part is what are your products and generally speaking, we consider our products our stories, right? But it can be more than that. It can certainly be your stories, but then you have different methods of getting their story out, which both include paperback, Ebook and audio and audio of course has a bigger and different cost structure, which brings us into the next one, which is financing.
Dan: So a business model is comprised of these four parts and for financing, if you’re just starting out, that could be anything from your, you know, bootstrapping to where you’re just writing on the laptop that you’ve borrowed from work and you’re trying to get the best thing out to you’ve used some credit cards or some savings in order to get the right editing or a much better cover? I typically cannot do, I mean I did my first covers myself for $20 and then I hired somebody as soon as I had income from the books in order to be able to push it forward. I wouldn’t suggest doing that now because I know a lot more than I did at the time. And I know that I can get some decent covers for $60 if I go out there to the premade areas. So within those four items, what are some of the types of business models for indie authors and indie publishers?
Dan: Well, let’s talk now a little bit about that wide versus exclusive model, that situation, and this has to do back with the business model and your revenue source. If you’re wide, you are pushing out your stories or your audio books or merchandise to the most places that you can. For example, you would be out on Amazon, you would be out on Kobo, you’d be out on Apple, you might be out on Smashwords, you might use Draft to Digital in order to push yourself down to, you know, secondary, tertiary, location distributors, publishers, well, you’re the publisher. But distributors in order to get into everywhere, every nook and cranny that you can around the world. And so that would be a wide model. But if you’re in Kindle Unlimited, Amazon limits you to only publishing, well, only publishing your ebooks on Amazon itself. You can use your paperbacks and go to Ingramspark or anywhere else.
Dan: So within that, if you’re not exclusive, Amazon only, then your wide, if you’re Amazon only, you then you deal with about 11 different income payment statements each month. And that comes from the different geographical areas of Amazon itself. And then if you’re wide, of course you’re going to get them from all the different companies and your complexity goes way up. Let’s talk about the difference between Ip Creator and a publisher. If you’re writing your own stories, you are the IP creator, you’re the product creator and if you’re a publisher, you’re acquiring the rights to publish the stories. And there are hybrids with this all over the place. We are a hybrid at LMBPN, we, I create IP but I also have upon occasion worked with others to acquire IP, usually with myself adding modifications to it in order to make it more, probably easier to sell to my target audience, let’s say.
Dan: But it is something that we’re looking at is to actually be a more traditional publisher going into the future. We also have things like audio rights. Are you an audio publisher or you an audio rights seller and this goes back and you know, revenue source, if you are going to be an audio publisher, we’ve published about 150 books. Like I said, these books cost anywhere from two grand to two, three and a half, $4,000 typically each book. And so while we do get to keep, you know, the 40% revenue split with Audible, if we’re exclusive to them or 25%, if we go wide, there’s a lot of money up front. If you’re an audio rights seller on the other hand then you are selling the rights to your ebook in order to acquire income. And the other business, whether it be Tantore or a Podium Publishing or Blackstone Audio or any of the others that actually acquired audio rights.
Dan: And we actually have acquired audio rights ourselves in the past for collaborators with the company. So you then have a business model where you have an IP creator/partner. And I can think of one in particular who writes in urban fantasy. The author loves to write the story, but she doesn’t like to do the world building. And so she has a partner that does the world building for the series that she does. And then she’ll write the stories within that world and then they split the profits. So that is one business model and revenue stream for creating profits. And then you have an IP creator and then a work for hire. What this is, you know, there are people, even as myself who will be able to create collaborative opportunities, but the writer doesn’t want to take the risk of what comes next with 70, 80, 90,000 or more books coming out each month.
Dan: It is easier for some work for hire authors to go through and just write the book and say, “Okay, here’s the book, but now you need to pay me.” And then they will allow all risk to the IP creator. And so that is one way that it is done. But then you also have splits in hybrids from that. Where do you have a work for hire but a small percentage of income or you have, you know, straight up collaboration, which is what we’re best known for, where the collaborator, retains 50% of the income. We handle all the costs for the editing. All, you know, most of the costs for the covers and you know, the marketing as well. And so there are just different methods to do the business models within the indie author, indie publisher arena. Now you need to be really careful if either you’re delivering a legal document or you’re signing a legal document, pay a close attention to what those things say.
Dan: Now there’s one here in the United States, you know, you can get a legal document out of a book and if so that legal document is going to be perhaps weighted toward whoever the entity was that wanted the legal document created. If it was someone like an author than the legal document might be weighted toward their favor. If it was a publisher the legal document might be weighted in their favor. And every legal document is negotiable. Don’t assume that if you’re given something that you have to accept it as is, go through it. Have someone look at it with you, make sure that it matches up with what you think you heard. And so those are all just different aspects of the business model. We have acquisition of rights, which is the traditional method of acquiring IP that we know from the, you know, from the trad pubs as we would call them.
Dan: And so you’re working with an author and they bring something to you, you review it, you like it, you agree on what the percentage cuts are going to be, who’s going to pay what, how is the marketing going to be done and then you push forward with it. And then also, you know, I’d like to consider the pop culture merchandise. So shirts or other items that are done for your characters and your IP is another revenue source. So I’m going to move on here a little bit. Wide audio versus Audible exclusive. So you know there’s a situation just like there is on the Amazon versus you know, exclusivity versus wide and that’s Audible. Audible presently holds 40% if you go exclusive with them and then they have 25% if you go wide, there’s a lot of information out there and I would suggest everyone take a look and see whether or not it is worth giving up that 15% extra to go wide because of the new ways that Audible is being distributed around the world.
Dan: And then also you can do advertising on your content, which is a little bit new. And what we’ve been doing, testing the waters if you will, is looking at doing Youtube videos for your Audible type of content. If you can either do the audio yourself or you have someone in your family and then run ads on it. And it not only helps you from doing, typically, an income stream, minor, admittedly, but also from a marketing perspective and look at seeing what those opportunities give you. So that’s, you know, another little item, not exactly what I wanted to talk in this video, but something for you to take a look at. So new business models, let me talk about the collaboration in business model and basically to give you the understand some of the gotchas. Collaboration’s are multiple styles. They can be everywhere from you’re collaborating with somebody else who owns all of the IP to you own all of the IP and someone else’s collaborating with you inside your universe.
Dan: So let’s talk about, why do it, why do a collaboration? One of them could be that you have no platform. Okay. So what is the platform? I was really confused when I started this industry with all of the jargon that was pushed around and platform, even probably to this day is one of the ones that I’m confused about the most. But in general, a platform is a way for you to get the word out to fans about your new stories so that they will read them, buy them and pass them along to others and get excited about them. It helps you with discoverability, which for me, 2019 is the term that LMBPN is using discoverability. How do people find us there? We think sometimes that we’ve saturated the market and the reality is we barely touched it. Craig Martell has a situation where he often talks about J K Rowling and seeing ads for Harry Potter.
Dan: And yet we know that there’ve been, what, six movies or something, seven movies of Harry Potter. There are different places where you can go and enjoy yourself like a Harry Potter, similar to Disney. And we’re like, if they need to do advertising, you probably need to do advertising, just a whole lot more. So you don’t have to do something you don’t like to or you’re not good at. And the collaboration, similar to what I’ve talked about before with the IP, you have the ability to understand what it is that you like doing and you bring a lot of fun. And that could be, for instance, I know one individual who doesn’t like to write the first pass of a story. Oh, they might like and enjoy putting another, you know, 30,000 words into an existing story. So if you have someone, you know, collaboration where they enjoy writing the first pass and you enjoy coming back and doing the edit and pass and adding to it, it’s a good reason to do collaboration, invite it and better income.
Dan: So one, another reason on collaboration is first you’ve been invited to be brought in and you know that their series is selling better. So you’re looking at it once again, discoverability. You’re going to be in a universe that sells better and while your cut will be less, the goal is that your cut will be less of a much larger amount and there’s opportunity. There might be an opportunity because you’re going to be in it two or three years. You and in this case, what I’m talking about is the actual stories themselves. So you might be in and out of the collaboration and stay friends and it took you three or four months to do it, but your books now part of that universe for years. And so people who come into the universe because the universe should be still be marketed, no different than Kurtherian Gambit is, but they find your books and because they have now these start tracking down to go find out more that you’ve written.
Dan: Once again, discoverability, another reason to do collaborations is just fun. A lot of times when we write it’s lonely. You know, we’re sitting there, we’re bang the head that our heads against the keyboards and we’re looking to see what we can do. And then now that you’ve got a group of people all focused on creating stories within a milieu, in a universe, you enjoy it, you’re creating something new, you know, there’s somebody else that has energy and excitement and creativity all with the same thing you’re focused on. So that it goes, takes me to the next step was, you know, join a group of likeminded people and then build something bigger than yourselves. If I had strictly been riding on Kurtherian Gambit, for example, I would have had 21 books, which I think was basically this time last year and let’s say that at my fastest I would have another eight books out.
Dan: But that’s not true. Kurtherian Gambit has way more books than I could ever have possibly put out myself. Satisfying the fans, which is really kind of the important part. And then also a more products to sell business model situation. I would rather have a smaller percentage of more books out than more books and not, you know, and all of the percentage. And that’s personal. You know, a lot of these are just opinions of what I personally like. I do know authors who only want to put their own books out. They’re happy with their speed, which I’m pleased that they are and they only want to worry about themselves. That’s a very common business model, but not part of this discussion right now.
Dan: Right. Have others help you build something larger than you personally can, Kurtherian Gambit, help others with a leg up using your IP. I put this in here because it’s important to me. I wanted to find out if I could help other authors from the success of Kurtherian Gambit attain something for themselves. And I can look now into the past and say, “Yes, I did.” I’ve helped multiple authors acquire discoverability for their own books, be able to quit their own jobs, and go full time author using collaborations and IP. There are challenges with doing this, many of them, and I’ll speak to some of them right now. So in collaborations, one of the biggest ones you’re going to have is talking about who wins an IP or creative discussion. Guaranteed almost all of us at sometimes will disagree with our partner on where something should go creatively.
Dan: If you’re an individual that must own the rights, must have the final say explain that upfront to your collaborators. They need to be aware of this and have to accept this, you know, don’t let it be something that creeps up on you when you’re halfway through the collaboration design of the beats for say, four books. Or if you’re an individual that says, “Hey, I can take direction” and you can’t because you need it your way. Don’t do a collaboration. They’re not for everybody and just recognize that and be okay with it. So once again, collaborations, if someone else has sold more books than you and you’re asking to write in their universe, you need to realize that there’s a reason they’ve sold those books and if people are rereading those books, then there is a reason that the fans are liking it. If you can’t understand what that reason is, don’t go into that collaboration agreement thinking you’re going to change someone who is successful.
Dan: You need to learn what they are doing and meld it into your situation. So just to be aware that that for myself, some of the biggest issues with collaborations has been with what I would call overly picky individuals. And our structure of what create together didn’t mesh very well. And it created issues personally because it’s stressful. You know, I tend to be a very get-along type of person and if I meet someone who is very adamant about something, it stresses me out. So I prefer not to do that anymore. Just understand what your personality is and how it works, then you’re going to have income. And the spouses of those that you’re collaborating with might have a word here as well. I’ve had a couple of collaborators very early when we were doing, they were doing very well and their spouses are questioning why would it, why would the person that in this case, these two guys, why would I pay them?
Dan: You know, their spouses just didn’t understand why that would happen. And so you have to have some agreements, some assurances of how they’re going to get paid, when they’re going to get paid. And these are all part of the legal documents that I talked about before. So having that as a basis. I want to talk about the more advanced one that we’re working on right now at LMBPN, something I’m calling distributed collaboration. First, with collaborations there are issues. I spoke to the emotional ones, really hard to outsource that. Not impossible but difficult, but the biggest one are the payments and the paying everybody on time. I can tell you, for example, if LMBPN, we promise to pay within five business days of Amazon, particularly Amazon, paying us and we’ve had to build massive spreadsheets so that we can actually figure out how to pay everybody and get the percentages right so that I can then pay them.
Dan: And we typically pay within 48 hours of us getting paid. Depending on whether it’s actually, weekends or not. I mean there’s only so much you can do with the banks. So, but we have five days to get it there if something should dramatically go wrong. The challenge is once you go past a certain amount of books and oh, let’s talk about wide versus exclusive. For the most part we are exclusive with Amazon on collaborations where we owe people percentages, which means we have one spreadsheet that we have to deal with, a large spreadsheet and then we have to deal with multiple currencies. So you have to figure out what’s the currency evaluation or the currency to dollars to US dollars so that we can do the transfers. Then we can figure out how to pay everybody. And then for myself, I have to go through either, I use Wells Fargo, so I do direct deposits for a big chunk of them, have to do it whether it’s a business or is it a personal, and then I have to go through Paypal for the rest.
Dan: I have, you know, some of my collaborators use Payoneer because they’re obviously overseas and so they have to deal with it if I do direct deposit. They have to figure out what’s going on in that situation. So now you have this massive issue with transferring, you know, we made 500 Australian dollars and we have to transfer that into US dollars, which is probably somewhere around 375 or something. And then we have to break it back apart and then we have to get into banks that actually go back over to Australia and they will then switch it back over to Australian dollars. Sometimes it’s Paypal, sometimes it’s through a Payoneer account. Sometimes they have acquired a US bank of which I have no idea how that happens. The next one are legal documents. So with collaborations, you have legal documents, the rights and sub rights.
Dan: And here the sub rights I’m talking about include what about your audio rights, what about your Zimbabwe radio rights? You know, what are the legal documents say about that? I can tell you that from our perspective, the way we do it is once we set up an agreement on percentages and we’ll do the simplest 50/50 split, that if I have the ability to sell the rights, let’s say into French, then they acquire, once we take out the percentage for the agent in order to sell it. Once you know, I have an amount, they have an amount If it is 50, 50, it’s the same amount, they get the same amount I do. I set up the legal documents where I don’t have to ask permission to sell it into French, but once I have accomplished that, they get their money into their account on the same timeline as what we do before, which is five days upon us receiving the payment itself.
Dan: But think about the wide versus exclusive issue again. In Amazon, you’re going to have the nine to 11, I do not remember the exact number of payments that come in. If you go wide now you’re going to have Apple’s payments and Kobo’s payments and everybody else, you just caused your headaches to multiply a lot. And so be considerate of that. And we were ourselves with our distributed collaboration concept, and I’ll show you how we quote unquote fixed it in a minute. Other issues with collaborations and specifically distributed collaborations are going to be issues with cannon. How do you fix issues with cannon? One of the things that we encountered with Kurtherian Gambit were people who wanted to read didn’t want to read the books necessary to understand the canon for our stories. So they, for instance, if we had 25 books to read, they would read about two books and then start writing, you can’t know the canon of the stories in two books.
Dan: And so we had situations where people would get it wrong. So what kind of backstop measures do you have in place to make sure that the canon is correct? Now you as an author can start by reading them all. That is certainly one way that is done ourselves. I don’t even get canon right from my own books at times, much less everybody else’s book. So we created what we call it or I created a JI team, just in time team to catch if our editors failed to catch something or canon issues if the editors failed to catch it. And just, it’s one more way to put out a quality book. I would suggest a canon team, if you have and locate one person who has the personality to understand all the nuances of books, hide them first, give them all of your books and let them read them and they’ll tell you what the canon issues are.
Dan: You have an option with distributed collaboration with a possible not canon sticker. And I think, let me take a second. I don’t think I explained exactly what I meant by distributed collaboration. So a few, maybe half a year, a year ago, Amazon had what they called Kindle worlds. And so Amazon held the IP. An author could go and write in Kindle worlds and you didn’t necessarily have to bug the original author. Let’s presume that I had done it, which I did not, but let’s assume that I had then you could have written Kurtherian Gambit through Kindle worlds and Kindle worlds would have handled everything based on the agreement that you made with them. That faltered, that failed. And there is a company Draft to Digital that created a new product called Draft to Digital Universes of which this whole distributed collaboration is based on.
Dan: It is the ability to move some of the responsibilities of collaboration from LMBPN over to Draft to Digital. Draft to Digital will acquire a 10% take in this. So we get our percentages after, but they’re responsible for many of the problems that I’m discussing here. So going back to my little list of things that I wanted to talk about. If you have, one thing that we’re playing with is allowing something that is similar to fans write for the fans, which is a product client that we created. But that product line is canon, meaning that the readers and everything else, our fans and they don’t allow anything in Write For The Fans, Write For The Fans that is outside of canon. There was some concern on my side because you can go to something like fanfiction.net or is it, yeah .net and someone can write anything they want to and pretty much companies don’t sue there because it’s fan fiction.
Dan: There’s no money involved and so they allow it to go on. I wanted to say, well what if a fan wants do this fanfiction? They didn’t want it to be canon because maybe they wanted Batman to be involved and a witch, well, they can’t do that because it’s a money situation so DC would be involved but let’s say that they wanted to put something in that’s not part of canon that doesn’t also cause a legal issue with another company. I thought about putting like a non-canon sticker on the book and requiring it. I don’t know that we’re going to do that at the time because fans typically are pushing back on that. But it’s something I wanted to bring up to say it’s something that we’ve considered. It brings up in this distributed collaboration an issue specifically when someone is taking a story down a dark road or a way that you don’t want to be represented with your IP.
Dan: So if you allow that, you now have stories out there that are associated with you that you don’t want associated. So you need a way to stop this. And one way to do it, the Draft to Digital Universes, what they do is when and if you don’t know who Draft to Digital is, I’m going to have another video where I talk with with these guys and let them actually speak to them yourself. So I’m trying to save some of these answers for the end of this video. So what happens in a nutshell is you have to sign up with Draft To Digital and you have to be approved by the universe owner, in this example me, in order to be able to publish and I will be discussing with, with Draft To Digital saying, “Hey, any book that’s going to go through our Zu universe for the Draft to Digital Universe, they have to be approved.”
Dan: If they aren’t, well then you don’t get published on Draft to Digital. Just that simple. And one of the requirements that I did not think of myself, this concern, it was actually a person in Adelaide, Australia that brought it to my attention at a 20 books event there was that what if someone took a wicked twist and they put some sort of character I didn’t want in the universe, I didn’t think about it because I thought who would do that? And then I realized she was right. We have to be careful on what kind of characters come into our IP. And so be aware of it yourself. And then finally, advertising email list, you’ll need to be creating some sort of marketing for the collaborative universe itself so that people who write in it, you can help push them. This is one way that Amazon Worlds I don’t think worked very well.
Dan: You know, they didn’t really push all that well, the different things that was going on and they didn’t tell people about it. So our version of distributed collaborative universe, it was something that I called the Zu or the Zu universe and it’s Zu is actually short for Kudzu. And one of the issues with collaborations is what happens when somebody creates cannon that somebody else doesn’t follow? And so in the Zu universe, there are alien flora, alien fauna. And I specifically architected it such that if author a comes in and they build some sort of creature and then author B who’s writing in approximately the same timeline, doesn’t use it. Why not? Why don’t we see this? And so it was designed such that the Zu itself doesn’t care what animals or creatures live and survive. It’s constantly creating new ones. And so we have a logical reason that says if a particular alien dies, alien monster, then you might not ever see it in any other book, even if it’s successful, but the humans kill it, it doesn’t mean that the Zu is going to create it again.
Dan: It might be onto the next thing. So you have to be aware of what’s going on. I built Zu so that it had seven different little cities around it. And so that if someone is in, let’s say the US side, they might never meet somebody who is in the encampment that includes the French and the Israelis for example, or the Chinese or the Russians or you know, any of the seven. And so we built them large enough that you don’t have to hit each other, you know, they’re inside the zoo. You need to consider your author pitch for this distributed collaboration and consider it potentially months ahead of time, who will be writing and make sure they have the areas that they need to be able to call their own. This kind of goes back to the issue with collaborations. When you have creative dissonance between you guys, you know, you’re going to need to understand and explain to them what are the constraints that they must write within, what are the ramifications if they choose to color outside your lines and what happens to them?
Dan: And the answer can be, your book doesn’t come in. Now they might be able to reuse their book and you know, change, pull out all of the particular IP items that, you know, make it unique to your universe and do it more generically. Or they might just have to can it, but you will need to be able to say, this cannot go in. I told you about this. This is how it works and this is what needs to go on. And as an author, I know that a lot of us like to get along. We’re somewhat introverts. We want the next best thing for the next person. And it’s hard for us, for some of us, some of us, not so much, but for some of us it’s hard for us to push back and say, “You can’t do this. I’m sorry.” If you care to do this advanced business model, you’re going to need to, or you can partner with someone that can do it.
Dan: It might be your spouse, it might be another business partner. Whatever it takes, your collaborative universe needs to be whole not only for yourself, but for all of the other players in it. I hope that makes sense. You need to be able to push adherence to dates and adherence to quality. Both of those things are important. I messed up a fair amount at the beginning of my collaborative universe efforts because I felt, “Hey, these individuals are writing, they’re the ones who are putting the most work in.” And you know, we would put the money in for the editing and the IP and the marketing and covers and they would be putting the time to write. And for this reason I chose not to push adherence to dates as a big issue because life happens. And what I learned was when we don’t hit the dates, especially toward the latter part of the books, books two, book three, book four, book five, then we have lost a significant chunk of marketing opportunity, at least for the way that we did, which was more of a rapid release model.
Dan: And it messes us up. And I’m not talking minorly. For a recent collaborative effort I’ve done where we released the first book. I think in September we slowed down on book like four, three to four, right. And I would argue that we’ve lost 30 to $40,000 easily because of this and probably another 20,000 on book five because we didn’t hit the dates. It’s a lot of money for lack of hitting dates and so when people, a year later or two years later, they talk about, well, how successful were you? They don’t remember that they miss the dates. What they’ll say is, “Hey, we missed this opportunity for income,” and it’s like, no, you need to go back and take a look at this and say, hey, this is a potential problem. How are you going to deal with it? And some of the ways to deal with it, quite frankly, it’s just hold onto the books until they get out.
Dan: Downside, no income, there’s no income coming in because once a person releases the book to your company or to you and you have to get through the editing and you have to get through the process and then that you have to do the release. Even if you do that within two weeks, you’re still at least 60 to 90 days away from any income on that book. So dates are really important. Quality is important. As you have a good editing team, the collaborators might rely more and more on that editing team versus delivering to you quality product. Your costs go up and it takes longer to get the book out. So you need to have something in there related to quality that they’re delivering to you. Make sure you create connections to potential offers earlier than what you’re ready to release your distributed collaboration environment.
Dan: I know of one person who had a concept and they delivered it at the first 20 books in Vegas and it just, it was on fire. It was such a great and impressive idea that she was able to pick up authors, like, left and right. It was like picking up change and you know, on the off the floors of someplace, but in general you’ll need to actually hone your message of what it is that your universe is about to get other authors excited or to even get on their calendar itself. So, be aware of that, what you need to do. Tight now I’m going to set it up to where I’m going to talk with one of the guys from Draft to Digital. It could be Dan Wood, it could be Kevin Tumlinson, it might be Mark, Leslie Lefebvre. Let’s see who it is.
Dan: Hey everybody, this is Michael Anderle and this is the second part of the discussion for ALLi related to distributed collaboration and advanced business models. I have asked Dan Wood, a friend from Draft to Digital to come on and not only explain a little bit about their company, but also specifically about the Draft to Digital Universes that are one of the components of doing this advanced business model. So Dan, thank you very much for coming and taking up your time and giving us a little bit more insight. First on Draft to Digital, who you guys are, and then explicitly the universes product that you guys are in beta with right now.
Michael: Great. Well thank you for having me. We’re Draft to Digital, we work with a whole lot of different indie authors to just help them distribute their books everywhere. So we’re always looking for different ways, different opportunities to get books all over the world and be it in digital, audio or print. And so one thing that we’ve discovered as we’ve attended conferences over the last few years is that collaboration is becoming such a huge part of success. You know, there’s a lot of reasons for that. The indie community is such a great community where people want to help each other and share, finding readers is difficult and so sometimes leading readers to other people, you know, write books like you or have like a similar viewpoint is a really good thing, you know, the problem we’ve heard people talk about over the years has been that when you collaborate someone gets stuck having to do all the accounting, they have to do the taxes and that’s no fun.
Michael: It’s what everyone hates. So we’ve been working on for a while on some sort of way to make that easier. You know, as a company, we work with authors all over the world and so we’ve had to figure out how to pay people in America and Australia, Africa, just about every country you can think of. You know, we’ve had to figure out what tax information we needed to do. So we were like, we can kind of put that to good use to help people run their business and to collaborate better. When, last year when Amazon closed Kindle Worlds, you know, kind of rather quickly, we had a lot of authors reach out to us that wanted to take those books and be able to distribute them and still kind of split royalties between the universe owner and the people who had written within their world.
Dan: A quick second real quick and inform people what Kindle Worlds was, because there was actually a different components in a different business model than what most people are used to now. So people didn’t have it before then. I mean, from what I remember specifically, so it was an area inside of Amazon that they would reach out to a universe owner. So it might be like Lindsay Brokers is an example of one who had one and people could write in her universe through the Kindle Worlds and they had rules and set up different things that, you know, the collaborator had to do. And depending on the collaborator themselves, they might be involved very little all the way to very much in this. And but then Amazon would be the responsible party for actually selling it, setting prices. You know, they would only sell it US because I understand after researching it that they had a kind of an old time accounting system that wasn’t, they just really couldn’t bring to the present. And so that was also one of the logistical issues that they had. And then frankly there were a lot of people like myself who I wouldn’t do it because it stopped me from setting prices around the world and doing advertising and different things against, it was just too many constraints and-
Dan: And that’s so powerful, having control of all of that pricing.
Michael: So if you, so they died, you know, it’s like, “Hey, everybody, we’re shutting down. You have 30 days or 60 or 90 whatever it is to get your stuff and figure something out.”
Dan: Yeah, I mean it’s such a neat idea to being able to open up your world to fanfiction, but where you’re also making some money off of it so it’s not like they’re just going and writing about your world on Wattpad and no one’s really making any money but maybe Wattpad.
Michael: Yeah, exactly.
Dan: And it’s a really cool idea both for letting fans right within your world. If I recall correctly, I think once you had a kindle world, just about anyone could write in it.
Michael: I mean there are some that you have the ability, but
Dan: They had some stipulations-
Michael: specify how much, you know, the rules that they had to live by. Like you can do this, you can’t do that. I don’t know how effective it was in implementation. And one of the things that, you know, I met you guys at NIK again this last year and y’all were announcing the product and I jumped on it because it was something that, for myself as a large collaboration company, we had seen a lot of the problems related to growth and having to break apart the finances. But the one and the additional piece that in speaking to you guys about it was that y’all allow me to say who can and can’t put product into the universe and there’s a gate there so I can stop effectively trash from.
Dan: Right. And we thought that was very important because you’re putting your name on this product or something about yourself is going to show up. You want to make sure that you control who can and can’t write within your universe.
Michael: Yeah, exactly. And that’s, so for and just for those that don’t know, if you distribute through Draft to Digital, you can certainly go to Amazon, Kobo, Apple, Smash, well, not them obviously. But many different, yeah, it was like, sorry, oops, many, many potential distributors, but they’re going to take 10%. So that is, you know, the, so they’re not making any money unless you make money is exactly how you guys talk about it.
Dan: We don’t charge anything. Like we don’t have any hidden fees or upfront fees. If you never sell a book we never make any money. If you sell books, we make money. So it really encourages us to go out there and try to get your book sold and more visible on all the retailers.
Michael: And it was funny because you and I met my first ever author event back in 2016 for Smarter Artists in Austin. It was in a bowling alley of all places. And I argued with you at that time, I’m like, guys, 10% is too much, you know, and we’ve had this ongoing discussion throughout this history of what we’re doing. I’m wide now and, so what we’re testing different wide things, but when it came to Draft to Digital Universes, I’m like, absolutely 10%. I’m done. Sold, you’re welcome to it. I’m happy to it. I see what the costs are going to be on my side to do that. And it is a foregone conclusion that it is. I don’t want to say it’s worth more than that because I don’t want anyone at Draft to Digital to go, you know, we should charge 20% for this.
Dan: I won’t tell my bosses. They will never see this.
Dan: As, you know, with our distribution model, kind of depending on, you know, making money when you make money, it’s, we have to give you good tools and we have to give you a lot of value to make sure that that percentage is worth it to you. And so we’re always building those tools. The collaborative tools I think are some of the neatest ones we have coming,coming out now.
Michael: Now you were telling me a little bit right before we got started, we were having all sorts of zoom issues. So thankfully we had time to test and you were mentioning some of the stuff I wasn’t familiar with that you’re looking to bring out on in Universes. Can you speak to those a little bit?
Dan: Yeah. Well, let me, let me go. I’m not sure if we’ve mentioned exactly like what we’re doing with our shared universe program. It is very much like the Kindle Worlds and right now, it’s the people who we have allowed into it and have been Beta testing with our people who had a Kindle World previously. And so they’ve been bringing over their books to us. We distribute it wide rather than just going to Amazon. Cause originally Kindle Worlds were just on Amazon. Now you can make those books available everywhere in the world.
Michael: But could you-
Dan: and in libraries.
Michael: Granted, but if we want to just be strictly Amazon with KU, can you guys accomplish that?
Dan: Not at this time. Right now, the only way to do you KU is, as an indie author is directly within KDP. We don’t know if that will change or not. You know, it’s certainly something we would like to be able to offer.
Michael: Sp you’re open to it. It’s just an Amazon issue. Okay. Yeah. That could just be backends not able to talk to each other.
Dan: Yeah. Yeah. They have different systems for different sizes of publishers for the ways different people go into their system. So.
Dan: So yeah, so like we’ve been doing that. We are planning in the near future to open up the shared universes to anyone. You as the world owner or universe owner comes to us, you say, I’m interested in setting up this universe. You will have to maintain your own, like make your own legal contract with the authors deal out of work it within your world. You know, send us a copy of that so we know what sort of what the rules are, should things go sour in your relationship. You let us know how we should react to on our end.
Michael: You don’t have any boilerplate? Is that going to be an option to understand what things we need to be careful about or?
Dan: We don’t at this time. We’d originally made one based on the old Amazon contracts and people were very unhappy with how Draconian the original Amazon contracts were about all of that. Because to protect the universe owner, you have to, you know, you kind of have to grab several different rights. You had to be very thorough. Nearly everyone just started making, you know, coming up with their own template because they, you know, they wanted to cater it to the authors they worked with and you know, what they believed about the business. I know several of these authors have shared with their friends because, within the genre that kind of know what are good terms for that group. But we don’t offer one right now. Okay.
Michael: And then how, I would imagine you guys can’t say who’s in the beta right now. So what you might do is just basically ask around to friends going, “Hey, does anyone know who’s in Draft to Digital’s Universes program?
Dan: Yeah. You know, I think different groups, you know, I think 20 Books to 50 k is a great group to ask within. Ones more specific to your genre, you know, ask if anyone’s in the program, how it’s going for them, you know, how they handled their contract. You know, there’s just so many ways to connect now to your author tribe online that those can be the best way is to make connections with them or conferences. You know, I have the luxury of getting to go to so many conferences and so-
Michael: You suffered in Bali.
Dan: it’s a great way to meet people.
Michael: Yeah. You suffered in Bali. I think I came out. I’m still. You didn’t sacrifice for the company. But your little mobile video thing that you have, I still want one of those.
Dan: The Dji Osmo pocket. I highly recommend them. Very good. So that’s with the, going back to what you, the question about the thing, the other things we’re planning on doing with it.
Dan: We really want to take it further and you know, offer things like, we know it’s really hard for people setting up multi author box sets. And so that’s something we’ll be able to build out and handle the taxes and the accounting on. So then instead of one person getting stuck with it, you guys can just kind of tell us these are the books that would go into it. I’m not sure how far we’re going to get, like if we’re going to compile all those books into the multi author box set at first. But you know, eventually we’ll be doing stuff like that. We’re looking at potentials like the ACX model where if you don’t have money up front to pay for something, where if you can find someone willing to do a royalty split with you for a certain amount of time. So let’s say, with editing, which tends to be the most expensive part of, you know, getting your book done, you know, maybe just doing a royalty split up to a certain point with the editor that they’re comfortable with where it’s a little bit of risk on their end, but then they might get paid more if the book does really well.
Michael: So the different ways of the new collaborations that are being facilitated or even the new business models that are being facilitated, bringing it back around for the reason for this talk in the first place through the technologies and through the communication and the collaborations that are happening now, you’re just making it easier. People are doing some of these, but who do you get to trust and Draft to Digital is a trusted service provider and so I appreciate you taking the time to jump on here. Is there anything else related to the universes product or something similar that you want to discuss real quick to help people?
Dan: One thing I’ll definitely mention it as far as like who you trust and who you’re working with. Yeah. I’m glad that Draft to Digital, this is our sixth or seventh year as a company. I guess it’s the seventh. We started in 2012. We’re privately owned and so again, we’re not getting outside funding or we’re not looking to sell the company. It’s something that we are very committed to building the best publishing platform and easiest for authors to work with, you know, if any of you have an opportunity to go to conferences, odds are you’re going to see us there cause we’re at nearly every indie oriented conference, and you know, we’re doing more of the industry facing stuff now as well. And so-
Michael: Will I see you in London?
Dan: We’re not this time, we’ll be at Book Expo, Mark Lefebvre will be at Book Expo, so,
Michael: All right. So we’ll see Mark at BA.
Dan: Yeah. And we’ll be like the Arta big national one coming up. I will be there. Yeah, NINC obviously is one of my favorites and I’ve got to talk to you several times at NINC, so I highly recommend NINC if you have a chance to go to it. But yeah, that’s what we’re focused on. The collaboration part is just like kind of within the DNA of the company because we’ve been always working on ways to help authors. And obviously probably the one thing you never have enough of is time. Like there’s just, with the pace of writing, people are doing these days and with the marketing and all of the little things, we can save people a ton of time just with our different tools. And because we’ve worked with authors who are brand new and we’ve also worked with veteran authors that are leaving traditional publishing and trying self publishing for the first time. Odds are if you have a question or something like we’re going to have the answer because we’ve encountered so many different situations, you know, we have really great email support.
Dan: We do have a phone number where you can call us if you want to talk to a real person on the phone because-
Michael: That’s not your personal phone number.
Dan: No, no, no, no, no. Oh Gosh. Can you imagine? Although my, new cards do have my cell phone number. I’m kind of regretting that. So=
Michael: Only kind of? Well, thank you very much, Dan. I appreciate you taking your time to avail yourself to answer some of these questions. And I hope everybody enjoys a look into some of the new stuff that’s coming down the pike. You know, the concept behind distributed collaborations where you’re moving some of the resources and things that you need to do and the responsibility to publish outside of your company so that you get, and like Dan just said, freeing yourself up from time and risk and effort is who needs to understand what the taxes are in Zimbabwe, not me. So thank you Dan, and I hope everyone has a wonderful conference here online with ALLi.
Dan: Thank you.
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