I have decided to publish my fourth book in the form of protected web pages accessed via a subscription. I hope that more quant traders will follow this route. I offer a few explanations below for my decision based on my experience with book publishing.
What you will read below are hard-learned lessons that can save you a lot of valuable time and money.
I am not a first-time author but best selling author
My first three books were great successes. Especially the second book on the subject of stock trading with price patterns was a best seller on my publisher’s website for several weeks. I have a lot of experience dealing with book publishers. When I announced that I was writing a book on price patterns at a conference some years ago, two publishers went into a bidding war on the spot regarding the advance and royalty level. I went with the highest bidder but as I found out later that did not matter. You may get ripped off no matter what. Here is why:
Royalties are based on gross sales, not on a minimum price per unit
Book publishers will pay you based on gross sales. They will refuse to set a minimum price per unit because if they do that they cannot make any money from you. Then, they often do wholesales to bookstores around the world at a price of a few dollars per unit. You may end up getting almost nothing. Here is a real example:
One of my publishers sold my book wholesale for $1 to bookstores in the Far East. Some of these bookstores sold the book for as much as $100. However, I received 18 cents royalty per book. I called a few of the bookstores to ask about this discrepancy and they hung up on me even after I said that I am one of the authors of books they were selling for $100. I then suspected that the publisher was ripping me off by having a private contract with the sellers. I went to a law office and they asked me for a $30,000 advance just to start an investigation.
You will never have control over what the publisher does
As an author, you are at the mercy of the publisher. They can send you a royalty check or decide not to. There is little you can do other than follow the legal route if they do not. But remember this: Most book publishing houses are like law offices with a publishing department. You will get nowhere and you will end up spending more money to fight them. You are at their mercy completely. And that is not all: you are also at the mercy of intellectual property pirates.
Your book PDF may be distributed in forums shortly after publication
Someone buys a hard copy of your book, scans it, and then uploads it to forums. It happened to me before. Doing that with pdf and e-book versions is even easier. There are at least two problems with this. The first is that people read your book for free. You can argue that those people would never buy it anyway. However, if you have included some edge(s) in your book, then those who paid for it get the short end. This is important: respecting those who paid for the information.
The second problem is that some outfits that sell used books can get hold of the electronic form. It is quite easy nowadays to print a book and sell it as used in excellent condition but for much less. A friend published a hardcopy book via a major online publishing service. After only a few days, he had sold only two units, there were five used units for sale for much less. He contacted the websites and no one answered as to why there were used units for sale. I hope you get the point.
Bogus “used books in excellent condition” will reduce your royalty check
Who buys books and then sells them back to distributors for a small profit? I have never done that. No one I know has ever done that. Most people highlight sentences and even write on book pages. Where do these “used books in excellent condition, just like new” come from in such great volume? Think about it: most quants I know have donated books they did not need to their local library. They did not sell anything to a used books distributor.
Is this some scheme to rip off authors? I think it is but I have no proof. I will not spend a second trying to prove that. Instead, I seek ways to protect my intellectual property and keep my profits.
Note that used booksellers are essentially protected by the U.S. Copyright Act, Section 109(a):
“…the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.”
This is how I decided to distribute my book
Each chapter of the book is a webpage that is protected by a membership plugin. The book buyer must subscribe to access the content.
At the end of each chapter, there are navigation links to the table of contents and previous and next chapters.
In this way, the book can be accessed from any electronic device if the theme of the website is mobile-enabled. People will be happy to read the book on the bus, train, plane, or even at the beach.
Book subscription period
All subscriptions must expire at a certain time. In the beginning, I offered a six-month subscription with an option of a free extension, if requested, but I just changed that to a one-year with a free extension. I think this is plenty of time in a fast-moving world. Most readers will need about 15 days on average anyway.
I hope more authors will follow this route
I was the victim of author rip-off in the past and I would not like this to happen to anyone because I know what writing a book means in terms of personal sacrifices. After publishing my first book I was not getting royalty checks although it was listed on the publishers’ website as a best seller. I called the publisher and I asked why I did not receive a royalty check. I was told that my advance was not covered yet. When I demanded an accounting report, I got a $700 check in the mail in a few days.
If you give your book to a publisher you are at their mercy because they can decide to do wholesales and even not pay you any royalty. There is nothing you can do except following an expensive legal path that is not worth the frustration and money. If you self-publish, you may face issues of illegal distribution from pirates of intellectual property and you may have problems with a great number of “used books” at lower prices, essentially protected by copyright law.
It takes some work to configure and operate properly a membership website but I think it is worth the time and effort and I hope more authors will follow this route.
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