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04 February 2010 @ 07:28 pm
sustainable funding models  

Somebody in comments asked, more or less, what this “sustainable funding model” thing with the Hot Time novella was, so now that I am feeling less damaged than yesterday (my toe is now wonderfully purple. It doesn’t hurt as much and is healing up fine) I thought I’d try to address it.

Gratuitously, though, I’m going to mention at the top rather than at the end of this entry that speaking of this whole topic, Crowdfunding community Rose & Bay is now running their votes for (among other things) best crowdfunded fiction of 2009, and “Hot Time” is on the list of nominees.

Once upon a time some lucky few artists managed to acquire patrons, who would support them in their artistic endeavours and generally get something in exchange. These days I’m pretty sure there are still a lucky few artists managing the same gig, but for most of us out there trying to earn a living, it’s largely a crap shoot.

I have explained before how writers get paid (in a nutshell, erratically and much less well than movies, television, and JK Rowling would make you think; Sharon Lee goes into it in slightly more detail today (but only slightly more)). Basically I know know how much I’m getting paid (payment for delivering a book) or I know when I’m getting paid (royalties). The two rarely converge; in sort of the best case scenario I get paid quarterly, except it usually doesn’t work that way. It’s more often that I get paid twice or even three times in one quarter and not at all in two.

Because, annoyingly, bills insist on arriving every month instead of with the vaguery displayed by my income’s arrival, despite best intentions and plans, the money usually runs out before the next payment is in the bank. So it behooves an artist to try finding different ways of making money*, and the Internet has begun to provide an interesting possibility toward that end: crowdfunding, or, in an older parlance, patronage.

With “Hot Time in the Old Town Tonight“, I was (and am) running an experiment in online patronage. Last June I put up (what was intended to be) a short story for commission through the now-defunct fundable.com, which was a site that collected pledges for a project. If the pledges reached the fundraising (patronage) goal I set, then it collected the actual money, and I would write a short story exclusively for the people who commissioned it. My goal was $750 plus fundable.com fees, so it came out around $830 for what was intended to be a 7500 short story–$.10 a word, more or less, which is a viable word rate for professional short story publications.

About fifty people threw in to commission the story, met and exceeded the patronage goal, and I wrote what ended up a 23,000 word novella for them. Those 50 or so people got exclusive access to the story, which belongs in the Old Races universe and is a sequel to the online freebie Five Card Draw, for what turned out to be half a year. The novella is now up again for the second round of funding/patronage/call-it-what-you-will, and remains pretty exclusive: either you buy it now, or you will have no chance to read this story until someday when I find a traditional publisher for it. That could be years away. It could be never. I have no idea.

To give the results of the commission real-world context, I was able to pay bills for a month when I very likely wouldn’t have been able to otherwise. One of the critical things for me as a writer is that it was literally that month’s bills that were going to go unpaid…and direct funding models means I actually get the money now instead of four-months-to-several-years** after a reader buys a book off the shelves.

There’s also the question, of course, of percentages. Direct funding/patronage/whatever means I get 100% of the income generated, as opposed to the 7ish % I get off my books. 100% Right Now vs 7% in six months has some obvious appeal to it.

Right now is where somebody says “Ye gods, cut out the middleman!” Not a chance. I will never give up my traditional publishers and I dearly hope they will never give up me. For one, Jay Lake details just what a publisher does for a writer, and frankly, it’s most of the heavy lifting. I do the creative work. They do everything else. Critically, they introduce me to an audience willing to pay for my work–and some of those people find me online, become blog readers, and may even become patrons in the direct funding sense. I could not *accomplish* a patronage model without my traditional publishers; my friends, generous as they are, aren’t generally wealthy enough to actually support me.

(There’s a brilliant idea called 1000 True Fans, which suggests an artist only needs 1000 people willing to pay full price for every project they do, and the artist can then live on those proceeds. It’s probably true, in fact, but finding 1000 True Fans is a hell of a task in itself.)

I was also asked what set the price point, since hey, “Hot Time” is a novella for $10 and I can go buy a full-length e-novel at Amazon for the same price. Well, in this case, what set it was that fundable.com had a minimum $10 pledge amount, so in re-sale six months later, $10 was the only fair price I could set. Similarly, Tim Pratt is considering that same basic question, what constitutes a fair price point, for the crowdfunding model for his next book.

In short (after rather a lot of in long), the idea here is to try to develop a sustainable funding model wherein I can write, say, four stories a year for a comparatively exclusive audience, who get 1. a story and 2. the satisfaction of directly funding creativity that wouldn’t happen without them. For me, it’s a possibility of short-term income I wouldn’t otherwise have, and, because I retain the rights to republish these stories, also to build up (for example) enough of a story backlog to eventually pitch an anthology to a traditional publisher, therefore also bringing in potential long-term income.

And it’s also just sort of a…response to what the Internet is making possible, I suppose. It would have been damned hard ten years ago to try something like this, and I think as a model it’s still in its infancy. But it’s certainly intriguing, and so far it’s been reasonably successful. I hope very much that I’ll have a chance to try it again sometime later this year.

*Yes, obviously, I or any artist could go get a day job. Except 1. have you noticed the economy lately? and 2. my resume and skills are so far out of date as to be laughable, as I haven’t belonged to the standard work force in half a decade.

**This gets mildly complicated with advances vs royalties, but for example, because of my contract on THE QUEEN’S BASTARD and THE PRETENDER’S CROWN, which came out in May 2008 and 2009 respectively, I received my last advance payment from the publishers for those books in May 2009. If I’m lucky I’ll “earn out”–earn back the advances and begin earning new money from those books, ie, royalties, sometime in 2011. In the meantime, the money I’ve been paid for those books is largely money I lived between two and four years ago. It’s not big enough to last longer than that.

(x-posted from the essential kit)

Current Mood: thoughtfulthoughtful
Evil Headdrivingblind on February 4th, 2010 06:43 pm (UTC)
You are so awesome to me right now (shock) for giving out this kind of detail and perspective. Thanks!
kitmizkit on February 4th, 2010 07:54 pm (UTC)
My pleasure! :)
robertlfleckrobertlfleck on February 4th, 2010 07:02 pm (UTC)
Fascinating, and another good arrow to have in a writer's quiver.

Of course, I think the current version of old-world patronage is actually called "a spouse with a stable job." ;-)
Amberleyamberley on February 4th, 2010 07:17 pm (UTC)
Changing business models and disruptive innovation
Good luck with the Novella sale! Although taking it off the market after a limited time seems strange to me: what's the value of having written words that aren't earning anything? But maybe it's a useful experiment to see if the potential scarcity (act now or you'll never see it!) outweighs the desire of some future fan to give you money. Turning away money seems odd to me.

Some artists are experimenting with subscription models. Peter Beagle has a 52/50 project where for $25 he mails a weekly song lyric or poem for a year. Thea Gilmore offers an exclusive monthly song for GBP52 (USD88)/year, plus various bonuses.

Famously, Amanda Palmer was hanging out on twitter one Friday and wound up selling $19,000 of T-shirts commemorating the event. Plus wound up engaged to Neil Gaiman, although I don't think there's any direct link there.

Friends and I have discussed among ourselves our eagerness to buy James Alan Gardner's unpublished League of Peoples novel, but there's currently no good aggregator of demand. I'm rooting for Cory Doctorow's With a Little Help self-publishing/podcasting project, in the hopes that it will beat a path to make it easier for other writers to follow.

$750 for 7500 words is 10 cents a word, but wasn't the actual result something like $1000 (after fundable's cut) for 23,000 words, which is only 4 cents a word? Unless you wrote 23,000 words in the time it usually takes to write 7500 words?

Seth Godin has a lot of useful things to say about building community and doing permission marketing to them, but all that takes time, and its a different skillset from writing, so some writers have more of it than others. John Scalzi and Neil Gaiman are great at it. There are others I'm thinking of that just want to write, and so leave their fates in the hands of the strange bookstore chain computer model next book ordering process.

Recommended reading: The Innovator's Dilemma by Clayton Christensen, Influence: Science and Practice, 5th ed by Robert Cialdini, Meatball Sundae by Seth Godin (although all of his ideas also appear on his blog).
kitmizkit on February 4th, 2010 07:39 pm (UTC)
Re: Changing business models and disruptive innovation
Although taking it off the market after a limited time seems strange to me: what's the value of having written words that aren't earning anything?

Ah. I should've mentioned that, but forgot to. The value is that traditional publishers still generally prefer material that hasn't been hanging around online, and the publisher most likely to pick this story up--Luna, who published the Negotiator books--feels that way Very Strongly Indeed.

Amanda Palmer's in a whole different league than I am, engagement to Neil Gaiman nonwithstanding. :)

And yeah, the price per word has come out much more like 4 cents a word (maybe 5, with the people who've now bought in), so it's a damned bargain, if you ask me. :)
Mary Annepers1stence on February 4th, 2010 08:55 pm (UTC)
Re: Changing business models and disruptive innovation
Also, there's a certain psychological value to the ideas of urgency and exclusivity. Those two concepts are what underlie a large portion of fundraising for nonprofit charities. Anytime you can create a sense of those things, no matter if they are merely perceptual rather than actual, your results (response rates and actual $ raised) will be higher.

Urgency gets people off their arse and motivates them to actual pony up their money, rather than either a)re-thinking the purchase or b)meaning to make the purchase but not ever getting around to it.

Exclusivity/insider access helps create buzz and makes people feel special. People will pay for that; isn't that part of why people go to conventions and attend panels? Or join fan clubs or forums where the creative/expert authorities hang out?

Time-limited offers in this context work on both those principles, on top of the one that Catie mentions above about publisher preference.
Bryantbryant on February 4th, 2010 07:43 pm (UTC)
Re: Changing business models and disruptive innovation
I think one of the important things about Hot Time is that it's an experiment in the directions that Cory Doctorow and most crowd-funders aren't taking -- i.e., it's not winding up as a freebie. Personally I'm a huge fan of the Creative Commons and so on, but I think it's really important that other directions also be explored, else how will we know?

(Michael Stackpole may know. I wouldn't be at all surprised if he was the single author making the most from direct online ebook sales.)
16:9 1.78:1 OAR: Ryusixteenbynine on February 4th, 2010 08:43 pm (UTC)
Re: Changing business models and disruptive innovation
Creative Commons seems to work best when you are using it as a way to augment other things - as a pool for people to draw on to create stuff, not as an end in itself. I like the idea of people being able to read my stuff, but in the end the biggest investment they make is *time* and not money, so it makes little sense to give it away. That simply creates a situation where I am, at best, competing against myself, and at worst competing against everything else that people choose to give away rather than monetize.
16:9 1.78:1 OAR: Ryusixteenbynine on February 4th, 2010 08:41 pm (UTC)
I agree with the "1000 true fans" perspective, including the caveat that finding that many true fans is an extremely difficult endeavor. Fans all have varying levels of commitment. But if you can find a way to satisfy their different commitments, then you have more of a chance of making them into long-term fans of one kind or another, and driving the total up.

I'm considering a "crowdfunded" project akin to the one described here, although as you have hinted, this is not something that is meant to replace existing work but to augment it. In my case, it isn't meant to replace either my other self-published work or my day job. (My day job situation is precarious enough; I'm no longer employed fulltime.)

So I'm curious to see where this goes, in both our cases.