Long post, but if you want to know how Seth Godin, or you, could make millions of dollars per month, read the entire thing.
Seth Godin says no more books. In print form that is. This is certainly big news to hit the publishing world. News that was inevitable really, but certainly still worthy of a strike of lightening to many involved in the changing business. Tim Ferriss nails it, and an explanation about the book business, here in this post. A must read really.
Seth talks about moving on in his blog post. He says that…
Traditional book publishers use techniques perfected a hundred years ago to help authors reach unknown readers, using a stable technology (books) and an antique and expensive distribution system.
The thing is–now I know who my readers are. Adding layers or faux scarcity doesn’t help me or you. As the medium changes, publishers are on the defensive…. I honestly can’t think of a single traditional book publisher who has led the development of a successful marketplace/marketing innovation in the last decade. The question asked by the corporate suits always seems to be, “how is this change in the marketplace going to hurt our core business?” To be succinct: I’m not sure that I serve my audience (you) by worrying about how a new approach is going to help or hurt Barnes & Noble.
My audience does things like buy five or ten copies at a time and distribute them to friends and co-workers. They (you) forward blog posts and PDFs. They join online discussion forums. None of these things are supported by the core of the current corporate publishing model.
Ouch! A stake to the heart for some. I’m not writing this to agree or disagree with him (those are his words). I’m writing this post to talk about The Monetization Shift that is currently taking place on the Web and in the publishing business.
Here’s the truth of what’s happening now in the space. I should know, I’m right smack-dab in the middle of it and I see it from all angles.
Most “big names” and brands are figuring out that you can make ten times as much money doing it differently. How? Going direct to their audience.
Look at the success of the Affiliate Summit show, which continue to grow and grow even in a down economy when other shows are fading away. Why? Because it’s about making money on the Web with legitimate businesses and opportunities.
Heck, even brands like Lebron James are realizing that they no longer need the middle men as much. With the Web and social media they can go directly to their audience. See the power shift happening all around us?
Now of course there are certainly a ton of people who aren’t focused on money only. Scott Stratten, author of UnMarketing: Stop Marketing. Start Engaging. (affiliate link), certainly isn’t doing a 30 city book tour to get rich selling books. He does it because he likes it. Blogher isn’t about making money. In fact, if you read feedback from the show most of the bloggers there aren’t even concerned about earning revenue (they will be soon though I think). Not all marketers are using social media in spammy ways, yet for some reason, many people lump those spammy ways in with the people who use it differently to promote their brands and businesses… to spread messages and problem-solving or entertaining content that people need.
So no, not everything is about making money.
What About Seth Godin?
He’s written 12 best-selling books and made a ton of money from it. As far as I know he doesn’t do consulting; doesn’t need to. He is wealthy already. But look at his shift as a great indication that he “could” make so much more money. I’m talking tens of millions of dollars more if he were to really go after it and go direct.
Think about it. Seth has sold millions of books. If you look at the traditional split of revenue from a publishing relationship, a typical author can make a fee for writing the book, then royalties for each book sold. That can be anywhere from a few thousand to fifty-thousand for the signing fee and 15-20% of the cost of the book sold. Remember, the cost is what’s left over from the publisher after they sell it to Amazon or BN.com. So a book that sells for $16.95 on Amazon… They probably bought it for half of that? I have no idea. Then, the author gets 15% of that price. Amazon marks it up and keeps the rest.
Now let’s just say that Seth has sold one million books. And let’s assume that he’s gotten paid $100k for each book as a signing fee, and made $2.00 for every book sold. 12 books = $1.2 million in signing fees. 1 million books at $2/book = $2 million.
Of course, those numbers are complete guesses. But I would bet that it was within a 30% plus or minus. Or I could be way off. The point is this. What Seth “could” do is. What a new author “could” do is make ten times as much money doing it a bit differently.
Let’s run some scenarios. If Seth Godin were to switch a new model right now he could earn 10 times as much money as he currently does in my opinion. Let’s just say that Seth decided to create the Godin Marketing Insights Club. I made that up. GMIC charges $499/month to anyone who wants in to have access to Seth’s private thoughts. Maybe he includes a forum that he can have assistants run (like Third Tribe) (affiliate link). Maybe he gives away early copies of new eBooks to his members. Maybe he does a weekly one-hour phone call lesson group call in to his members. Etc…
Run the numbers people. The guy has potentially sold a million books and has how many fans? Let’s be conservative here and say that out of all of his millions of fans he could get 10,000 people/business to pay him $499/month for what I described above.
My iPhone calculator says that number is $4.9 million in revenue per month.
What if it was 10% of 10,000 then? That’s 1,000 members. Again, not so shabby. $499,000/month.
Let’s take it to 10% of 1,000 just to see. That’s 100 monthly members. Seth would ONLY earn $49,900/month. Only.
Think Seth, or you and me, could live off those numbers? After bandwidth and admin costs (which are nothing), he’s left with what? 90% of that as net? Then he has to do what? One phone call a month and release some lessons (which he already does on his blog) every week to his members?
People won’t pay that much Jim. Wrong. So wrong. I bet Seth could get 10,000 people/businesses into that program within 12 months. In fact, I know he could, if he wanted to do it.
What about free?
Now you’re saying that that model is wrong and cheap? Why? Because he provides excellent help and problem-solving insights to people that want/need it? C’mon. Not everything has to be totally free. I love free. I give away about 4-5 hours of my time on the phone every week giving free advice, not kidding. I have free eBooks, totally free, no optin. I have free membership sites. Again, I get free. Keep doing free. But don’t tell me it’s wrong to put a value on the helpful services/products you provide in addition to your free stuff. And certainly don’t tell me there’s something wrong with making a profit. Even a LOT of it.
Stop it. There’s nothing wrong with making money as long as your helping people and giving them solutions to their problems. If I hear one more person allude to the fact that if you make a lot of money you must be stepping on someone’s throat to do it… I’m going to scream. Not all business is like that. End rant.
I’m not saying all this to try and convince Seth to do this. I’m using him as an example of what he “could” do. What you “could” do. This is happening as we speak. Celebrities are actively seeking out these Web monetization experts because they see the money trail. Big businesses are seeing it as well. Pretty soon the bloggers will see it, and everyone else.
Zappos does about $5 million a day in sales. Amazon noticed and bought them this year. Did you know that Zappos Insights is a monthly member program that teaches businesses how to do better customer service? Did you know that they charge $39.95 a month for access? Or you can bring the entire staff to an in-person event at $1497/person. Run those numbers on you calculator.
This is why I wrote my book at this period in time. This is why it’s perfect right now. Now more than ever people need to find new ways to get attention and turn that into revenue. You’ve lost your job or your marketing budget is slashed. What do you do? You either take your shot and start a Web business you’re passionate about, or you find ways to generate new income through attention-getting ideas. Or you take your existing business model and add a new, third-party revenue stream to it and make a boat load of money.
Here’s where things are going: The Monetization Shift
People/business/big brands/bloggers/celebrities… are waking up and realizing what many under the radar Web entrepreneurs have known for a long time now. That if you package your brand or your expertise or your knowledge in a certain way and make it easy for people to consume it and buy it, you can make a LOT of money online. The people who do this already don’t want you to know it frankly, and I’m probably going to make some enemies on my quest to tell the world how they do it. Why? Because they’re doing it so well, and making so much money legitimately, that they don’t really want the rest of the world to figure it out. But that’s too bad because they are going to eventually. It sounds all “guru” to say things like that, but it’s true. Deny it all you want, these things are happening. You just don’t realize it because you’re stuck not paying attention because of the way most of them market themselves. Look around the marketing and open your eyes.
The problem for most people who don’t know it yet is that. A. Most people don’t know how to do this. B. The rest of them think that doing it is “selling out” or being all “marketing-ey.” I made that word up of course. But it should be a word. I know 1,000 really smart people who are not earning their maximum revenue potential because they don’t want to be a “marketer”. It’s not their thing. Fine, I get it. You don’t have to be. Just don’t deny what you “could” be if you wanted it, and certainly don’t try to tell other people they’re somehow evil or bad because they want to do it.
What you’re going to see in 2011 is a major influx of big name celebrities and businesses coming into the Internet Marketing space to claim their gold. And at first the purists who hate marketing will cry foul. But when they realize how successful this model has become they’ll be quick to jump on board.
Look for big name celebrities who have made a past killing on TV to jump into the Internet Marketing frey and quadruple the money they made from TV. Maybe even more.
The scaling problem for most authors
I can’t tell you how many people call me or my friends in my arena who are doing these types of things and are practically begging to learn how to do it as well. A good example is an author I know who does really well for themselves. I mean really well. But they’ve realized that there’s a ceiling in revenue and time they can’t crack. They make their money off of speaking gigs and consulting and book sales. That’s a great model. But it doesn’t scale. You can only book yourself into so many speaking gigs a year, and your consulting business is great, but it’s dealing with clients which take a lot of your time. And we already know you have to sell a lot of books to make real money.
Because that’s what were’ talking about here. Real money. Not a million dollars a year, but 10 million dollars a year. Making over a million a month. Yep, people do that. Lots of them, and it’s not from spamming and adult stuff either. From real businesses; just packaged the right way, or launched the right way.
Everyone knows a lot about something. Consider that you are an expert in your field. Why in the world shouldn’t you put the information you have in a package online that allows people to buy it from you? The point is if all of this I’m talking about is your goal, you’re currently doing it wrong.
The monetization shift is beginning to happen in a HUGE way. Are you listening and participating? Or are you gonna watch it pass you by?
Get to work. Oh, and Seth, I get 10% of that monthly revenue when you do what I said. 🙂