SM: What was the market landscape like when you founded the company?
EG: Well for one thing, Blurb was a very contrarian play at the time. VCs were funding blogging platforms and social networks and online plays – and here we were taking bits back into atoms. But fortunately I had good relationships in the VC community and we closed an A round of $2MM to build the platform.
One of the reasons we were successful raising $$ was our position that the current book market is throttled by the tyranny of retail economics – if the tools to create and market professional quality books were truly available to everyone, how big could the book business be?
Regarding the economics of the traditional book publishing business, there are many players in that food chain who need to get paid – the publisher, distributor, retailer, designer, and then finally – the author. In the online world, those barriers are removed. With Blurb the author creates and designs their own book and then can market it in the online bookstore for purchase, retaining 100% of the markup. Blurb takes no royalties and there are no middlemen who need to get paid.
Here’s how this works: Blurb book creators can set a price for their books in the bookstore and retain 100% of the difference between their cost and the retail price they set. This program, called Set Your Price, is currently available in the US and is planned to rollout into Europe shortly. We make money on the print side. This means that the typical Blurb author makes $8-10/book as opposed to a more typical $1/book in the traditional publishing world.
SM: Eileen, can you please explain the economics of the book business. Who gets what % of the pie (Author, Agent, Publisher, Retailer. etc.)? EG: Sure. Retailers take the maximum. Almost 50%. The Agent takes 15-20%. The publisher gets squeezed, and it is cause for huge celebration if they make 20%. The author, of course, gets the short end of the stick. On a book that costs $24.95, the author gets at most $1-$1.50. Then there is book marketing costs, paid by either the Publisher, of very often, by the Author. Flying around for book tour on their own frequent flyer miles. Sleeping on friends’ couches. You know …
Some publishers even ask the author to pay to be represented. Then there is the cost of the graphic designer, book packager, editor … it’s a very lengthy process, with a very poor efficiency level.