Traditional vs Indy Publishing

Dean Wesley Smith had another good blog post here about the differences in cash flow between publishing a novel traditionally vice going the new indy, self publishing route.  He didn’t take the time value of money into account, so for giggles I did some quick computations on Excel, based on his assumptions and assuming a 3% discount rate to account for inflation (I assume an aspiring writer will spend his income, not invest it.  Obviously if he invests it, the discount rate will need to be higher).  Here are the results:

He came away with a $16,000 difference between the two, in favor of Indy.  While I agree the advantage goes to the Indy publisher, it’s not quite as severe a difference as his computations would indicate.  Still, it’s a great way to illustrate the point of how publishing has changed.  I had no idea how much ebooks had shaken things up until I started writing Masters and began reading writing and publishing blogs.  Amazing!