It came to my attention today that some folks don’t really get what JukePop’s new Investment feature is about. The messages from the two authors currently in the program (Brian Guthrie of Rise and myself) don’t quite explain how people will profit from donating, and the only FAQ page on Investment is reportedly rather confusing. In the interest of goading more people into considering contributing to Prelude, here’s a full explanation of the Investment feature–simplified.

So Basically

Firstly, the “Investment” feature on JukePop is just a fancy way of saying a “crowdfunding” platform, like Kickstarter. “Investors” are people who donate money toward the book’s goal.

JukePop wants to publish some of its stories to retailers like Amazon and iBook. This way its authors can get paid and JP can earn a portion of the profits to keep itself going. Before doing that, JukePop needs to have a finished product from the author, not the unedited mish-mash that most stories turn into during serial writing. That will often  entail professional editing, a cover art rehaul, and marketing. In other words, that will require money.

Hence, Crowdfunding

Hence, the crowdfunding campaign. Authors write a pitch to their audience, set a funding goal, then they leave it to the masses to determine whether their story will get the services it needs to become that “finished product.” As of this writing, Rise has already hit its funding goal, and Prelude is more than 1/10th of the way there. Considering that both of these stories were pretty popular during their run on JP, I suspect that +Votes will be a future measurement of how likely a campaign is to succeed.

The Investors Getting Paid Part

Now, most crowdfunding platforms have “perks” that go out to donors to incentivize bigger donations. Some of you may have seen this. Donate $5, get a T-shirt. Donate $10, get a gift card for the mall. JukePop doesn’t swing that way. Since the only things that will be funded on JP are books, the reward scheme has been revised towards a completely different incentive: shared profits.

That’s right. Donate $5, get a share of the profits. Donate $10, get a larger share of the profits.

Each campaign will tailor this differently, so for the sake of keeping this simple I will use Prelude as an example.

The goal for Prelude is $2,000. That’s how much I need to get editing, cover art, and to market the book. When I signed up for the program, I listed that as 50% of the net profits I intend to make when the book launches. That means that if someone donates $2,000, they will have provided 50% of the book’s net sales. And you know what that means? It means they’ll get 50% of all future sales.

Okay, $2,000 is a lot. What if you donate only $20? According to math, you’ll have provided 0.5% of the net sales. That means you’ll get 0.5% of all future sales instead. Obviously, the less you donate, the less you earn, and the more you donate, the more you’ll earn. But the bottom line is that no matter how much you donate, you will be getting a stake of the profits.

Whaaat

I know, too good to be true. Except it’s not, when you think about it. This is a purely low-risk, high-reward system, which any real financial investor worth their salt should jump at.

Here’s some more maths for you. Prelude will launch at $8.99. If just 500 people purchase the book on launch day, the profits (before fees) will be nearly $4,500. 50% of that will go to me. The other 50% will go to everyone who donated to the campaign. Investment goal: $2,000. Return on investment on launch day: $2,250. What does that mean for you? Profits.

Did you donate $40? Here’s $40 back. Did you donate $100? Here’s a Benjamin for your troubles. $200? $300? Take it back, take it back! My profits are yours; your profits are yours.

And you know what happens afterwards, when the book hits 1,000 sales, or 2,000, or 5,000? That’s more and more money going back into the investors’ pockets. YOU are getting paid for having contributed to a book’s publication.

I think this is a groundbreaking development in the indie publishing scene, but hey, what do I know? I’m just  a guy who writes books. Prelude still has about 25 days and $1,765 to go, so if you’re interested in helping it become a success, do give it a read, and contribute what you think the story is worth. I’ll make it WORTH your while.

Advertisements

7 thoughts on “A Simplified Explanation of JukePop’s Investment Feature

      1. $8.99 is very expensive for a self-published e-book. They are going to be hard to move at that price. Also, who owns the rights to the finished work? The website is vague on that as well.

  1. I’m aware of that. $2.99 and $3.99 earn the most sales according to the Smashwords 2014 Survey. But I don’t think that means $8.99 will be a hard sell, especially with myself and several investors doing the promotion.

    If anything I’ll put the book on sale at those price points, but otherwise I’m aiming to get my investors the most return on their investment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s