Kevin O. McLaughlin: Science Fiction and Fantasy author and blogger.
Posts tagged B&N
Author’s Guild: latest evidence of loss of a clue?
Mar 9th
The Author’s Guild blog has just posted a letter from Scott Turow titled “Grim News”. The post expounds upon how the DOJ’s recent announcement it intends to file suit against major publishers for conspiring to fix prices on books is a terrible thing for everyone, and basically defends the assorted publishers’ actions.
Leaving aside the major issue of trying to excuse publishers taking allegedly illegal actions in the defense of their business model, let’s look at the rest of the issues a minute.
Remember, his thoughts were sparked by the “Grim News” that the Department of Justice has just announced it plans to sue several major publishers and Apple for colluding to price fix ebooks with Apple, via the agency pricing system on ebooks. His thoughts are here.
Scott Confuses “Bookseller” with “Brick and Mortar Bookseller”
It’s an easy mistake to make. We’re all used to thinking about bookstores as those actual places you go to, you know, buy books. But that’s simply not the case for most readers anymore. Most consumer books are bought online. In fact, Amazon alone is thought to have close to half the trade book market in the US, these days.
Are the brick bookstores getting hammered? Sure. First by B&N – then by Borders – then Amazon, and now by ebooks from a variety of sellers. I know a lot of you reading this like the physical bookstores, enjoy browsing the stacks. Lots of folks liked buying CDs from a big CD store, too. That didn’t save CD stores, and bookstores are headed to the same place they did: online. Today most music is bought in MP3; and what’s left of the CD market is mostly either top album sales in Walmarts or online sales. Some music is coming out in MP3 only now, and that trend will likely grow.
We’re about seven years post iPod. We’re also about three years post Kindle. Based on comparisons of the trends in each, it is extremely likely that book buying is going to follow a similar pattern, which means over the next few years almost all chain bookstores will close, most indie bookstores (physical ones) will close, and most (but nowhere near all) books bought will be ebooks.
We don’t have to like it, but we should prepare ourselves for the idea. Ebooks are a replacement media, and are almost certainly the last nail in the coffin of physical bookstores. Nothing publishers or writers do is going to substantially slow that process.
Scott Attacks the Amazon Walled Garden
Scott attacks Amazon for having a walled garden, using it as an excuse for their alleged collusion with Apple. That would make sense – walled garden approaches to commerce limit competition, and aren’t really good for suppliers. But Apple, Sony, and B&N each have their own walled gardens too. It’s about as hard to get most Apple epubs into a Nook as it is to get most Kindle books into a Nook. Just because a company is using the epub “standard” doesn’t mean that DRM makes it easy to transfer the books to a new reader.
I recall getting a free review copy of Stephen King’s “11/22/63″ from the publisher’s website. I know from personal experience that converting a Kindle book to Nook is a LOT easier than getting that book onto the Nook software on my cell phone (yes, my cell phone has both Nook and Kindle apps – why not?). Shame on Scribner for making what ought to be an easy experience into one so painful that, tech savvy as I am, I had to spend half an hour trying to figure out how to follow arcane directions that I had to use Google to find in the first place.
Here’s the other catch: Amazon didn’t make their place a walled garden; publishers gave Amazon the walls. It’s called “DRM” – digital rights management. The little bits of code which prevent an ebook from being converted or copied. Years ago, the music industry figured out DRM was bad for business, bad for sales, and dumped it. The book publishing business has not caught on that the same might just be true for them, so pretty universally big publishers launch their ebooks with DRM.
Yes, I can remove DRM. In fact, just about anyone can remove DRM. But it’s a pain, and unless your Google-fu is strong enough, finding out how can be tough. Most customers probably won’t bother unless they’re driven to do so for some reason. Which means the DRM publishers *ordered* Amazon to put on their books is one of the most powerful tools Amazon has for retaining customers (note: Amazon is just as happy to not put DRM on books; none of my works have DRM on Amazon, because I don’t want DRM on my books – I want readers to be able to read my books where they want to). Once customers have invested heavily in a DRM-laden library from Amazon (or anyone else) they are unlikely to switch venues.
Publishers, you MADE the monster you fear.
Scott Mixes Up His Facts About Booksellers
Once again, recall: Scott only considers bookstores with a physical store “booksellers”. Those online places which ship tens of millions of books per year to customers don’t count.
He claims “bookstores are critical to modern bookselling”. No – they’re critical to large publishers maintaining their oligopoly on distribution of books. Books are selling just fine online.
He claims “Marketing studies consistently show that readers are far more adventurous in their choice of books when in a bookstore than when shopping online.” To which I reply, “lies, damned lies, and statistics”. There are very few studies out there about book buying patterns performed in the last two years which I have not read. I have never seen data which even vaguely backs up his claim. Citation, please?
He says “Publishing shouldn’t have to choose between bricks and clicks.” He’s missed the point. Publishers don’t get to choose where they sell their product. Readers get to choose where they want to buy the product publishers sell. If readers want to buy books from physical bookstores, they will; if not, they won’t. Publishers don’t get a say in this.
He says “A robust book marketplace demands both bookstore showrooms to properly display new titles and online distribution for the convenience of customers.” A fascinating claim. Why? He never explains. In fact, the majority of fiction ebook bestsellers in my recent genre surveys have no print presence in bookstores, putting the lie to his claim. What he truly means is major publishers need bookstore showrooms to properly display their wares and advertise them to readers so they can charge higher prices for their work.
He claims that bestsellers are OK, but that “For new authors, however, a difficult profession is poised to become much more difficult.” Again, pretty obviously false. Even a cursory investigation of Amazon shows that, on that site alone, several thousand self published ebooks are selling in excess of a thousand copies a month. The reverse of his claim is actually true: as bookshelf space decreases, bestseller advances are going down. However, more “midlist” writers are making excellent returns on their work than we’ve seen in over fifty years.
Scott Thinks Agency Helped!
No, not really. What agency pricing did was allow publishers to set their prices: which they did. At very high levels. In fact, skimming by Amazon one can find hundreds of ebooks from major presses at $10-15. Most of those titles have numerous 1-star reviews from customers protesting the price. Publishers didn’t help themselves with their ebook pricing scheme.
But most devastating for publishers is the loss of a majority of the ebook market.
There’s only one type of book growing in sales today – ebooks. Print sales are declining, and will likely continue to decline in a rapid slide for years yet before they settle down. Ebooks are the growth market. Ebooks are what most readers will be buying – if they are not already – within a year or two. And by pricing themselves out of the market, all existing evidence says that publishers have handed a majority share of that market to self publishing writers and small presses. No, we don’t have all the data to absolutely and positively prove that as fact – but all data which does exist, including all the market surveys I have personally done, support that theory adequately enough.
The folks who will mourn the passing of agency pricing the most are not publishers – it’s the indie writers, the self publishers, who will miss it the most. Agency pricing has allowed self publishers to dominate ebook fiction in a manner which would never have been possible if Amazon and B&N had been able to discount books from major publishers. Once Amazon gets to discount the hit bestsellers (at their expense), indies will have a harder time of it. We can only hope enough writers will have won enough fanbase by the time that happens to make a difference in the long run.
So yes, when agency pricing falls, life will get harder for writers, but not for the reasons Scott suggests. 
So what the heck is going on there over at the Author’s Guild?
They’re sticking up for publishers committing allegedly illegal actions. They’re spreading information that’s got more holes than swiss cheese, loaded with false claims and erroneous data. They’re favoring one retailer over another. They’re proving they’ve locked their minds into 20th century retail, ignoring the fact that for better or worse, retail has changed with the advent of the internet.
Perhaps Scott, who wrote this article, really believes this stuff he wrote; it’s certainly being shoved down the throat of the public by enough mass media sources (the owners of whom also own the publishers currently under threat). But shouldn’t somebody over at the Author’s Guild be better informed? It’s embarrassing to see this sort of tripe up on the website of what’s supposedly a writer-focused organization.
The New Publisher: Innovation and Incompetence
Feb 17th
Yesterday, the Author’s Guild placed an ill-advised blog entry on their site. It’s such an obvious piece of fluff propaganda that it’s being picked apart around the internet. One of the better commentaries was penned by Passive Guy over on his blog.
I’ll agree with PG’s summary: the writer of said post was clueless.
PG hit the main points pretty well (and I recommend his article), but I want to expand on a couple of them.
Amazon’s first Kindle, released in November 2007, was certainly innovative, but its key breakthrough wasn’t any particular piece of technology. Sony had already commercialized e-ink display screens for handheld e-books in September 2006. (E Ink, a Cambridge company co-founded by MIT Media Lab professor Joseph Jacobson developed the displays used by both companies.) Amazon’s leap was to marry e-ink displays to another existing technology, wireless connectivity, to bring e-book shopping and downloading right to the handheld device.
Amazon’s innovation, in other words, was to untether the Sony device and put a virtual store inside it.
Not even close.
Amazon produced a decent device, yes. But Amazon’s primary innovation was to create a better user experience on their web store than anyone else. It’s why they’ve succeeded as well in online retail as they have. Yes, lower prices is part of that user experience. But Amazon customers routinely shop there even for items which are the same price elsewhere.
Why?
Because Amazon has the best designed retail website in the world.
It’s not about the device. It’s about the user experience.
Pricing – Predatory vs Smart
The article goes on to say:
But it was even worse than that. Amazon had deployed its buy-button removal weapon before, but never so publicly, never on such a massive scale, and never (to our knowledge) as a means of shielding its ability to use a separate anticompetitive tactic: its practice of routinely selling e-books at a loss. Such practices, commonly known as predatory pricing, are a means of using superior capital resources not to innovate nor to provide better service, but to weaken or eliminate competition.
Pricing your products lower to sell more is not an Amazon innovation. Local gas stations routinely battle each other to have the lowest price per gallon on gasoline. I worked at a convenience store, many years ago, which charged less for gallons of milk than any other store in the area. They lost money on the milk. They earned money on everything else customers bought when they came in for the milk.
Walmart is one of the best known examples of price reduction as a tool to build retail. Walmart routinely offers prices on most of their goods lower than other retailers in an area. They’ve built an enormous economy of scale to accomplish this, leveraging their ability to sell massive quantities of product to get that product at lower prices and sell it at lower margins.
Online sales use a different method to achieve lower prices. Economy of scale is less important than economy of expenses. Freed of physical stores, online retailers have dramatically reduced costs to do business. They convert those reduced expenses into an ability to price their goods at lower retail costs to the customer.
This is an advantage which brick and mortar retail cannot compete with. The prognosis for brick and mortar retail? Anything which CAN be sold effectively online, WILL be sold online. Some small retail establishments will be able to survive in niche markets, but brick and mortar chains cannot compete with online retail.
It’s not predatory pricing. It’s smart pricing. Amazon turned a profit last year. B&N did not. Amazon is not the company with issues about how it prices its products…
Who is REALLY locking customers in?
Predatory pricing could, in turn, help Amazon buttress its other critical barrier to entry into the e-book marketplace: its use of a proprietary e-book format, rather than the industry-standard epub format. Kindle owners would naturally be reluctant to switch to incompatible devices after they had sunk money into a personal e-library of Kindle editions. Viewed this way, Amazon’s costs incurred in selling e-books at a loss amounted to an investment in erecting walls around its young, booming e-book marketplace. The more Amazon succeeded in locking customers in to Kindle’s device and format, the less rewarding the market for any potential competitor. Amazon’s investment could pay off handsomely as the e-book market took off.
Again, no. A failure to think this through seems typical here, but let’s consider the issue of formats for a moment.
First, let’s look at this from a publishers’ perspective. Publishers want to sell books. They ought to want those books to be as easy for readers to use, and transport from device to device, as possible. Instead, major publishers are universally adding DRM to their ebooks.
Now, understand, the Amazon format is almost identical to the epub. Converting one to another is easy, and fast. There are free software packages which can convert your entire library at the touch of a button. Users know this – it’s one reason why DRM-free books are more popular with readers, and why indie publishers add the line “DRM free” in their product description.
By adding DRM, publishers are helping Amazon lock customers into the Amazon system. The DRM generates the customer lock. Without DRM, users could easily move the book over to their new Nook, or Kobo reader, or whatever. With DRM as a barrier to exit, however, customers are loathe to leave the Kindle system for a new device.
In other words, publishers are directly contributing to the strength of Amazon’s position by using a technology (DRM) already proven to have no effect in reducing piracy.
Imitating roadkill is not an effective business strategy.
A truly competitive, open market has no indispensable player that can call the shots. The book publishing industry has such a player, and Amazon is poised and by all appearances eager to use its muscle to rip up the remaining physical infrastructure of book retailing and the vital book-browsing ecosystem it supports.
Here’s the thing. Amazon isn’t so much ripping up competitors as it is stepping over them, while they lie carpet-like on the floor.
Imitating roadkill is not an effective business strategy.
For bookstores? We know the brick and mortar bookstore is dying fast. We know online bookstores are the new thing, for ebooks and print books. Already, most books are bought online in the US, and that percentage will only grow.
So why, then, are there so few decent online bookstores?
Comparing Kobo, iBookstore, B&N.com, and most other online bookstores with Amazon is like comparing my three year old’s tricycle with a Jaguar or Ferrari. The other sites all look decent, mind you. But they lack the power, tools, features, content, and overall *feel* of a good store. Amazon has probably the best online retail store in the world. All a competitor has to do is copy them, and they’d at least be in the ball game with a fighting chance. Instead, they’ve produced webstores which simply don’t do the job well. They’re frustrating to use. They don’t allow users to browse well. They are not good shopping experiences.
Let’s bring it back around to publishers a sec. It’s ironic that the Author’s Guild is complaining about an Amazon monopoly, when the folks actually being investigated in the US and EU are the Big Publishers and Apple, for allegedly colluding to fix prices through the agency system they introduced and then forced on Amazon.
But the agency system is a triple disaster for publishers. On the one hand, it set them up for a class action lawsuit – led by Amazon! – and Justice Dept. investigations. On the other hand, it allowed publishers to set fixed prices that Amazon could not discount, which has resulted in self published books (generally about 1/3 to 1/2 the price of those from major publishers) taking a majority of ebook sales in many types of ebooks (of the top 200 bestselling science fiction ebooks on Amazon, 152 were self published as of Feb 14th 2012; across all fiction genres, the top 25 list in each genre was 72-92% self published in January).
More insidiously, the agency system actually shored up Amazon’s market control.
How?
Because the agency system ensures that all ebooks are priced the same everywhere. Retailers cannot discount them, unless they find the book someplace elsewhere at a lower price. When all prices are the same everywhere on a product, what sells goods?
Service. Convenience. Ease of use. Powerful user tools, for an internet site.
All things Amazon has in spades, and all things none of their competitors have been able to manage. The result is predictable: Amazon has easily managed a majority share of ebook sales. They’ve had time to get popular now, so they’ll be harder to knock out of that seat than ever. But there’s no reason a new online bookstore couldn’t get some serious market share away from Amazon or (more likely) Amazon’s sleeping competitors. All the new store would have to do is provide as stellar a shopping experience as Amazon does. Ideally, an even more stellar one. When prices are the same everywhere, it all boils down to the user experience, and right now, no other store comes close to Amazon.
Honestly, I’d love to be in that field right now. I think the ebook world is ripe for a hot new company to come up and smack some heads around. More, I think Amazon would welcome some serious competition, even if it came from a small spitfire company. Remember, Amazon started as a small spitfire company, too. They know too well that companies which linger for long without serious competition begin to slow down and stop innovating, which is death when that next spitfire rolls up his sleeves and goes to work. And Amazon certainly isn’t getting any competition from other bookstores right now.
They’re not getting any real competition from major publishers in that business, either. You’d think, if a new publisher sprang up offering better royalty rates, better contract terms, and better marketing efforts, that big publishers would at least think about stepping up their game. Instead? No change. So big publishers are faced with three issues:
- Midlist writers leaving them to self publish.
- Bestsellers leaving to go publish with Amazon imprints.
- The sure and certain knowledge that most books they turn down will be sitting there for sale as competition soon afterward. Probably at 1/3 to 1/2 the price they sell books, too.
But like the other bookstores, publishers seem more inclined to play carpet than they are to step up and actually compete.
Folks, I don’t have time for people who refuse to compete, and then whine because someone else is doing better than them.
Publishers and bookstores alike can survive – and thrive – in this, if they look at the Amazon moves as challenges to be matched and surpassed, rather than unfair business practices. You want to win, get in the game. Otherwise, go home and stop whining.
The New Publisher: Selling to Readers
Feb 2nd
This is the beginning of a new series I’ll be following up on regularly. Here, I’ll be writing about publishers: big, small, and self. How they fit into the new publishing paradigm. What they can do to maximize their success given all the changes we’re seeing today. About what big publishers can learn from smaller presses, smaller presses can learn from self publishers, and self publishers can learn from everone else. We’re living in a fascinating time of epic change. And as with any industry with great disruption, publishing will see some groups able to leverage the change for greater success, while others remain mired in past practices and fail.
Book Marketing – The Old Way
For the last twenty years, most publishers in the United States have been heavily engaged in a vibrant marketing business. This book industry has spawned numerous book fairs, where publishers push their newest releases. Certain publications with only a few thousand readers each month are considered both successful and highly important, because they are a medium through which publishers can reach key book buyers. The entire model has been one of publishers producing books and then selling their wares to a very slim number of major book buyers at chain markets – Borders, Books a Million, Barnes and Nobles, B Dalton, Waldenbooks – and non-bookstore chains like Walmart and Target.
Over the last decade we’ve seen that market compress. Daltons and Waldenbooks went away, which was fine because they were simply absorbed by bigger competitors. Online bookstores were OK as well, because they were just more shelf space to sell books. Even Borders going under would not have been a disaster under the old model – loss of shelf space for a while, yes, but the market would recover.
But over the last ten years, things have been changing. Book buying has moved increasingly online. By some estimates, Amazon alone may sell half of all books in the US today, ignoring all other online booksellers. Online bookstores have several key advantages over brick and mortar stores:
- They have lower overhead, so they can charge less for product and still make money.
- They have centralized storage of books rather than distributed storage, therefore the shelf space is effectively unlimited. With ebooks, this has grown even more true.
- They represent an easy way for customers to browse books and get nearly any book they could want.
Which is all great for readers. But online bookstores represent a particular problem for publishers, because of that virtually unlimited shelf space. You don’t need to sell books to an online retailer. They take all of them. They take every major publisher release, all the small press releases, and are now actively taking books even from self published authors and giving them the same shelf space as any NYC-published book.
Bookstores Are Changing
Right now, the last bastion of chain bookstores is in trouble: B&N is teetering on the edge of bankruptcy. The fact that they’re considering spinning off their Nook as its own business spells out clearly that they’re in trouble. The Nook IS the future for B&N. The only reason to spin it out is if they believe they cannot save the rest of the company, and are trying to salvage what they can before the rest goes under.
Indie bookstores are going under at a faster rate than ever before, and although we’re seeing a surge of new stores open in the wake of Borders closing, and will probably see more open after B&N dumps the brick and mortar stores (or folds entirely), most of those will simply not be able to succeed in an environment where books are cheaper online, and online stores offer more breadth of availability.
The only brick and mortar bookstore which can survive these changes will be one which can offer books as cheap as Amazon, offer immediate access to as many books as Amazon, and still remain profitable. A difficult proposition (albeit not an impossible one).
Suddenly, we’re looking at a near future where 80-90% or more of books might be purchased online (ebooks and print).
Now, on the one hand, that’s OK. Publishers will still have a great outlet for books. It’ll be online instead of in brick retail, but the venues are still there. But on the other hand, it’s a problem because most publishers have spent a very long time becoming expert marketers…
…to chain bookstores.
Which aren’t going to exist much longer.
Without the bookstore chains, all that marketing experience is out the window. There’s no need for it, anymore, not when anyone can upload a book to online bookstores as easily as they can. There’s no selling anymore. Suddenly the book fairs and expos are pointless. Kirkus loses its primary purpose (helping publishers sell books to retail chains). The massive industry built around that type of marketing is undermined and loses value. It’s already lost value, and loses more with every brick bookstore closure and every new customer who moves to ebooks or online print book buying.
New Marketing for the New Publisher
Writers have been able to be their own publishers for a very long time now. Editing, cover art, and book formatting have always been available for people who wanted to create their own books. But in the past, almost all of these efforts failed, earning the (justly) derided title of “vanity publishing”. Writers, and even to some degree small publishers, lacked one key ingredient: distribution. Major publishers had a virtual lock on book distribution. This has for decades been the primary value publishers offer to writers; everything else they do can be outsourced.
When the distribution lock went away with the dominance of online bookstores, it’s left publishers in something of a pickle. Everything they offer, writers can now do for themselves, and generally do cheaper. A major topic last month at Digital Book World was what, if anything, publishers could offer writers to retain a good sense of value on their side of the deal?
I believe that the answer is marketing. But not the marketing of last year, done to bookstore chains that are dead or dying. Rather, I believe publishers must learn to market themselves effectively to readers.
Understand, most publishers haven’t done much of this sort of work for a very long time. There’s a serious learning curve attached. But writers out there are definitely seeing the value which an excellent marketing department can give their books. Ridan Publishing has seen virtually every book they have launched reach its respective genre bestseller list, and is now being approached by “name” fantasy and science fiction writers like Joe Haldeman interested in working with them. That’s an enormous coup for a small press like Ridan. But writers as a whole seem to feel that their superb marketing department is well worth the 30% of net that Ridan keeps.
Yes, they keep less than half what a major publisher does for ebook sales, even though they do substantially more. And that’s the sort of math I believe publishers are going to need to get used to in the near future; but pricing and royalty shares should be their own post.
Marketing isn’t about selling to bookstores anymore. It’s about reaching readers.
1) It’s about building brand recognition as a publisher. Right now, most readers don’t recognize the names of most publishers, or even care who published a given book. With a few exceptions (certain romance presses, and some science fiction publishers like Baen), readers buy a book for the author, not the publisher. This element is critical to change. Publishers need to build brand loyalty among readers to their specific imprints. What this means, for a large publisher, is that a central access point of shared resources should be used collectively by a very large number of small imprints. Each imprint would work with a small number of highly focused books, all of them excellent, all of them related enough in subject or tone that readers of one will tend to enjoy the others. Brand loyalty – to publisher, not to writer – is going to be critical in building publisher value.
2) Reviews are as important as ever. Which reviews are important has changed. At the moment, the most important book reviews in the world are probably the ones written by readers, on Amazon. Major industry reviews are no longer key to book success and will grow less so as brick and mortar retail continues to contract. The NYT reviews are no longer what they were a decade ago. Today, getting reviews where readers buy books is most important, and a set of disseminated reviews at various book blogs around the internet is second. You want reviews to be placed where readers can easily see them and have their fancy tweaked.
3) Direct customer relationships are crucial. Most of the successful indies and small presses I see today utilize direct relationships with their readers. One of the most common elements of this system is a mailing list. Twitter, Facebook, and blogs can be useful tools to acquire readers for your deeper connection methods (like newsletters), but by themselves tend to have only mediocre results in actually pushing sales. Social media is about connections, not about selling. Using it to build deeper connections with readers/fans is useful. Publishers must then drive those connections into brand loyalties, converting those brief connections into lasting customer relationships.
It’s a very different form of selling from what most large publishers are used to.
I’m not sure how many of them are going to be able to make the shift. Those who do will probably excel in the new industry. Those who can’t will probably see their market share and influence continue to diminish, and may eventually fold from the trade book industry altogether. No matter – for each that folds, I predict we’ll see several outstanding new companies spring up to replace them, agile and adapting to each new change as it comes along.
As writer/publishers, owners of small publishing companies, or management at larger publishers, we face a significant challenge in the years ahead – to find ways to build our specific brands into something readers can have loyalty toward, and then leveraging that loyalty by continuing to consistently produce books that slice of the overall readership will love to read.
Special thanks to Kris Rusch, whose article here sparked the idea for this general response to one of the greatest challenges our industry faces today!
Revisiting My 2011 Publishing Industry Predictions
Dec 31st
WAY back in December last year, I made a post with a set of predictions about what would happen in 2011, in the realm of ebooks and epublishing.
So I was curious, with the year ending, how I did. What came true? Where was my crystal ball horribly off?
Let’s see.
- EPUB solidifies as the main open format. AMZ maintains its lead as the dominant format, however, losing some market share as iBook builds on the continued success of the iPad, but still holding 2/3 of the market for Amazon.
Yes. No real shockers there, though.
- Ereading Devices begin to coalesce into several main groups: dedicated eInk ereaders (long battery life, easier reading, but poor internet and less multipurpose), tablet computers (the iPad, Archos, and the numerous iPad clones planned by every major computer retailer for early next year), and pocket communications devices (basically, cell phones, often with video phone, often mini-tablets in their own right, with ereader functionality). None of these are dominant yet. Netbook sales plummet as tablet computers eat their market.
Yes. Although the Archos is dead, the Fire and Nook Tablet have risen to the challenge. Some computer manufacturers have had their tablets flop (Dell, HP), while others are seeing sales soar (Asus, Toshiba). The iPad is still dominant, but has a host of competing products, and phones continue to grow – the Samsung Note is a great example of a supersize cell phone that’s half cell, half tablet.
- By the end of 2011, wireless internet companies are offering cheap tablet computers for free with two year 3G/4G contract (not so far out; the cheap ones are only $100-200 retail right now), giving millions more people access to mobile internet tablets (with ereader capability).
Oops. I missed on this one. I still feel this was a missed opportunity for wireless providers. There are some *very* inexpensive tablets out there still, and 3G services are already offering discounts for the high end tablets like the Galaxy. Offering the basic models for free with a plan should be a no-brainer. But it hasn’t happened – not yet anyway. I’ll reserve this one for 2012.
- Amazon releases the color eInk Kindle. It sees sales as a niche product, since it costs more than the B&W eink, but doesn’t play video or look as crisp as LCD tablets – so it’s really mostly for readers who want to buy magazines and newspapers from Amazon.
I got this one part right. We certainly have a color Kindle! The Fire has sold millions of units already. But it’s not eInk. And far from being a niche product, it looks like the Fire is perhaps the most popular Kindle right now. The reason it’s not a niche is because it’s LCD, not eInk – so it has much broader potential appeal. Amazon’s moves with free video for Prime members has been a powerful stroke in marketing the Fire, too. So I hit the board on this, but missed the bullseye.
- Borders declares bankruptcy to reorganize. They close most or all of their big box stores, moving to a mostly online retail position with minimal brick exposure.
This happened. And then their reorganization failed, and they got an extension. Then it failed again, and they went under completely.
- At least three new ebook retailers take off to compete with Amazon, B&N, Borders, iBook, Sony, Kobo, and Smashwords.
Yes. Actually, there are quite a few more than three. But none have been able to generate enough market share to be real competitors yet. Some regional companies are getting into ebooks in a big way, though – Kalahari.com is serving some overseas markets in the same manner Amazon is here in the US, and is beginning to make people take notice, for instance.
- B&N begins the process to close their large stores, shifting to smaller print on demand stores capable of producing fast, quality books from their e-inventory. This does not happen in 2011, but they begin the work to make it happen.
Definitely seeing the shift toward this in B&N, as they busily dump every store for which they don’t own the physical property. Not seeing them make major moves into POD based stores yet, and it’s possible they simply might skip that step entirely. Ebooks are growing so fast that there might be very little time between when big box bookstores stop being viable (probably happening in 2013-2014 here in the US) and when even POD based bookstores stop being viable due to increasing ebook dominance.
- Ebooks pass 25% of total consumer book sales.
Yes, happened in January. Dipped down a bit over the summer, but definitely back over 25% before the end of the year.
- Joe Konrath sells his millionth self-published Kindle book toward the end of the year (he’s passed 200k for 2010).
Darn it, I inserted this partly as a joke, but I really did think the guy had it in him. ;) He didn’t make it, far as I know, but I think he’s getting close. And good for him. Some people have done as much for indies as Joe has, but few have done more. He’s earned his success the hard way, and I’m glad for him.
- New York Times sets up the ebook bestseller list, as they have announced they plan to do. Over 10% of the books on the list are self-published by the end of the year, with signs that this is growing.
A tricky one. The NYT did indeed set up this list, but I did not predict that they would deliberately falsify their list by excluding indie books! This has devalued their list (already dubious) in terms of using it as any sort of measure of success. Later, they began adding a few self published books, but very few. As a result, at this writing only one of the top 25 fiction ebooks on their list is self published. HOWEVER – seven of the top 25 ebooks on Amazon are self published. And scanning fiction genres recently, 60-80% of the top 20 list for every genre I reviewed was self published. Indies have moved onto the bestseller lists in a very noticeable way.
- No major publisher shuts down (I know some folks are predicting this, but I just don’t see it, not next year anyway). However, we see more line consolidations and changes to infrastructure as publishers continue to prepare for the digital-primary publishing world.
Correctly predicted. I think we may see some issues for some publishers in the next year or two, but most are still reporting higher than normal profits, due largely to paying a lower than usual share of profits to writers on ebooks.
So that’s where we were. Many predictions were dead on; some were off on the specifics, but on in general. And I missed on a couple completely. ;) But that’s the nature of predictions. Overall, I think we’re sitting just about exactly where I expected us to be when I made those comments a year ago. Indie sales have moved to an undeniable chunk of the marketplace – not yet dominant perhaps, except in fiction, but substantial and growing. Publishers are still chugging along and beginning to come to grips with the new market. Retailers are continuing to battle for customers and work on improving the experience for their users.
It’s been a fascinating year – the year when the stage was really set. I think 2012 will be critical, too, because it will largely determine how the chips fall, where control of what work is published lands, and who ends up in the best position in the years ahead. Make smart decisions, folks – what we do now will have reverberations felt for many years to come.
BISG Announces ISBN Recommendations – Problems
Dec 13th
The Book Industry Study Group (BISG) announced last week a new document describing their idea for best practices in ISBN use for publishing today, specifically addressing digital publishing. Some excepts from the press release:
New York, NY (December 7, 2011) – The Book Industry Study Group (BISG) announced today the publication of a new Policy Statement detailing best practices for assigning ISBNs to digital products. Developed over the past 18 months within BISG’s Identification Committee, BISG Policy Statement POL-1101 addresses the critical need to reduce product identification confusion in the market place in order to provide the best possible consumer-level purchasing experience.
BISG encourages all member companies and other industry stakeholders to download the Policy Statement online at http://www.bisg.org/what-we-do-cat-4-policy-statements.php and work toward adopting the suggested guidelines as soon as practical, with a target for new product introductions of no later than March 2012. The best practices are applicable to content intended for distribution to the general public in North America, but could be applied elsewhere as well.
The Policy Statement has been endorsed by BookNet Canada, a not-for-profit agency dedicated to innovation in the Canadian book supply chain, theNational Information Standards Organization (NISO), where content publishers, libraries, and software developers turn for information industry standards that allow them to work together, and IBPA, the Independent Book Publishers Association.
In the spring of 2010, BISG’s Identification Committee created a Working Group to research and gather data around the practice of assigning identifiers to digital content throughout the US supply chain. “The specific mandate of the Working Group was to gather a true picture of how the US book supply chain was handling ISBN assignments, and then formulate best practice recommendations based on this pragmatic understanding,” said Angela Bole, BISG’s Deputy Executive Director. “Around 60 unique individuals and 40 unique companies participated in the effort. It was a truly collaborative learning process.”
Noted Phil Madans, Director of Publishing Standards and Practices for Hachette Book Group and Chair of the Committee in charge of developing the Policy Statement, “It was quite a challenge to bring some measure of consistency and clarity to what our research revealed to be so chaotic and confused that some even reported thinking ISBN assignment should be optional–a ‘nice to have’. This, clearly, would not work.”
The full Policy Statement includes level-setting definitions for Physical Book, Digital Book and Consumer as well as general rules of ISBN assignment and particular best practices for identifying digital products in the supply network. In addition, the Statement includes eight examples intended to provide guidance on how to assign ISBNs to Digital Books in real life situations based on specific use cases.
…
The following excerpt starts on page 6 of the 12-page Policy Statement:
“Separate ISBNs should be assigned to all unique Digital Books for ordering, listing, delivery and sales tracking purposes. In general, there are three major factors that determine the need to assign unique ISBNs to Digital Books.
– Content
If two digital books are created, one an exact textual reproduction of a Physical Book and the other an enhanced version that includes video, audio, etc., then the two Digital Books are unique and different products, and each requires a unique ISBN.– Format
If an EPUB format, a PDF format and a Mobi format (among others) are created, each format should be assigned a unique ISBN. This is similar to creating a hardcover and paperback edition of a Physical Book and should follow the same rules regarding ISBN assignment.
Rest of the press release available here.
Let’s face facts – this is a lot of hot air with no substance behind it.
ISBNs are a great system. I’m all for keeping it around, if it were made a fair and consistent system across all publishers. In Canada, for instance, it’s easy to agree to the BISG recommendations (as they noted in their press release) – because Canadians get ISBNs for free.
In the US, ISBNs range from $1 each (very reasonable – I’d pay that) to over $100, depending upon the number of them purchased. This is a leftover from the era when encouraging the purchase of multiples made sense, because it was easier to manage. In the era of computers, it’s not relevant anymore – and the $125 price tag for individual ISBNs is now simply a weapon to hurt smaller publishers. This is a large expense – sometimes the biggest single expense – for self publishers producing ebooks, and it’s especially damaging for people writing and publishing short works of both fiction and nonfiction.
Once upon a time, you needed an ISBN to get books into retail chains. Still true, for print books most of the time. With ebooks? Neither Amazon or B&N require ISBNs, which means over 90% of the US ebook market is open to books without the numbers. Mr. Madan’s comments above about people believing ISBNs “should be optional–a ‘nice to have’” are ironic – because in the publishing of ebooks, that’s precisely what they are today. They are not essential; therefore they are optional. They’re an optional element which adds very little value to author-publishers, and a great deal of expense. So they’re an option which is often skipped.
In October, I personally surveyed the top 200 ebooks on Amazon in romance, mystery, thriller, fantasy, science fiction, mystery, and horror genres. Across the board, in every one of those genres, over 50% of the top 200 ebooks were self published. Virtually none of those self published books used ISBNs.
The ebook medium is already dominated by books without ISBNs. BISG is trying to play catch-up, at this point, and encourage folks to use the numbering system before it falls apart entirely.
And if they really want to make that work, here’s a clue about what they need to do:
Get Bowker to make every ISBN purchase cost $1 or less. Even if bought one at a time.
Anything short of that spells the end of the ISBN system. And honestly, even that might not save ISBNs at this point – the system might simply be doomed.
Which would be a shame. It’s a nice system, and there are some advantages to having it around. But it’s not going to survive if there is a severe economic disadvantage to most publishers (small ones) using the system, and it’s not going to survive if the system continues to unfairly favor large publishers.
New Things and Giveaways!
Oct 7th
So, a few new changes to the blog over the last 24 hours!
First, I added a new column. The new column has links to my books and short stories on various vendors (just Amazon and Smashwords for now, but I’ll be adding B&N soon as well). I can already see that becoming a problem down the road as I get more stories up. I think I need a slider or something…! Not yet. But can definitely see the need. If anyone out there knows a good tool that I can use with WordPress to show images and text links in a scrolling manner, I’d be obliged to hear about it.
I also added a new page – contact me! I’ve got links there to Facebook, Twitter, and my email. I’ll always try to respond to every email. Might not be right away, but I do love hearing from readers, so I’ll get back to you. There’s also a link to a newsletter sign-up. And another link to the same newsletter in the side bar.
What newsletter? Well, it’s new, too. =) I’m using MailChimp to collect the email addresses of readers who’d like to hear about upcoming book and short story releases. The list is private, of course, and will be used sparingly; but if you’ve enjoyed By Darkness Revealed, for instance, and would like to read “Ashes Ascendant” when it comes out, then the newsletter is a great way to hear about the release.
Yes, soon. =)
And to top it all off, I’ve decided to try something really different, and participate in a blog hop.
Never having done one before, I have no idea how well this will be received, but…why not? As a character from my kids’ favorite show says “Get messy! Make mistakes!” One could do worse than follow the advice of Ms. Frizzle.
So I’ve signed up to offer a giveaway for the 7th through 10th of October, as part of the HOP FOR RED OCTOBER.
And what am I giving away, you ask?
Something with monsters, and magic, and a little mayhem.
Something with darkness, and sinister beings, and a battle against a renewed evil.
For the next few days, til the blog hop is done, every person who signs up on my newsletter list will receive a coupon good for a copy of By Darkness Revealed on Smashwords.com. That will include all major and most of the minor ebook formats – Kindle, epub, even PDF. Download and enjoy in the format of your choice, just for signing up.
One reader who signs up in that time will receive a free print copy of the book, autographed by the author however the winner would like.
But that’s not really enough; so here’s a little advance news. A short while before Ashes Ascendant is released to the world, I will be doing a drawing for several people to win ARCs – advance release copies – of the book. The winners will be chosen from folks who’ve reviewed By Darkness Revealed at the location of their choice. Amazon, B&N, Apple, Smashwords, Goodreads, your own blog – doesn’t matter where, and multiple entries will be awarded for reviews at up to three locations.
So, you can sign up for the newsletter now, get a free ebook, maybe win a free print copy of the book, AND get more information emailed to you about an upcoming special giveaway of a privileged few advance copies of the sequel!
All for signing up with a newsletter? Yes!
To make it really easy, here’s the newsletter link:
Thanks for stopping by! Enjoy the book! And check out the other blogs in the Hop here:
Are publishers under-reporting ebook sales to authors?
Apr 14th
It’s been an interesting couple of days in the publishing world. It seems like some publishers may be under-reporting ebook sales to their authors, in some cases reporting as little as 10% of the actual sales in royalty statements.
Needless to say, this has a lot of writers confused and concerned.
Yesterday, Mike Stackpole talked about this issue. Today, David Farland wrote about it in his “Daily Kick” emails to writers, and Kris Rusch blogged about it on her Business Rusch blog. All three confirmed the problem. What seems to be happening is writers who have indie and corporate published books are comparing the results of the two for the first six months of 2010 right now. And finding that corporate books whose Amazon ranking was higher than their indie books are reportedly selling 30 copies to the 300 copies the indie book sold.
The better rank (which should mean more sales, not less) is getting 10% as many sales.
Kris Rusch went into a lot of detail about what she thinks is going on: basically, bad accounting practices designed to sort of tide the companies over while they get their act together. The problem is, that’s still money (potentially, a lot of money) not being paid out to writers.
This is a dangerous road for publishers to start down. Remember when everyone was appalled that Borders had stopped paying some of the publishers supplying the company with books? When you stop paying the people who provide what you sell, you’re a heartbeat away from going out of business. It seems like right now, some publishers are doing something similar to their writers. It’s a precarious place to be.
As David Farland said, “In such a world, authors really may have no choice but to walk away from the New York model.”
Disintermediation?
Mar 9th
There is a serious question writers today are beginning to ask: what services are publishers providing? And are those services worth the cost?
For a book published *right now*, today, probably the answer is yes. Despite the fact that contracts are getting worse, and regaining rights on a contracted book today is very hard (often impossible), right now publishers still have exclusive access to big bookstores. Big Bookstores (and smaller ones) are still a very large percent of all book sales, so *right now* its still probably OK to take a loss in longterm income in exchange for the benefits of immediate visibility being in a bookstore gives your other, self published books.
The problem is, that’s quite possibly not true anymore for a book you *submit* today. It takes 12-24 months from contract to being in print. And maybe a year or more to get a contract. That’s 2-3 years (or more). A lot can happen in that time.
Borders is closing a bunch of their stores, and even odds might not exist anymore by the end of the year. B&N closed a net 7% of their stores last year, and is expected to close even more this year. The big bookstore chains are failing. Some folks are talking about ebooks hitting 50% of the market *this year* – which would simply kill the big bookstores dead, flat out. B&N would survive as an online store in bankruptcy, and Borders would flatline. It’s almost certain ebooks will hit 25% this year, which will cause a lot of bookstores to close AND cause a number of bankruptcies among publishers.
What happens to your book if your publisher goes bankrupt? They won’t all go under, but some publishing houses almost certainly will over the next two years. If you’re unlucky enough to have your book in production at a house when it goes into bankruptcy, then your book will be tied up in those proceedings for years more, before you’re able to shop it around all over again.
What do publishers offer, once the big bookstore chains are gone in two years or less? Editing, which writers can hire out. Covers, which writers can hire out. Formatting, which writers can hire out. Um…
Yeah, that’s about it.
A good book prep company costs you about $1000 to put a pro cover on a book and format it for you. On the cheap you can get that done for about $300, or less if you format yourself. Editing is expensive, with copy editing on a novel ranging from $250-$1000, and content editing being $2k+. But even if you go full out, you’re looking at maybe $3-4k for production costs per book – to produce something every bit as good as any large publisher can make today. So the math is easy, then.
And it does not favor the publisher.
All of this means that publishers are going to have to reinvent themselves in the coming years. Writers can get editing, formats, and covers anywhere, and bookstore distribution will no longer be a big factor soon. So – what can they offer? I think we’ll see publishers beginning to try to brand themselves. Something like what companies like Baen and Harlequin already have. Harlequin readers know what they are getting from a book. Many of them care less about the writer than about the label, knowing that a Harlequin book is probably going to be something they like. Baen readers are similar in SF. Baen publishes a specific flavor and style of science fiction, and readers know pretty much that if they like one Baen book, they will most likely like the next one too. Baen and Harlequin have build brands around their names, and if pushed a bit more this would add additional value.
I think publishers will be forced to move to 50% of net contracts for ebooks. Probably this year or next, we’ll see that become the norm. Already, most small presses are doing this, and as bookstores fade small presses are going to have a lot of other advantages over large presses (smaller staffs, less overhead, more nimble/faster movement of books, less hide-bound). I strongly suspect that some of the more pro small presses today will be large presses in five years.
Beyond that, I really don’t know. I know that publishers have some wonderful, creative people working for them. And I’m sure their brains are working harder on these issues than mine is. They’ll come up with ideas. Some will work, some won’t. The ones whose ideas work will still be in business three years from now.
Digital distribution of books *has* disintermediated consumer book publishers. It’s happened. It’s done. What we’re seeing now is the scramble as people a) realize that and b) figure out what they are going to do about it
Just in – Ebooks now outselling paper on B&N.com
Dec 30th
According to a Huffington Post article, Barnes & Nobles has just announced that they are now selling more ebooks than print books from their website. B&N apparently sold over one million ebooks on Christmas day alone. Also, both B&N.com and Amazon have announced that the Nook and Kindle (respectively) are now their best-selling items ever, outselling even the last Harry Potter novel.
Wow. Just…wow.
I said earlier in the year that holiday sales of ereaders was going to cause massive acceleration in ebook sales early this year, and it looks like that’s already proving true. Really, we’re seeing this happen faster than anyone had predicted. It’s simply amazing. I look at my little Kindle there, and I know that I have access to just about any book I want, whenever I want it. Just crazy. But fun. 
Looking forward to seeing some of my stuff up there too, this year!
