Posts tagged ebook
Popularity is the default index readers see when they just hop into a genre and browse. That makes it an excellent snapshot of what’s in front of readers at any given time. However, Amazon has set up the popularity algorithm to tend to favor books in the Select program, by “carrying over” a certain level of the popularity earned when a book goes free. Book goes off free, it lands on the paid list again, and as soon as it sells a little the carried over popularity catapults it up to the top of the list. That makes the Popularity listing volatile, a constantly shifting array of books.
Which is awesome for Amazon, from a sales perspective. You want your readers to see a new batch of books every time they visit. Churn is smart. But it’s not quite as good if one is collecting raw data on the state of sales – as we’ll see.
Amazon also has a Bestseller list, for ebooks, by genre. This is a much more static listing, made by compiling raw sales. It’s updated hourly, but books that get there tend to stay there for a while. So what might the difference be, if we compared Bestseller status with the constantly changing Popularity index?
To answer that question, I’ve compiled the same set of data on Amazon’s ebook bestseller list, for Science Fiction. As an added bonus, I’ve also compiled the same data (bestsellers) for fantasy. There are some interesting differences between the two data sets, as we’ll see.
As per the previous survey: EVERY attempt was made to ensure the data was as accurate as possible. Publishing companies owned by the author were counted as self publishing. Publishing companies which publish any submitted book for a fee were likewise counted as self publishing. Publishing companies which in any way vet incoming books or have a submission process were counted as traditional publishers. Whenever a question existed whether a publisher was trad or indie, I counted it as trad.
Science Fiction Top 99
When I collected this data, there was a glitched duplicate copy of “Dance of Dragons” on the top 100. The listing said unavailable, but was still showing in the top 100. Yes, we know Mr. Martin sells a lot of books. You don’t need to show us two copies of the same book in the top 100 to prove it. ;) Anyway, I simply counted the other 99 listings, rather than count the same book twice.
The breakdown was 38 (38.4%) traditionally published books and 61 (61.6%) self published books. Of the 38 traditionally published books, 22 were first published ten or more years ago; only 16 were “recent” releases.
Pricing for SF
I’ve broken out pricing again by price, and by indie/trad. I’ve wrapped prices +/- 21 cents into the corresponding $x.99 category, for simplicity.
$0.99 – Indie 22, Trad 4, Total 26 (26.3%)
$1.99 – Indie 2, Trad 0, Total 2 (2%)
$2.99 – Indie 22, Trad 2, Total 24 (24.2%)
$3.99 – Indie 5, Trad 1, Total 6 (6.1%)
$4.99 – Indie 9, Trad 5, Total 14 (14.1%)
$5.99 – Indie 1, Trad 3, Total 4 (4%)
$6.99 – Indie 0, Trad 2, Total 2 (2%)
$7.99 – Indie 0, Trad 8, Total 8 (8.1%)
$8.99 – Indie 0, Trad 2, Total 2 (2%)
$9.99 – Indie 0, Trad 2, Total 2 (2%)
$10.99 Total 0
$11.99 Indie 0, Trad 2, Total 2 (2%)
$12.99 Indie 0, Trad 2, Total 2 (2%)
$13.99 Indie 0, Trad 4, Total 4 (4%)
$14.99 Indie 0, Trad 1, Total 1 (1%)
For a visual reference:
Once again, we’re seeing solid prices from many indie publishers. The 99 cent bracket was set for only 36% of indie books. About 25% had priced their books above $2.99. It will be interesting to watch how that pricing trend continues into the future.
Overall, while indies maintained a solid lead in the bestseller list (61 of 99 books), they lacked the complete dominance seen in the Popularity index – likely due to decreased influence of the Select free periods. Good information to have.
Fantasy Top 100
The fantasy results were substantially different from science fiction – surprising on the surface, given that the two genres are often merged in bookstores, and are part of the same category on Amazon. But fantasy readers showed a marked lack of attention for older works of fantasy. Of the 47 traditionally published titles, only four were first published over ten years ago. Over 90% of trad pub fantasy bestsellers were relatively recent books.
Overall, self published books represented only 53 of the top 100 books, substantially less than we saw in science fiction.
As we’ll see, fantasy readers also showed substantially more tolerance for higher prices, both from indies and from traditional publishers. The lack of indie writer dominance in this genre is probably related to this price tolerance.
I’ve broken out pricing again by price, and by indie/trad. I’ve wrapped prices +/- 21 cents into the corresponding $x.99 category, for simplicity. Additionally, one $2.51 book was counted as $2.99 (indie) and one $7.39 book was counted as $6.99 (trad).
$0.99 – Indie 13, Trad 0, Total 13 (13%)
$1.99 – Indie 2, Trad 0, Total 2 (2%)
$2.99 – Indie 23, Trad 0, Total 23 (23%)
$3.99 – Indie 12, Trad 0, Total 12 (12%)
$4.99 – Indie 2, Trad 1, Total 3 (3%)
$5.99 – Indie 0, Trad 0, Total 0 (0%)
$6.99 – Indie 0, Trad 1, Total 1 (1%)
$7.99 – Indie 0, Trad 20, Total 20 (20%)
$8.99 – Indie 1, Trad 11, Total 11 (11%)
$9.99 – Indie 0, Trad 3, Total 3 (3%)
$10.99 Total 0
$11.99 Indie 0, Trad 1, Total 1 (1%)
$12.99 Indie 0, Trad 6, Total 6 (6%)
$13.99 Indie 0, Trad 0, Total 0 (0%)
$14.99 Indie 0, Trad 3, Total 3 (3%)
$29.99 Indie 0, Trad 1, Total 1 (1%) (Martin boxed set)
For a visual reference:
This is a really interesting graph. What we see is a clear divide down the middle, with almost no overlap. On the one side, indie writers publishing mostly at the 99 cent, $2.99, and $3.99 price points. On the other, traditionally published books dominated by $7.99 and $8.99 pricing, with a scattering of higher numbers in sufficient density to be statistically significant.
Clearly there’s a higher tolerance for steeper prices in this genre. It’s likely that indies could raise prices somewhat and still be effective sellers in fantasy. The steep valley sitting between the blue and red cliffs represents a potential area of additional profit for fantasy writers.
I intend to do more of these surveys down the road. Watching the changes over time will be interesting, and I believe it will help empower writers to make better, more informed decisions about their publishing options and pricing of their products.
It’s clear that there is substantial variance from genre to genre. Even in two genres typically seen as related, even overlapping, the data showed a large difference in both indie market share and in popular price points. Other genres will likely have their own secrets to reveal.
Lastly, while it appears that bestsellers are not dominated by indies to quite the degree the Popularity index suggested, self published books still have a majority of the bestseller lists in both genres surveyed, especially in science fiction. This would have been impossible a year ago – unthinkable two years ago! It’s fascinating to watch this sort of dramatic change unfold.
Thanks for the comments on the last survey. I hope this data proves as useful to everyone as the other, and hope you’ll continue to add your comments here! I enjoy hearing from folks who’ve gotten some value from what I’m doing here.
1) How much of the market do indies (self publishers) really have?
2) What price is working for folks?
There’s going to be some variability to the answers. Some genres will likely see greater or less indie penetration; some will see higher or lower prices as the most popular. What follows is raw data mined from Amazon (which represents ~70% of the US ebook market, and is therefore a better tool for ebook numbers than Bookscan is for print). Answers from one genre won’t answer decisively for all genres. Nevertheless, it’s a useful tool for getting some ideas.
I picked science fiction for the genre to mine. A couple of reasons: SF was consistently a genre where indies had a lower presence in the top 25 bestselling list, for my December/January checks; and I write SF, and have read SF for over three decades, so I know the publisher names very well.
Analysis and data are from the top 200 bestselling science fiction ebooks on Amazon, February 26th 2012. EVERY attempt was made to ensure the data was as accurate as possible. Publishing companies owned by the author were counted as self publishing. Publishing companies which publish any submitted book for a fee were likewise counted as self publishing (there was one case of an Outskirts book). Publishing companies which in any way vet incoming books or have a submission process were counted as traditional publishers (couple of cases of Piers Anthony books by Premier Digital Publishing, for example). Whenever a question existed whether a publisher was trad or indie, I counted it as trad.
Please note that this is a limited data set, from one retailer (albeit a dominant one), about one genre of fiction.
Self Publishing (Indie) vs Traditional Publishing
Top 25 Bestselling breakdown was 72% indie, 28% traditional, with a 18/7 split.
Overall for the top 200 books, there were 154 indie books and 46 traditionally published books, or 77% indie and 23% traditional publisher.
Of interest: out of those 46 trad pub books, only 25 were recent books (which I define as originally published in the last ten years). The remaining 21 were older books, by authors like Burroughs, Heinlein, Asimov, Orwell, Anthony, and Adams. These older books represent most of the prices under $10 for traditionally published ebooks.
A couple of stray thoughts:
1) The idea that “only a few” self publishers are doing well is false. This is 154 books all selling well in excess of a thousand copies per month, in one (rather smallish) genre.
2) The data showed 72% indie penetration for the top 25, and 77% for the top 200. I suspect that the figure would remain roughly constant much deeper.
I’ve broken out pricing by price, and by indie/trad.
$0.99 – indie 48; trad 3; all 51 (25.5%)
$1.49/1.50 – indie 2; trad 0; all 2 (1%)
$1.99 – indie 7; trad 0; all 7 (3.5%)
$2.99 – indie 74; trad 4; all 78 (39%)
$3.95/99 – indie 8; trad 3; all 11 (5.5%)
$4.50/4.79/4.99 – indie 13; trad 7; all 20 (10%)
$5.99-6.35 – indie 2; trad 4; all 6 (3%)
$6.99 – indie 0; trad 4; all 4 (2%)
$7.95-$8.09 – indie 0; trad 10; all 10 (5%)
$8.99/9.00 – indie 0; trad 2; all 2 (1%)
$9.99 – indie 0; trad 3; all 3 (1.5%)
$11.99 – indie 0; trad 1; all 1 (0.5%)
$12.99 – indie 0; trad 2; all 2 (1%)
$13.99 – indie 0; trad 2; all 2 (1%)
$14.99 – indie 0; trad 1; all 1 (0.5%)
Despite the marked dominance of the 99 cent and $2.99 price points, I am noting an upward trend in self published ebook prices among better selling writers. As they grow fanbases, I suspect these writers are becoming more confident in their work and bolder in their pricing. There’s a distinct move toward the $4.50-$5.00 price point for indies (8.4% of indie books), and 14.9% of bestselling indie SF ebooks were priced above the $2.99 point.
There’s also a distinct drop off point after $8.00. Very few books were able to prove highly successful above that price, indicating that about the price of a mass market paperback is the highest most consumers are willing to pay for most ebooks. The exceptions were books by well known name authors such as George R.R. Martin.
What’s next? Difficult to say. I feel that the 99 cent and $2.99 points will remain dominant for as long as Amazon continues to use their current pricing structure. The 99 cent point is the lowest price allowed; the $2.99 point is the lowest books can get a 70% royalty from Amazon. That makes these prices standard starting points for newer writers trying to “earn their chops”.
I believe we’re seeing a trend which will continue of self published authors starting at those points, then gradually moving prices up as they acquire more readership and audience. More books, more years of work in learning the craft, and more readers will enable writers to boost prices and therefore profit more from each sale.
On the trad pub side, I believe we’ll see less books published at prices over MMP price. Their ebook prices will trend down – *must* trend down, to compete with indie pricing – so we’ll see a settling into $5-8 for most traditionally published ebooks, with higher prices for books they believe will sell well at a higher price. However, with such a high percentage of the ebook market (in this genre; preliminary evidence suggests similar self publishing penetration in most other genres) seized by self published books, publishers are in a tough spot. Retaining dominance in chain bookstores is their only remaining point of strength. As sales in those chains continue to dwindle, publishers will be forced to find more effective ways to regain lost market share in ebooks, or be relegated to a minority market position.
I’d love to hear your thoughts on the data presented above! If you see flaws, please point them out; this is the first time I’ve done this in-depth a survey, but I intend to do more. If there are other things you think I ought to have looked at, or would like me to examine in future surveys, please let me know. Hopefully, this data will prove useful to many of us in making informed business decisions!
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.
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.
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.
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!
The holidays are over. All those millions of new Kindles are unwrapped and in use. So I thought it might be a good time to take another peek at those bestseller lists, and see how the indies are faring in a market which some analysts believe has doubled since this time last year.
The answer is, very well.
If you’ve been reading here a while, you’ll remember that on December 20th I was window shopping for ebooks on Amazon and noticed something odd. Last October, there were a few indie books in the top seats of most genres, but the majority of each top 25 list was traditionally published books. In December, something seemed to have changed, and self published books were everywhere. I did a survey of four genres and posted the results here.
Today I revisited those genres, and added two more. So I’m covering Romance, Fantasy, Science Fiction, Thrillers, Mystery, and Horror today. What follows is an analysis of the top 25 breakdown in each genre on Amazon. Why Amazon? With around 70% of the US ebook market, Amazon represents a higher percentage of ebook sales than Bookscan does of print, making the Amazon lists the most reliable bestseller list for ebooks available today.
I’ve also mentioned how many of the top 25 were in the Kindle Select program, as this seems to be having an increasingly robust impact on bestseller listing.
- Romance: 24 self published, 1 trade published, 20 Kindle Select
- Fantasy: 18 self published, 7 trade published, 17 Kindle Select
- Science Fiction: 18 self published, 7 trade published, 14 Kindle Select
- Thrillers: 18 self published, 7 trade published, 19 Kindle Select
- Mystery: 21 self published, 4 trade published, 21 Kindle Select
- Horror: 23 self published, 2 trade published, 23 Kindle Select
So at this moment, self published books represent from 72-92% of these Top 25 bestseller lists.
Also noteworthy that 56-92% of the books on these lists were in the Kindle Select programs, and overall over 90% of the self published books were enrolled in Select. While Select may not be working perfectly for every writer, it does seem to now be key in reaching the very top of the Amazon bestseller lists.
Now, bestseller lists aren’t everything. They’re the top books right now. Tomorrow, some of those books will have swapped out. And thousands of other books, indie and trad pub, are selling just fine without ever reaching a bestseller list.
But it’s noteworthy that not only did indies grab the majority of the bestseller lists last month – they seem to have held that majority and even gained more ground on traditional publishers in some genres.
The prevalence of Select in those titles is also relevant, because it demonstrates the effectiveness of that program. While I still believe it’s something of a lottery – and most writers will probably do better to at least have *most* of their books available everywhere – it’s undeniable that Select is making magic for some writers. Having a book rotate through Select might be a powerful tool for indies to build name recognition on Amazon.
I’ve updated the blog. New look – a crisp, clean website which should load a little faster and look a little more professional. I have to admit, I liked the old stonework art I used to have. It’s art I made, back when I was doing game art, so it had a little personal appeal. But I have to admit the clean white looks sharp.
When I founded this blog back in Autumn 2010, I wasn’t really sure what I was doing with myself. I knew that publishing was changing. I knew I loved writing, and that the way the writing profession seemed to be shifting had a lot of appeal. I’ve run a few businesses, and enjoy the work. Authors as entrepreneurs? Sign me up!
I’ve ended up doing quite a lot more than that now, though. Yes, I’ve been writing, and yes, I’ve been publishing that work. But to date, I’ve earned more income from formatting work for other writers, and done more work advising others on how best to go about doing things in this new world. I’ve listened to some of the best in the business, and I’ve participated in, even run, some intensive studies of the changing publishing marketplace.
In the process, I’ve created a blog which is fairly scattered. And as a very bright person pointed out to me earlier today, that’s not really the best way to go about things. So this is a moment of refocus. The old blog name was centered around me, my learning, my SF and fantasy writing: “Swords and Starflight: Exploring the worlds of writing and publishing”.
The new blog name is “Digital Delta: Charting a course through the changing world of publishing.”
Appropriate, because that’s what I’ll be writing about here. Yes, I’ll talk some about my own writing still. But the majority of what I put up here will be detailed information and analysis about the publishing industry as it exists today, and as it is likely to exist in the near future.
Because we’ve seen enormous change over the last two years, monumental change just over the last twelve months. But I think we’re still at the tip of the iceberg, and there’s much more to come. We’re still collectively working to find ways of coping with just these first steps of the digital publishing revolution, but the deeper changes won’t happen for a while yet. I predict that the next three years are going to be a rollercoaster of events as retailers, publishers, agents, writers, and everyone else involved in the industry work overtime to keep up.
Change can be scary. Folks, change can also be a lot of fun. Change can mean endings, but change can also mean new beginnings, new opportunities.
Let’s find them together.
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?
- 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.
It’s been two months since I checked in with Amazon rankings, and saw how indies were doing. In October, my survey showed that while traditional presses still dominated the top 10 in most genres, indie published books owned over 50% of the top 200 Amazon ebooks in romance, fantasy, mystery, thriller, science fiction, and horror genres. It was an amazing coup for indies, at the time. Powerful movement to the top seats across the board in fiction.
I went back last night to peek, and was floored by the results. Here’s the survey of the top 20 ebooks on Amazon in many genres. I’d welcome folks pointing out anything they see which I might have missed.
2 major press publications; 2 small press; 16 self published; 17 available on the Kindle Lending Library (KLL).
7 major press publications; 13 self published books; 10 books on KLL. Incidentally, the ONLY AUTHORS in the top 20 fantasy books who were not self published were George R.R. Martin and one book by Stephanie Meyer. With six of the seven titles all by one author (single books and a collection of his books), it’s not as good as it looks for major publishers.
2 major press publications; 2 small press published books; 16 self published books; 11 books on KLL.
A bright point for major publishers – 6 major press titles in the top 20; two small press; 12 self published books; 11 books on the KLL. This last is very important – all of the KLL books were self published, which means only one self published book made the top 20 without being in KLL.
A few things stand out here. First, that indie (by which I mean self published) dominance of ebooks has extended. Where once indies were largely excluded from the top 10 but dominant in the top 200, they now control a majority of the top 10 in many genres, and the top 20 in all genres surveyed. That’s a dramatic change. In this, the biggest sales period of the year for print publishers, to see indies simply step in and take over such an overwhelming majority of the top seats is unprecedented.
How did it happen?
If you go back to the numbers above, you’ll quickly see that the majority of the indie books which made the top 20 were enrolled in Kindle Select, a program which lets writers trade exclusivity on Amazon for entrance into the Kindle Lending Library. There’s been enormous debate over whether such a move is worthwhile to indies. Now the early evidence is in – and is strongly in favor of getting at least one book into KLL.
KLL loans out one book per month to all Amazon Prime members with Kindle devices. Those loans count as “sales” for purposes of Amazon Ranking placement, which means if a couple hundred people borrow your book, your ranking will go up very fast. This in turn creates more visibility for the book, which radically boosts overall sales, spurring the book even higher. KLL board are fairly consistently outperforming other Kindle books across the board right now, as a result. In addition, the author is paid a percentage of a monthly pool of money, based on units loaned.
So the initial numbers, at least, are in. KLL and KDP Select are boosting sales of indies in a very dramatic, very visible way. Coupled with continued insistence by major publishers on charging $10-15 for ebooks, this has accelerated the trend toward indie publishers gaining greater market share. This is bad news for the publishers, who are using the higher prices to help keep print sales alive while transitioning to digital, and who have been working hard to keep their books out of the Kindle Lending Library. They might still be successful on both counts; but their moves are having the side effect of ceding most of the ebook market to competitors.
Wrote this for a discussion elsewhere, and then I decided it made a great year-end retrospective on how far we’ve come this year. Some AMAZING stuff has happened this year!
Just think back for a moment about how much indie/self publishing has grown, over the last year. Digital publishing has created something of a renaissance for writers. Self publishing, or “indie” as just about everyone is saying today, is rapidly growing to a dominant position in the market. It’s not outliers, anymore.
In December 2010, the first indie book hit the Amazon ebook top 100. By March 2011, there were 37, and the number of self published titles has dipped below that only a couple of weeks since (Sunshine Deals). As of July, over 1/3 of the top 1000 Amazon ebooks were self published. In October, my own survey showed that *at least* 50% of the top 200 ebooks in romance, thriller, fantasy, mystery, science fiction, and horror genres were indie books (any book where I was unable to ascertain if it was indie or small press was marked “not indie”, which means there is probably error, but in favor of more self published market share, not less).
Based on the current data, there are *minimally* hundreds of writers making a full time living from their self published ebooks. Hard to say just how many, because sales vary and pricing varies as well (selling 200 copies a month of a $5 book earns about the same as 2000 copies per month of a 99 cent book).
Ebooks are already closing on 50% of the fiction market. They are expected to surpass that percentage, if they haven’t already, in the first few months of 2012 (after some ten million+ new ereaders are opened as Christmas presents). Nonfiction is lagging behind, but “text type” nonfiction is also shifting rapidly.
In short, traditional publishers have lost a double-digit percentage of the overall US trade book market to indie publishers, and will probably lose substantially more over the next year as more professionals move into publishing their own ebooks. That would have been unthinkable three years ago.
Now it’s reality.
It’s still an incredibly competitive environment. But then, so is traditional publishing. And editors are now routinely saying at writer’s conferences that they’re having greater success scoping out new talent on ebook bestseller lists than they are getting new writers from agents. What does that mean? Indie publishing might be turning into the new slushpile. Even if your goal is a big contract from a big publisher, your BEST course to achieve that might be to self publish a few books, prove your mettle – prove you have a market and fanbase! – and then approach some publishers. Publishers are finding that a proven writer with an existing fanbase is a surer bet than an unknown.
EVERYTHING has changed. Everything we “knew” to be absolutely true in 2008 should be questioned today. It’s up to us to each stay tuned in on the new industry, because most of the old chestnuts are no longer valid today. But it’s also an amazingly exciting time to be writing!
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.
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.
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.