E-reader War Heats Up. How Can You Profit?

The big players are already jockeying for position in advance of what promises to be a bumper holiday season for e-reader, tablet, and e-book sales.

All the major manufacturers are expected to release new e-readers and tablets including Sony, Apple, Amazon, and Barnes & Noble. In addition, there are expected to be a range of devices from a selection of manufacturers tied to the Google platform.

While users of one device aren’t necessarily chained to the retailer’s e-bookstore, customers will tend to do most of their shopping there because it’s just easier. The one major exception to that trend was Apple.

Their uninspiring iBookstore never had the design chops (or popularity) of something like iTunes. In fact, it was never a priority for the company – the app wasn’t even shipped with the first batches of iPads and iPhones. When that app became the most downloaded of summer 2010, Apple relented and included it with all future shipments.

But they never moved many books. There was big fanfare in March 2011 when they announced they had “sold” 100 million books. This figure, of course, included free downloads. And when you factor in that they have sold over 100 million iPhones worldwide and 25 million iPads, this figure becomes a little less impressive.

In fact, by the time the WWDC rolled around in June, Apple again announced that they had “sold” 100 million books. Not much movement there.

Two recent developments should change all that. First, the iBookstore was integrated properly into iTunes, and the huge delay in uploaded books propagating to iTunes itself was dramatically cut from months to a matter of days.

Second, and much more importantly, Apple belatedly followed through on their earlier threat to bar in-app purchases.

There is some confusion out there regarding what this means, and what effect it will have. But this is big news, and I’ll explain why.

Up until now, iPhone, iPad, and iPod touch owners were able to download the Kindle, Barnes & Noble, Google, or Kobo apps and purchase books through them. In effect, they will no longer be able to do so.

Instead, they will have to go through the relatively laborious process of opening their web browser, navigating to the site of the e-bookstore in question, searching for the book they want, signing into their account, then purchasing it.

You might not think this is a big deal. However, having worked for a major tech company, and conducted and participated in several usability studies, I can tell you that the more steps you add to a potential purchase, for every extra click a customer has to make before their payment is processed, the number of sales falls dramatically.

People are lazy. Especially online. They expect to be able to click once or twice and get what they want easily. If they can’t they will go somewhere else where they can.

All those iPad, iPhone, and iPod touch owners who read e-books will start using the iBookstore in their droves.

Amazon will lose market share. Apple will gain market share. I would imagine that Google, Barnes & Noble, and Kobo will also see a slight drop-off.

That’s what will happen in the short term. In the long-term, it could affect the sales of Apple devices. I understand the logic of Apple’s move. No-one was using their bookstore. However, Apple usually try and compete by producing the very best product, and charging a premium for it – which customers are happy to pay.

This time, they are forcing customers to use a vastly inferior product. There may be a backlash. Personally, I was trying to decide between an iPad, an iPhone, and a Kindle. This may have made the decision for me. I try and avoid generalizations based solely on my own feelings, but I would imagine that, given some of the feedback on various tech sites, I am not alone.

This is just one battleground in a fiercely competitive war that’s taking place all over the US and, indeed, the world.

Toys-R-Us have announced that they will start carrying the Kindle from Sunday, joining Walmart, Staples, Target, and BestBuy. OfficeMax and Fred Meyer Stores will start stocking the Nook from tomorrow, joining Walmart, Staples, and BestBuy, as well as all the Barnes & Noble stores.

Apple have their own network of swish retail stores, but their tablet can also be purchased at Target, Walmart, and BestBuy.

Kobo, meanwhile, have a bit of an image problem, in the US at least. Tied in customers minds to the liquidating Borders organization, they have been plagued with requests for discounts from bargain-hunting customers, assuming that they are being liquidated too.

They aren’t, but that notion won’t help US sales.

As for the rest, the amount of high-traffic outlets stocking e-readers keeps on increasing. More people will come into contact with new e-readers every day. More people will be living in a town with no bookstore, but with several retailers stocking all kinds of different e-readers.

And then, in September and October, all the new devices will be released: an Amazon tablet (and possibly a phone), a new iPhone, maybe a new iPad too, a new Nook reader, and lots and lots more.

The new devices will have attractive price tags, and the older models will be slashed. Amazon are widely expected to drop the ad-supported Kindle below the $100 psychological price point. Their competitors will follow suit, and some will even undercut them.

All of these new products will be launched with wall-to-wall promo, both online and offline, both in all the above-mentioned outlets, and in the media.

If you are skeptical about what kind of numbers these devices will sell in, you should note that only 12% of the US population own an e-reader, and only 8% own a tablet. E-reader ownership doubled in the six months from November 2010 to May 2011, while tablet ownership only increased marginally.

Amazon are said to be producing 15 million Kindles, and they, historically, tend to be conservative in their production numbers.

All of these new device owners will want something to read, which is why the device manufacturers are all keen to tie their readers to their stores.

From last November right through to February this year, there was a huge surge in e-book sales as people loaded up their devices. In fact, in February, e-books were the #1 selling format (they are currently #2 for 2011 so far).

I expect a similar surge this year.

If you are a writer, and you are wondering what all this means for you, or how you can best position yourself to take advantage of all these changes, I would suggest two things.

First, if you are not in the iBookstore, either by uploading direct, or through Smashword’s Premium Catalogue, make that a priority for all your existing titles.

Second, if you are spending a lot of time promoting and not so much writing, you might want to reconsider. This is traditionally a slow time of year for book sales (and e-books seem to be following that pattern).

So instead of busting a gut on promo in a slow market, perhaps you should be focusing on getting more books up in time for the holiday season.

Then you can promote.

About davidgaughran

David Gaughran is an Irish writer, living in London, the author of "Mercenary" and "A Storm Hits Valparaiso" as well as "Let's Get Digital" and "Let's Get Visible."
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112 Responses to E-reader War Heats Up. How Can You Profit?

  1. Just last week my local Tesco started stocking Kindles. And it’s not a giant super Tesco, it’s just one of the bigger ones that sells only groceries. Yet, they’re stocking Kindles. AWESOME!

    THIS is why I want to get four books out before Christmas. :-)

  2. I was on my iPad two nights ago. I fired up the Kindle app, went to shop, bought a book, started reading. Later that night I updated my Kindle app and – there you go – not allowed anymore. But what you had to do on both the iPod/Phone and iPad is not buy THROUGH the Kindle app anyhow. The app would close, automatically open your browser to what you wanted to buy, you’d buy it, and then the browser app would automatically close and Kindle would open. So it was not as seamless as one would imagine.

    Now, you will still have to do the shopping entirely by hand, but truth be told, the nice thing about how Amazon has it set up, I can be here on my PC at work, browse Amazon, find a cool e-book, buy it so that it is sent to my Kindle, or iPad, or iPod Touch, and when I fire that device up and connect, there it is. I actually find this a lot handier; I do almost all my book buying not on the devices, but while I’m doing something OTHER than reading. Maybe I am in the minority, but that’s just how I’ve rolled the last few months.

    I definitely agree about promotion vs. writing, though. Right now, a lot of indie authors are focusing on promoting their material because whatever your book might be, you’re still catering to a niche market – eReader owners. As that market grows, your audience will grow proportionately.

    Right now, I’ve only got one item on Amazon. I hope to get a novella, a novel, another e-zine, and 1-2 short stories up there by the end of 2011. A lot of work, but most of the material exists in draft form. Content, content, content…

    • Jack – That’s a good point. I do the same. When I’m surfing or emailing or whatever and come across something I like, I buy it on my laptop. Then when I turn on my Kindle, voila! It’s there. I do sometimes buy from my Kindle, but not often.

    • Do you think that if you didn’t own a Kindle, and just owned an iPad/iPhone that you would go through the extra steps to purchase on Amazon? Do you think new iPad/iPhone owners will bother?

      • When I didn’t have the Kindle (I’ve owned it less than a month) I still bought almost all my eBooks for the Apple devices through a traditional computer. Part of the reason for this is that while book browsing, if I find something I want and the Kindle price is significantly cheaper, or it’s a big, heavy book that’ll be a pain to carry around all the time, I’ll buy as an eBook, but I also tend to buy a lot of used paperbacks (mostly action pulps) that you can’t get in an e-format.

        If I was just surfing on the iPad, I would probably still have no problem buying through the new method – Amazon’s website is easily navigable on the iPad. Normal amazon pages are significantly more difficult to browse on the iPod though. At the end of the day, I’d still buy through an iPad, but I think now, even more of my reading purchases will be done on a normal computer.

        I do know, though, that I won’t be buying through iBooks – why would I? I have a PC at work, a PC laptop, a Kindle reader, and two Apple mobile devices. That’s three distinctly different reading platforms, but they can all use the same Kindle files. Works for me…

      • dahayden says:

        I use an iPod Touch as my ereader and I’m going through the extra step to stick with Amazon because the iBookstore is a piece of junk. The iBooks App is by far the best reading app, but their store experience is terrible. Very few recommendations, poor browsing, no gifting, no wish lists, etc. Really a poor shopping experience. I’d rather just load up the browser. And I’d say 75% of the ebooks I buy and sample are found when surfing via the web on my Macbook.

        I’m really not happy with Apple’s decision here. They’ve got the right to do what they want. And I have the right not to like it.

  3. josephine wade says:

    Last night I went to compare price/quality on a book and I usually bounce between my book apps., but when I opened the kindle app. there wasn’t a shop Amazon button. By the time I opened the browser I was a little annoyed and not that into the book any more (yeah, kind of lame I know). But I thought it was just a temporary thing. What exactly is the logic for closing app. purchasing? On smaller devices apps are just easier to manage than web browsers.

    Toys ‘R Us selling kindle is pretty big.

    • This wasn’t Amazon’s choice. Apple have forced this (so that people will use the iBookstore instead).

      • I wonder if now, however, Amazon’s own shopping app will be altered to allow you to buy an eBook? When I first started using it and I noticed you couldn’t buy an eBook through it, I assumed that’s because you could use the Kindle app. I suppose the same restriction that applies to the Kindle app applies to the Amazon shopping app?

  4. Why I don’t deal with Apple devices. They’re always bleeding their customers in ways that aren’t really part of the deal you thought you were getting. But I thought Jobs claimed last year they already had a third of the ebook market?

    Still, if Apple gets serious about selling books, it will expand the markets. Soon the device wars will be over and it will be a content war. And writers (the smart ones, and the lucky ones) will still control their content.

    • If Apple have a third of the e-book market, I will eat my extensive collection of hats.

      Amazon have around 60%. B&N have 20%-25% (despite their claims of higher). Apple, Google, Kobo, Sony and the rest share 15%-20% – probably in that order.

      I’m not sure if Apple are really serious about selling books or whether it’s more about checking Amazon’s growth. I think Jobs has no interest in books, he totally missed the e-book explosion, and I think he is no reader himself.

      • dahayden says:

        Steve Jobs has said on several occasions that people don’t read anymore. He doesn’t care. Which is why it still humors me that so many of the major publishers celebrated iBooks crying out that Apple would save them. Yeah, how’s that working out?

        From what I’ve seen of indie authors discussing their sales online, no one sells much on the iBookstore. Not only is it low in overall sales but it’s a particularly poor environment for indie authors. And if it ever came to it, Apple would land on the side of big publishing and not indie authors or small presses.

      • Agreed on both counts. I want Amazon to win this war. But not by too much. Apple were the ones that got them to introduce the 70% royalties after all.

      • Neil says:

        I’ll agree with the numbers, but if one goes global, I’ve heard the order is:
        Amazon (approaching 50%)
        B&N 15% to 20% (recall, only a large US presence)
        Apple, Sony, and Kobo in a 8% (3 way tie)
        Google (still trying to gain tracktion)

        Jobs isn’t a reader… this is about money control and denying buzz to Amazon/Nook/Google.

        This will backfire. People will buy on their computer and send to their IPad/IPhone/Iwhatever. Whisperlink is too convenient.

      • Do you think Kobo have that much? I suppose it’s possible especially given their international presence, but I suppose we are all guessing at the moment.

        I agree that this is probably more about poking Amazon in the eye than anything else.

  5. Stefan says:

    I wonder how many people really shop through their Kindle (or on Amazon via iPhone).
    I remember trying it once or twice when I got my Kindle, but since then it’s through the web browser on my laptop – which is much more convenient. And also let’s you compare prices with Smashwords easily (Amazon surcharge…).
    Actually, this is one of the reasons why I’m happy I didn’t go for the 3G version: not worth the extra money.

    • Actually the one reason why I regret not getting 3G is the ability to sync my current position in a book with my other reading devices (desktop, laptop, two mobiles, plus the kindle). But other than that, I feel no need for 3G because of the same reasons.

    • Neil says:

      I’ve bought a total of 3 books via the Kindle. All three were sequels to a just finished novel while on a business trip. Otherwise, all were purchased via my laptop. Apple had better be careful. If this pushes people back to using *another* computing device, it will raise interest in the Kindle tablet (or whatever Amazon’s Android tablet is called).

      Oh, I like the convenience of the 3G, but I’m unlikely to pay for it again.

      This will not help the iBookstore significantly. Most readers I know who read on the IPad buy via either Amazon, Nook, Smashwords, or any site but the iBookstore. Sometimes via the Kindle/Nook app or sometimes via the web browser. It will hurt Amazon/B&N/etc.

      It will also help ereader sales this Christmas.

      Neil

  6. Loving this dialogue. Good job David!

  7. Maggy says:

    Great article, Dave, and I agree. Promotion right now is dead in the water. It’s take us forever to get going, but we finally put DARK SIDE OF THE MOON up on Nook, and will be following with the other two books in the Laura Cardinal series and then on down the line. (Can’t put up THE SHOP, though.) We makes our choices!

    I love your thoughtful posts and market research. Keep it up!

  8. JJ Toner says:

    I’m still at a loss to know how anybody can find anything on an iPad or iPhone. I have tried, repeatedly to find my book on itunes without any success. I’ve tried author name and title. No joy. I can locate it by creating a specific URL containing the book’s isbn, but what use is that to a browsing reader?

  9. Maggy says:

    Hey, I feel like I already won the Pick 6! Especially in my choice of the blogger who broke the news…

  10. Alex Adena says:

    I’m going to throw another issue into the mix — authors have to do a better job of selling to Nook owners. If David is correct, and B&N has 25 percent of the market, we are losing tons and tons of sales. The ratio I see on Kindleboards — the end of the month reporting by authors — is at least a 10 to 1 ratio in favor of the Kindle.

    Yes, the B&N website is atrocious and incredibly stacked in favor of the legacy publishers but we need to discover a work-around. I’m selling at 99 cents in August, but when I go to $2.99 starting in September I’m going to try Facebook advertising targeted at Nook owners. I’ve also been doing some Twitter data mining that I’m hoping will help, too.

    The iPad is a similar challenge as the Nook, but let’s solve one problem at a time :)

    • Alex,

      You have a point, but it’s not all indies fault. B&N does a number of things to stack things in the favor of publishers:

      #1 International self-publishers are barred from B&N. This means they can’t tailor descriptions, they can’t review, they can’t purchase, and they must upload through Smashwords – and PubIt books have greater visibility on the the site. International publishers, however, are allowed.

      #2 B&N cooks the bestseller list to tilt it in favor of publishers. I wouldn’t be surprised if they do the same for “also boughts” etc.

      #3 B&N has more (and is planning much more) front of store co-op, sold only to publishers. A casual browser has to navigate past plenty of books from publishers before they can get to an indie.

      Now, all that doesn’t mean we can’t compete. And romance/erotica indies seem to do particularly well on B&N (but they have had their own difficulties too). Most indies, when they give interviews and such (and I’ve been guilty of this myself), only tend to give their Amazon links. That’s one easy place to start. Nook forums are another. I was hanging out on the Nook Boards, but made one sale and didn’t feel it was worthwhile as the forum wasn’t that busy. If anyone knows another, I’m all ears.

      Dave

      • Alex Adena says:

        I agree that B&N has stacked the deck against us but I also think most indie authors don’t even try. The link on a Facebook ad, for example, can go directly to your book’s location at B&N. And we can create separate ads to target just Nook owners.

        Now, I can’t claim whether it’s going to WORK or not because I won’t be doing that until September. I just suspect that most of us don’t try very hard because Amazon is so much more author-friendly.

      • Alex,

        I’d be interested to see how your ads go. My friend trialed a few for me. They didn’t sell many books, but they were great for boosting Page likes.

      • dahayden says:

        My experience with putting my book up on B&N left a poor taste in my mouth. I’m currently distributing their through PubIt and Smashwords. In the future, I’ll just use Smashwords. Yes, my statistics will be slower. That doesn’t concern me. My Smashwords version doesn’t have a big PubIt logo under it. It also has the correct publishing date on it, not 4 months earlier like the PubIt edition. Appeared on their website faster as well, much faster.

        I also had two bad ratings appear in the first 15 minutes my book went live on B&N through PubIt and I’ve already talked with two other authors who had the exact same experience. Makes no sense.

      • Some authors have reported lower visibility on B&N once they switched from PubIt and went through Smashwords. Just keep it in mind. See if you notice the same. You can always switch back if you find that.

      • dahayden says:

        I’ll keep that in mind. So far the only sales I’ve had on B&N were from the Smashwords version. That may change over time.

      • I’ve done okay at Barnes and Noble–through Smashwords–and sell one B and N book for every five sold Amazon, but I think that’s for a couple of reasons:
        1) I figured out early on how to appear in B and N’s search engine by tweaking the titles of my books–particularly having a subtitle that specifically directs to my genre. If you type in ‘time travel’ or ‘king arthur’ into the nook search engine, you’ll see what I mean.
        2) I gave away my books for free for a while on Smashwords and that got my books noticed at Barnes and Noble, even with the deck stacked against indies. At the time, I just wanted to build readership and didn’t realize that it also gave me a ranking at Barnes and Noble that is still holding months later.

        That said, I have no idea how to market directly there, though I do include B and N links whenever possible.

      • Neil says:

        #2 B&N cooks the bestseller list to tilt it in favor of publishers. I wouldn’t be surprised if they do the same for “also boughts” etc.

        #3 B&N has more (and is planning much more) front of store co-op, sold only to publishers.

        I browsed B&N to see if there would be one, just one, indie recommendation. Nope. I went anonymous to Amazon (I love the icognito feature of Chrome) and saw a few indie books recommended doing the same search.

        Neil

      • I don’t even go to the store. Interesting though.

    • josephine wade says:

      Alex,
      I’ve thought about how to best market there too, but I can see no rhyme or reason. They seem to have a very old school mentality which only circulates about 40% of their inventory. As far as I can tell they have a huge inventory which never makes it into the eyes of the public (or very rarely).

      Some self-published writers do really well there and they do have self-published selections available, but I don’t know why most writers don’t have proportionate success. The only thing I can figure is that the demographics of the people who purchase Nooks are very homogenious and if you write for their popular genres you’ll do well there. I don’t know really just speculating. I think there must be more to it than what is available as a consumer.

  11. David, this is a great article but, as Jack has described, the change in these apps is not as great as you postulate. Neither will its effects. Most Kindle owners don’t do most of their Amazon access through the Kindle. I bought one book that way just to see it work. All the other books I’ve purchased, or that my wife has purchased, have been done so via laptops. Following the order we just turn the Kindle on and it downloads. The browser access is simply that much better and it hasn’t been a decision maker/breaker for most people, if discussions about it are any indicator. I doubt that it will be for iPad drivers either.

    Cheers — Larry

    • Larry,

      You and Jack have a point. Perhaps I labored it a little. I don’t think all iPad/iPhone users are going to switch to the iBookstore tomorrow. I think some will, but even a small percentage will have an effect. But I’m more thinking about new iPad owners (and there will be a lot of those). I think much more of those could get tied to the iBookstore from the start.

  12. James says:

    David,
    I’m with you on most of this except the iPad, and I’ve recently written on a similar topic myself.
    The iPad isn’t primarily for reading books; the Kindle, Nook, and Kobo are. But Amazon, B&N and Kobo are likely headed the direction of Apple, not vice-versa: I expect dedicated e-readers to go away in the next several years as tablet prices drop and those “lazy” people snatch them up as replacement computers–and book readers. In other words, I think the Kindle of today will be found at thrift stores in several years, and will seem quaint. Amazon realizes this.

    One place where dedicated e-readers might stick is the classroom–they’re already dirt cheap (in the US, anyway), and leave out the tablet features that teachers don’t want.

    For writers? I think you’ve hinted at the best advice–go where the readers are, regardless of the device. One of my biggest concerns is seeing authors blindly chasing technology cul de sacs, or placing their publishing in one basket (Amazon).

    -James
    “The Tech Savvy Writer”

    • Hi James,

      I’ll have a good nose around your site – looks interesting.

      For me, I want a dedicated e-reader. I only want my device to do one thing so I don’t get distracted to do something else. If I had a tablet, I fear I would be flicking between the book and the internet. I want to switch off with a book, not be plugged in. But maybe I am in the minority.

      Dave

      • For me it’s a matter of screen legibility rather than features. As far as I know, current tablet screens don’t yet match the glare-free legibility of dedicated ereaders e-ink displays.

      • There’s all sorts of talk of color e-ink displays coming next. Not sure if it will be in time for this next batch of tablets, but everyone is working on it.

    • I’m not entirely sure about this. I’ve used an iPad for over a year, and I have only used the Kindle for a month, but I already see some benefits.

      1. The Kindle is thinner and lighter than all but the smallest tablets. That actually comes in very handy. It’s about a third the weight of an iPad and significantly easier to hold in your hand and read for an extended length of time. Tablets will get smaller and lighter, but whatever dimensions they reach, a new Kindle will probably beat it out.

      2. The Kindle only draws power from the battery when you switch a page, assuming you leave wifi and 3G off. The iPad runs out of power in 10-12 hours, but I can read my Kindle for a couple of hours every night, and I charge it about twice a month, if that. I could easily take it on a camping trip or a trip where I wouldn’t be able to frequently recharge a tablet, and not worry about the battery running dry. When I read a lot on the iPad, I’d be glancing at the power meter every half hour or so.

      3. When using a tablet as a reader, I tend to get fidgety. I read for a bit, check my mail. Read for a bit, check Twitter. Read for a bit, send an IM. I don’t enjoy my reading experience as much because all those other internet distractions are there at my fingertips. On the Kindle, I read a book I enjoy, period. A much more submersing experience.

      4. I think the idea behind the Kindle as a “electronic book”, nothing more, nothing less, appeals to a lot of people. the e-ink looks more like paper and you read it more like a written page than you do a tablet screen. I think the fact that it’s not self-illuminated is made up for by the fact that you can read it in bright light and it’s not bright light shining directly in your eyes for hours at a time. I have read whole books on both the Kindle and the iPad and find the Kindle much more comfortable as a reading platform.

      You’re right that some day, dedicated e-readers will go away, but I think what the kindle does, it does very, very well – giving the reader the same sensory experience as they have reading a paper book, in an electronic format.

      • Sold.

        That’s what I want from a reading device. Them pesky kids may have other ideas.

      • James says:

        Jack,
        I hear you, but if you’re publishing your work, you’ve got to focus on where your *readers* are and their preferences, not your own. For example, millions of e-books have been sold via the iBookstore (Apple claims “100 million”, but I’m not so sure). For another example, I meet folks on the bus and at work all the time who don’t want three portable devices (phone, laptop/tablet, e-reader), so they opt for a phone and tablet.

        But in the end, whatever nostalgia and preference I’ve got for a particular form factor, my readers are going to tell me where they’re reading. I’ll go meet them there.

      • Neil says:

        I wonder if dedicated e-readers will go away. Apple still sells IPods despite everything being a music player today… Sometimes the easiest way to enjoy something is the simple device that is optimized for one activity.

        I have a K2, but after reading on a borrowed K3 for just a few hours I realized:
        1. With weight, less is more
        2. The crispness of the screen makes reading so much more relaxing.

        If ereaders are cheap enough (I’m talking $69 by Christmas 2012), they’ll keep selling.

        Neil

      • That’s a very good point. If your e-reader only does one thing, they don’t have to keep upgrading the camera and other extraneous hardware with each iteration. That will see prices drop a lot. Remember how expensive calculators used to be?

  13. David,

    I have a feeling that Apple’s app decision is only going to hurt Apple. This is why. Their tendency to try and control the market usually backfires on them. They did this with the iPhone when it first came out. They made it available only through AT&T which was a big mistake. Competitors began producing phones that were on a par, if not better than the iPhone and those phones were available through other service providers, like Verizon. Also, the iPhone was extremely expensive when it first came out. Both of these facts hurt the demand for the iPhone.

    What I think will happen with this app thing is that people who want to read digital books through apps (especially cheap digital books like the ones you find on Amazon) will not go to the iBookstore. They’ll trade their iPhone in for another smart phone and use that instead. I could be wrong but that’s what I believe.

    Also, the iPad is great for many reasons but not for reading books – you can’t see screen very well when you take it outside and many people like to enjoy a book while on the beach or sitting in their favorite lawn chair in the backyard. Reading is a leisurely activity that many enjoy doing outside or near a window in their home. This is why the Kindle has sold so well, I think.

    Put all this together and Apple is going to shoot itself in the foot again … but it still remains to be seen.

    What do you think?

    V/r,
    Melissa

    • Hi Melissa,

      Long term I think that could be the case, but we shall see. Google, for example, are going for a very open approach (on the hardware side at least), but I’m not so sure that will translate into the same kind of success they have had with smartphones. Although, they have enough resources to either keep trying until they get it right (like they may have done with social networks) and the sense to cut their losses and just buy a competitor (like they did with video).

      For me, the real battles in publishing are not between agents and publishers, or indies and publishers, or writers in general and anyone, it’s between the tech companies: Google, Apple, Amazon.

      Dave

      • “For me, the real battles in publishing are not between agents and publishers, or indies and publishers, or writers in general and anyone, it’s between the tech companies: Google, Apple, Amazon.”

        Yeah, that’s right.

      • Holy sh*t, I said something smart. It happens once every couple of weeks. I should try cutting and pasting them all and putting them together. Or maybe release my own range of indie fortune cookies. Let’s Get Fortune Cookies!

      • Haha! You say a lot of smart things, actually.

        Also, to add to that, as long as there is competition among the tech companies, as long as the digital market is not controlled by just one of them, authors will be able to profit. An online friend of mine, Brad Torgerson said something very wise – if Amazon (or B&N or Apple, etc.) seized full control of the market, that would not be good. They would have the power to change the royalty rates and pretty much do whatever they wanted. At that point, we would be at their mercy.

        I think he is right.

        P.S. Looking forward to those fortune cookies! =o)

      • Oh if any company gets a stranglehold we are all in trouble. They will be able to slash royalties, demand exclusivity and all sorts of stuff.

        Amazon are the most “indie friendly”, for now at least, so I want them to win – but not by too much, after all, it was Apple’s entry into the market which caused Amazon to raise royalty rates to 70%.

  14. I haven’t tried it myself, but several indie authors I know have tried to upload to the iBookstore and given up in frustration. Until Apple makes this process as easy as Amazon makes it, you won’t see many indies in the iBookstore.

    I’m in the iBookstore through Smashwords, and I sell a few books that way, but nothing like what I sell on Amazon.

  15. virginiallorca says:

    As an aside, locally, Northern Illinois, I today received a newsletter from my library stating that they have decided to participate in e lending and everyone is on board but Kindle, that for some reason Amazon doesn’t want to do the library thing. I find this strange as I have heard of libraries not only doing the Kindle e lending but actually lending the device in some instances, and I’ve been hearing this for months. I guess this whole subject is going to be in flux for awhile.

  16. Tony Slater says:

    I tell you something I’m still in the dark about, but which I hear mentioned a lot: the Smashwords premium catalogue. Is this how I get my books into the iBookstore ahead of Apple’s attempt to enlarge their market share? Is it enough to be on Smashwords (which I’m not), or is this Premium Catalogue necessary to sell through iBooks? And how long will it take me to submit to and go live in this premium catalogue?
    Just something I was planning on looking into, but haven’t had chance – might be worth a mini post for those of us (like me) who are idiots!
    I really hate the idea of Apple making it harder for iPad users to buy my book on Amazon. Apple is a completely unknown quantity to me, in terms of possible royalties, etc. I have my Author Central pages up and running, but presumably I’ll need something similar on iBooks? If Apple are going to claim a much bigger market share (and what Jobs wants…) then I need to bone up and quick!

    • Tut tut, Tony, you mustn’t have read Part 2, Step 5 of my opus.

      Here’s the short version:

      When you upload to Smashwords, you just go on sale on their site. You then have to assign an ISBN to your work (they offer free ones), then apply for the Premium Catalogue (which is free also). It takes a couple of weeks before they manually check your work for formatting errors or links to Amazon (not allowed). Once you pass that, in another week or two you start appearing at all their partner sites: Barnes & Noble, Apple, Sony, Kobo, Diesel etc.

      I recommend you upload to Smashwords ASAP. It’s 10% of my sales and 15% of my royalties – and that’s not including anything from Apple etc (they are slower to report), that’s just from the site itself. Plus you can do all sorts of marketing things with coupons. Plus its the only way for most international readers to buy your book (including everyone in South America) without facing a $2 surcharge from Amazon.

    • Bill King says:

      Hello again, Tony,
      Basically you just need to follow Smashwords formatting and copyright guidelineswhen you upload your book to get into the premium catalogue. Its a more or less automatic process but it can take up to a couple of weeks. Make sure you check their Meatgrinder report and do anything it asks. If you read their style guide and implement its perfectly sensible recommendations, you should have no problems.

    • Tony Slater says:

      Ah, you two!
      Dave, your Opus will be given the attention it fully deserves on a tawdry beach in the Costa Del Sol in three days time! It’s a ‘real’ honeymoon, surprise gift from my parents (as in, get the f@*& out of the house, you’re married for God’s sake!).
      So I’ll be studying hard and prepping for the Smashwords thing. One slight concern though, is the ISBN – I’ve had advice not to get one from a third party at all costs, as this could end the dream of a publisher snapping up the rights to a paperback version – is this true? I could of course buy an ISBN (or ten), as I really don’t want Smashwords to be my publisher! More to think about… but the advantages offered by coupons is great. So much slicker than emailing a copy to a reviewer.
      Bill, I’ve heard such wonderful things about those Smashwords guidelines… something about them being a joy to read and implement, an enjoyable way to spend three months or so…
      Oh, and I’ve got Death’s Angels for the beach too – gotta love how one Kindle can carry enough entertainment for an entire holiday and yet stay the same weight! All I need now is another Kindle, so I’ll actually be allowed to read things on it – my first one has discovered it’s true home in my wife’s hands and doesn’t leave very often.

      • Tony,

        That’s the first time I’ve heard that one and I can’t see the basis for it. What possible impediment to a deal could there be? You still own all the rights to your work. The only drawback of taking the free ISBN is that Smashwords will be listed as the publisher of that edition in certain catalogues such as Bowkers In Print. The only time you REALLY need an ISBN is if you go direct with Apple, or if you do a print version. If either of those things are on the horizon, then you could get a block of 10 (works out a lot cheaper, and you will need 2 per book – one digital, one print – and a further one if you ever got fancy and did a hardback).

  17. J. Tanner says:

    Nice article.

    The crackdown is not unlike Apple, but seems particularly indefensible. Is their public reasoning outlined somewhere (their private motivation seems obvious)? Are their any rumblings of legal challenges from the big e-book competitors?

    • Oh it was hilarious:

      We have not changed our developer terms or guidelines. We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase.

      This is a piece of Orwellian doublespeak (which is ironic considering the Superbowl half-time ad that catapulted the company into the public consciousness). Essentially, what this means is that if you want to offer in-app purchase, it must go through the Apple purchasing system. That itself means that you must give Apple a 30% cut. For Amazon, this would mean they would have to give all of the 30% they keep for a $2.99 sale, meaning they would make a loss on those books.

      It’s a convoluted way of essentially barring Amazon, B&N, and the rest from selling in-app. I haven’t heard any rumblings of legal challenges from them, but some App developers were talking about it. Not sure how far such a suit would get, or how long it would take to resolve anything.

  18. James says:

    Do authors really get much benefit from “in-app purchases”? If so, why isn’t Amazon offering them for non-Amazon booksellers?

    • I’m not sure what you mean. All sales are lumped together in our sales reports. We don’t get a breakdown of how many were sold through the Kindle app, Kindles themselves, the website, or whatever. We just get the total.

      • James says:

        Sorry, to clarify:
        I think Apple’s more flexible than Amazon. You can only buy Kindle content from Amazon, but Apple actually allows you to buy content from anywhere, as long as you *also* provide the option to buy the content inside the app. The reason Amazon didn’t like it? They want all content sold *by* them to be bought directly *from* them. Apple’s not requiring that, I don’t think.

      • I see what you mean now.

        I think this may change soon, there is talk of Amazon selling EPUBs in the near future, and it will be interesting to watch the effect that has on the marketplace, as they have by far the best store. Could it increase their share of the e-book market? Probably. How would that effect e-reader sales? That’s unclear. But the long tail of income is in the content, not the device.

        As to Apple. You are right, they are not requiring that. However, my understanding is that their rules for in-app purchase now require going through the Apple payment system. This means forking over a 30% transaction fee to Apple. As Amazon only retain 30% of most sales, this would mean that they would make nothing from those sales through Apple devices (and effectively would lose money). This effectively bars any other retailer from selling through an app.

  19. J. Tanner says:

    Okay, so after my eyeballs spun three times like a slot machine… I think “purchasing outside of the app” equates to, in the Kindle case, processing an order on Amazon.com through a browser window/subwindow while “purchasing in-app” must also conveniently require using the I-Tunes engine to process that payment. Because there is little reason that the Kindle Reader development team could not load the amazon store and payment engine seemlessly “within” the app by using an in-app dialog that populates with internet data… unless they are also banned from doing that for reasons other than technical.
    Am I interpreting that mumbo-jumbo correctly?

  20. J. Tanner says:

    Bleh. So, for me I guess that means, as you recommended, prioritizing setting up Smashwords over Nook. I was leaving it until last as it seems the least straightforward, but time to delve in…

    • Oh sorry, no, I didn’t mean that.

      B&N are still in the #2 spot in the US (and in fact there market share is growing slightly while Amazon’s is estimated to be falling slightly). B&N probably sell around 3 times as many books as Apple.

      Upload to B&N first. It’s easier anyway. Then Smashwords.

  21. Help, help… I am about to put two ebooks on Apple, as soon as I can wrestle my friend’s Mac for an afternoon.

    I understand that Smashwords pays quarterly. If I download on Apple directly, do they pay monthly?

    If I price a novel at $2.99, what do I receive in royalities if I put it on Apple directly or go through Smashwords?

    • I’ve never tried to upload to Apple because you need an ISBN and a Mac. I’ve also heard it’s a pain, but you can be the lab rat and report back!

      I’m pretty sure the royalties are 70% on $2.99 and above. Smashwords around 60% for sales on Apple. More on the site itself. I get $2.21 or $2.35 royalties from a $2.99 sale depending, which is nice.

    • James says:

      @hollistergrant,
      I think the first threshold is $150. So, you’ll need to reach $150 before receiving your first payment. Payments are typically sent about 30 days after the end of a period/month.
      For example, if you sold $150 worth of books between July 1st and 25th, you’d get paid for it around August 30th.

      The way to get paid faster? Use a third-party aggregator like Lulu or Smashwords.

  22. Well, I bought that ISBN just for the iBookstore at top-banana-dollar ($125), not knowing I could get a freebie from Smashwords, so I will try to download my books myself…. I’ll file an Apple Report to let you all know how it turns out.

    I did learn something useful, though, for my $125. If you buy an ISBN from Bowker, the govt. agency that sells them, and list your own name as the publisher, go on sale, etc…. and THEN decide you are going to form Great Banana Books, your own business for your own books, you can contact Bowker and they will change the publisher name associated with your ISBN, at no additional cost. You just have to remember to change the name with your bank and all the book retailers.

    • I think you get to also put the ISBN number in gold letters on your title page :)

      There are some other benefits. You get to go into that big Books-In-Print Catalogue. Plus you can reuse that ISBN for other digital editions (but not print), if you wanted to sell elsewhere that required them. You have it forever too. Doesn’t expire.

    • James says:

      @hollistergrant,
      I always recommend buying them in lots of 10, because you get 10 for the price of two. $125 for a single ISBN is standard, though.

      Smashwords doesn’t provide “free” ISBNs, if you consider they take a cut of every sale you make. If you’re expecting to sell more than a few dozen copies of something, buying your own ISBN might be a very good deal.

      • James,

        Smashwords take the same cut whether you take the free ISBN or purchase your own separately.

      • But yes, they are much cheaper if you buy in bulk. Publishers end up paying less than a dollar per ISBN. However, indies should be careful. Some have tried to purchase a block together and divvy them up, or purchase numbers of someone else who bought in bulk. If you do this, the original purchaser of the block of ISBNs will be listed as the official publisher of your book.

      • James, thanks for the advice. You’re right, 10 ISBNs cost $250. I’m blundering my way along and purchased two for $250.00. Later this year I will probably need two more, which I could have picked up without paying anything. I saw “purchase 10 ISBNs” on Bowker/My Identifiers and stopped reading since I didn’t need 10.

        I need to slow down and read everything twice – or write a pamphlet called “Ebook Blunders” and charge 99 cents for it.

  23. jkswift says:

    I have both a Kindle and an I-pad, but I do all of my reading on the Kindle. What has been interesting is watching how my brother and his family (2 kids 13 and 10) have been using their new I-pad (they don’t have a Kindle). I of course set them up with the Kindle app and walked them through the Amazon sign-up process (and told him to buy my books of course!). Fast forward a month. I checked his libraries. The Kindle had never been opened once. They had purchased about a dozen books through iBooks, and no I’m not including mine:). I asked if he ever looked for books on Amazon and he said “Why? They’re all on iTunes anyway. Too much hassle.”
    Granted he’s my brother, and may be lazier than some! But I think a lot of these new iPad owners won’t even know Amazon exists.

    • dahayden says:

      Statistically it’s not working out that way, not yet anyway. iBooks only has a fraction of the market and hardcore readers don’t seem to like the shopping experience. I know I don’t, even though I love Apple products in general. Even on the iPad the Kindle app sells far more books than the iBookstore.

      • jkswift says:

        Like you I don’t enjoy shopping on the iBookstore, so I can see how the hardcore readers wouldn’t either. I think it will never sell as many e-books as Amazon, but I would not be surprised if the iBookstore gives B&N a run for their money.

    • You both make good points.

      I think a lot of the first iPad buyers were the kind of tech-savvy early adopters who would have no problem seeking out a workaround to buy Kindle books on their tablet, even in advance of this move. However, a lot of the next wave won’t be so tech-savvy. They may just plump for the ease of iBooks app because they don’t know any better. They may not be the kind of people that are motivated to put in a little extra effort to use a superior product. Rather, they are the kind of people that would always use the software that comes with their laptop, rather than seeking out and downloading alternatives.

      That’s just my hunch, and I could be wrong. But I think we are going to see Apple sell a lot more books in the future.

  24. Wonderful article. Made me wonder if we are getting just a little lazy and too dependant on the latest gadgets. I don’t use anything produced by Apple yet I manage to run my life perfectly well. I have a Sony e-reader (only one available in the UK at the time) and also have Kindle on my PC which I use for everything I need to do (the PC that is, not the Kindle). I have so many books waiting to be read I can’t ever think of a day when I will need to update the technology. I do think ebooks will become HUGE as the readers are far more portable than a shelf full of books. I hope they will encourage more people to read, but I really can’t understand why anyone would want to read something on an iphone with a small screen. It amuses me that TVs are getting bigger while films are being shown on a phone!
    I would like to wish everyone the best of luck with their efforts and hope we all have success with our books.

  25. James says:

    For writers, I think the essential lesson is this: your reading preferences don’t matter, those of your readers do. In practice, this means don’t get hung up on a specific technology or company, or bet most of your livelihood on which one will dominate. You’ll often be wrong, and be distracted from writing.

  26. virginiallorca says:

    @Sarah Woodbury. Months ago, someone wondered in the comments on Smart Bitches Trashy Books, if elending was going on . Someone from Cudahy, Wisconsin said they not only could borrow e books, but also devices. (I believe they specified Kindle) I know some libraries have deals with certain devices containing certain genres being lent out. And some that let you borrow the device let you download from a limited resource. I am sure we are talking about individual jurisdictions working with individual sub contractors. I think I will go to a library board meeting and ask him why he said that. It seems a shame to muddy the waters when this whole subject is so new. But every one wants to put in their own oar.

  27. Mary says:

    “Free” ISBNs concern me. I prefer to provide my own ISBN so that the publisher will be the same across all platforms and distributors. One of the main functions of the ISBN organization is to provide an index for searching titles. If a book has multiple ISBNs provided by several distributors, I wonder what the consequences will be in the future.
    Consistent metadata is also a concern. I have found that Smashwords has embedded metadata inside the epub file that was incorrect. The “meta name=”author” of the chapters did not contain the author of the book. It was the name of the user who last edited the MS Word document before submitting it to Smashwords.
    Submitting books to Apple is not difficult for me. I find it to be straightforward. If you leave something out, they tell you what you missed and you can go back and enter it. There seems to be a difference between the way PC users and Mac users think. I’m a PC user but I didn’t have any difficulty.
    My problem with Apple is that you must use/own a Mac in order to publish with them. That’s the Apple way! One small perk of becoming an iBookProducer…you get a 30% discount (last time I checked) on a new Mac. If I had known, maybe I wouldn’t have built a Hackintosh in order to publish with them! :-p

  28. drdog09 says:

    Dave,

    Your observations vis a vis the Apple store will only persist for a few more years. Apple’s as well as other makers of ebook readers are going to face a massive level of competition this Christmas season. There is also the wrinkle that HTML5 is almost settled. So most of the Android devices will be HTML5 capable. That will bust open the epub standard as we currently know it. I detail further on my blog — http://thirdpipe.com/?p=10021

    • That was an interesting post of yours. And the possibilities with HTML5 and EPUB3 will allow non-fiction writers/publishers to catch up in the digital world. But it will also increase the time/investment necessary to produce a professional-looking non-fiction e-book, which will favor the larger publishers, for sure.

      Amazon are expected to allow EPUB sales at some point. That could change the whole dynamic of the marketplace. I hope that is a stepping stone towards EPUB becoming the universal platform (and it would seem to be).

    • James says:

      I’ve got to disagree–or maybe I’m not clear about your post.

      EPUB’s a standard for a lot of reasons, but it’s not the “standard” for all content–just mainly books. Your post on your blog is talking about *all* content, I think, which is something entirely different. If a publisher wants to release multimedia “books”, they’d likely either optimize it for a web browser (HTML 5 compatible, for example), or package it as an app. In other words, EPUB and HTML 5 aren’t analagous, and have different purposes.

      And as always, I’d add–don’t get hung up on which new standard is going to “blow away” some other standard. Writers should focus on where readers are, and not worry too much about which technology is used to build the road to reach them.

      • Mary says:

        The new EPUB3 format will integrate multimedia and will be HTML5 compatible. Look for it to be finalized later this summer.
        This is quoted from idpf.org, the organization that develops the EPUB standard:
        EPUB 3’s base content format is now based on the XML serialization of HTML5 (XHTML5) [ContentDocs30], whereas EPUB2 supported two basic content types: a profile of XHTML 1.1 and DTBook [OPS2] (a semantically-enhanced markup focused on accessibility concerns).

  29. Pingback: E-reader War Heats Up. How Can You Profit? | The Passive Voice

  30. James says:

    “The new EPUB3 format will integrate multimedia and will be HTML5 compatible.”
    EPUB *already* integrates multimedia (audio/video/images)–it has since the beginning.

    “EPUB 3′s base content format is now based on the XML serialization of HTML5″
    All versions of EPUB use three standards: XHTML (text and structure), XML (manifest, ToC, metadata), and CSS (presentation). For simplicity, it’s called “XML-based”. For version 3, the main change is to replace “XHTML” in the sentence above to “XHTML5″. The main reason? Better support of multimedia (audio and video).
    The short version for non-multimedia book writers? You won’t notice much difference at all. For those who *are* creating multimedia books, this is a sea change.

  31. Pingback: Apple’s Lawyers Get Busy | David Gaughran

  32. David, what do you think will happen with Apple now that Jobs has stepped down?

    • In the short term, not much. He will still be around in an advisory capacity, and they have been preparing for this for some time (and he has had to step aside temporarily before).

      In the longer term, it’s impossible to say. He truly was a visionary CEO, irreplaceable in many ways. But there is far more than one talented person at Apple.

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