Publishers Desperately Trying To Protect Print Sales, And Failing

It has been apparent for quite some time that large publishers had been desperately trying to slow the (inevitable) transition to e-books – much as they might deny it.

Despite all the breathless talk of “transmedia” and “metadata” and the furious rate of backlist digitization, the overarching strategy was clear: protect print sales at all costs, and pray that e-books will plateau soon (and that international markets won’t take to them with quite the same relish).

This is the only logical conclusion from tactics that include pricing e-books artificially high (even, allegedly, going as far as price-fixing, for which they are being investigated by the EU, the (US) Justice Department, and are the subject of a number of class action suits which were recently combined), holding back the release of e-books until the print versions are ready, and (previously) releasing hardbacks well in advance of digital.

It has always been denied, of course, and the official position was always that publishers were embracing the digital future. However, in the last couple of weeks, two senior figures from large publishers spoke with unusual candor, belying that corporate stance.

Evan Schnittman – Bloomsbury’s worldwide MD of Sales and Marketing, Print and Digital –  was speaking at The Bookseller’s Futurebook conference in London, when he said:

For every print book we lose to an e-book, we lose money.

A few days before that, in an article in the New York Times on the recent spate of high-quality hardbacks from large publishers, Nan Graham – Senior VP and Editor-in-Chief at Scribner – said:

We hoped that a handsome object would slow the migration to e-book for [Stephen] King.

This really couldn’t be any clearer. Large publishers want to “slow the migration to e-book” because when that happens they “lose money”.

The obvious question is why are large publishers losing money on the transition to digital? They sell e-books too, are responsible for many of the books on the bestseller lists, and are charging a lot of money for them.

On top of that there are all sorts of costs associated with print books that disappear in a digital world: printing, warehouses, distribution, shipping, returns, higher retailer margins, the sales-force that flog print to bookstores, and then repeating all those costs if the book is successful and has to be re-printed (Stephen King’s recent hardcover 11/22/63, for example, is on its fourth printing).

Why don’t large publishers welcome a digital future? Why aren’t they attempting to speed the adoption of e-books rather than actively working to slow it?

To answer those questions, you need to look at what large publishers lose in a digital world.

Before the rise of e-books, large publishers essentially had a lock on distribution. If you self-published, the road to readers was fraught with logistical and financial peril. The only way to compete on price (or at least be in the ballpark) was to have a sufficiently high print run keep the cost per book down.

Aside from printing costs, a pre-digital self-publisher also incurred huge storage costs while they attempted (and usually failed) to get their books into stores. On the rare occasions they were successful, they had to offer them on similar terms that publishers did, meaning steep discounts and, of course, returns – which created their own set of problems.

Small publishers had to fight to get into stores too and rarely matched the distributive reach of a release from a large publisher. They often didn’t have the same relationships with the buyers for the book chains, or the budget to spend on crucial in-store placement.

Large publishers more or less monopolized print distribution, and largely only competed with themselves, especially in chains, supermarkets, box stores, and airport book-stands.

Much as they would like to, large publishers have nothing like the same control in a digital world. The distribution system is much more open. Anyone can upload a book to Amazon and reach millions and millions of readers around the world. Other retailers have some restrictions, but most can be reached through an distributor/aggregator like Smashwords in exchange for a minimal royalty cut.

In fact, self-publishers often have a greater distributive reach in digital because they are not bound by territorial restrictions – they can sell our books to anyone, worldwide.

The financial barriers-to-entry are much lower in a digital world too. Instead of the thousands of dollars a self-publisher formerly needed to release a print book, self-publishers commonly launch an e-book for $1,000 or less (sometimes a lot less).

And along with reduced costs, rewards are far greater: up to 70% of list price with retailers, more again if you sell direct. Given that all costs in a digital world are up-front costs, self-publishing is a lot more viable in a digital world.

Naturally this, combined with the huge uptake in e-reader adoption, has led to a surge in self-publishing – and not just from those that couldn’t get a publisher or agent, but also from those who had been successful in trade publishing, but decided to strike out own their own.

What they are all finding (along with small publishers and e-publishers) is a lot more level playing field. Instead of sending a reader to a bookstore where they would have to navigate the familiar names piled high on tables and order the book (and wait), self-publishers can send them directly to an Amazon page where they can purchase with one click from the comfort of their home and start reading immediately.

So, for self-publishers, not only is it far cheaper (and simpler) to publish books than it used to be, it’s much easier to sell them. And readers are buying them in droves.

Amazon recently announced their top ten bestsellers for all of 2011 (to date, obviously) – a list of combined print and digital – and there were two self-publishers on the list.

It’s striking, given that self-publishers tend to sell miniscule amounts of print books (and indeed often don’t even bother releasing a print edition, but should come as no real surprise to anyone who has been watching the Amazon e-book bestseller lists.

Self-publishers regularly capture a third of the top spots in the Kindle Store – and not just the Top 10 or Top 20, this pattern stretches all the way down to the Top 400 or so (beyond that is relatively unknown).

If you drill down to where readers have switched over to digital first (and thus in larger proportions so far), self-publishers’ success is even more pronounced; they regularly dominate those lists, capturing half, or more, of the top spots.

What seems to be happening here, as I have argued before, is that when readers switch to digital, they are faced with a range of books they never would have been exposed to when they frequented bookstores – great books from small publishers, e-publishers, and self-publishers instead of the familiar names from the large publishers.

In fact, I would also argue (based on the changing shape of genre bestseller lists) that the longer a reader is exposed to that increased selection, the more likely they are to try these new writers, and become fans.

Does this spell danger for large publishers? Well, that depends. While they might be losing market share, if the pie is growing enough to accommodate all this new competition, then it won’t necessarily hurt them. However, worryingly for them, the monthly AAP figures indicate that new revenue from digital is not replacing the collapsing print revenue.

The monthly AAP figures always come with a number of caveats – primarily that only a limited number of publishers (usually the larger ones) report numbers. As such, things like revenue totals only reflect participating publishers (and no self-publishers).

Remember, this is in terms of revenue, not units sold. Here’s the chart (figures in millions of dollars):

FORMAT SEPT 2010 SEPT 2011 CHANGE
Adult Hardcover 181.1 148.3 -18.1%
Adult Trade Paperback 111.7 111.6 -0.1%
Adult Mass Market PB 67.8 31.0 -54.3%
Children’s/YA Hardcover 76.9 78.5 +2.1%
Children’s/YA Paperback 52.3 44.7 -21.2%
Ebooks 40.0 80.3 +100.9%

From the American Association of Publishers (AAP), via Galleycat.

These are the same trends we have seen all year (aside from a relatively respectable performance in Adult Trade Paperback). What will catch attention – aside from the continuing abysmal performance of Mass Market Paperback is that overall revenue is dropping. In these six primary categories, trade is down 6.7%

There can be monthly blips, though, so let’s look at the totals for the year to date and see if that huge increase in e-book revenue is replacing the massive losses in paper.

These figures are for the first nine months of 2011 versus the same period in 2010 (revenue figures are in millions of dollars).

FORMAT 2010 2011 CHANGE
Adult Hardcover 965.4 790.0 -18.2%
Adult Trade Paperback 1058.9 884.1 -16.5%
Adult Mass Market PB 508.6 341.4 -32.9%
Children’s/YA Hardcover 471.8 417.0 -11.6%
Children’s/YA Paperback 404.8 344.6 -14.9%
Ebooks 305.7 729.5 +138.6%

These numbers are calculated from adding the September totals above to the YTD totals to August released by the AAP last month, via MediaBistro.

Aside from collapsing print numbers and surging e-book growth, one thing is worth noting: overall revenue is shrinking. Year to date totals are down 5.6% and the revenue gap with 2010 widens as the year goes on (and as e-books increase their market share).

From all the above, it should be clear that as e-books gain market share, large publishers lose market share to new competitors in digital that were locked out of the print distribution system. Furthermore, it seems that while the digital pie may be growing, publishers are losing too much of that new business to replace the collapse of print revenue.

There are more forces at work, though, than readers just being exposed to titles that don’t come from large publishers.

With each bookstore that closes its doors forever (or a whole nationwide chain in the case of Borders), publishers don’t just lose all those spots to sell books, they are losing all those spots to advertise books.

In a recent survey reported in the New York Times, 39% of readers who had bought print books from Amazon had looked at the book in a physical bookstore first. Aside from this “showrooming” being bad for bookstores, it underlines the advertising value of all those books in stores (for publishers).

As more and more bookstores close, large publishers are essentially losing a whole bunch of free (and effective) advertising too.

And something more fundamental is happening. As readers switch to digital, large publishers aren’t just losing control of which books are being published, or where they are distributed, they are also losing control of which books are recommended.

That whole traditional recommendation system from table displays, endcaps, and handselling, to New York Times ads, Publishers Weekly starred reviews, and literary critics is losing its influence too.  And what’s taking its place is something that is far more disposed to recommending self-published work (or books from small publishers and e-publishers).

People fret about the disappearance of one ecosystem: the closure of stores, the slimming down of book sections in newspapers, or Oprah cancelling her book club, and don’t take into account the diverse, decentralized, vibrant system that is taking its place through crowdsourced reviews, hugely popular book blogs, Kindle fan newsletters that have fifty thousand subscribers, Kindle owner Facebook Pages with thirty thousand fans, e-reader forums with tens of thousands of members, huge social networks exclusively for books, as well as the millions and millions of conversations about books and their authors which are happening every day on social media, and by email.

It’s a chaotic and messy recommendation engine, but it’s also one that allows word-of-mouth to spread like wildfire. And it doesn’t care who published the book.

About davidgaughran

David Gaughran is a 34-year old Irish writer, living in London, who spends most of his time travelling the world, collecting stories. He is the author of the South American historical adventure "A Storm Hits Valparaiso" and the short stories "If You Go Into The Woods" and "Transfection" as well as the popular self-publishing guide "Let's Get Digital: How To Self-Publish, And Why You Should."
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92 Responses to Publishers Desperately Trying To Protect Print Sales, And Failing

  1. WiseMona says:

    You are so right David ‘it doesn’t care who published the book’…
    Great piece. I am always here reading your articles and am finding this journey of book writing and self publishing to be fascinating. I am still shocked at how many people (here at home) still think that self-publishing is only for those that can’t get a publishing deal. Best wishes to you for the holiday season.

    • Hi Mona,

      It’s only starting in Ireland, but it will follow the same path as the rest of the world. I noticed the other day that Apple said that the Irish iBookstore was their 10th most popular worldwide, which was interesting.

      Amazon don’t help here. Irish readers are trained (by Amazon) to order print books from the UK site. But if they attempt to buy e-books there, they are told they are not allowed. What many of them don’t know if that they are supposed to order from Amazon US. Even when they go to Amazon US, they are plagued with banners telling them to return to Amazon UK. It’s quite dumb. There is no good reason why Ireland couldn’t have been lumped in with Amazon UK (as Austria was with Amazone Germany) – especially because UK and Irish territorial rights are often bundled together.

      I see self-publishing starting to get some mainstream media attention too. The Irish Times is running a feature on it soon, and Liveline is doing something next week. On top of that, the Kindle just hit Ireland (Tescos) for a reasonable price. It will be interesting to see what they sell over Christmas.

      Dave

      • One probable reason for the decision not to link Ireland to the UK is the differing currencies used in these two countries. Had Britain adopted the euro I suspect a Uk-Ireland Kindle zone would have been a cert. As it didn’t, Ireland gets stuck with the universal currency of the US dollar via am.com.

        In other areas it appears language is key, with Germany and Austria linked, France and Belgium linked, etc. As they all use a single currency this was not an issue.

        This may explain why the Spanish Kindle site was not extended to embrace Spanish-speaking Latin America, and why it seems individual kindle sites are being mooted for Chile, Argentina, etc, despite the common language.

      • That’s plausible, but Irish customers wouldn’t have had an issue with seeing prices in (or being billed in) Sterling. We are quite used to it, and often are lumped in with the UK for global websites.

        Whatever the logic, there has to be a better solution than the current situation where many Irish people simply think they can’t buy e-books.

  2. I am always noticing the exception that proves the rule. One AmazonUK guy published on Kindle and has a POD with it. He says he sells more print. How is your print project going? I’m still sniffing around the edges.

    • JAWAR says:

      Greetings Virginia,
      I primarily print books to sell at speaking engagements,
      and bulk orders. Other than that I’ve focused on ebooks
      the business model simply makes more since. With the
      ability to print short-runs, it doesn’t make sense to print
      thousands of books without having pre-orders in place.

  3. People fret about the disappearance of one ecosystem: the closure of stores, the slimming down of book sections in newspapers, or Oprah cancelling her book club, and don’t take into account the diverse, decentralized, vibrant system that is taking its place through crowdsourced reviews, hugely popular book blogs, Kindle fan newsletters that have fifty thousand subscribers, Kindle owner Facebook Pages with thirty thousand fans, e-reader forums with tens of thousands of members, huge social networks exclusively for books, as well as the millions and millions of conversations about books and their authors which are happening every day on social media, and by email.

    Thank you for this entire post, but especially this paragraph. Always insightful, you’re framing this just as I (and many other self-pub authors) are beginning to realize. That the ways that people discover books is changing. It’s been in the works for some time, but it’s accelerating at a pace that only digital could drive.

  4. Instead of the thousands of dollars a self-publisher formerly needed to release a print book, self-publishers commonly launch an e-book for $1,000 or less (sometimes a lot less).

    Or nothing but sweat, tears and aching shoulders from being hunched over a keyboard for too long.

    Hee hee hee hee hee hee hee hee bank.

  5. The other thing I’ve noticed, at least for myself, is that authors that were formerly auto-buys for me have now dropped out of my radar. Not because I don’t want to read their books, I do. But why would I pay £8 for an e-book (even if it’s by an author I like) when I can pay less than £5 for a book of equal (or better) quality that is just as fun to read. I know of only ONE of my previously favorite authors whose e-books are priced under £5. I still buy hers. All the others? I’m just waiting to see if the price drops. In the meantime I’m snatching up great reads from indies who give me a great read at a reasonable price. This is how I buy books now.

    And I bet I’m not alone.

    • I’ve been watching my own behavior. I still buy books from my favorite authors, but I don’t take risks on stuff from large publishers like I used to (and I did that a lot). I would much rather risk $2.99 on a self-published book. I’m not noticing any change in quality. I’m still reading lots of great stuff (and the odd dud); it’s just costing me less.

      • I’m in the same camp as Shéa. I’ve given up on George R.R. Martin because I refuse to pay the ridiculously high price they want for an eBook. My wife splashed out $14 for Jean Auel’s latest eBook because she was a big fan and the quality of the formatting was horrible (I won’t go into the quality of the story itself). It was the last book by a major publisher that either of us have bought.

        I think the major houses know in their deepest hearts that eBooks are about to become main street. They also know that they are no better, and in some cases worse, than most self publishers at producing quality so why would the major talent in their stables keep bringing them new work? The big houses are going under and they’re casting about for any life raft, peice of driftwood or anvil that they can get their hands on.

        Looks like it will be the anvil.

      • DL Snow says:

        I find myself doing this as well – taking a lot more risks. The fact is, I’ve probably read just as many traditionally published ‘duds’ that cost me a whole lot more money. I love being able to download the sample first. You can usually tell a book’s quality in the first few chapters. I can read the sample at me leisure and buy it whenever I want from wherever I am (from home, while on holiday, sitting on the bus…). You’d think big publishers would jump all over this opportunity to sell at such convenience.

  6. Diane Kidman says:

    Indie writers are the Susan Boyle of publishing. The big guys may have laughed at first glance, but golly gee, when we open our mouthes! What an exciting time to be a writer. Just as exciting is watching a resurgence in the love for the written word. I can’t wait to see where this is all headed.

  7. I would be really interested in seeing some sales numbers from authors who are also doing the whole POD thing alongside their eBooks. I think it makes a lot of sense to have a print edition, too, if you can, just because there are still so many traditional readers out there. Are most self-publishers using CreateSpace for the trade paperbacks? Or are there other options you’d recommend?

    • I think most are using Createspace, with a minority using Lightning Source (and a select few, offset). I haven’t done a print edition yet, but my next release will be POD through Createspace (prob in Jan). Someone with more experience can chime in here, but from what I’ve heard, there are certain advantages to Lightning Source but it’s a lot more complicated (and not as open), and there have been recent issues with Amazon not keeping the books in stock. I think it makes sense to have print editions too – the costs of a POD edition are minimal. I just wouldn’t expend any effort getting them in stores.

      I’ve seen numbers now and then from those doing print editions. They are rarely stellar, but there is a handful who do well (in relative terms).

      • SBJones says:

        Amazon doesn’t keep POD books in stock, ever. If someone orders the book, they go and order it from Lightning Source with a wholesaler discount (20% minimum) set by the author. As far as I have been told. Lightning Source puts the book in an Amazon box and punts it direct to the customer.

        Formatting a book for Lightning Source is not complicated at all. It is easier than formatting the interior of an e-book. Covers are a bit tricky if you don’t know how to use photoshop or gimp. Also Lightning Source pays monthly on a delay like Amazon and Barnes and noble. Not quarterly.

        Right now I sell about 2 e-books for every print book, but I make 4x the $ on print than I do on e-books. Just like e-books, my print books are cheaper, and I make more money per unit sold than a traditional book. The big publishers could eliminate a ton of costs if they updated the way they do their print runs.

      • The issues I was referring to was something about Amazon not fulfilling (or processing) Lightning Source orders with the same speed as before. I’ll see if I can dig out the link, but I believe this has been an issue on and off since the summer.

      • The LSI issue was actually Amazon and Ingrams playing games (again!). Amazon was still fulfilling orders for LSI-printed books the same speed as before. But they were marking many of those books as “may take 2-3 weeks to deliver” on their website. They said this was because the books were POD, sourced outside Createspace, so they couldn’t control when/how fast those books arrived. In reality, the books were still arriving the same speed, but having that little “WARNING – make take forever to get to your house!” at the top of the screen hurt sales. A lot.

        My hunch is that this was a powerplay between two big companies, probably over the 20% rate LSI was allowing folks to set on print books. Amazon takes those books, but they can’t be as happy with them as they would be with a higher rate.

      • Thanks for clarifying that Kevin. While you are there, I’m putting together my first print version soon (Createspace for a variety of reasons). Do you know of a good web resource for a complete beginner that covers everything from the pros and cons of various trim sizes right up to the finished product?

      • I don’t know of a “one stop shopping” resource for that, unfortunately. There’s a few good books that cover some or all of the basics, but I haven’t bought most of them, so I can’t give reviews. I worked for my parents doing typography and small publishing, started setting type back in the 70s, and have done it off and on enough since that it wasn’t that hard to learn the new form.

        I do ebook and POD setup for folks on a fee-based basis though, David – be glad to answer specific questions you have about how to do it yourself via email (or here, other folks might benefit too), if you’d like.

      • I’ve a couple of people helping with typesetting and formatting, but I’ll certainly ping you with questions along the way. After I go through it, I’ll know the kind of questions a beginner (like me) would have and we’ll see if we can put together something to help the next guy or to answer the basics, or have you along to talk about it. I’ll have a better idea what will work after I go through it all myself.

        What trim size and font size would you shoot for with a 100k novel? On top of those words, I’m going to have a b&w map at the front, a few more pages of front matter and maybe 10 pages of backmatter. (And I’m probably going with Garamond.)

      • David:
        I read your posts carefully when my writing brain is fogged over. Two years ago I used DogEar Press for $1099.00 to do a print on demand, and they provided the set up to, with a few key strokes, epub it on Amazon, smashwords, etc. I had carefully compared Create Space with DogEar then, and the latter won. Create Space has clearly upgraded since then, but then so has DogEar (Lightning Source? I’ll check.).
        It’s never easy, is it? Another revolution swept over the publishing world while I was in that trance. Rip Van Winkle, let’s you and me go get a beer.

      • I love Garamond for the interior font. Great choice, in my opinion. What size trim and font depends upon what sort of effect you want for the book. Example, a 5×8″ trim 11pt Garamond for 100k words plus some extra stuff is probably going to be close to 300 pages (90k words comes to about 265 pages). That creates a very nice book, probably shy of 2cm thick. The 11pt text is similar to what you see from most mass market paperbacks, although if I was redoing my last novel I’d have done 12pt I think, just to make the text a little more clear.

        If you want to bump to a larger size, 6×9″ is nice. I’d also boost the font size then, however, to at least 12pt. Probably larger. Really, I’d probably boost the font so that the number of pages didn’t reduce too much – again, would have to play with that to see what the right size should be, precisely. What you’re looking for is a good ratio of trim size to font size so that the words look “right” on the page to a reader.

      • Thanks Kevin, that’s exactly the kind of information I was looking for. 11pt sounds a little too small for me. It’s more important for me to create a beautiful (and readable) book than it is to squeeze a little extra margin. One of my pet hates is a small font. Even with perfect eyesight it’s tiresome – and if you have any eyesight difficulties…

        I’ll play with a few different setups along those lines.

        P.S. Do you ever see anyone doing Large Print editions? Just something that crossed my mind the other day.

      • Yeah, like I said – if I changed one thing, it would probably be the font size. It’s just a little bit too small, I think. It’s about the same size as a MMP, but on the 5×8″ pages it could have been a little bigger and worked better.

        I haven’t seen anyone doing large print (hardly see any indies doing print at all, honestly!). But I was just talking to a patient at work a few days ago, who was reading a large print book, and it occurred to me that she probably *couldn’t* read my book, even if she wanted to. Something to think about – if not large print, then perhaps a format and font size which is large enough to work for more readers.

      • patricefitz says:

        Great post, as usual, David! Just this month I did a print version of one of my author’s books – “How David Met Sarah,” by Anne Kelleher – which is an interesting example because it is fiction, quite short (only 23,000 words), and designed to be read by developmentally disabled adults and their loved ones. I used CreateSpace, and was tremendously pleased with the results. I think we must have had an angel there, because they got us through the printing and sample process extraordinarily quickly, and we were able to receive 100 copies of the book in record time so that it was ready for the launch party for signing by the author. We used 13 pt. font in that book, in light of the audience. It’s written at a third-grade reading level, and that’s part of why it’s so short.

        We decided to print it because it is for such a specialized audience that it’s almost like non-fiction. The author will be doing readings and signings, along with her brother, who has Down Syndrome. This is the first in a series of five books designed for these readers. It has been endorsed by the (American) National Down Syndrome Society, and we are donating 20% of the profits from each book to the NDSS.

        I was so amazed at how simple, fast, and inexpensive it was that I’m printing my own book RUNNING next week through CreateSpace. It costs only $39 if you do your own cover (which we had, but had to add spine and back) and editing (which had already been done for the Kindle and Nook editions). I had someone else do the formatting for simplicity’s sake, but it turns out to be fairly straightforward. We printed in 6X9 for “How David Met Sarah,” and I’m doing 5.25X8 for RUNNING. That one will be smaller font size — I think it’s 11 pt.

        I hope all this detail isn’t boring anyone! Sometimes it helps to hear the nitty gritty of someone else’s experience. Please e me if you think I can be helpful on any print questions, David. I’m learning as I go, and I’m so excited about getting my own book in print.

        P.S. I got a 5-1/2 star review (out of 5) from Underground Book Reviews for RUNNING!

      • patricefitz says:

        One more thing: We definitely make more on eBooks (selling HDMS for $4.99 on Kindle and Nook, thus the 70% royalties) and far less on the print books sold through CreateSpace/Amazon (selling at $14.99, but went for the high price so that there is some money to be made by the Down Syndrome charity — we determined that CreateSpace’s Expanded Distribution plan was worthwhile, even though it makes our royalties smaller; something like only $3.50 per book, because then the book can get into libraries and academic settings, which is a natural fit for this book). The real money in print is to be made when you order the books yourself and do readings/signings. We sell the book then for $10, and it costs just over $2.50 to print and ship each copy. So that’s a 75% royalty rate. (After all the expenses up front, of course.) So far we are selling more books that way — at the author’s appearances or at specialized stores that carry a few copies. Of course, everyone loves this book because it is such a nice idea. We have a lot of support, and have just ordered the next 100 copies.

        This print ‘em and sell ‘em yourself makes sense for books that you can sell from your trunk (or would that be boot for you?) at readings. Not so much for fiction.

        Here’s the David book: http://www.amazon.com/How-David-Met-Sarah-ebook/dp/B005SMBFHM and here’s RUNNING: http://www.amazon.com/RUNNING-ebook/dp/B005AJA43O

      • I use Lightning Source and have been very pleased. My books had been showing as “in stock” until today I checked and the first one shows “May take 1-4 weeks to deliver” whereas the second one still shows “in stock”. SBJones is entirely correct about Amazon “stocking” POD books. Doesn’t happen. The order is processed straight through Lightning Source and shipped from one of their facilities, with an Amazon label. I have my books set at the standard 50% rate, but that forced me to a higher price point as well.

        Lightning Source does require a few more hoops to jump through to get started, but, if you have a business entity already set up (I used my graphic design and advertising business as the “publisher”) then it’s really easy to do. Being directly plugged in to Ingram’s worldwide catalog was a plus to me. I know Createspace is too, but I’m not the all-my-eggs-in-one-basket kind of person.

        I chose Minion as my font and was able to do all the typeset and layout myself since that’s what I do for a living anyway. Garamond is a fine choice. I also like Adobe Jensen for readability and style.

    • Matt Bone says:

      I would love to hear more about authors’ experiences with Createspace and Lightning Source. Eventually I’d like to have a POD version of my book as well as digital, though from a quick glance at Createspace’s profit/cost calculator, it seemed like the margins of profit were a hell of a lot lower than ebook sales (almost to the degree to make it not worth the effort). This could be as my book is a big fat fantasy, so the high number of pages is driving down the profit margin, or I could well have worked it out wrong.

      I’d also be interested to hear about the quality of the printed version of the books, and if they stand up to trad. produced paperbacks.

    • I also sell print copies of ‘Something to Read on the Plane’ through Amazon (as well as local bookshops). I hardly sold any print copies on Amazon prior to digital publishing – less than one per month over a couple of years – but this month I’ve already sold 14 copies. The exposure from digital books must be the reason for the increase in sales.

      I should add that my books are not POD. I had 2500 copies printed by a regular printer and have sold 1500.

    • Two quick thoughts on the POD topic:

      1) If you design your interior yourself, make sure you study some professionally designed books to avoid some common, amateurish mistakes I see all of the time in self-published books (page numbers that start on the very first page, odd kerning and spacing, etc). I am shocked by the poorly designed books put out by some very well known self-publishers.

      2) Does anyone know if authors who self-publish with CreateSpace have any luck getting their books into traditional bookstores for their signings? The reason I ask is that I get together with some friends every now and then for signings. We usually sell 50 to 100 books each, have a good time, and meet some old and new readers. So I would want to be sure the bookstore could actually get my books without jumping through a lot of hoops.

      Thanks!

      • Matt Bone says:

        Good point about the design errors Brian – I wonder if Createspace has a preview to check over the final look of the book before it’s printed?

      • You can order a proof copy (recommended) to see it in the flesh and make your adjustments accordingly (before you put it on sale).

      • Matt Bone says:

        Probably the best bet. Though using the calculator on Createspace, it does seem a longer book (mine is 140k) makes the profit margin very small, unless you ramp up the retail price – which I don’t particularly want to do. I might check out Lightning Source to see if its margins are any better.

  8. Pj Jones says:

    Another great post, David. I agree with Shea. I still have a few certain favorite NY authors that I download to my Kindle, but 9.99 for an ebook? Really? I am buying a lot more indie novels now than traditional.

  9. josephine wade says:

    I still do not understand larger publisher’s resistance to e-books. I get that self-publishing is something of a threat, but is it that great? If their overhead decreases then they could spend money offering author incentives like broad advertising campaigns and media relief (authors could just write and leave the rest to the publisher) and many authors would trade in high profits for this (not necessarily me, but many out there). So what are they losing?

    They still have the upper hand in anything that requires a lot of money to do it. Maybe indepents do take some spots for some time, but these spots are open for anyone to take them including major publishers. Are they afraid of hard work? Are they afraid of accounting transparency where it will be more difficult to bury bad numbers? I just don’t get the dragging of their heels. Is it just the love of a three dimensional book?

    I understand what you wrote, but it just doesn’t add up. Maybe my mindset is off.

    • I think what I wrote is only part of the picture. There is a whole other side to it: the natural human resistance to change, a conservative corporate culture, a love of print books, bookstores, and the current system in general, a failure to grasp the power of the internet, the difficulty in admitting you were wrong, and making the mistake of projecting your own preferences on the population in general.

      • josephine wade says:

        Thanks.
        I guess I see the biggest competition for authors and publishers is competition from other cheaper types of entertainment or a type of technology that pulls the economic heart-strings such that people would place their money elsewhere.
        I think there is enough of this publishing pie for everyone with long term goals to get their fill.

      • I think one underlying resistance is simply control. Publishers (along with bookstore chains which is a whole different conversation) used to have complete control. Even if they make a profit, they have lost control of the process. This is tremendously threatening.

  10. Another very informative post, David.

    Anecdotally, I bought the new King book as an e-book. Now that I’ve got a Kindle Fire, I imagine I’ll buy print books once in a blue moon. And I read a couple of books a week at least. I don’t think there’s anything I need so badly right now that I won’t way for an e-release. And you’re right, the selection of new works is kind of breathtaking. Publishers need to embrace the new paradigm.

    • The King book is a good example. I loved his early stuff (especially his shorts), but I haven’t felt like buying one of his in a while. That one interested me, but there was no way I was going to spend $16.46 on an e-book. If it was $9.99, I probably would have bought it. If it was $8, I wouldn’t have thought twice. My point is, I never buy the books I am on-the-fence about, unless they are self-published (or on sale). I still buy the books from my favorite authors, but the rest (which was a large percentage), rarely.

  11. A wonderful overall analysis of what traditional publishers don’t want indies, or the industry as a whole, to know! Can’t stop the inevitable. Trad publishers should wrap their arms around the warm, fuzzy, cozy, axiom: “If you can’t beat ‘em, join ‘em.” Thanks, David. Great stuff, as always.

  12. It seems to me that the publishers are caught between two worlds. They’ve been late to commit to ebooks, true, but it doesn’t make sense to me that they lose money on them. Once uploaded, it’s like printing money. It costs them nothing! Perhaps it’s because they still have the whole superstructure to pay for (including offices in NY!) and two separate businesses running concurrently. The staff they need for paper books is not the same as they need for ebooks.

    And yet … elsewhere, I’ve read that certain big publishers are making a profit in 2011, and will continue to do so, mostly on the backs of writers who’ve signed away their ebook rights at ridiculously low royalty rates.

    • Hi Sarah!

      I think it’s because the Big Six look at an eBook sale as a LOST print sale. So, if they were going to make about $6 profit on a $26 hardcover (which is actually being generous considering their overhead, but it gives us an easy number to work with!), and they make $4 per eBook sale (again, just using a rough number), they think of that as losing $2. They tend not to consider that the person who bought the eBook may have had absolutely no intention of buying the $26 hardcover. :)

      Just my best guess, though!

      Brian

    • Many are still making a profit, but are those profits as large? In most cases not and shareholders do NOT like decreased profits.

  13. jackz4000 says:

    Well then if according to the logic of, “…each ebook sale is a LOST print sale” one could say the Big 6 made their big mistake by offering ebooks for sale. They shot themselves in the foot. They have no one to blame for the surge in ebooks than themselves. I’d venture to say that without the Big 6 having produced ebooks for sale and having them sold through Amazon and B&N and Apple; that ebooks would never have caught on as they did. People would not have bought the volume of Kindles and Nooks and other ereaders only to read indie ebooks. By making their titles available they simply spurred on the surge of ebooks and ereaders making it a bigger market.

    If they had with held their titles from becoming ebooks they woulkd have greatly slowed the ebook surge.

  14. Werner says:

    The most important thing legacy publishers are overlooking – the key to why more e-books are sold over all other traditional formats – is that people love to read!

    We have a ravenous appetite to feed our minds information and stories of all sorts. We just want to do be able to buy what we read at a reasonable price.

    Since I purchased my Kindle last February, I have read more than I’ve had in years. Using an ereader is just so easy, convenient and cost effective.

  15. John Barlow says:

    Great post, as usual. One thing, though:

    “My point is, I never buy the books I am on-the-fence about, unless they are self-published…”

    Are you saying that for you self-publishing is now a positive filter (contra traditionally published books)?

    • The numbers of books I have purchased in the last six months makes the sample to small to be meaningful, but in this time I have noticed that I have become a lot more price sensitive, probably because I now know how much of that list price is going to the publisher and how little of it they share with the writer.

      In other words, I’ve no problem with risking $2.99, especially when I can sample. The higher price points are now exclusively for my favorite authors – I no longer take a chance on books in that price band; I have no need to – there are plenty of great cheap books around.

      • John Barlow says:

        Yes, I see. And that kind of price-sensitive behavior is increasingly typical, I guess. There’s a slight paradox in that our current favourite authors (the only ones for which we’ll pay top dollar) were nurtured / promoted by the legacy system; yet these days we are less likely to rely on the same publishers to supply us with tomorrow’s favourites.

      • patricefitz says:

        I’m in the same position, David. I balk at any eBooks over $10, and I used to buy hardcovers the day they came out! Which at times was $22+! Now I will buy things $2.99 and under on a whim…

        My RUNNING is $4.99 now, but I’m working on the “it’s expensive (vis a vis your typical indie) so it must be good, but it’s a bargain (vis a vis your traditionally pubbed ebook)”

        We’ll see if that works…

      • Mark Alger says:

        FWIW, I have always seen the pricing of hardcover books as being counterproductive. They’re so high, I will not buy them unless that is the only binding a book is available in that I really, really, really want. Otherwise, I’ll wait a year or two until the MMPB comes out. Which makes tradpubbed ebooks a no-brainer for me. As in I’d have to have no brains to buy one. I’m still buying MMPBs per preference unless the author or publisher has the sense to pay attention to the market’s pricing signals. (Frex: Baen, where their MMPBs are priced at $7.99 and the ebooks at $6.)

        M

  16. Joseph Flynn says:

    My last traditional publishing deal was for “The President’s Henchman,” the first title in my Jim McGill series — the first private eye to live in the White House; he’s married to the first female president. The deal was with a small firm, Variance Publishing, but they were willing to put up the money to buy front-table space with B&N. Only B&N refused to sell them that space. That sank the hardcover sales and canceled the paperback edition. When Variance brought out the ebook for TPH, they priced it at $9.99. Sales were slow. I persuaded them to lower the price to $2.99. Sales should exceed 10,000 copies for this year. TPH was #34 in fiction, political earlier today.

    “The K Street Killer” McGill #3 got up to #8 on Tuesday night in ebooks, political after a Kindle Nation promo. That title is selling for $3.99.

    As to POD, I’ve found Lightning Source to be more advantageous than Create Space. You don’t have to pay extra to get your print books distributed through all channels.

  17. Linda Hall says:

    Interesting post. I’ve been following your blog for some time. I live in Canada and recently bought a Kobo Touch – which I LOVE! Quite possibly I may never read another print book again. I can even borrow eBooks from our local public library. What concerns me is not eBooks ‘taking over ‘ print and bookstores closing- that’s already happened. What concerns me is Monster Amazon swallowing up all other ebook formats and readers.
    Kindle books aren’t readily available outside of the U.S. which is why I bought a Kobo.

  18. David,

    I appreciated this post very much. It presents an interesting contrast to a recent post by Kathryn Rusch titled “How Traditional Publishers Are Making Money”. Her point there was that although print sales are down, profits are up at almost all of the big six because margins are greater on ebook sales. Part of this is a reflection of lower distribution costs. But another big part is that authors are receiving lower royalties on their ebook sales.

    Your point, however, is that while traditional pubs may be making more money on the books they do sell, in the bigger picture they’re losing market share to the indies. Every indie best seller siphons away money from a traditional publisher. And eventually this will take its toll.

    I’ll be curious to see how long this process takes. It seems to be unfolding with greater speed in the area of genre fiction, where neither reader nor writer really relies on the machinery of a large publisher. But how long will it take in other areas where there is this greater reliance? I’m thinking, for example, of fields where a large advance is critical for research and writing — say, biography, history, or works of investigative journalism. Just a thought.

    It makes me wonder whether big publishing will remain indispensable for some time to come in at least some areas — and whether as a result it will remain big enough to support other kinds of books.

  19. E Hunter says:

    I just mentioned this in a post the other day. On one hand, the old book culture is dying. It’s inevitable. But we’re watching a new one born in front of us, and it’s very exciting.

  20. I was going to make a similar comment to Robert, above, but he beat me to it. ;)

    Kris Rusch’s article here: http://kriswrites.com/2011/11/16/the-business-rusch-how-traditional-publishers-are-making-money/ makes some interesting points. Most pertinent, when taken in context with your data, is that despite *sales* being down for major publishers, *profits* are up.

    How can that be?

    Some of it is flat out loss of extra costs associated with print. Printing, warehousing, and shipping all cost money. Returns cost a bundle more – some sources mention that returns average as high as 50%, which means that for mass market paperbacks (where “return” means the cover is torn off and shipped back to the publisher, and the actual book destroyed) – which happen to be one of the areas most impacted by ebooks – returns represent a devastating loss to publishers. Ebooks don’t have returns (well, they do, but they don’t cost publishers money). All these things add up.

    Author royalty percentages are also, as Kris points out, simply a lower percentage of the profit on ebooks. On the surface, it appears similar. For print, publishers get 50% from the retailer, then pay the author 12-30% or so of that half (6-15% of the suggested cover price). For ebooks, writers get 25% of the publisher share – but costs are lower, so that actually represents a substantially lower percent of the actual profits. Even a small increase in profit per sale represents a large boost in overall profits for the publisher.

    So why have publishers been so afraid?

    Partly, maybe for the reasons you suggest. The loss of control of distribution, and the chaos that brings with it. But partly, I think it’s simply fear of change in any form. Publishing is a business which has changed very little in the last fifty years (until about 2009, anyway!). Publishers have built systems which work for them, work well, and have worked well for decades. Ebooks are a form of disruptive change which threatens all that. This is a business used to working on things years in advance, and they simply can’t do that anymore, because they have no idea what things will look like in a couple of years. For a business which relies on things staying the same (stability) for assurance of profits, radical change at a very fast pace is the *last* thing they want to see.

    I’m not sure they’ve even got their heads wrapped around how deeply entrenched and strong indie publishing has become in just the last year. I’m not sure, based on my discussions with some folks in the industry, if that’s really on their radar at all yet. Publishers look at the Amazon publishing arms and see a Huge Threat, because it’s one they can identify with and understand. They’re not even recognizing the greater danger from writers putting their own work out.

    • Robert’s reply got me thinking, and I’ll reply to both of you here.

      I don’t think my post and Kris’s article are completely in conflict with each other. I’m not forecasting immediate financial trouble for all large publishers. I’m looking a little further down the road to where their might be problems (certainly for at least some of them).

      Let’s say the AAP numbers are representative (and accurate) and the industry has shrunk 5% or so since this time last year. Individual companies could still be performing better than that (with the obvious corollary being that some will be performing worse).

      Let’s also take the first example Kris uses – Pearson. Their e-book sales are up 128% year-on-year. Sounds impressive until you realize that the market grew on average for large trade publishers by 138.6% year-on-year – so Pearson are actually performing below average.

      Going through the rest of Kris’ article, it’s clear that some publishers are performing better than others. Torstar (Harlequin) are down, Simon & Schuster are up, Lagardere (Hachette – despite the memo) are down, others are up.

      I never argued that publishers’ performance would move in lockstep. It’s quite clear to anyone that some publishers are managing change better than others.

      Where I would differ from Kris, and where our views diverge, is that she sees a rosy future for traditional publishing, whereas I am a little bleaker about the prospects of some of the larger publishers (rather than trade publishing in general).

      My general argument is that (a) publishers face increased competition in a digital world – that much is clear, a simple look at the bestseller charts will show that; and (b) that this competition will increase over time. This second part is harder to argue, but I stand behind it. If you look at the genres that went digital first: romance and thrillers – you can see that self-publishers and small publishers have captured over half of the Kindle bestseller lists. If you move on to the next genres that went digital: SF/F/H etc – the proportion is almost as good. What we are seeing is that the longer a “genre” goes digital, the more spots on the bestseller list large publishers lose to competitors. In other words, large publishers begin to lose readers as soon as they switch to e-books, and they lose more over time. That last part is crucial, and an indication that things will worsen from their current position (remember that the vast majority of readers and trade is still in print, but won’t be in a few years).

      While they might be making profits today, if I’m right, that financial position will worsen over time (and not that much time). We’ll see.

      Of course, there is also the whole argument about shedding writers (which Joe Konrath always makes) and how that will adversely affect the fortunes of large publishers, but I didn’t want to get into that here. Instead I focused on something which gets less air-time.

      I really think there is fundamental shift occuring about which books are recommended to readers and I think that could have a huge long-term effect on the market. The old system was wedded to the large publishers and would normally only recommend their books (with a few exceptions). The new system that is emerging doesn’t care who has published the book and is far more disposed to recommended self-published work or titles from small publishers. Recommendations are what really drive sales (that and author loyalty). I can’t remember the last time I read a newspaper book review – and they used to be so important in deciding which books I would check out. I doubt I’m alone – people get their recommendations now from KND, Pixel of Ink, Twitter, Facebook, or Amazon reviews.

      That replacing of one recommendation ecosystem with another could affect the market more dramatically than anything else we have talked about. It’s only beginning, but like e-books, I only see it going one way. Traditional publishers are fighting book with the launch of things like Bookish – but I fail to see it working.

      Let’s take an imaginary reader to illustrate my point.

      When my imaginary reader (who loves James Patterson) switches to e-books, I’m not saying that he will suddenly stop buying James Patterson books. It’s about him not buying Dan Brown anymore – who he was never crazy about to begin with, but it was all the airport store had. Now he has his Kindle, he can download whatever he likes wherever he likes – and a lot of that stuff he is buying instead of Dan Brown is going to be indie stuff, and some that reader’s dollars are no longer going into the large publisher’s coffers. In fact, I’m arguing that the proportion that will is going to drop over time.

      I haven’t stopped reading any of my old favorite writers – almost all of them published by large publishers. But, I’ve stopped buying stuff I was on the fence about. I’ve stopped taking risks with trade published stuff – I would rather risk $2.99 on an indie. I simply spend far less on books from large publishers than I used to – far less – and I would be surprised if that proportion didn’t drop further over time. I don’t think I’m that unique.

  21. DC Gallin says:

    Thanks again for great post, David! So on one hand we have artificially overpriced e books by publishers and on the other hand there is a basement bargain where selfpublishers offer their books as if they were selling socks!
    The high prices publishers demand are of course unrealistic, but so are the 99 cents selfpublishers tend to charge… That’s not even the price of a cup of coffee at Starbucks and people are apparently addicted to those hits of caffeine.

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  23. Melissa says:

    “It’s a chaotic and messy recommendation engine, but it’s also one that allows word-of-mouth to spread like wildfire. And it doesn’t care who published the book.”

    Yep, in a nutshell, that’s it!

  24. Dave says:

    I think what I wrote is only part of the picture. There is a whole other side to it: the natural human resistance to change, a conservative corporate culture, a love of print books, bookstores, and the current system in general, a failure to grasp the power of the internet, the difficulty in admitting you were wrong, and making the mistake of projecting your own preferences on the population in general.

    Dave, great post.

    Missed you at the lastest Konrath post-fest. His and Barry’s fisking of the now infamous “Hachette” memo eroded into another (surprise) indie vs.traditional shootout.

    I made a comment there on something that applies here: insulated coorporate delusion:

    That right there is a monumental sympton of a massive internal problem facing traditionals that they’re not even aware of: a corporate culture of insulated delusion. Not having any Big 6 experience I can still recognize this because I’ve seen it elsewhere. Years ago I managed for a big box retailer; not the ‘Red’ or ‘Blue’ stores but that #3 company; Y’know, the one whose stores are almost entirely dilapidated ####holes sequestered to areas with the cheapest rent.

    Hint: they bought Borders and despite 14 years of explosive, international growth still managed to run it into the ground.

    Anyway, working within management of this horribly declining company taught me a lot about self induced corporate delusion. In meetings with senior management us “field guys” would detail how we’re being hoplessly outclassed and outperformed in so many areas. Time and time again we were told to shut up and only worry about item’s A, B and C while completely ignoring critical areas D thru Z. Do this and everything will be juuust fiiine.

    The Hachette statement and your commentary that individuals within the Traditional structure can’t offer open, honest public discussion “without taking heat” perfectly capture this insulated delusion. I’m not convinced of an full, imminent demise of the Big 6 but I think they’re in far, far more trouble than they realize.

    Dave

    • I’m in an editing deathmatch with my WIP in a desperate struggle to get it uploaded in time for Christmas Day so I’ve missed a lot of stuff. I’ll pop over when the final final final draft is back off to the editor on Sunday night. Which will give me two days to sort out the backmatter in the new book and the updated backmatter for the existing books, write blurb copy, promo emails, book launch blog posts, do the formatting, and upload to all the existing retailers, plus the few new ones I’ve added. Just writing that makes me tired. I think I need to watch some reality TV and empty my brain.

  25. You hit it right on with the “distribution monopoly.” It’s truly why so many books of equal quality are more likely to be rejected than accepted. NY only NEEDS x number of books. It’s all they can handle. It’s easy for a writer to take it personally, but it’s really not all that personal. Go down to the Wal-Mart and sample the last 20 titles remaining. Few are of any noteworthy quality at all, certainly no more grabbing than your average competent indie.

    And that is where the great lie is exposed. The $15 “legitimized” ebooks are not substantially better than thousands of similar books, and that’s what readers are discovering. It’s easy when you were in traditional publishing (as I was for six books), and feel slightly superior, like you had something better than the others. But it’s really luck and timing. I am kind of embarrassed I used to think that. I know I am the only one who can do what I do, but I am not spectacularly gifted or talented or blessed–just another writer doing his thing.

    Now, publishers COULD have responded by gobbling up every competent book that crossed their desks, if they could have turned the rudder of tradition fast enough. Unfortunately the people in the pilot seat are often the most “experienced” and they have to believe in their experience, because that’s all they have. Medallion, Dorcester, and Kensington were the first mid-levels to realize they could instantly make a ton of money by dropping print and gobbling up writers, then siphoning off what is basically a free revenue stream. Indeed, it seems they are more open to submissions than the Big Six for those unfortunate and uneducated writers getting deals there..

    I heard three of the Big Six are teaming up to do their own digital bookstore (and possibly a lending library to compete with Amazon’s) so it could get interesting. I don’t think publishers have necessarily beens tupid–I think they are dealing with things as best they can. We on the ground have been in trench warfare but the word is just now filtering back to headquarters. We’ll see.

    • Yes, exactly. I think they are starting to figure out what we are doing now, but by the time they do – and implement it – we will be on to the next thing or the thing after that (and trying to figure out what the new thing is that Amazon just did).

      A lumbering corporate behemoth is never going to innovate as quickly as an army of interconnected web savvy individuals who are conducting continual experiments with their own products and sharing the results.

      And, from what I’ve heard about Bookish, I don’t think it’s going to take over the world – I feel zero compulsion to check it out.

  26. I find that I tend to buy the cheaper books and look for the trad-pubbed in the library. Overall, I’m buying a lot more books now than I did before I had a Kindle. I think I paid more than $10/book for about 10 books–otherwise, my average price is around $4. I buy the occasional older book I find from a favorite traditional author, and that is what keeps me from buying almost exclusively self-published.

    It’s not just cost that has me buying more books, it’s the incredible convenience, and no matter how beautiful a hardcover book is, unless they can instantly deliver it to me in my living room on a Saturday night 30 seconds after I order it, I’ll continue to buy ebooks. I’ve had my Kindle for a year now, and I haven’t bought a single paper book since then except for some for my daughter and to help support her school during a book fair.

  27. A quick note on the notion that e-books might plateau at 40% or 50% (advanced by a large publisher in the link at the top of this post) – Amazon announced they are selling over 1 million Kindles a week – http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1640193&highlight=

    I think growth has to slow first before it plateaus!

    (P.S. If the publishers truly are embracing a digital future, and truly will do better in a digital world, then why are they hoping that e-book growth will slow/stop soon?)

  28. “Instead of the thousands of dollars a self-publisher formerly needed to release a print book, self-publishers commonly launch an e-book for $1,000 or less (sometimes a lot less).”

    It might be worth pointing out that it cost me nothing to e-publish But Can You Drink The Water? A friend is a writing tutor and she helped with the editing. I did a favour for a graphic artist who designed the cover. I managed to do the formatting myself. After being rejected by agents and publishers for several years, I’ve now sold over 15 00 e-copies :)

    • Oh for sure, hence the “sometimes a lot less”. I just didn’t want to draw the ire of those who complain that indies are unprofessional and don’t use editors or cover designers etc. I know that many indies barter for these services – which I think is fantastic, I often do the same myself – I just wanted one phrase that would cover all the vastly different approaches we are all using to put out a professional product.

      P.S. Congrats on those sales!

  29. David, you’ve nailed it again. Over the past three weeks, I’ve experienced first-hand what it is like for a self-published author to watch his work soar right past the biggest names in the Publishers’ Pantheon.

    All it took was for HUNTER, my debut thriller, to be spotlighted by Amazon as the #1 “Editors’ Pick” for the week of 11/27 – 12/3, and its ebook sales skyrocketed right past the latest blockbusters by Stephen King, Janet Evanovich, James Patterson, John Grisham, Michael Connelly, and Suzanne Collins. Twelve days and over 40,000 purchases after the Amazon promotion ended, and my book still ranks among the Top 25 bestsellers on Amazon.

    Ebook self-publishing, as you point out so well in Let’s Get Digital, has completely leveled the playing field for indie authors vis-a-vis the big publishers. Marketing and distribution that worked in the era of print is rapidly becoming outmoded in the Age of Ebooks. A single individual, working from his home and focused narrowly on his own book or books, can actually out-compete the Big 6 on the ebook playing field and net far more money per sale than do major authors under the imprints of the New York houses.

    I’ve never felt more encouraged as an independent author. And the tens of thousands of sales I’ve racked up in just 19 days provides me a lot more “validation” as a writer than any publishing house logo on its spine ever could. I have seen the future of publishing, and I am that future.

    • Very cool, Robert!

      How did you get your book spotlighted by Amazon as the #1 “Editors’ Pick”? Usually the big New York publishers pay for that sort of exposure, as mentioned in this article: http://www.publishersweekly.com/pw/by-topic/industry-news/bookselling/article/49874-is-amazon-pushing-publishers-to-brink-on-terms-co-op-.html?utm_source=Publishers+Weekly%27s+PW+Daily&utm_campaign=d65d908769-UA-15906914-1&utm_medium=email

    • Robert, that was quite a run. You may have gotten a nice spotlight on your work, but if it wasn’t up to scratch it wouldn’t have performed so tremendously. You really maxed out any push they gave you – congratulations. On the one hand I’m continually amazed that indies can compete with the very biggest books from the biggest authors out there. On the other hand, it’s very simple: indies are giving readers what they want at an attractive price and Amazon aren’t throwing any roadblocks in their way and pushing the books they think will sell, regardless of who published them.

      When things aren’t so crazy for you, I would love to have you come along and talk about the ride.

      • David, I’d be delighted to. Thanks. Along with the holidays and a daughter about to have a baby, it has been insane.

        But the “run” continues, with HUNTER still in the Kindle Store “Top 25″ as of Sat. morning, December 17 — ten days after the promotion ended on December 3. Since then, KDP has launched a host of “Daily Deals” and other promotions casting their spotlights on specific books; almost all of these have soared past mine onto the bestseller list, some even hitting #1; but virtually all of them have since sunk out of the Top 25. I’m gratified that HUNTER is still hanging in there.

        In answer to Brian: I don’t know why they spotlighted HUNTER. One outside possibility: Early in November, I sent word about my book to the “Omnivoracious Editors”, the book editors at Amazon, who blog and comment about books. I spotted an obscure link on their blog (I don’t even see it now) where authors could submit books for their consideration. It is possible that one or more of them checked it out, liked it — and/or saw the large number of 5-star reader reviews and reasonably decent sales — and decided to feature it. At the time I sent along info about my book to the editors, my average customer star-rating was 4.9 out of 5.0.

        That is purely speculative, though, since I haven’t seen a word on their blog about my book. So I really haven’t a clue as to why mine was spotlighted. Maybe HUNTER was selected by one of those mysterious Amazonian algorithms. Or picked out of a hat in an office lottery.

        Ask me if I really care!

      • And, it should be mentioned, “hanging in there” at $3.99 rather than the $1.99 when it was part of the Amazon promotion. Great for all sorts of reasons, not least the checks you’ll be getting.

        I also had a thought the other day when I heard that Prime Rentals counted as sales for ranking purposes. When you were at #4, KDP Select hadn’t been launched yet, but the Lending Library had, with 5,000 books – the most high profile being the Hunger Games trilogy. Given the small selection of books, it was no surprise to see it dominating the Lending Library charts. But all those “lends” counted as sales for ranking purposes, back before your book was in the library. I would love to know if your book would have gone even higher than #4 if that wasn’t the case. It’s possible, but we’ll never know. In any event, it’s a fantastic achievement, one that will only ever be replicated by a tiny handful of writers. And the continuing success of the book must be extremely heartening.

        Getting hassle over a sequel yet from all those new fans? I hope they don’t go all GRRM on you…

        P.S. I’m not sure if I told you this, but the paperback edition of Hunter was recommended to me in an email from Amazon. I don’t know how big the email blast was, but did you get any paperback bump in the last few weeks? I think the email was around 2 weeks ago – not exactly sure.

  30. Dave says:

    Robert

    Congrat’s on the success story…sell it brother! Hunter sounds great, I plan to check it out.

    Dave

    Writing Trip

  31. W. H. Dean says:

    Hi David,

    I tend to agree about the overall trend toward digital and importance of the loss of distribution to traditional publishing, but I’m a lot less sanguine over the rest.

    You wrote: “From all the above, it should be clear that as e-books gain market share, large publishers lose market share to new competitors in digital that were locked out of the print distribution system.”

    Maybe. I’m not disputing the loss (perhaps temporary) of control over distribution. But everything hangs on how much market share (if any of significance, where significance = $) new competitors are taking away from traditional publishing.

    Some evidence suggests, for example, that people are buying more e-books and that more people are reading e-books. If the increases in number of books sold and new readers outstrip the value of the loss of market to self-publishers, then it’s a minor irritant to traditional publishing. The fact that we’re still in a recession is another confounding factor.

    One way or another, I don’t see how these numbers say anything decisive about the effect of self-publishing or e-books on traditional publishing.

    You wrote: “Furthermore, it seems that while the digital pie may be growing, publishers are losing too much of that new business to replace the collapse of print revenue.”

    I’m not disputing that digital can’t make up for print losses for now. But I will dispute the diminishing pie because the main bit of evidence is Amazon’s bestseller lists. Those lists are compiled by Amazon in accordance with their own nebulous ranking system. We have no real idea how these rankings translate into sales and sales into revenue. On any given week, the number one might have sold a million copies at $12, while numbers two through ten only sold a few thousand combined at 99 cents (and selling a million copies at 99 cents and a million at $14.99 are two different things when it comes to revenue).

    So, indie domination of Amazon’s bestseller list might not count for all that much lost revenue, once you factor in price differential and increased readership.

    • There is a lot of speculation and guesswork in this piece. I’m attempting to cobble together an argument with limited (and in some cases flawed) data, but it’s the best data I have.

      Here is some more limited, flawed data. I have encountered hundreds and hundreds of readers who say they will either (a) only buy indie books or (b) mostly buy indie books or (c) refuse to pay over a certain price (say $8 or $10) for an e-book. All of these readers are buying more indie books and less books from large publishers. As a reader, I’m in category (c) myself, and I encounter huge amounts of readers just like me every day.

      I’m sure every other self-publisher has encountered similar readers having similar discussions.

      Now, I’ve no idea how representative they are of the average reader, or what proportion of readers they would make up. But it does seem that readers are becoming more sensitive on price – as things like the one star boycotts of high price Big 6 books would seem to indicate.

      I think we would all agree that indie books are eating into large publisher’s business. However, the question is whether this is a neglible amount or a significant amount.

      Because we don’t have access to hard data, I’m leaning on imperfect measures like the growing proportion of bestseller lists being captured by indies.

      There have been more comprehensive looks at the the top-selling books on Amazon – with one stating that over a third of the Top 1000 in July were self-published titles. That proportion is consistent with other surveys. And while ranking isn’t directly related to current sales, it is a function of sales.

      Other sources like the WSJ bestseller list which are tabulated on actual hard sales regularly show self-publishers making an impact there too.

      I wish we had harder data. But I’ve tried to piece together an argument based on the limited data we have, as well as logic. I think it’s a pretty safe assumption that publishers would lose market share when they move from a model where they only compete with each other, to one where they compete with thousands and thousands of new competitors (on a relatively level playing field).

    • Let me put it another way.

      Large publishers do a lot of business from things like airport stores (where selection is greatly restricted, usually to the very familiar perennial bestsellers) and customers who only buy books at Christmas – often not for themselves, but for the bibliophile in the family.

      I can’t tell you how many crummy books I have bought in train stations or airports over the years. Needless to say, the percentage of crud (to me) is a lot higher than in a bookstore with a more extensive selection (where I can buy something I think I might actually enjoy, rather than the least worst thing). In a digital world, I never face that problem again. This results in a loss of business for large publishers as e-reader owners, when faced with a selection which includes books from small publishers, e-publishers, and self-publishers, will buy those books (as the bestseller lists show) and will buy more of those books over time (as the genre bestseller lists show).

      And to take our intrepid Christmas shopper, instead of buying whatever is on the front table in B&N, they are buying an Amazon gift voucher for the Kindle owner in the family – which represents a loss of business for large publishers for the same reason.

      • W. H. Dean says:

        We’re all in the same boat when it comes to evidence. We have to draw hypotheses from scraps and put together the big picture. Where we differ is not over the fundamental trends, but over how much play there is in those murky numbers and what exactly they mean.

        To ballpark it a bit, the numbers are so underdetermined that self-published books e-books could be grabbing anywhere from 30% to less than 1% of the e-book market, once you factor in all the variables. I think it’s on the low end once you factor in the all-important effect of low prices. I mean that the bulk of readers might not be changing their habits with regard to traditional books; instead, they’re largely new readers or they’re picking up cheap indie reads in addition to their traditional favourites.

        I’ll exaggerate the point a bit for the sake of clarity. It’s possible that cheap indie e-books are really an emerging market that went largely untapped until now. Call them the cheap and convenient reader market, which consists largely of people who didn’t read much before; or, more likely, these are mostly people who read used paperbacks (why, by the way, does everyone forget this enormous market which is so price sensitive?). Now that they can buy cheap books that can be conveniently read them on e-readers, they’re beginning to show up in retail sales figures. Obviously, this market doesn’t represent a move away from paper or from traditional publishing; it represents a whole new subset of buyers responding to a whole “new” (i.e., new = cheap) supply of goods.

        From a purely economic standpoint, my hypothesis is more plausible as an explanation for the bulk of indie e-book sales than a mass migration from the traditional market (if only because traditional e-books are still turning out revenue). As for the apparent collapse of paperback sales, well, the bulk of it could be attributable to a number of factors: the stagnant economy, first and foremost, and the rise of digital only marginally. And maybe the decline in paper sales reflects a real cultural change away from reading that’s being disguised in e-books sales by the effect of low prices—don’t discount this possibility because it was a going concern for publishers long before the rise e-books.

        The bottom line, then, is that the numbers allow the possibility that the traditional market has remained largely unaffected by the rise of self-published e-books. The switch to digital may be playing only a minor role in the recent collapse of paper as buyers of traditional books make the switch to digital (without also making the switch to indie). That’s why I suggest that indies (who all sell cheap) can fill out bestseller lists without really cutting into traditional revenue. To put a fine point on it, John Locke’s one million 99-cent e-books may well represent a new niche of 99-cent book buyers, not one million fewer Patterson sales, or even one hundred fewer.

        Here’s another real economic phenomenon not considered much: cheap indie books might also be buoying traditional e-book sales as new readers are created through cheap introductory prices (thereby counteracting a possible decline in general readership). We tend to forget that entry-level goods create demand for their higher-end counterparts. I’m not saying traditionally published books are better; I’m saying the newbie reader who is first enticed by low prices eventually becomes an avid reader for whom price is less important.

        One final note. I don’t really buy the whole idea that traditional publishers are trying to protect paper, because they’re not in the paper-selling business, they’re in the money-making business. Paper and the distribution chains that go with it is a means, not an end. Their only concern with regard to paper vs. e-books is to protect the high price points on e-books in order to protect profits.

      • This is my basic point: Large publishers’ control over print distribution results in far less competition in paper. Digital is open, hence more competition. More competition equals a loss in market share, unless the competition isn’t selling anything. The bestseller charts indicate otherwise, as do the numerous, and increasing, self-publishing success stories.

        Now, it could be the case that self-publishers are exclusively creating whole new markets, or exclusively convincing large publishers’ existing customers to increase their budgets and spend the excess on their work.

        But I don’t really buy that. I think readers switching to digital are reading more, for sure, there is plenty of anecdotal evidence of that, and some surveys have backed that up. I’m not sure if it has been as firmly established that they are spending more (given lower priced e-books from self-publishers), but that wouldn’t surprise me either. However, neither phenomenon disproves my argument.

        E-books have (amongst other things) eviscerated mass market paperback sales (they were in decline before e-books, but e-books certainly hastened their demise). All those genre readers who used to gobble up cheap paperbacks, are now gobbling up cheap indie e-books. Those paperbacks were published by large publishers – so there must be some business lost there. It’s possible (probable even) that self-publishers have brought some “lapsed readers” back into the market, but I don’t think its plausible to suggest that self-publishers’ readerships exclusively consist of such people. And if they don’t, then they must be cutting into large publishers’ business.

        Large publishers have lost control over what is published, what is distributed, and what is sold. More fundamentally – I suggest – they are losing control over which books are being recommended. A reader that switches to digital is faced – for the first time – with thousands and thousands of great, professionally produced, well written, enticing self-published e-books with tons of glowing reviews and very attractive prices. And these books are being recommended to new e-reader owners from all sorts of sources – new sources – that are pushing self-published titles.

        The gradual takeover of the bestseller lists would seem to suggest that the longer readers are exposed to self-published work, the more of it they buy. I’m not suggesting readers stop buying Stephen King – when they love Stephen King – just because they get a Kindle. I’m suggesting they stop buying, say, Dean Koontz – who they were never that crazy about, but there was nothing else in the store – and try indie books instead.

      • W. H. Dean says:

        David,

        I’m not claiming that the hypothesis above is true or more representative of the evidence, because the evidence is too weak to argue either way. All I’m saying is that my interpretation is no less consistent with the data than the sunnier view of things. Here are some more reasons for scepticism.

        I don’t know exactly how many indie books are sold, but I do know that only two indies (the last I heard) broke through 1 million sales. We also know that sales will be distributed according to the power law with a few racking up massive sales and the rest selling about as much as the few. Supposing Hocking and Locke brought in $3 million combined in revenue (their books both sold for 99 cents) and everyone else brought in another $30 million, we have $33 million in gross revenue from indies last year.

        The Big Six’s net (not gross) revenue in 2010 from all “e-books and other non-physical formats” was $878 million. Our $33 million represents less than 4% of the Big Six’s number (3.7%) and would thus amount to about 3.6% of the total market. Even if the indie number is $100 million (which seems unrealistic), indies still only represent 10% of the market. My point is that a small number like that can just as easily be attributed to growth or to a new niche market.

        As for the collapse of paperbacks, they were being done in by video games, cable TV and the internet long before e-books came along. E-books are only the latest factor, which is bound to affect indies in the long run—I mean once the novelty of e-books wears off.

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  33. Julie Day says:

    Wow, this is v interesting. I have just started self-publishing teen ebooks. And briefly reading this makes me feel that going digital is the thing to do now. I also feel that trad publishers are trying to catch up with us self-publishers, having seen what sales we can reach and what we can do with it. I vote going digital now.

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