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2015: New Challenges in Publishing

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Now that the dust has settled on 2014, we begin to see what 2015 will bring. Is the e-book market crashing? Too soon to say, but there are some worrying signs of trouble. Here are the most likely:

1. A growing glut in books. The fast growth in titles in the Kindle Store will continue unabated: in August 2014, the number of books available was around 3.3 million, now, six months later, it’s getting to 3.7 million (as per the data available in the Amazon Associates search box; I just checked, the exact number of e-books is 3,647,578). At this rate, expect it to get close to 5 million by the end of this year.

2. Adding to the overflow in everyone’s Kindle is the fact that traditional publishers have now woken up to the market-effectiveness of low-priced e-books.

That’s a big change for 2015. Low prices and going free were the marketing strategies of choice for indies – no more. And Russell Blake was one of the first to catch on to this change (see here).

Big Publishers are no longer afraid that e-books will “gobble up” sales from their printed books. They’ve finally understood that e-books are no threat simply because they are not the same product. A printed book is an object, something you show off to your friends, give your family or use to scribble comments in the margin. An e-book is not an object, it’s a reading service: it’s hard to give as a gift (though it can be done) and it’s not even clear if it’s something you can bequeath to your children when you die. So now self-published authors must bear the onslaught of low prices on current New York Times best sellers – and that already happened at Christmas when Amazon showcased on its website a big sale of Hachette’s best sellers at $2.50 apiece.

Life was always hard for new self-published authors who had to withstand competition not only from the traditional, established “mega sellers” but from fellow “midlist” authors with huge back lists to self-publish and a big fan base acquired in earlier days when they were traditionally published.

Now life has just become a lot harder.

3. A breakdown in the e-book market caused by book subscription services. The latest arrival, Kindle Unlimited (KU), with 700,000 titles that KU members can access for the modest sum of $9.99 per month, is the biggest, potentially a much larger market than the other two, Oyster and Scribd. It is also the one that happens to pay its authors least, provoking the ire of many indies that have decided to “leave” KU (to do so is simple: all an author has to do is to get out of KDP Select).

Some argue that both Oyster and Scribd that pay authors better don’t have a sustainable business model, yet Scribd just raised $22 million to fund its e-book service (see here). Scribd’s aim? To get on board “all the significant publishers”.

No doubt Amazon wants the same for KU.

Perhaps it won’t be so easy, as a result of the possible withdrawal of some best-selling indie authors, the likes of J.A. Konrath who trumpetted he left KU or H.M. Ward who announced on the K-boards that “KU crushed my sales”, as the New York Times recently reported (see here). But KU will no doubt rely on traditional publishers, not to mention Amazon’s own imprints, and one can expect that eventually, KU will contain plenty of NYT best sellers as well as a myriad of unknown indies and better known indies who have smartly cut up their longer books in independent sections, creating out of each title, 3 or 4 books, as Bob Meyer suggested.

The strategy to deal with KU is simple. For example, if you have a trilogy, put all the books of the trilogy into KU and keep the omnibus edition out. If you have serialized your novel, publish every episode as a separate book on KU and keep the omnibus edition out – and available of course in the Kindle Store and on all other platforms (ibooks, Kobo, Barnes and Noble etc).

The implication of this strategy?

Expect the number of titles available on KU to grow exponentially this year. And the pay-out per book read to drop (Amazon pays the author as soon as readers have passed the 10% mark). It’s now around $1.40 per book read – overtime, expect it to drop to around 50 cents and below.

Are subscription services, and KU in particular, like Spotify?  More to the point, should we expect the destruction of the book industry?

The answer is complex, KU is not Spotify, books are not songs. Printed books will survive, what is at stake here are e-books.

First, an observation. So far, indies who became best-selling authors usually made big sales thanks to their “voracious readers”, i.e. people addicted to a certain kind of literature, like the teenager who reads every western that comes out, or the lady who reads every book about zombies, regardless of whether it is written by a big name or an unknown author.

In short, “voracious readers” are the ones who have made best-selling authors out of indies. They’re the ones who, because of their reading habits, were always looking for low-priced books in order to stretch their budget as far as it would go. That’s why going free or setting your book at 99 cents worked so well during the “indie gold rush” that began in 2010 and ended now with KU. It is clear that those price strategies are not likely to work all that well anymore. You can try them for your books that are outside of KDP Select, but not for those inside (there’s no need). And voracious readers are not going to respond to your price campaigns because they are safely esconced in KU and have plenty to read. Indeed, even for them, their Kindle may start looking like it’s over-flowing.

But, hold your breath, there’s a silver lining to KU. For an excellent, balanced and dispassionate analysis, read Jake Kerr on the subject (here); he’s had experience with the music industry and is probably one of the persons best placed to understand what is happening.

Kerr points out that KU won’t really make that much difference to big names like Rowling or best sellers in a niche, but “of all people who should consider KU, new authors are the safest bets for making the most of it”. Why? Because, bottom line, it provides them with excellent exposure to “voracious readers”, the real beneficiaries  of book subscription services and the ones who are likely to stay in KU.

4. Book marketing strategies in 2015 will have to take into account the “non-voracious reader”, that kind of reader who is more picking, more difficult to convince but once convinced, more effective at spreading the word about a book in a convincing way.  And they care about what is said about the book by people who can make professional reviews.They are always looking for a good read but like to check out on the author, they want to hear what is being said about books in the media, they are out to pick the ones that give them something more than mere entertainment from a “genre” novel, they don’t want to waste time with poor quality books. These are people who probably are not going to join KU or any other subscription service. They read less and they read in many genres and they are demanding. They buy fewer books than voracious readers but they do buy books – maybe 5 or 6 a year – and when they do, they are ready to spend more on a book if they think it’s worth it. Price is less important for that kind of reader than content. And what is important to understand: These are the people that turn books into lasting mega best-sellers because there are so many more people like them than there are voracious readers, the voracious ones have always been in a minority.

In a way, we are back to the traditional publisher’s eco-system of literary critics publishing thoughtful articles reviewing books in the mainstream media (from the New York Times to Granta magazine).

This is why Amazon will have to consider doing something to improve the review system in the Kindle Store. Fellow readers have told me that on Amazon they tend to ignore book reviews.  Given the quality of reviews now, they’re probably right to ignore them.

So what’s the problem?  Amazon, so far, has relied on “customer reviews” and the only effort at identifying top reviewers is through the Vine Program  – unfortunately, if you check them out, you will see that those “top Vine reviewers” were not necessarily knowledgeable about books and literature; they just happened to reach the top because of all the other reviews they did on Amazon products, from cameras to jewelry. For example, one of the Vine Program’s top reviewers for books is someone who likes to read and reviews exclusively a sub-sector of science fiction, military sci-fi, and nothing else. That is fine, it’s his right to do so. It is clear that he enjoys spending his time reviewing products like electronic gear which he gets to try out than the (few) books he gets to read.

What Amazon needs to do is to pull together a body of top book reviewers, thus creating a special Book Vine Program, showcasing those professional-level reviews separately from customer reviews. If this were done, book reviews would really help readers in selecting the right read – something that doesn’t happen now.

The digital age so far has been in the hands of Amazon’s commercial eco-system, where books are ranked based on sales in real time – no doubt, an interesting statistic that appeals to the competitive instinct in human nature but that also has a practical use: it allows Amazon to efficiently organize its bookselling website. Makes sense: you search for your favorite genre or sub-genre by refining your keywords, and you get a list of the top best-selling titles in that particular area. But you’re human too, you don’t really read beyond the 25th title in the list before choosing something on the basis of a catchy book description (pitch). Fair enough and a rather clever way to organize a website. But more can be done by adding a new feature, a ranking based on professional-level book reviews – not merely a filter for selecting books that have 4-star-customer-reviews-and-above, as is the case now.

That’s just one thing Amazon could do. And it could do more now that the Amazon-Hachette dispute is settled. Expect growing cooperation between Amazon and the Big Publishers in 2015 and some big surprises – probably not all of them going the indies way, but some might, I’m keeping my fingers crossed.

And this gets us to the crux of the matter:

5. Book discovery remains the #1 problem, still waiting for a solution. Can Amazon propose a solution? I suggested above an upgrading in their Vine Program to make it more appropriate to the book market.

Surely more can be done – for example, in terms of more book fairs aimed at readers rather than at publishing professionals. Let’s make books fun to read! Let’s usher in the Age of the Enhanced E-book, mixing words with images, music and video! Let’s link with Hollywood, with the videogame industry, let’s expand e-book markets around the world, making it easier to buy digital…For example, Google books is using a better payments model than Amazon, easier to use for people who live in  countries like India, and that should probably be the payments model for the future.

6. The rise in tie-in novels. As Amazon famously pointed out to Hachette, books need to be priced low because they compete with other forms of entertainment, from video-games and TV series to sport and travel. But low-pricing is not the only rejoinder to that challenge. Remember the saying? If you can’t beat ’em, join ’em! That’s why you can expect tie-in novels to play an ever more important part in the industry, as the New York Times recently noted (see here).

As authors, we’ve always dreamt of seeing our work turned into movies, like the Hunger Games or Game of Thrones – this is the reverse: books are written after movies have become stellar, like Star Wars or the recent case reported by the NYT, Sons of Anarchy, that recently ended its 7-year run on FX and needed a boost from good old-fashioned books.

7. The world of self-publishing is changing fast and the gold rush is over.  Now everyone acknowledges this and it is no longer the subject of debate as it still was last year. Everyone has also become keenly aware that publishing is a fast-changing and highly complex industry, as it continues to be buffetted by the digital revolution (not least by KU and book subscription services). The way forward for aspiring authors is hard to see and they would be well-advised to carefully consider their options and not rush into self-publishing. This is precisely the kind of advice they can get from veteran blogger and best-selling author Anne R. Allen, see here. I recommend a careful read of that thoughtful post full of interesting information. It’s the first time I see what happened to the first generation of self-published stars like Amanda Hocking who, after selling a million copies on Amazon, had joined traditional publishing (with a huge advance that drew admiration from the press): we are finally getting the bottom line from an editor at St Martin’s press who confesses the disappointment of Big Publishers with their newly acquired self-published authors, saying they discovered the “market was tapped out”.

So, as Anne R. Allen puts it, “the self-published e-book is no longer the new query“. Even if you sell hundreds of thousands of copies, don’t expect a Big Publisher to approach you. And bookstore chains like Barnes and Noble and W.H.Smith and Waterstone won’t like you. Amazon is no longer the “indie playground it used to be”, bonuses are awarded to big star authors who belong to traditional publishers and Amazon imprints. Bookbub, the top advertising venue for indies, has become overrun by “trad pub” titles at the expense of indies. “Social media has been spammed to death. Facebook has become pretty much useless for authors” – and I would add, so has Twitter and Pinterest. The final, most striking comment comes once again from Bob Meyer who told the New York Times: “If you’re not an author with a slavish fan following, you’re in a lot of trouble. Everyone already has a ton of things on their Kindle they haven’t opened.”

In short, if you have chosen the self-published route, be aware that you have to stay in it forever (or change name and genre). You may never get the Pulitzer or the Booker, but you will probably make a lot of money. Provided you sell hundreds of thousands of books of course…So yes, don’t expect self-publishing to wither away, there are still plenty of self-pubbed authors who make a lot of sales (and money), particularly in well-defined niche genres (romantic suspense is probably the biggest, as Bella Andre’s success shows). But the days of the successful “hybrid” author, with one foot in trad publishing and the other in self-publishing, could be soon over. One of the main reasons why a self-pubbed super star went with a trad publisher was to get books in print and into bookstores – but that may no longer be needed with the recent improvements in Ingram’s services (see Porter Anderson’s interesting post on this, here).

Your views about the changes 2015 will bring? Please share in the comments. What else do you see as a big challenge in 2015?

 

Post-scriptum: To usher in the New Year, I’ve lowered the price of my latest book, Gateway to Forever,  at 99 cents. Wonder what that will do to KU (chuckle), but if you’re curious, you can see it here, and this is the new cover:

A love story set 200 years from now…

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2014: A Pivotal Year in Publishing

This is the end of the year, a perfect day to draw lessons from the main publishing events in 2014.

First, one bit of good news for 2014: it will be remembered as the year audio-book sales took off. In 2013, downloaded audio books hit an all time high in both revenue and units, and that trend continued in 2014 (see Bookstats.org). In February, I wrote on this blog about audio-books (here) reporting on the fast rise of audiobook titles. On Audible there are more than 150,000 titles in every genre – up from less than 5,000 in 2009, an amazing growth.  And 2014 was the year that saw the creation of the Deyan Institute of Voice Artististry and Technology (see here), the world’s first campus dedicated to audiobook production. Yes, audiobooks have come of age! Enhanced e-books, containing music and possibly video clips, long announced but not yet really successful, may come next as the technology progresses.
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But the news were not all good. We were all captivated by the show put on by Amazon and Hachette in their long, drawn-out dispute that took up half the year. As a result, we tended to overlook what was happening to the e-book market as a whole. Few of us listened when Amazon told Hachette that books should be priced low – maybe like a cup of coffee? – because books in our society are competing with other forms of entertainment, like TV series, videogames, travel and sports. Yet, if we had taken that argument on board, we might not have been so surprised at what happened next – specifically, when Amazon created in July its new subscription service, Kindle Unlimited or KU, that allows you free access to some 700,000 titles for just $9.99 a month – that’s a lot of cups of coffee -.

Actually 2014 had started on the heels of a lackluster year for the e-book market. Here is a chart that shows sales revenues from e-books since 2008 (remember, the starting point was November 2007 when Amazon launched the new publishing digital age with its famous first Kindle sale):

As you can see, US publishers collected $3 billion from e-book sales in 2013 – and (another reminder!) e-books are the preferred environment for self-published authors . $3 billion may look like a big number, but it’s not so big if you set it against revenues from the whole US publishing industry: $27 billion if you include journals, and $14.6 for “trade” (fiction and non-fiction books).

What is striking in this chart is the way e-book sales started to flatten out after 2012, suggesting that the e-book market by 2014 had actually reached “maturity” (there’s a typo in that chart: 2011 is repeated twice, but the data is correct). It is still too early for definitive data for 2014, but the available quarterly data suggests that sales have continued to plateau through the year. I won’t bother you further with statistics, but the data is in and tells a discomforting story for self-published authors that have come to rely on the e-book market (though they produce printed books too, they typically launch their books on e-platforms). In fact, if the stigma has been successfully removed from self-publishing and vanity presses have become a thing of the past, it is entirely due to the remarkable e-book sales of a score of self-published authors, including Amanda Hocking, JA Konrath, Bella Andre, Hugh Howey, HM Ward, Russell Blake, Elizbeth Spann Craig and many others (no space here to mention them all!).

The sense of discomfort was strong among self-published authors through the year and I felt it acutely, often blogging about it. Many of you, dear readers, must have felt the same way, because the blog posts that attracted the most traffic all had to do with the problems facing us as independent book publishers (being indies, we run our book selling as a small business). Out of a total 103 posts published in 2014, 35 attracted three to four times the average number of views and they all concerned publishing issues, from book discovery and how to improve the Amazon review system to  marketing advice you can get straight from Amazon’s Marketing Central (published in January 2014, that was the most viewed post in the whole year, see here).

Only one non-publishing post made it in the top 35, and this was about Putin and his “New Russia” dream (here). In a way, I regret that, because I enjoy writing about other things, such as politics and art. The best traffic I had on an art post this year was the one about the Mandela monument in South Africa (here).

The conclusion is inescapable: all the posts that attracted traffic were focused on publishing and book marketing (no surprise there, after all, I’m an economist by training). Noteworthy among them:

  • The tsunami of books, particularly in the Kindle Store (see here): when I wrote that post last August, the number of titles was around 3.4 million – now, I just checked, it’s close to… 3.8 million! This flood of books that fill up our e-readers is all the more worrisome that publishing as a whole is threatened by our obsession with visuals (here);  books need to be short to grab the distracted reader’s attention, hence the sudden success of the serialized novel (here); by the end of summer, I had become sufficiently preoccupied with the whole issue to try and summarize what was really happening to the digital publishing environment dominated by Amazon (here); remarkably, my concerns were not reflected in any of the debates about e-publishing held at the Women’s Fiction Festival in Matera, the biggest writers’ conference on the European continent, bringing together editors and writers from both sides of the Atlantic: here the sun was still shining brightly on the e-book market, with Bella Andre and many others explaining how they had achieved success;
  • The role of book reviews as we all drown into a tsunami of books (here) and the urgent need to improve Amazon’s review system by strengthening its Vine Program (here); I suggested that there is space on Amazon for two different types of reviews: the customer review and the literary critique; this would be an important first step to strengthen the e-book market, as it lacks what the traditional printed book market has, i.e. literary authorities who can help guide readers to good reads;
  • The rise of a new genre, cli-fi or what Margaret Atwood prefers to call “speculative fiction”; several posts revolved around the climate change issue and the kind of books inspired by it, notably here , here and here – including an interview of the father of cli-fi, Dan Bloom (here)- clearly, having just finished writing a cli-fi novel of my own, Gateway to Forever, and bursting with the research I did for that book, I plead guilty – please, consider it “content marketing”!

Looking to 2015, some clouds are accumulating on the horizon.

  • First, in Europe where Amazon (and other American corporations) have been clobbered by the European Union. They have been forced throughout the EU to apply national taxes on e-books – and the VAT on e-books happens to be high everywhere except in France and of course Luxembourg, a place that, as of 2015, will no longer be the tax haven it used to be for American corporations (see here for more on this question – yes, published in January 2014, I could see it coming!)
  • Second, in America, the growing furor over Kindle Unlimited; first, JA Konrath annoucing he is pulling out of KDP Select (the way for self-published authors to have their books listed in KU); next, a notable article in the New York Times reporting on authors “snubbing their nose” at KU, including HM Ward; most recently, a remarkable blog post by author John Scalzi who wonders how the damage can be undone. And the latest blog post on the subject that is a must read, is this one, on the Ebook Bargains UK blog. Is publishing about to go the way the music industry went with Spotify? Are authors going to be left high and dry the way musicians are? That is something that requires some serious thinking – I will post about this early next year.

What about you, dear reader? What would you like to see on my blog? More interviews of authors? I did a few, including one with romantic suspense best-selling author Liz Jennings published by Impakter (see here) that got shared many times and one with Marsha Roberts and Bob Rector. This is an unusual couple in many ways: they are both professional writers, Bob is also a film producer and Marsha a theater producer, and they have been happily married for 39 years, something of a feat for two persons working in the same sector and who are artists to boot, each with a strong independent streak. That post, published in May, got a flood of visits (here). I also reported for Publishing Perspectives on several events in Italy, including, inter alia, a reality show for authors on Italian TV that “ignored the psychology of authors”, the Women’s Fiction Festival in Matera (it’s next September, do try and come!) and a publishing startup, Reedsy, a great place to find freelance professional editors and book cover designers. I also covered Reedsy on Impakter, but from a different angle and with some extraordinary images provided by Impakter (strong visuals are a characteristic feature of that site).

And for the first time this year, responding to a request from Impakter, I started to use my real name (Claude Forthomme) whenever I published articles based on my 25 year experience in the United Nations. The Impakter editor argued people were interested in the United Nations, that this was something people knew little about, beyond some (often boring) newspaper headlines. I complied and furnished Impakter with over a dozen articles and much to my surprise, the response was excellent – here is the Impakter section on the United Nations (to go to it, click here):

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As you can see, not all the articles are mine: many more people are now writing on Impakter, including a major FAO official, Laurent Thomas, Assistant Director General.

I’d love to know how you feel about what you read here and what other subjects you’d want me to cover…And how about yourself if you’re a blogger? What do you plan to write about in 2015? Please share.

Since today is 30 December and it’s Holiday time,  let’s ignore the gathering clouds for the moment. Look up, the sky is blue and allow me to wish you a very Happy New Year!

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