Monday, November 1, 2010

World of Tomorrow Week, Part 1 of 4: eBooks

Happy November, mes auteurs! It's world of tomorrow week here on PMN, and we're kicking off the new month/week/feature with a discussion of that troublesome new(ish) format, that enfant terrible, that enigmatic elephant in the room: the e-book.

A Little History

First, I hesitate to call e-books "new," since they've been around in one form or another since the early 1970s. Granted, they were impossible to read and not exactly portable, but they were there. They became slightly more popular as computer technology improved; I know several people who have been reading them since at least the mid-'90s. However! It's undeniable that the format has undergone a virtual (get it?) renaissance in the past three years due to the release of myriad dedicated e-readers, chief among these Amazon's Kindle and Barnes & Noble's nook.

Since 2007, e-book sales have annually been increasing by hundreds of percentage points (that is, doubling, tripling, or more), and these sales have largely been fueled by consumers (like you!) seeking lower prices, more convenience, and greater portability. Physical books aren't seeing anything like this. While I certainly sympathize with those of you who remain unwaveringly supportive of the physical book, I caution you not to do so at the expense of missing out on the digital revolution. Physical books certainly have a place in the market, but e-book market share is growing exponentially. Eschewing them out of nostalgia or spite is, frankly, shooting yourself in the foot.


This has been a contentious issue for awhile now. Here are the basics:

· E-books are not free to create. Yes, the overhead associated with creating an e-book is much lower than that for a physical book: the publisher does not have to pay for printing, shipping, or storing physical texts, nor do they have to deal with the expensive specter of returns. However, many mss that are fine to send to the printer for the creation of physical copies are unsuitable for the production of e-books: the flow of text may not translate, facing pages may be split apart, images may need captions added, &c, &c.

Granted, as publishers become more accustomed to preparing mss for e-production, this issue will begin to be dealt with from the get-go, but it's not a factor that can be ignored at present. However—

· E-books should be cheaper than physical books. As a consumer, you're not really buying a book when you purchase an e-book; you're purchasing a permanent license to read that book. Further, while e-books aren't free to create, they are much cheaper, and so it makes sense that the final product should cost less for consumers to purchase.

Here's where I put in my plea for patience, mes auteurs. If you see bizarre pricing on Amazon, or if the e-book somehow costs more than the physical book, or any other aspect of the book's price or availability pisses you off, please do not retaliate against the author by giving the book a one-star review. I understand I'm largely preaching to the choir here, since most (if not all) of you are writers and most (if not all) of you would never do this to a fellow auteur, but it does happen and I do want to discourage this practice.

Example: a publisher who has accepted Apple's agency model is selling an e-book on Amazon. Due to said model, the publisher sells the book through Amazon at a fixed price, which Amazon cannot alter, and Amazon takes a cut on each sale.

The physical book, however, is sold by Amazon on the wholesale model, meaning the publisher sells it to (rather than through) Amazon at a fixed discount, and Amazon can then re-sell the book to consumers at whatever price they want. This means that, occasionally, a physical book can cost less than its e-version. This is mostly Amazon's fault, and only slightly the publisher's (and certainly not the author's).

· The publisher and the retailer have the right to sell an e-book for a profit. It's called capitalism, folks. If a publisher can't sell an e-book at a profit for $2.99 a copy, you're not getting it at that price, no matter how much you carry on. E-retailers like Amazon (in fact, almost exclusively Amazon) have accustomed customers to these prices by selling their e-books (and bestselling physical books) at a loss for years. When publishers assign prices through the agency model, they aren't being greedy when they tell you you can't have a book for $1.99 or $2.99 or $9.99; they're trying to stay in business. Granted, sometimes they do it in confusing and/or stupid ways. Again, however, to quote Bender Bending Rodriguez: the truth is often stupid.

This is one of the most exciting, unpredictable, and (honestly) scary times to be working in publishing, mes auteurs, and a lot of industry insiders (particularly—no ageism intended—the older ones) are bewildered by e-book sales. They're afraid those sales will damage the big chains; they're afraid those sales will destroy the independent book store; they're afraid those sales will eliminate the hardcover or the mass market paperback or physical books altogether; they're afraid they'll lose their jobs. To be fair, in some cases, these fears have a legitimate basis. But I would say ninety-nine times out of a hundred, e-book pricing is determined by numbers and sales projections, not by irrational hand-wringing.

Sales and Distribution

Currently, the e-book market is dominated by Amazon and Barnes & Noble, with a little influence from the Apple iBookstore. As time goes on, however, I fully expect smaller e-book publishers (taking advantage of the minimal overhead and the vast sales floor that is the Internet) to get in on the game. I'll address this later in the week, but I imagine self-publishers and "boutique" e-book publishers (combinations of agencies, small publishing houses, and independent booksellers) will start to gain appreciable market share over the next three to five years.

Keep in mind that all this means maintaining your on-line presence (via your author website, blog, Twitter account, &c) will become increasingly important. If your books are principally being sold via the Internet, you need to be present in and selling yourself via that same medium. This is more important if you're with a smaller house; the branding of the larger houses will help you to some extent, though if you're solidly midlist, don't expect a lot in the way of marketing or co-op.

I don't think the larger houses will start selling directly to consumers, as large e-retailers like Amazon and Barnes & Noble would retaliate by pulling those publishers' titles from their e-shelves, which (I imagine) would do those publishers more harm than their DTC operation could offset. For better or worse, I think the Big Six are in bed with Amazon for the long haul.

Parity with Physical Books

I've been known to tout the year 2015 as the point in time when e-book sales will reach parity with physical book sales; that is, the point where e-books will comprise 50% of the market. Given the current rate of growth, however, I'm now more inclined to estimate parity occurring in late 2013 or early 2014.

Parity means that fewer physical books will be produced, although I strongly disagree with industry professionals who believe it will be a one-to-one correspondence (e.g. the market can only support 200,000 copies of a given title, so if 100,000 are sold as e-books, only 100,000 will be sold in physical form). I am convinced that hardcover buyers and e-book aficionados are, at least for the time being, almost entirely separate markets, and moreover that e-books are encouraging non-readers to read, not converting current readers wholesale to the e-format. All this to say: greater e-book sales will, à mon avis, mean more sales overall, not the same number of sales split different ways.

What You Can Do

Finally, dear readers, what you can do:

· Make sure there's an e-book. It sounds basic, but it's essential: make sure there's going to be an electronic version of your book. If your agent sells the rights, do your best to make sure those rights are exercised; if you reserve them (which is quickly becoming less and less common), make sure you find someone to sell that e-book for you.

· Get as much e-exposure as possible. Make sure that your e-book is available on the Kindle, the nook, via Google Editions (when it's available), via the publisher's website (if applicable), &c &c. Link to it on your blog, tweet about it, put it on Facebook, keep a permanent link somewhere on your website, and so on. Mention it in guest blog posts, on podcasts, in interviews. You want a digital footprint to rival Bigfoot's.

· Try to ensure the e-book is mentioned wherever the physical book is found. Every time the physical copy is brought up, try to get the e-book plugged as well. While they may (in the near future) be packaged together, the two formats are currently treated as more or less separate. Even a single line reading e-book available will help generate sales. This goes for all electronic and all printed promotional materials.

· Target your audience. Find out from your agent, editor, or publisher who's reading e-books in your genre and target those people. Guest post on blogs they read; try to get advertising on websites they frequent; ask about electronic co-op in the form of e-mail blasts, coupons, and splash pages on e-retailers' sites. E-book fanatics are among the most voracious and loyal readers of all. If you can get them hooked on your book(s), you're advancing your career in a major way.

· Innovate. True, there are a number of genres (such as cookbooks, children's books, art books, and graphic novels) that haven't yet made the leap to the e-book format; it's currently the domain of fiction and narrative non-fiction. However! If we've learned anything from our sojourn through the wond'rous world of electronic media, mes auteurs, it's that the industry is changing rapidly. If you're shopping, say, a picture book, keep in mind that it may be the norm to produce it as an e-book by the time it's represented, sold, and ready for publication. Ditto for other image-heavy or non-traditional media. For all you know, there may be e-pop-up books coming. Remember: at this pivotal stage in the history of publishing, if you're not a step ahead, you're a step behind.

That's all for today, meine Autoren. Tomorrow: self-publishing returns!


  1. I disagree with your assessment that Amazon is to blame for the current pricing models. It's publishers' own cowardice that created the agency e-model rather than a more realistic price.

    Publishers are playing a three-party game plan in a two-party game. Their need to act as provider for paper text and seller for e-text has set them at odds with themselves.

    The Big 6 should not sell their own ebooks and worry that B&N/Amazon will remove their ebooks from their own markets. They should remove them from those markets first and make themselves the only available vendor for that product. Then a $10 ebook at a fair 50% royalty rate nets them twice what they make now with a $17.50 ebook that no one wants to buy because we're not stupid.

    To do so would cause Amazon/B&N to remove PAPER texts from shelves as a retaliation and that's what they fear (although not as much as they fear actually creating their own marketplace, let me tell you). The mystery of DRM, the fear of the piracy specter, the complete lack of understanding on format type or an industry standard for format (fastest way to kill the Kindle? Make epub the standard ebook format).

    Amazon isn't a villain in this play. It's the party that had the courage to take the gamble on electronic when paper was still the 99% market share. They've positioned themselves to be the God-King of publishing when that percentage is reversed and by the time publishers realize how much they've given away, it will be too late.

  2. Also, making ebooks is only difficult for the unprepared publisher. While there was a lot of wrong turns at the beginning of the process, most have established a work-flow that either imports the manuscript into ebook preferred formatting or exports from the typeset pages into a formatted template.

    The most challenging elements to consistently get right in an ebook are paragraph breaks, indentations, and special characters like ellipses. After the up-front cost of establishing import software or export DTDs, a typeset manuscript can be formatted for ebook effectively for free.

  3. Don't forget the iPad. True the iBook library is more limited, but both Kindle and Nook have free iPad apps and those editions do very well on an iPad, which is also a color platform and more friendly to other forms of publishing than the narrative-only Kindle and Nook. Though the backlit screen is not useful on the beach compared with the Kindle display, it is a godsend in a dark room.

  4. You just can't quote Bender Bending Rodriguez too often.

  5. When you say ebooks were impossible to read in the 1970s, do you mean that literally, or just generally for the average consumer? If the former...what was the point? (I'm one of those library types who views having a collection that can't be accessed as useless, so that's probably influencing my concern.)

    Being that sort of library type means I'm also happy to see you point out that with an ebook, you're really buying a license to the content.

    Ebooks as a widespread product are fairly new, so of course it makes sense that it will take time for prices and policies to stabilize. The authors have little control of this, and retaliation is unfair. I've seen a few comments on similar posts that authors deserve that sort of punishment for getting in bed with these publishers...I'd like to know what those commenters would do if that were a condition in publishing their own books.

    Nice post.

  6. You say:
    ...and moreover that e-books are encouraging non-readers to read, not converting current readers wholesale to the e-format.

    Imagine a conversation -
    "You need to read this book."
    "I don't read books."
    "So, buy this reader for $150 and then the book and then read it."
    "Why should I spend $160 to not read something I can not read for $15?"

    The pricing should reflect the cost to manufacture and a premium for the time of purchase. A movie the first week it is out might cost $8 but by the time it is a month old and in the theater with the sticky floors it is $2.

  7. "Target your audience. Find out from your agent, editor, or publisher who's reading e-books in your genre and target those people."

    I haven't found one of the aforementioned able to answer this one. As an industry insider, can you throw some light on where the e-readers hang online?? Seems the dozens of Yahoo loops supposedly targeted to readers are full of nothing but author promo. One out of a hundred comments on related blogs is generated by a reader, not from another author or industry professional. If you have the inside scoop on answering this question: Where do the voracious e-readers hang out online?---Please share!!

  8. Another thing I think authors should be thinking about is how their sites look on mobile phones. If you don't have a mobile phone version of your site yet, you're ok. For now. But pretty soon it will become more important.

  9. I agree with Mr. Selby's comment that Amazon is not the problem with the overpriced e-book. Remember only five of the Big 6 use the agency model. Random House seems to be surviving quite well without iBookstore and the agency model pricing system. How many one star rating for overpriced e-books has e-books from Random House got?

    The sad part is the Big 6 minus One's fear of lower prices may have cost books its last chance to return as a major player for the consumers' dollar. Cost never sets price. Demand sets price. Cost affects profit, but increase volume with controlled costs can be the most profitable choice.
    If the Big 6 minus One can not survive under the rules of a free market, why is Random House surviving under the wholesale system? The agency model has little to do with capitalism and more to do with Apple playing on the publishers fears of change.

    Christine London, two places you might try in your search for the e-readers. The Amazon forums have all ready made a few unknown writers successful. And there is J. A. Konrath's A Newbie's Guide To Publishing.

  10. You say: "I am convinced that hardcover buyers and e-book aficionados are, at least for the time being, almost entirely separate markets, and moreover that e-books are encouraging non-readers to read, not converting current readers wholesale to the e-format."

    I'm going to disagree with you on this point (although I feel the rest of your piece is genius.) I am a big book buyer averaging a book a week, usually one of these a month hardcover. Now that I have an e-reader I am buying more books than in the past and am a bit more likely to purchase a hardcover due to the price point and the fact that I don't need to buy more bookshelves.

    The majority of e-reader book buyers are not new readers in my opinion, but may buy more books than they did in the past

  11. Terrific article, Eric. Why can't publishers deal with the fact that ebooks are here to stay? And I agree with Eileen, that being able to buy ebooks has encouraged me to buy hardcovers. Ebooks have allowed readers to buy MORE BOOKS. And the truth is, if I love something I've read on ebook enough, I will go out and buy the "book" book.

  12. Interesting to read yet another perspective on this whole area. I've been reading eBooks pretty much since I discovered Baen Books as a publisher. They always opted for open formats and enticed readers by offering some of their back catalog for free, and new books in advance of the actual hardcopy. They've continued that trend by now making ARC's available for purchase while their authors also post snippets of upcoming novels on their site forum in order to whet the readers appetites. One of the authors wrote a couple of opinion pieces on eBooks for their Free Library at the time it launched, and his own experience was that making a bakc catalogue book available for free online, actually increased his hard copy sales as well.
    My own reasons for liking ebooks are 3-fold:
    1. 1 ebook reader with a few hundred books is a lot lighter to carry around when travelling than the 10 or so hardcopies I'd need to keep me occuppied for a week.
    2. I can get books in advance of publication date from one of my preferred publishing houses.
    3. I can get the books that aren't available in bookstores here (ireland) far more easily.

    I do have one complaint though.. I read sci-fi & fantasy so this isn't an issue for me, for my mother who reads straight fiction there is a huge issue in country restrictions for purchases of eBooks. She has a Nook but can't buy any books from B&N because our credit cards do not have US addresses. Even fictionwise restricts sales of mainstream fiction eBooks to US customers. If a book is going to be sold in eBook format why not make it available to world wide customers after all you can still order the hardcopy to be shipped to a non-US address.

  13. I'm late getting caught up, but I do think there are some differences in e-books, depending on the publisher. I "own" many, since the publisher offers them as downloads to my computer first, which I then upload to my reader. If something happens to the reader, or I accidentally delete it, I still have the copy I purchased.

    Terry's Place
    Romance with a Twist--of Mystery