Monthly Archives: February 2012

Two questions that loom over the trade publishing business

29 February 2012

From publishing professional Mike Shatzkin:

A lot of people in publishing would pay a lot of money to get a reliable answer to these two questions:

When will the growth in Amazon’s share of the consumer book business stop?

Who will be left standing when it does?

. . . .

Any discussion of Amazon’s success must acknowledge that the other key component, aside from the strategic components of long-term vision, smart use of capitalization, and customer-centricity, has been the quality of their execution.This has been true from the beginning and it is still true today. Some of this is subjective, but it still looks to me like they offer a better print searching-and-buying experience than and a better overall ebook ecosystem than Nook or Kobo. I read on an iPhone and use all the ebook purchasing systems from time to time, but I use Kindle the most because it is the best. I am close to somebody who prefers to buy from because (she says; I don’t do this research…) they give money to Democrats and Amazon gives money to Republicans, but she still does her searching at Amazon because it works better before she hops over to to make her purchase.

. . . .

This goes back to 1997. Ingram, well aware that Amazon had started its business by simply using Ingram to supply most of the books its customers wanted (Bezos put his business in Seattle because Ingram’s Rosemont, OR warehouse was a couple of hours away), decided they could put many retailers in business the same way. So they announced the formation of I2S2: Ingram Internet Support Services. I2S2 would provide the tools to allow any bookstore to start selling online. Prominent industry thinkers saw I2S2 as the way all booksellers could start to reap the opportunities of the Internet as a sales channel.

Had Amazon not quickly reacted to this threat, they could have gone away so fast that we’d have trouble remembering their name now. But they did. They promptly cut their sale prices so deeply on most of what they sold that the other retailers, focused as they were on their stores, saw no point to expanding into unprofitable web business. Almost as quickly as I2S2 was announced, it was dead.

. . . .

I2S2 was the first instance of Amazon successfully using price as a weapon but it has been an important part of their arsenal ever since. It has been a powerful one. It works for them commercially because they aren’t just a bookseller; they use book pricing to acquire customers and nurture their loyalty.

. . . .

But using price as a weapon has another benefit; it puts the customer on your side. Even when Amazon’s lower prices are subsidized by their being excused from sales tax responsibilities that fund state and local governments and disadvantage local retailers who could be their friends and neighbors, consumers want it and defend it.

. . . .

I recall in the late 1990s the suggestion was made by some pundits (but definitely not this one) that publishers should combine to compete with Amazon. If they had, they almost certainly would have failed as ignominiously as I2S2 and the Bertelsmann-B&N combination did. Publishers wouldn’t have gone into online bookselling to lose money and it would have taken vision and guts to use books the way Bezos did, as a springboard to create a global online Walmart. The point I want to emphasize is that it was not a failure on the publishers’ part to have “allowed” Amazon to grow their online hegemony. It was not in their power to have changed it.

. . . .

eBooks have enabled commercially viable self-publishing in ways never before anticipated, giving authors leverage in their negotiations with publishers they never had before. And agents now have to share the concern of the publishers and retailers that Amazon could disintermediate them as well by providing their publishing and distribution services to authors directly.

. . . .

This would all be difficult enough if there weren’t a huge cultural gap between Amazon and the rest of the publishing industry. But there is. More and more, people who have been in publishing for years see Amazon as “in” the book business, but not “of” the book business. That attitude is exacerbated because the answer to the second question above (“who is left standing?”) for many is “perhaps not me.”

Link to the rest at The Shatzkin Files

As usual, Mike’s insights are extremely valuable.

Passive Guy absolutely agrees that Amazon is not “of publishing.”

Amazon is an internet company and is much more similar to Google or Facebook than it is to Random House or Barnes & Noble. Unlike Big Publishing, which has been using basically the same operating model for well over 50 years, Amazon is all about change and, as Mike points out, has made major changes in its business model many times during its history and will undoubtedly make many more.

Amazon may have started out as a seller of books and CD’s, but it’s way beyond that right now. If you were to ask Jeff Bezos who Amazon’s principal competitors are today, PG doubts Bezos would mention Barnes & Noble. PG’s guess is Bezos thinks about Wal-Mart far more often than he thinks about Barnes & Noble.

Certainly, some senior people inside Amazon are focused on media sales, but Barnes & Noble no longer has the ability to cause Amazon serious trouble. Neither does Big Publishing.

Being a well-run organization, Amazon doesn’t want to lose in any market segment and the Kindle is evidence of that. However, Amazon is competing against Staples and Office Max in another segment and Best Buy in another segment (although that battle is mostly over) and Home Depot and Lowe’s in another segment.

Books are very important to PG and to the people who visit The Passive Voice so we tend to focus on Amazon as a bookseller and self-publishing platform. But Amazon is much more than that.

In a competition between almost anybody and Amazon, Amazon has one giant advantage – it focuses on customers with more intensity than any competitor. And Amazon understands better than anyone else that, as an internet retailer, it can understand its customers better than any supplier or meatspace retailer.

Who knows more about the people who purchase HarperCollins books, HarperCollins or Amazon? There is no contest and this is a knowledge battle HarperCollins can never win.

Every day thousands of Amazon customers buy HarperCollins books. Amazon knows exactly who they are and what other books they buy and what other non-book items they buy. That knowledge allows Amazon to serve HarperCollins customers better than HC can and better than any other bookseller can.

In PG’s view, we’re still in the early days of Amazon figuring out ways to serve and delight its customers better than anyone else who doesn’t have as many online customers as Amazon does.

And, as has been mentioned here, Amazon regards indie authors as its customers.

As a postscript to all the Amazon-as-Godzilla people, PG will simply point out that Godzilla was never focused on delighting customers.

If Amazon ever starts acting like Godzilla, some little internet startup will begin developing an oxygen destroyer or some other Godzilla-killer. Remember that only a few years ago, Barnes & Noble was Godzilla.

A mule will labor ten years

29 February 2012

A mule will labor ten years willingly and patiently for you, for the privilege of kicking you once.

William Faulkner

How to Counter Amazon: Create a One World E-Book Alliance

29 February 2012

From Javier Celaya via Publishing Perspectives:

During my presentation earlier this month at the If Book Then conference in Milan, I proposed that European publishers create a joint platform to compete against Amazon. Although I admire Amazon for its culture of innovation and superb customer service, I do not consider it beneficial either for society (readers) or any of the entities involved in the book industry (publishers, bookstores, libraries, etc.) to allow one company to take on such a leading position in the cultural world and be able to determine its future at its own whim. A diverse variety of online bookstores would guarantee more competition, resulting in better services and a broader range of content for all readers.

Although the creation of a joint venture is not an easy task, I am pleased to see that my suggestion was not taken as entirely ludicrous. Last week, the main Spanish financial daily – Expansión – published an article announcing thatGrupo Planeta, Telefónica and Bertelsmann are planning to create a common platform to counteract Amazon’s growing leadership position.

. . . .

Amazon is an excellent company with almost 20 years’ experience in electronic business, an admirable customer service policy, and an enviable corporate ethos of persistent innovation. Offering a competitive alternative to Amazon will not be easy, although it will not be an impossible one either. Other industries, such as the aeronautical industry, which was once dominated by Boeing, managed to develop the Airbus consortium. The publishing industry can also aspire to create its own “cultural Airbus.”

. . . .

The financial resources required to create a serious alternative to Amazon cannot be taken on by one company alone, however strong its line of business. Any companies wishing to compete against Amazon will have to realize that they will be running a long-distance race involving annual investments of several million euros in technology. This will deliver only low profits in the mid-term. Various sources believe that 5 to 8 million dollars would be required each year to maintain and update an electronic business platform with new applications and services aspiring to achieve the same level of sophistication and innovation offered by Amazon to its clients.

. . . .

Various sources indicate that Amazon’s current global market share of e-book sales is close to 30%. If this market share were to exceed 50%, Amazon’s dominant position would have serious repercussions on the global book industry. The only way of suppressing this incredible growth is to create stronger alternatives in its own territory. In the context of collaboration as a way of competing against Amazon, apart from thinking of creating a “cultural Airbus” to defend our natural territories (Europe and Latin America), we should also contemplate the possibility of creating an international alliance of e-book stores, i.e. One World E-Book Alliance, as a way of competing within its own territory.

Link to the rest at Publishing Perspectives

If you can’t get an elephant to tap-dance, why don’t you bring 100 elephants together to tap-dance in formation?

Cultural Airbus = All About Publishers

Amazon = All About Customers

Passive Guy is sure Javier is a nice person and he has no doubt the speech was a big hit with a group of terrified publishers, but, in a hotly-contested field, PG thinks this is the worst idea he’s heard about how to compete effectively with Amazon.

How to Have a Successful KDP Select Campaign

29 February 2012

From Publetariat:

If you plan to promote your book through Amazon’s KDP Select “Free” promotion, you can potentially receive exposure that is equivalent to a billboard standing in the middle of Times Square in New York City, or you might not.

There are several factors that can influence how well or how poorly your book fares when given such an incredible opportunity. Because the response to a promotion can vary from one title to the next, it is very important that you get everything right BEFORE you set your book loose.

. . . .

Your Book Cover is the very first thing readers see, so it only stands to reason that it better be AWESOME. Unfortunately, many self-published authors have an unprofessional looking cover, yet expect professional results. Your cover needs to grab a reader’s attention, draw them in, or create enough curiosity to earn a “click”. If your book cover is lame or screams “self-published” you might get far fewer clicks than if you spent a little bit of money on a sweet cover. And in the world of KDP Select promotions, a loss of clicks can mean a loss of several hundred to several thousand dollars. So it is definitely worth the expense.

. . . .

[M]y opinion of book pricing has nothing to do with the value of your book, it has to do with the size of your audience. Therefore, if you’re a newer author, and if you do not have many reviews, or awards, I would not recommend pricing your book over $2.99 during a KDP promotion. Unless your book really catches fire, a newer author is at risk of losing sales when over priced. In fact, check out the top 100; you’ll notice that there are more low priced books than ever before.

Link to the rest at Publetariat

Book Design: 6 Variations on Drop-Cap Typography

29 February 2012

From book designer Joel Friedlander:

The tradition in book design of making the first letter in a paragraph larger than the rest of the type goes back pretty far. In fact, it predates printing entirely. This practice started with scribes. When writing out books, they would sometimes treat these first letters as an opportunity for embellishment. The monks who were scribes would enlarge the letter to the point that it was big enough to become part of an intricate illustration.

. . . .

There’s really only one place you should consider using drop caps, and that’s in the first paragraph of each chapter.

There are only a couple of functions served by the drop cap, so let’s take a look at them. This will give us a better idea of when to use them and when not.

  • Decoration—In a book with hundreds of pages of gray rectangles of type, it’s considerate to your reader to give her a bit of decoration once in a while, and drop caps are perfect for that.
  • Navigation—A secondary function of the drop cap is to let the reader know a new section of the book is beginning. When you see that large letter, it physically alerts you that something new is coming.

Link to the rest at The Book Designer

Lots of Low-Cost Kindle Books

29 February 2012

If you haven’t seen this on Amazon, it’s worth checking out – 100 Kindle Books for $3.99 or Less

How piracy built the U.S. publishing industry

29 February 2012

From CNet:

For decades, the U.S. government turned a blind eye to the pirating of intellectual property–and the practice helped some of the country’s largest book publishers make their fortunes.

. . . .

[Gotham: A History of New York City to 1898 describes] the birth of New York’s publishing sector in the 1830s and 1840s, and guess what? The U.S. government’s relaxed attitude toward copyright at the time gave publishers a big boost.

According to the book, one of the most lucrative revenue streams for U.S. publishers during this period came from churning out unauthorized copies of British books before their rivals could. Authors didn’t get a dime, say Burrows and Wallace. But don’t feel too bad for the British publishers–they’d done exactly the same to French authors.

From the book:

Some (U.S. publishers) sent agents to England with orders to grab volumes from bookstalls… and ship them west by fast packet. Copy was then rushed from the dock to the composing room, presses run night and day, and books hurried to the stores or hawked in the streets like hot corn.

According to Burrows and Wallace, one of the most successful pirates was the company that eventually became HarperCollins, now owned by News Corp.

It wasn’t as if the U.S. government had no copyright laws at the time. The country put copyright protections on the books in 1787. But those only covered U.S. works.

Link to the rest at CNet and thanks to Jeff for the tip.

E-book consumers are increasing their purchase of books

29 February 2012

From a Book Industry Study Group press release:

E-book consumers are increasing their purchase of books — both print and e-book formats — online and especially through in-app purchasing, and decreasing their use of brick-and-mortar stores, according to the Book Industry Study Group (BISG)’s closely watched Consumer Attitudes Toward E-Book Reading survey. The first installment in Volume Three of the survey reveals that more than half of e-book readers increased their use of apps to purchase books and more than one-third increased their use of general retail websites such as The gains for these digital vendors come at the expense of brick and mortar bookstores, even independents. More than a third of e-book buyers decreased their spending at national chains and 29% said they are buying less from their local indie.

“The e-book market is developing very quickly, with consumer attitudes and behavior changing over the course of months, rather than years,” said Angela Bole, BISG’s Deputy Executive Director.

. . . .

Findings also show that while dedicated e-readers remain the dominant e-reading platform, especially among Power Buyers, multi-function tablet devices and smartphones are gaining in popularity. Consumer Attitudes Toward E-Book Reading results show:

  • Almost 17% of respondents indicated that tablets were the devices most used to read e-books — up from 13% in the previous survey.
  • Respondents who preferred smartphones jumped from 5.3% to 9.2%.
  • Dedicated e-readers were preferred by 60.9% of all respondents, down from 71.6% in the previous survey.

Link to the rest at Book Industry Study Group

Paypal to Loosen Grip on Erotica Ban (Maybe)

29 February 2012

From The Digital Reader:

The Paypal-Smashwords censorship saga took a new turn last night. After a long phone call on Monday, Paypal said that they might relax their ban and give authors more time to remove the content.

All this started late Friday night with an email. Smashwords founder Mark Coker was given an ultimatum by Paypal. Either remove certain types of erotica or Paypal would stop processing payments for Smashwords.

. . . .

Paypal’s threats to Smashwords were just one of a larger crackdown on certain types of erotica. In the past couple weeks, several ebookstore which sold erotica, including Bookstrand and All Romance eBooks, have revised their policies. While it’s not clear that Paypal is involved in all the situations, I strongly suspect that Paypal has recently made similar demands to all the ebookstores.

But there is some good news for Smashwords. Mark sent out an email last night . . . . After the talk on Monday, Paypal is willing to reconsider the content they object to. It appears that Paypal has noticed the uproar over the weekend and might not be thrilled with the  negative publicity. So they are now willing to maybe allow works where the banned content is just mentioned, but not the central theme.

Link to the rest at The Digital Reader

Formatting your book with OpenOffice

29 February 2012

From author Lianne Simon via Self-Publishing Review:

Although I’ve got a great publisher for the e-book edition of Confessions of a Teenage Hermaphrodite, I decided to self-publish the paperback. Since I was already familiar with OpenOffice and unable to afford Adobe InDesign, I decided to invest some time to see if using OpenOffice was feasible.

. . . .

Editing always seems to inject typographic and formatting errors. So my first step was to insure that I didn’t have any tabs, double spaces, extra hard returns, or other debris in my file. What remained was the standard 12-point Times Roman, letter size, one inch margins, double-spaced document that we all use when we send a manuscript to an agent.

. . . .

I use paragraph styles in my documents, but sometimes editing results in blocks of text that are ‘confused’ about their style. My first step, then was to re-assert a generic paragraph formatting everywhere.

I checked the ‘Text body’ paragraph style to make sure the paragraph indent was set to a reasonable initial value. You can bring up the Styles and Formatting by selecting it in the Format menu or by pressing F11. Don’t use the formatting in the toolbar.

. . . .

Since I use the ‘Text body’ paragraph style for my body text, I selected the entire document and applied the ‘Text body’ paragraph style by double-clicking on ‘Text body’ in the list of paragraph styles. Once again, don’t change the format using the toolbar. I hate this step because it removes all of the styling I did before sending the document off to agents.

Link to the rest at Self-Publishing Review

There is lots more that adds up to a step-by-step formatting recipe for a POD book.

A couple of Passive Guy tips:

1. PG uses OpenOffice Writer to clean up a few different issues with Word. Sometimes, if you have formatting problems you can’t seem to fix with Word, a trip through OpenOffice can clean them up.

2. Even if you’re not going to use CreateSpace for your POD, the CreateSpace interior templates can save you a lot of time because they come ready to go with left page and right page formatting, alternating author and title headers, reasonably-spaced chapter first pages, page numbering that starts with Chapter 1 and a good collection of basic styles applicable for indie POD work.

When PG is putting together a POD interior file, he begins with a CreateSpace template he’s modified to work the way he wants it to work.


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