E-Book Sales Fall After New Amazon Contracts

4 September 2015

From The Wall Street Journal:

When the world’s largest publishers struck e-book distribution deals with Amazon.comInc. over the past several months, they seemingly got what they wanted: the right to set the prices of their titles and avoid the steep discounts the online retail giant often applies.

But in the early going, that strategy doesn’t appear to be paying off. Three big publishers that signed new pacts with Amazon— Lagardere SCA’s Hachette Book Group, News Corp’s HarperCollins Publishers and CBS Corp.’s Simon & Schuster—reported declining e-book revenue in their latest reporting periods.

“The new business model for e-books is having a significant impact on what [the big] publishers report,” said one publishing executive. “There’s no question that publishers’ net receipts have gone down.”

A recent snapshot of e-book prices found that titles in the Kindle bookstore from the five biggest publishers cost, on average, $10.81, while all other 2015 e-books on the site had an average price of $4.95, according to industry researcher Codex Group LLC.

“Since book buyers expect the price of a Kindle e-book to be well under $9, once you get to over $10 consumers start to say, ‘Let me think about that,’” said Codex CEO Peter Hildick-Smith.

. . . .

On Thursday morning, there wasn’t a single title priced at $9.99 among the top 20 titles on the company’s Kindle best-seller list. Last summer, Amazon offered the digital edition of James Patterson’s thriller “Invisible” for the bargain price of $8.99. Mr. Patterson’s newest tale of suspense, “Alert,” went on sale Aug. 3 on Amazon for $14.99, a price set by Hachette, Mr. Patterson’s publisher. The unit sales for Mr. Patterson’s e-books weren’t available.

The precise impact of the deals with Amazon, the dominant player in book sales, is still a matter of industry debate. The drop in sales could be partly due to a crop of lackluster new titles. But some publishing executives say higher e-book prices, resulting from the Amazon deals, are discouraging purchases.

. . . .

Hachette cited fewer hot titles and the implementation of its Amazon deal as reasons that e-books fell to 24% of its U.S. net trade sales in the first half of 2015, from 29% a year earlier. Declining e-book sales contributed to a 7.8% drop in revenue in the period.

. . . .

Pricing e-books is a Goldilocks problem for the book giants: For years they worried that consumer prices were too low, and now they are seeing the disadvantages of bumped-up prices. Publishers said the current pricing model involves some sacrifice but they felt it was worth it to keep Amazon in check. What’s more, they have noticed a bump in sales of physical books that is possibly related to the higher price of digital books.

To figure out how to set prices, a team of data specialists at Macmillan’s Manhattan offices in the Flat Iron building sifts through a database of 74 million transactions looking for trends. Amazon looms large in that decision-making: It accounted for 64% of the U.S. e-book market, by units sold, during the second quarter, according to Codex.

. . . .

One high-level publishing executive disputed that the Amazon pacts are contributing to the e-book sales decline. “This is a title-driven business,” he said. “If you have a good book, price isn’t an issue.”

Link to the rest at The Wall Street Journal (Link may expire) and thanks to Nirmala for the tip.

Of course publishers don’t know how to price books at retail. Bookstores know how to determine retail prices for books because they actually sell them to readers.

Since Amazon is the biggest bookstore in the world, one which obsessively collects and analyzes data concerning customer behavior, it is much better qualified to set optimum prices to maximize revenues from the sales of ebooks than a bunch of provincial publishers who have never run any sort of store and have virtually nothing in common with a typical reader.

If you give a kid a stick of dynamite, why would you expect anything other than trouble?

Amazon Could Be Working on These 6 New Devices

3 September 2015

From The Motley Fool:

According to a recent report from The Wall Street Journal, Amazon has laid off “dozens of engineers” at Lab126, the business unit behind Amazon’s various consumer electronic devices, including the Kindle and its ill-fated Fire Phone.

But the WSJ has also uncovered six different products Amazon may be working on. Although some may never see the light of day, others could eventually play a key role in Amazon’s business.

. . . .

Amazon’s kitchen computer could be the second-generation Amazon Echo. The smart speaker has been somewhat of a hit. Although Amazon does not disclose exact sales figures, Echo has over 24,000 reviews and is listed as its top seller in home automation controllers. As it stands, the current Echo can accept voice commands and control certain smart home devices, but it could benefit from the inclusion of other features, including a touchscreen.

The kitchen is the central room in many American households, and by pitching a device aimed at the kitchen in particular, Amazon could make a more aggressive play at expanding its Prime Pantry and fledgling grocery delivery businesses.

. . . .

Finally, and perhaps most significantly, Amazon is reportedly working on a battery that would allow its Kindle e-readers to last for two full years on a single charge. Amazon has managed to improve the Kindle’s battery life since its introduction in 2007 by about threefold — the original Kindle lasted for about two weeks on a charge, and current Kindles can last about six weeks — but two full years would represent a dramatic improvement.

Digital books have obviously been successful, but paperbacks and hardcovers remain relevant and desired. A Kindle that can last for two years would come much closer to offering a legitimate alternative to physical books. It would also drive a bigger wedge between dedicated e-readers and standard tablets, and encourage more e-book buyers to stick with Amazon.

Link to the rest at The Motley Fool

PG recharges so many different devices in a given day that a Kindle that lasts two years would seem to be a solution for a problem he doesn’t have, but he’s not as smart as Amazon is about new products.

Mobile Readers Abound; the Ads, Not So Much

31 August 2015

From The Wall Street Journal:

Traditional and online publishers are struggling to cash in on their surging mobile traffic, raising questions about their future growth as consumers increasingly turn to smartphones and tablets for media.

News and information outlets ranging from the New York Times and The Wall Street Journal to Business Insider and About.com all can point to rapid growth in mobile usage. Time spent on publishers’ mobile offerings jumped 40% in the 12 months through July and now accounts for 55% of total time spent on their properties, up from 42% two years ago, according to estimates by measurement specialist comScore.

The problem is that for many publishers mobile revenue isn’t keeping pace—by a long shot—creating what industry executives are calling a “mobile gap.”

Selling advertising on mobile devices is proving difficult: It is hard to show mobile users enough ads, traditional ad formats like “banners” perform miserably, and publishers can’t easily do sophisticated tracking and targeting of ads. These issues extend from publishers’ mobile websites to their apps.

. . . .

More than half of unique visits to The Wall Street Journal Digital Network—which includes the Journal, MarketWatch, Barron’s, and WSJ Magazine—now come from non-desktop devices, but mobile accounts for less than 20% of the network’s digital ad revenue, according to a person familiar with the matter.

Link to the rest at The Wall Street Journal (Link may expire)

The digital debate is done, and the reading public are the winners

31 August 2015

From The Guardian:

When I started writing this column three-and-a-half years ago, the digital publishing revolution was just starting to filter down to public consciousness.

From a pub lunch where someone was showing off their new Kindle to the 8.53am slot on the Today programme, conversations revolved around the same old questions. Is Amazon intent on destroying literary civilisation or is it a well-oiled customer-focused machine? Are publishers greedy and conservative middlemen or gatekeepers upholding quality? Is the person opposite you on the train reading Middlemarch or self-published vampire porn? What happens if you drop your e-reader in the bath?

The answers tended to be very black and white. You were either an ebook zealot or a luddite refusenik. A heartless free-marketeer or a romantic economic illiterate. There was little room for nuance or ambiguity.

Link to the rest at The Guardian

The Fear of Data

19 August 2015

From Digital Book World:

Change leads to anxiety, and there has been a lot of change in publishing in recent years. There is one trend, though, that is striking more fears in publishers’ minds than any other. And that is the fear of data.

While sales data has been with us for a long time and is used extensively, there are now new kinds of data that are becoming available. Social media campaigns can reveal who clicked on a link. Email campaigns can be tracked for opens, forwards and reactions to calls to action. But the availability of reading data is probably causing more angst than any other because it strikes at the heart of publishing— everything from acquisition to editorial to marketing to author care.

. . . .

One fear is that reading data will influence what gets published. This is a somewhat strange notion, as self-publishing has already removed almost any barrier to market, and more books than ever before are getting published. What the doubters really mean is that data could influence what the big publishing houses will publish in the future, such as more celebrity biographies, tales from YouTube stars and vampire novels.

The fear is that, in the future, worthy books of high literary quality will be shunned. Yet titles are getting acquired by editors even when sales data point toward the reality that they are never going to deliver a positive return. What those who have reservations about data fail to see, however, is that data will make it easier to find the audience that appreciates these books. Rather than support an expensive marketing campaign across mass retail, publishers can tailor their campaigns to the relevant audience by virtue of an improved understanding of who likes to read a certain kind of book. And just as important, publishers will also discover the optimal approach to reach that audience.

. . . .

Another fear is that reading data will influence the editorial process. Will books be edited toward the lowest common denominator? Well, let us look at nonfiction books. Doesn’t it make sense to write a textbook, educational text or any non-fiction text for that matter so that it is easier for readers to absorb? The desired outcome is for readers to acquire new knowledge, not to show off the brilliance of the author.

It’s important of course to use data responsibly. Data of a beginner’s reading of an advanced textbook would give the wrong picture. A book for a beginner needs to be written, tested and measured differently than a book written for an intermediate or advanced expert. More than ever, it will be important to know who the intended reader is. But now we can measure if we are actually achieving that goal.

Link to the rest at Digital Book World

With booksellers’ pressure: DRM is now soft in Germany

19 August 2015

From Futurebook:

Today, most of Germany’s main publishing forces are, or soon will be, hard-DRM-free.

This morning, we had the first reports from Buchreport: Random House Germany has joined the other leading publishers there, citing “an ever-widening industry consensus.” As of 1st October, Verlagsgruppe Random House has announced that it will switch from “hard DRM” to “soft” or “social” DRM — digital watermarking.

Retailers, therefore, will have a choice as to whether to apply hard DRM, themselves. And booksellers are among the driving forces behind that “ever-widening industry consensus,” as it has played out in Germany. Is there anything here suggesting a way forward in the UK, US or other markets on Digital Rights Management, DRM? Can we put together a context in which bookshops and bookstores and their customers and publishers might navigate this part of the digital dynamic in the future? Perhaps. The High Street may want to study what has happened.

Briefly, Germany’s booksellers have argued that if publishers didn’t “soften” DRM — so that customers could easily use store-bought ebooks across devices of their choosing — then Amazon would ultimately “own” the ebook market and shut out the shops.

A Kindle ebook sold in Germany continues to be protected by Amazon’s form of “hard” DRM, the Kindle file system which maintains its sales and distribution construct in what we term a “walled garden.” That’s not changing. But the Kindle system is so convenient for consumers to use that the fear has been that its dominance would rise if bookshops couldn’t offer a genuinely manageable alternative for readers to use with their ebooks.

. . . .

Some advisors in-country emphasise that the German story is not “about” ebooks, per se: Instead, they say, it’s about publishers needing the support of the nation’s booksellers.

True, the news release from Random House Germany today includes the line, “We want to promote interest in digital reading further, and make it as simple as possible for readers to read ebooks.” But ebooks are, in the aggregate, a relatively small percentage of the market in Germany. Print still is very powerful, it moves in bookstores, and those bookstores have had a good, hard stare at the industry. The industry has paid attention.

Other factors are in play, surely: Hard DRM costs something when publishers apply it, a small per-copy cost (I’m told between 15 and 22 cents per copy on average) but that adds up.

But the repeated refrain is that “as simple as possible” is the part of the Random House statement to focus on. Consumers have had difficulty registering for permission to ease some hard-DRM restrictions on how broadly they could use their protected copies of content. The main source of complaint in the German developments around DRM seems to have come from the shops, speaking, as it were, on behalf of their customers who were reportedly annoyed and frustrated by such DRM restrictions and likely to bolt to Amazon if given too much hassle.

Link to the rest at Futurebook and thanks to Jane and others for the tip.

Hummingbird Aims to ‘Democratize E-Book Retailing’

19 August 2015

From Shelf Awareness:

American West Books, Sanger, Calif., a major book supplier to Costco, Sam’s Club, Whole Foods and other retailers, has founded Hummingbird Digital Media, which will supply organizations and individuals, including independent bookstores, with a turnkey program that allows them to offer clients and customers a catalogue of the most popular e-books and audiobooks. The program is also available for nonprofits, print and online media, book publishers, professional associations, chain retailers, conferences, book clubs, speakers, bloggers and authors.

The company slogan is “We’re democratizing e-book retailing,” and it wrote, “Imagine a world where e-book sales were not dominated by three huge companies. Imagine a world where thousands of individuals and organizations could compete with Apple’s iBooks, Amazon’s Kindle, and Barnes & Noble’s Nook.”

“What we’ve developed is a program where anyone and everyone can get into the e-book and audiobook business with a few mouse clicks,” Stephen Blake Mettee, Hummingbird Digital Media president and chief visionary officer. “We like to say we are unleashing the power of the many.”

Link to the rest at Shelf Awareness

Here’s a link to Hummingbird

Kindle Unlimited Scores a Knockout

16 August 2015

From Hugh Howey:

After 40 days in the Kindle Unlimited program, and after going through my first royalty statement that includes KU pagereads, I have a few observations.

First, a little background for the uninitiated: Over a year ago, Amazon launched an ebook subscription service known as Kindle Unlimited. For $9.95 a month, readers could enjoy unlimited access to over a million ebooks. For authors, the program was contentious, because it required making those titles exclusive with Amazon. You couldn’t sell them elsewhere. This was the price of admission.

To entice their bestselling authors to try the program, Amazon allowed several dozen indies to keep their titles in KU for a limited time without the exclusivity requirement. I was invited into the trial, and I could see the benefit of being in the program immediately, but it wasn’t clear whether my readership was best served by being in KU or not. When the time trial expired, I pulled my ebooks out of KU. Looking back, I can see that this was a huge mistake.

A month and a half ago, Amazon changed the way they pay authors in KU, moving to a per-page-read method rather than a flat fee (once 10% of an ebook was read). The idea was to reward reader engagement with longer works, rather than pay short story authors the same amount as novelists. As a data geek, I was dying to test this program out and see what difference it made for earnings, reader engagement, and sales rank. Entry to KU would require me being exclusive with Amazon for at least 90 days. With several of their competitors in disarray, and with KU free of competition from books by major publishers, I thought now was a good time to give it a go.

Even though the new KU seemed to reward novels over short stories, I immediately began publishing shorter works and making them available in KU. I wanted to see if short fiction — an area I’m fond of and have made a career exploring — was still viable in KU. After joining the program, I released several titles in the 7,000 – 12,000 word range.

. . . .

I knew within a week that I’d made the right decision to join KU. My KU ebooks saw an immediate boost in ranking. Not only were the page-reads mounting, but the sales of those ebooks were also on the rise! This was like advertising that I got paid for, and advertising that led to more paid sales. The only cost was exclusivity.

I’ve written at length about exclusivity, but I’ll sum up here what might seem paradoxical at first: You can sometimes reach more readers by making your products available with fewervendors. By concentrating sales in one location, sales rank gets a boost and more reader reviews are compiled in a single place. This means more visibility and more word-of-mouth sales. It can also mean more readers.

. . . .

What is the collapse of Nook doing for the adoption of ebooks? Barnes and Noble goes back and forth on whether or not they’re going to support their own device. That causes those who bought a Nook to become wary of committing to buying more digital books. And what about Apple’s refusal to make iTunes a web-based store rather than an application? This makes sharing links and buying ebooks more difficult across devices. And let’s not even start on B&N’s storefront. Or Google’s hubris when it comes to dealing with authors.

Indiscriminate business partnerships does not move the industry forward, and making my ebooks available at places that don’t provide the best reader experience does not help my career. When I saw that KU was going to help me reach more readers —and more than make up lost income from all other outlets combined — I was swayed. But it was when I blogged about unlimited access to ebooks with readers, and heard what kind of experience those readers were having with KU, that I saw why it was important for me to only make my works available at top-notch retailers.

The reason is this: I want greater and greater ebook adoption. I want more and more readers to move to ebooks. It is the artistic medium, the environmental medium, the democratic medium, the literary medium, and the indie medium.

Link to the rest at Hugh Howey and thanks to Stephen for the tip.

Here’s a link to Hugh Howey’s books books. If you like an author’s post, you can show your appreciation by checking out their books.

The Rise of Phone Reading

13 August 2015

From The Wall Street Journal:

Last fall, Andrew Vestal found himself rocking his baby daughter, Ada, back to sleep every morning between 3 a.m. and 5 a.m. Cradling Ada in the crook of his arm, he discovered he could read his dimly-lit phone with one hand. That’s how he read David Mitchell’s 624-page science-fiction saga “The Bone Clocks.”

Mr. Vestal’s iPhone has offered him a way to squeeze in time for reading that he otherwise might have given up. He reads on lunch breaks. He even reads between meetings as he walks across Microsoft’s Seattle campus, where he works as a program manager.

Before he tried it, he wondered whether reading in snippets might be dissatisfying. But to his surprise, he found he could quickly re-immerse himself in the book he was reading. “I want reading to be part of my life,” said Mr. Vestal, age 35. “If I waited for the kind of time I used to have—sitting down for five hours—I wouldn’t read at all.”

. . . .

“The future of digital reading is on the phone,” said Judith Curr, publisher of the Simon & Schuster imprint Atria Books. “It’s going to be on the phone and it’s going to be on paper.”

For now, tablets like the iPad and Kindle Fire remain the most popular platform to read digital books. According to Nielsen, the percentage of people who read primarily on tablets was 41% in the first quarter of 2015, compared with 30% in 2012.

But what has captured publishers’ attention is the increase in the number of people reading their phones. In a Nielsen survey of 2,000 people this past December, about 54% of e-book buyers said they used smartphones to read their books at least some of the time. That’s up from 24% in 2012, according to a separate study commissioned by Nielsen.

. . . .

One reason people are reading on phones is convenience. If you’re standing in line at the deli, waiting at the DMV or riding home on the train, you may not have a print book or an e-reader or tablet. But chances are, you are carrying a smartphone. Some 64% of American adults now own a smartphone, up from 35% in the spring of 2011.

. . . .

“The best device to read on is the one you have with you,” said Willem Van Lancker, co-founder and chief product officer of the subscription-book service Oyster. “It requires no planning. My bookshelf at home isn’t any good to me when I’m at the park.”

Another reason people are turning to phones is the size and clarity of new smartphone models, which make reading much easier.

Link to the rest at The Wall Street Journal (Link may expire)

Ebooks are changing the way we read, and the way novelists write

10 August 2015

From The Guardian:

If you hand me the original paperback edition of Thomas Pynchon’s Gravity’s Rainbow I can, quickly and without too much scrabbling, find you the page where the hero loses the girl. My disappointment on his behalf has lingered physically on that page for the past 20 years. Likewise, in Vasily Grossman’s Life and Fate, there is a long section where a platoon of the Red Army defends “House 6/1”, establishing a temporary zone of political freedom there. For me, this freedom seems to live in that chunk of pages. If I look at the book end-on, I can see, roughly, where House 6/1 exists.

Yet with the coming of ebooks, the world of the physical book, read so many times that your imagination can “inhabit” individual pages, is dying. I’m not the only person in my circle who has stopped buying new books in anything other than digital form, and even the cherished books described above are now re-read, when I need to, on Kindle.

But what is the ebook doing to the way we read? And how, in turn, are the changes in the way millions of us read going to affect the way novelists write? This is not just a question for academics; you only have to look at people on a beach this summer to see how influential fiction remains, and how, if its narratives were to change radically, our self-conception might also change.

In Words Onscreen, published this year, the American linguist Naomi Baron surveyed the change in reading patterns that digital publishing has wrought. Where the impact can be measured, it consists primarily of a propensity to summarise. We read webpages in an “F” pattern: the top line, scroll down a bit, have another read, scroll down. Academics have reacted to the increased volume of digitally published papers by skim-reading them. As for books, both anecdotal and survey evidence suggests that English literature students are skim-reading set works by default.

The attention span has shortened not just because ebooks consist of a continuous, searchable digital text, but because they are being read on devices we use for other things. Baron reports that a large percentage of young people read ebooks on their cellphones – dipping into them in the coffee queue or on public transport, but then checking their work email or their online love life, a thumbswipe away.

. . . .

What I think the literary academics are worried about is the loss of immersiveness. If I list the books I would save from a burning house – or an exploding Kindle – they all create worlds in which one can become immersed: Pynchon, Grossmann, Marquez, Lawrence Durrell in the Alexandria Quartet, Peter Carey in almost everything.

In the 20th century, we came to value this quality of immersion as literary and to see clear narratives, with characters observed only through their actions, as sub-literary. But a novel such as Donna Tartt’s Pulitzer-winning The Goldfinch, subtly derided by the literary world for its readability, is not the product of the Kindle – but of a new relationship between writer and reader.

Pre-digital people had a single “self” and they hauled its sorry ass through the pages of the literary canon in the hope that it would come out better. Digital people have multiple selves, and so what they are doing with an immersive story is more provisional and temporary.

Link to the rest at The Guardian

PG will note that students in English Literature classes (including himself) were skim-reading some assigned works long before owning anything remotely like a consumer electronic device. How are you going to get through The Faerie Queene with your sanity intact without skimming?

A student quickly understands what an amazing accomplishment it is to write page after page after page of text with eight lines in iambic pentameter followed by a single line in iambic hexameter. While not quite the same, it must be an amazing accomplishment to read one of the longest poems in the English language filled with what the author, Edmund Spenser, described as a narrative “cloudily enwrapped in allegorical devices.”

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