Smashwords

2017 Book Industry Predictions: Intrigue and Angst amid Boundless Opportunity

8 January 2017

From Mark Coker via Smashwords Blog:

If you could see into the future, what would you do to change it?

Each year I polish off my imaginary crystal ball and attempt to divine how the boiling crosscurrents of technology, competitive intrigue, author aspirations, and reader tastes will shape the opportunities facing authors, publishers and retailers for the year ahead.

. . . .

2017 will mark a special milestone for the ebook industry.  It marks the ten year anniversary of the Kindle.  It’s also the ten year anniversary of Smashwords’ incorporation.  In early 2007, after three years of crafting our business plan, I hired our first programmer and began active development on the Smashwords platform which we launched in early 2008.

Although my prediction track record has been pretty good over the years (see the end of this post for a complete list of my past predictions), my overarching objective is not to be correct.  Instead, these predictions are meant to spark conversation and contemplation.

. . . .

Before we get into my ten predictions for 2017, let’s take a moment to review the amazing transformational change over the last decade, and celebrate how far the indie author movement has come in such a short period of time.

Ten years ago traditional publishers controlled the means of book production, distribution and sales.  It was a print-centric world where print books accounted for 99.8% of book sales, and where publishers were the bouncers at the pearly gates of authordom.

Publishers controlled which writers graduated to become published authors, which books readers could read, which authors remained in print, and which authors would be allowed to publish another book.

. . . .

In the last ten years ebooks took off.  Ebooks today account for maybe 25% of book sales, up from essentially nothing a decade ago.  In genres like romance, the percentage is much higher.

When I look back at the rise of the indie author movement the last ten years, romance authors and their readers have always led at the tip of the spear.  They were first to embrace the indie ebook publishing, the first to achieve significant commercial success as indies, and the first to pioneer many of today’s best practices for ebook publishing and promotion.

Romance authors – predominantly women – are the some of the smartest players in this business, and their readers are the most coveted and voracious.  These are the readers who often read a book a day.

Romance authors are the canaries in the coal mine.  Romance authors were first to benefit from the rise of ebooks and the first to experience the deleterious effects when the market became saturated.  They’ve also been the first to fall prey to some of the more troubling developments in the industry now affecting writers and publishers in every category.

In the last decade, hundreds of thousands of writers have joined the indie author movement, drawn by the advantages of self-publishing ebooks.  What are these advantages?  In a nutshell, indie authors enjoy faster time to market, greater global distribution, complete creative control, greater pricing and promotion flexibility, greater opportunity to serve their readers with high-quality low-cost ebooks, and the opportunity to earn royalty rates up to five times higher than what the traditional publishers pay.

. . . .

1.  Indie authors will continue to capture greater ebook market share in 2017 

Indies will capture a greater share of digital reading in 2017.  Factors driving this include:

  • Each year the indie author community raises its game to become more sophisticated and more professional.  Indies are learning to implement – and in many cases pioneering – the best practices that motivate readers to choose one ebook over another.
  • Indie ebook authors combine quality with lower prices, providing readers tremendous reading value.
  • Even though indie ebooks are already low-priced, indie authors have greater flexibility to lower prices further than do the large publishers.  This is a mixed blessing.  This also means indies are vulnerable to some of the greatest devaluation pressures because indies don’t wield the collective bargaining power of large publishers.

2.  The glut will grow more pronounced

Over the last few years here at the Smashwords blog I’ve talked a lot about how there’s a glut of high-quality low-cost ebooks.  These ebooks are immortal and will never go out of print.  Thanks to low-cost virtual shelf space, retailers can stock these ebooks forever – even if the books don’t sell.  Although it’s great that your book will forever occupy the shelf, and forever be discoverable and purchasable by new readers, it also means that the virtual shelves are becoming more overcrowded every day.   The major ebook retailers each stock millions of ebook titles in their online stores, with Amazon fast approaching five million titles.  Every day from yesterday forward it will become more challenging to stand out, which leads me to my third prediction.

. . . .

10.   Amazon to face anti-trust scrutiny for unfair business practices

This is a long shot, but in the spirit of prediction folly I’m going to go out on a limb here.  In anti-trust law, there’s nothing illegal about operating a monopoly (where you have exclusive control over a commodity and can manipulate prices) or a monopsony (when there’s only one major buyer).  What’s illegal however, is when a company exploits their monopoly or monopsony for unfair business advantage that makes it impossible for other competitors to compete on a level playing field.

Amazon defenders will argue that Amazon is a brilliant competitor and innovator, and that those who think Amazon plays unfair should stop whining and start innovating.  But this argument rings hollow.  The other retailers have innovated, and continue to innovate.  I work with them.  I see it.  This specious argument by Amazon defenders confuses market share for commitment.  If Kobo earns authors 1/10th of what they earn at Amazon, it’s not necessarily a failing of Kobo, it’s a function of market share.  If you decide to open an indie ebook store specializing in personalized recommendations for cookbooks, the fact that you can’t grow sales to billions of dollars overnight is not a failure to innovate.

One industry watcher explained Amazon’s anti-competitive business practices to me with an analogy about trains, which I’ll paraphrase and expand upon:

Let’s say you own the railroad network that connects farms to the largest marketplace (which your railroad also owns) 1,000 miles away where 70% of corn is bought and sold; and your railroad also owns some corn fields along the rail lines.  If the railroad operator decides to give its own corn first priority on shipments, then their corn will reach the market first while the corn of other producers spoils or is late to market.  If the railroad also gives its own corn preferential display in the marketplace, or if it denies other producers the option to sell under favorable terms in their marketplace, or gives them poor placement within the marketplace, then what are the other farmers to do?  Shame on the other farmers for not buying their own railroad or operating their own marketplace!

Bringing this back to Amazon, Amazon operates the world’s largest ebook retailer providing access to 70% of the world’s ebook readers.  They operate their own publishing imprints.  This means Amazon has the ability to give its exclusive titles first class priority on the train and in the marketplace, and they do.  They operate the Kindle store where all books are allowed but exclusive KDP Select books and Amazon-imprint books are given preferential store placement.  They operate marketplaces such as Kindle Unlimited where only exclusive books are available and non-exclusive books are shut out.  Shame on you Mr. Retailer or Ms. Author for failing to innovate.

This is anti-competitive and unfair, and these facts have led some anti-trust experts to conclude that the only way to solve this problem is for Amazon to be broken up into smaller, independent companies that operate at arms length.

Amazon has so far been able to skirt anti-trust scrutiny by arguing that the network they operate benefits consumers because of Amazon’s track record of lowering consumer prices for ebooks, and this is very true.

But what about the producers?  Do they have any rights?  You’re a producer, you tell me.

Link to the rest at Smashwords

2016 Smashwords Survey Reveals Insight into the Habits of Bestselling Authors

19 April 2016

From Smashwords:

My goal with the Survey is to help Smashwords authors and publishers identify opportunities to reach more readers.

The Smashwords Survey takes a data-driven approach to identify potential best practices that can give you an incremental advantage.

The Survey also helps us identify habits of the most successful authors.

. . . .

Key Findings for 2016 Survey

We looked at actual retail sales over the 12 month period between March 2015 through February 2016.  Here are the key findings:

  1. Fiction dominates – 89.5% of our sales were fiction titles.  Despite fiction’s dominance, a number of non-fiction titles were among our top performers of the year.
  2. Bestsellers have a greater social media presence – It’s not a huge surprise, but better-selling authors are much more likely to have a social media presence in the form of author web sites, blogs and Facebook and Twitter presence.
  3. Romance dominates – Romance continues to dominate sales for Smashwords authors and publishers.  Romance accounted for 50% of our sales during the survey period.  Writers in other genres and categories can gain much inspiration from romance writers.  Romance writers are typically ahead of the curve when it comes to adopting new best practices, and certainly this is underscored by their early adoption of series writing, free series starters and preorder usage.
  4. New adult romance had the highest average earnings per romance title, but that’s only part of the story – For the first time ever we looked at the relative performance of different subcategories of romance.  While New Adult, YA and contemporary had the highest average earnings per title within romance, when we examined median performance we found that subcategories of Sci-fi romance, fantasy and erotic romance earned the highest median yields per title.  If folks find this analysis useful, maybe I’ll do similar analyses of other popular genres.

. . . .

7. Pricing sweet spots – For the last few years, $3.99 was the sweet spot for most indie fiction ebooks.  It was the price that maximized both unit downloads and earnings.  For the 2016 Survey, $2.99 barely edged out $3.99 for the greatest average unit downloads.  However, we observed some shifting on the earnings front.  $3.99 retained the mantle for the average price that generates the highest earnings, and $4.99 came in as the second best price, beating out $2.99.  I think this speaks to a growing number of professional indie authors finding success migrating to slightly higher prices.  In general, most indie authors of full length fiction are probably best served at $3.99 to maximize earnings and unit sales.  You’ll also see that some strong performing non-fiction titles skewed the earnings data for the higher price ranges.

Link to the rest at Smashwords and thanks to SFR for the tip.

The Power of Free: How to Sell More E-Books

29 March 2016

From Publishers Weekly:

Do you want to sell more books and increase the value of your author brand? Then give some of your e-books away for free.

To many authors, the idea of giving their work away for free is counterintuitive—and possibly abhorrent and sacrilegious. Free devalues your work, right?

Wrong. Free makes your work more valuable. As an author, you are a brand. Readers buy books from authors who have earned their trust. But to earn readers’ trust, you must first earn their awareness. If readers don’t know you, they can’t trust you—your brand carries no value to them. You’re invisible. Even if you’re already a New York Times bestseller, there are millions of potential readers out there who have never heard of you and have never read your stuff.

Free makes it possible to reach new readers who would otherwise never take a chance on you. Free enables readers to sample and discover new authors without financial risk.

According to the 2015 Smashwords Survey, free e-books get 41 times more downloads on average than other e-books. This is the power of free. Free drives sampling and discovery.

Link to the rest at Publishers Weekly

Smash It Up

13 February 2016

From author Alexander McNabb:

For the first time in my book writing career, I have been censored. And it’s not by who you’d think it would be.

Birdkill is now available on all platforms, both ebook and paperback. That’s Amazon, Barnes & Noble, Kobo, iBooks and all major ebook retailers. From 1 March 2016 the paperback will be in stock at WH Smith in the United Arab Emirates and available on order from any bookshop in the world by quoting ISBN 978-1523986736.

I use a ‘multi-publishing platform’ called Smashwords to manage the distribution of the ePub book, which avoids having to deal directly with B&N, Apple, Kobo and all the others. Smashwords has always been core to my distribution, offering as it does an alternative to Amazon which, although I am broadly in favour, does tend towards the Evil Empire a tad too much to make one want to wholeheartedly endorse it as a sole platform.

Imagine, then, my horror when Smashwords came back and informed me last nightBirdkill had failed its review process. What was the book’s cardinal sin? That it makes mention of the Kindle and other publishing platforms. This makes Smashwords’ partners ‘uncomfortable’, apparently. So in order to pass Smashwords’ review process, I had to remove the text at the end that tells readers where they can buy my books.

The wicked words in question:

Please do not link or refer to any other digital download source other than Smashwords. Our retail partners don’t want to see links to Amazon, Barnes & Noble, or mention of the Kindle or Nook.

But hang on a second. That’s the content of my book. It’s my right to publish what the hell I want, isn’t it? Surely that’s what all this free speech gobbledegook is about? Who cares what their partners are comfortable with or do or don’t ‘want to see’ or ‘mention’? It’s a fact the book’s available on Kindle and Nook. So you’re masking the truth here. It’s commercial censorship.

You’re insisting I don’t mention your rivals in my content. What if I want to have one of my characters enjoying reading a novel on their Kindle? Or having fun shopping on Amazon.com?

Amazon, for all its Dark Empire status, has never for any reason whatsoever asked me to amend the content of one of my books.

The UAE’s National Media Council (An ‘Islamic’ Middle Eastern Arab government ‘censoring’ my books before they can be printed here in the UAE) has never –despite the books containing plenty of content you’d think they’d find uncomfortable to say the least – asked me to amend the content of one of my books.

Link to the rest at Fake Plastic Souks

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

Amazon Lowers Kindle Unlimited Payouts

4 November 2015

From the Smashwords blog:

Last Friday in a bit of news that was missed by most indie authors, Amazon quietly announced that because they’re pricing their Kindle Unlimited ebook subscription service at $3.00 per month in India, authors will now earn less.

I’m sorry to say I predicted such a devaluation back in March in an interview with the International Publishers Association titled, Not all Subscription Services are Created Equal. In that interview I warned there was nothing stopping Amazon from waking up one day and deciding that their $9.99 subscription service should be priced at $3.00 instead.  So now it’s happening in India.  Amazon hints it will happen in other countries too.

Was I prophetic?  Not really.  None of this should come as a surprise, yet thousands of authors will be surprised once they realize the slippery slope that is KDP Select.  It’s an inevitable outcome when authors surrender full pricing and compensation control (via their KDP Select enrollment) to a company whose entire business model is predicated upon commoditizing and devaluing products by stripping suppliers of pricing control.  Amazon does this in the name of offering customers the lowest possible prices.

There’s another potentially more insidious form of devaluation taking place, and sadly the indie author community (which supplies the bulk of KU titles) is Amazon’s unwitting accomplice.

Kindle Unlimited is training readers to think that single-copy ebook purchases are too expensive.

. . . .

Kindle Unlimited is crucifying single copy sales upon the altar of greed and gluttony.

Link to the rest at Smashwords and thanks to Toni for the tip.

PG doesn’t understand how gluttony plays into ebook subscriptions, but he’s not too enamored with Mark’s view that indie authors are “unwitting accomplices” or otherwise unable to look out for their own welfare without Smashwords’ help.

If Smashwords wants to effectively compete with Amazon, providing an excellent online environment where indie authors earn a lot of money because readers can easily discover books they like on something better than a Tinkertoy website would be a more effective strategy than trashing Amazon.

In PG’s unfailingly humble opinion, any hint of sore losership in a company’s marketing communications is a terrible idea. In that respect, a comparison between the content and tone of this Smashwords post and the Draft2Digital blog is illuminating.

Smashwords Announces Distribution to Gardners Books: Expanded distribution to over 400 retail stores, 2,000 public libraries and 400 academic libraries

16 October 2015

From The Smashwords Blog:

Smashwords today announced a comprehensive distribution agreement with Gardners, the UK’s largest book wholesaler.

The agreement significantly expands the global footprint of the Smashwords ebook distribution network, enabling Smashwords authors and publishers to reach hundreds of online retailers, public libraries and academic libraries.

On October 22 Smashwords will begin delivering 230,000 ebooks sourced from the over 100,000 indie authors and small independent presses to 400 ebook stores powered by Gardners operating in 32 countries and serving customers in 138 countries; 2,000 public libraries in the U.K.; and 400 academic libraries in the UK, Europe and Middle East.  The agreement excludes Smashwords erotica titles.

. . . .

Gardners powers the online ebook store operations of over 400 small and medium-sized booksellers globally as part of its white label ecommerce and digital content fulfillment & distribution services.

Notable retailers with ebook stores powered by Gardners include www.hive.co.uk, www.books.telegraph.co.uk ,www.indieebook.co.uk in the UK, www.bokus.com in Sweden ,  www.takealot.com in South Africa and www.saxo.comin Denmark.  Hive.co.uk, which is owned and operated by Gardners, is interesting because it features and supports hundreds of independent brick and mortar retailers.  Every sale benefits the consumer’s selected shop. Hive features a large range of titles from the Gardners catalog of over five million items which include ebooks, print books, DVDs, audiobooks, stationary supplies and more.

Smashwords authors and publishers will earn 60% of the after-VAT list price at Gardners-powered ebook stores, the same terms as they earn with Smashwords at iBooks and other major retailers.

Link to the rest at The Smashwords Blog and thanks to Stephen and others for the tip.

Smashwords Nightmare

2 October 2015

From author Alice Sabo:

My books are for sale where?

Let me preface this. Back in 2012 when I self published my first book, I was happy to load White Lies into Smashwords and send it off to all the retailers they distribute to. Finding my ebook on sale at Barnes and Noble or iTunes was exciting. When Smashwords expanded, I thought that was fantastic. My books were available all over the world. And my reports showed me a trickle of sales in foreign countries. I was delighted.

Then the sales abruptly stopped. In the past 8 months, I’ve sold only 1 book through all those distributors. I thought it was odd that as I published new books my sales went down, but I haven’t been doing a lot of advertising.

Last month I decided to experiment with putting 2 books into KDP exclusively. I unpublished them from Smashwords on August 30, and waited. And waited… Luckily, Scattered Seeds was a pre-sale and didn’t go out to all the distributors. Lethal Seasons was another story.

First unhappy surprise – Kobo redistributes my books. I discovered this through a forum somewhere. So I went out to look and sure enough, there are my books on a French website. I have no idea what the market is for post apocalyptic survivor stories in France, much less for those in English in a non-English speaking country. As the author and publisher of that book I was annoyed that I didn’t know about this redistribution. Although I admit it could be in the fine print somewhere that I carelessly skimmed over.

Second unhappy surprise – Smashwords can’t control their partners. I am still waiting for Flipkart to remove Lethal Seasons from their website, 31 days after making the request. I have emailed them several times, only to be told that all they can do is ask. Even now that they have severed their partnership, Smashwords seems unable to retrieve its catalog from Flipkart.

Link to the rest at All there is . . . and the rest of it

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

Do E-Books Earn More Money at Lower Prices?

16 September 2015

From Brady Dale at The Observer

. . .

With e-books rising and print’s share declining, there’s a fierce debate about what e-books should cost. The publishers recently won the right to raise their prices on Amazon at will, but signs suggest it’s not paying off. At least, if you measure the payoff in dollars. Evidence suggests higher prices may not be the best way to make more money in the digital literature market, but publishers may have other reasons for jacking up costs.

. . .

If any books were necessary, one would think it would be the books from major publishers. Those are the books you are most likely to get quizzed about at cocktail parties or that your boss is most likely to say that you should read. Yet even for these stickier titles, higher prices lower sales. In fact, lowering sales so much that the publishers are making less money than they made before.

Meanwhile, all told, more writers are producing more books and making more money than ever before. A lot of that increase has occurred outside major publishers, though.

This is a point that Amazon has made in the past. Last summer, it gave the public a peek into its data around prices and e-book sales. The Amazon Books Team posted on the Kindle Forum, writing:

For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000.

Smashwords, the online retail giant’s little baby brother, made a similar point on its blog. It wrote that, in its experience, lower prices modestly increase total income while majorly boosting readership, which the company contends better insures a writer’s future.

. . .

This question of perception may explain what’s going on with the major publishers. Booksellers still account for most of the publisher’s money and relationships. They no doubt fear that low e-book prices undercuts the sales of physical books in the storefronts of their old friends. Fair enough, but the world is changing.

. . .

Publishers, it seems, are making less, as well. Of course, they have the right to do whatever they want, but the move doesn’t seem to be helping anyone but—perhaps—booksellers. So, why are the big guys still raising e-book prices?

Link to the rest at The Observer

This post provided as part of a package of perpetual participation during PG’s vacation by Bridget McKenna

Smashwords and Flipkart to End Distribution Relationship – Amazon Scores Victory

26 August 2015

From Smashwords:

Smashwords and Flipkart are ending their distribution agreement first announced in August, 2013.

The unfortunate news effectively hands the market for indie ebooks in India to Amazon.

A few weeks ago, I notified Flipkart that Smashwords was placing its distribution agreement with Flipkart under review.

I provided Flipkart a deadline by which Flipkart was asked to repair certain problems related to the listing and removal of Smashwords titles, and to provide Smashwords an acceptable plan to prevent such issues from recurring in the future.

I informed Flipkart that if these requirements were not met that Smashwords would request the immediate removal of all Smashwords titles.  The deadline was missed and an acceptable plan was not presented.

This morning Smashwords received word from Flipkart that after careful consideration, Flipkart determined their systems are not yet capable of supporting the dynamic nature of the Smashwords catalog.  As a result they will begin winding down the relationship with Smashwords and remove our titles.

. . . .

Our primary concern was Flipkart’s delays associated with the removal of Smashwords titles that had been unpublished. Most of these titles were removed because the Smashwords author or publisher made the decision to enroll their book in KDP Select, an ebook self publishing option offered by Amazon that requires authors to make their books exclusive to Amazon.

Once authors enroll a title in KDP Select, Amazon requires the author to immediately remove the book from all competing retailers otherwise the book is removed from the KDP Select program and the author is warned that repeated offenses could lead to the termination of their entire KDP account.

As you might imagine, these fire-and-brimstone emails from Amazon are unnerving to authors.

. . . .

Many indies don’t understand the long term implications of KDP Select.  The million or so books enrolled in KDP Select are almost entirely provided by the indie author community. Amazon coerces authors to enroll their books my making KDP Select books more discoverable and more desireable to Kindle customers, while making non-exclusive books less visible and less desirable.   The message is quite simple:  If you want to sell more books at the world’s largest ebook retailer, you must be exclusive.

I don’t blame indies for their difficult decision.  I met with one indie author a few weeks ago at a conference who told me words to the effect of, “I hate the exclusivity of KDP Select, yet I’m in it because I have a mortgage to pay.  Books in KDP Select sell better than non-exclusive books.

. . . .

I believe KDP Select is toxic to the future of indie publishing because it forces authors to abandon competing retailers and become more dependent upon Amazon.  When competing retailers lose access to this important inventory of indie titles, they can’t compete.

Amazon wields its dominant market share like a club to bludgeon authors who don’t fall into compliance with Amazon’s exclusivity or pricing requirements, even when the lack of compliance is not the author’s fault.  No other ebook retailer practices such draconian punishment of authors.

. . . .

To be clear, the termination of our agreement with Flipkart is not Amazon’s fault.  However, Amazon was a catalyst because the harm they’re causing our shared authors made it impossible for us to give Flipkart the runway they needed to improve their systems.

Although Flipkart is a small ebook retailer and the financial impact on Smashwords authors will be negligible, I’m more concerned by what this signals for the future of ebook retailing around the world.

Link to the rest at Smashwords

How to Publish Ebooks – an Ebook Publishing Intensive by Mark Coker

26 July 2015

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Thanks to Chris for the tip.

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