Digital marketing and coping with Amazon are the two big challenges for publishers as we begin 2017

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From veteran publishing consultant Mike Shatzkin:

[T]he big challenges for the industry [in 2017] — how to change marketing to hit customers who are mostly learning what to buy online (which, as you’ll see, is well covered) and how to cope with the steadily growing market share that is Amazon’s — remain the ones I would have anticipated.

Although I do actually know other people who, like me, consume just about all their books on screens, we’re a minority who are not really looked upon by those who have stuck with paper as the avant garde. Whatever market share ebooks achieve by evolution (and the data suggest that share has plateaued in the past couple of years), the expectations of revolution are at least temporarily over. I thought we’d be clearly on a path by now to most people reading most narrative books digitally. We aren’t, even though the one precondition I thought was necessary has been met: most people carry screens all the time that would work fine for ebooks. This clearly demonstrates that there is a limit to how much the appeal of convenience changes reader habits when the comfort level with a form is a competing consideration.

. . . .

By anecdotal information gleaned from publishers, Amazon appears to be booking half or more of the print sales for many publishers and many books.

(I told this fact to a former CEO who has been out of the business for 20 years last week. He said, “you mean, if I sell 40,000 books, Amazon will sell 20,000?” I said, “yes”. He said, “wow.”)

One informed estimate I heard is that Amazon constitutes upwards of 95 percent of online print sales. Kindle has outrun its ebook competition, gaining share consistently from Apple’s iBooks, B&N’s Nook, and Kobo and Google. Amazon probably has an ebook share in the mid-60s for most publishers. However, with the ebooks they control and keep off other platforms — Amazon Publishing and many of their top indie authors — and with additional impetus compared to the other vendors from their subscription business, their overall ebook market share is perhaps 10 or more points higher than that.

. . . .

So my expectation this year is that the most important information [Digital Book World] is going to have to deliver will come from Data Guy, Hugh Howey’s collaborator on the Author Earnings website, whom Michael Cader and I introduced to the DBW audience last year.

. . . .

Data Guy has broadened his remit, which was originally about understanding ebook sales, by joining forces with Nielsen Bookscan. That enables him to analyze print, audio, and digital sales through online and physical store channels, and to look at the books both by source (indies, Amazon-published, and “traditional”) and by genre. DBW has published a mini White Paper, available now, that tips to a lot of this information.

. . . .

I am hoping that there will be price breakdowns [in the Digital Book World presentation by Data Guy] as well. I have noticed that the last four or five ebooks I’ve bought have been pretty pricey — well above $9.99. These books are all non-fiction and they are relatively serious and nichey, not aimed at mass audiences. I’m pretty certain that both the publisher and the author are making more profit on those sales than they would on a print sale of that book. The information already revealed by Data Guy through the White Paper would support conjecture that the biggest ebook sales are going to much cheaper ebooks published in high-volume-per-reader genres (like romance, mystery, and sci-fi).

Link to the rest at The Shatzkin Files

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48 thoughts on “Digital marketing and coping with Amazon are the two big challenges for publishers as we begin 2017”

  2. Although I do actually know other people who, like me, consume just about all their books on screens, we’re a minority who are not really looked upon by those who have stuck with paper as the avant garde.

    Not avante garde? Say it ain’t so…

  3. A cynic could conclude that Author Earnings is pulling a sneaky one.

    By announcing a sudden indie downturn in market share, which is what Trad Publishing wants to hear, AE gets all the Trad Pub media outlets like DBW and Shatzkin to legitimize and advertise AuthorEarnings.com to trad authors, effectively spreading the word.

    And then, after being anointed by the tradpub talking heads as the best official source of traditional publishing ebook data, and with a broadened audience that now includes far more trad authors than before…

    I wouldn’t be surprised if the next AE report finds that the indie downturn was just an atypical single-quarter blip, with nontraditional market share resuming its previously-uninterrupted growth. 😉

    • Data Guy warned that it might be ‘an atypical single-quarter blip’ when the report came out (as at the time he could find no real reason for the drop.)

      • The Shatz qualified his mention of Author Earnings by calling it “Amazon centric”. Which means he’s free to say it doesn’t cover all other retailers and especially print sales.

  4. 2000 books a year?
    That’s a lot.
    And because of the stupid boycott they’re all Amazon exclusive. That alone should make AmazonBooks viable.

  5. > coping with Amazon

    Jeff Bezos already ate their lunch. Now he will yank their shorts up over their head and take their shoes too.

    Now that Amazon is a publisher itself, with a whole line of imprints, the traditional publishers have one of their major distributors as a direct competitor.

    “The avalanche has already started. It is too late for the pebbles to vote.”

    • The only reason he tooted them is because they showed a dip in ebooks this last time around, which he hopes will please his trad-pub readers.

      • It’s tough to argue against that.

        Part of me wanted to until I remembered what the latest AE report said. Am I seeing dots and connections where there aren’t any? Maybe, but then why is he just now acknowledging AE as being worthy of consideration? Look to human nature and follow the money.

        • He’s acknowledging AE because for once it’s saying something ‘he’ wants to believe, if the next one shows the indies eating trad-pub’s lunch worse than ever before he’ll never mention it again. As you said ‘follow the money’.

    • The fact he’s touting Auther Earnings numbers is a big change from eighteen months ago.

      Not long ago, he said AE was worthless since it didn’t consider advances that don’t earn out.

  7. Veteran publishing consultant Mike always likes his viewpoints to sound new, as though he has his finger on the pulse of the TRUE industry. So he recycles stuff and pulls it forward into the present.

    No, it’s hardly news.

  8. This is supposed to be news? The twin problems of digital marketing and dealing with Amazon have been publishers’ chief bugaboos ever since the Kindle dragged them kicking and screaming into the ebook era. What, exactly, is supposed to have changed about that?

    • Well, they got their (legal) Agency contracts and are choking on them. That is newish. To the establishment, anyway.

  9. From what I’ve seen, customers are very savvy, and have been for quite a number of years, on “what to buy online,” whether it’s in e- or print-book.

    Patronizing, yes indeed.

  10. Sorry, Mike, but Amazon is only a problem to publishers because they’ll just as happily sell used and indie/self-pub right next to the big boys.

    “Digital marketing”? What’s that? Are you referring to them trying not to sell their overpriced ebooks? Or them learning how to do internet ads?

    The qig5 and other publishers’ biggest challenges will be trying to get good writers to keep putting up with them and their lowering advances and bad for the writer contracts (and their overpricing ebooks killing off the discoverablity of new writers.)

    Trad-pub lives on the best sellers they control, but if those best selling writers start finding self publishing more rewarding trad-pub may soon be stuck selling coloring books.

    • Allen, I think that they will change. If 2017 turns out to be like 2016, they will have to do something dramatic. At the very least, they’ll have to offer better contracts to top talent. Hachette have said that they’re working on more frequent royalty/sales reports, so there’s hope.

      Then again, I’m being optimistic; it’s more likely that they’ll blame everyone but themselves. Misguided readers, elections, terrorist attacks, Amazon.com’s discounts or lack of discounts, authors in their stable demanding better terms, lack of promotion efforts by their authors . . .

      I’m waiting for them to blame their bestselling authors for not writing more blurbs to be used on mid-list covers. That’s when I’ll stop buying from them.

      • Paula, until those changes (if any) are out there and being gotten/talked about by the writers no one’s going to believe Hachette or the others, and that’s going to be a very real problem for them. Remember that 12-24 month turnaround they have? The qig5 already have what they’re going to offer readers in 2017. Any writer not already waving a contract around won’t get squat for their stories this year unless they go the indie/self-pub route.

        So the question for readers is if any of the qig5 are putting the finishing touches on the book of the year — or is it going to rise out of that haystack of all those self publishers? And if it’s from that uncontrollable haystack, will one of the qig5 be able to buy the rights to claim it as their own? (Or will the writer decide they don’t ‘need’ nurturing after making it big on their own?)

  11. This guy provides consistent entertainment, at least. I especially enjoy the patronizing stance he adopts toward readers. This time it’s displayed in right up at the top in the phrase “customers who are mostly learning what to buy online.” Poor, foolish readers, who must be schooled in what to read! That is the function of all those gatekeepers, after all. Or maybe it’s the job of the avant garde who prefer old-fashioned technologies like paper.

    • Absolutely right, Anna! And the comments here are a joy to behold in themselves.

      It took me a while, but I mostly read ebooks now. I started about eight years ago on an old Palm TX. Some reference books, cookbooks and crafts books are best in paper, though.

  12. Name me one other person on the planet who cares what “those who have stuck with paper” see as the avant garde. Besides, most readers, not all, read both as it suits their needs.

    • I wonder if it’s true that “most” people read both (paper and digital). I haven’t read anything on paper since 2009. No intention to so again in my lifetime (which may not be all that long, considering my age). However, I do have a friend who’s a Kindle owner, but every so often she wants the heft of a book in her hands. My daughter drifts from Kindle to Audible to paper, and back again.

      I also wonder if the slowing down of ebook sales is related to Amazon’s KU.

      • “I wonder if it’s true that “most” people read both (paper and digital).”

        Both my wife and I read both. When an eBook is $9.99 we head to the library.

        Dan

        • If it’s fiction, library here I come. If it is non-fiction I need for research, and I need it faster than ILL can get it, I’ll buy if it is less than $25. Otherwise used or I try to find another source, or ILL it is.

        • When an ebook is $9.99 I check the other listings on Amazon and there is often a paperback listed at the same price. Just ordered 4 of the paperbacks yesterday for that reason because I like reading paper. It’s, uh, easier for dummies like me to flip back a few pages to check who the heck is that character just mentioned in the story that I have already forgotten. It takes me forever to find the right page on a Kindle and maybe 3 seconds on a paper book.

          • I’m like you, Phoebe, and can’t remember anything these days. But I use the “search within this book” feature and don’t have to flip pages at all…and so once again I prefer the Kindle version over paper. I’ve read one paper book since 2009 – because a friend loaned it to me and insisted I read it. It was an awful experience as I read on the treadmill to make exercising palatable, and the paper/treadmill experience doesn’t work for these old eyes.

      • The relevant question is not how many people buy paper versus buy digital, but how many copies are sold on paper versus how many are sold in digital.

        If 99 people buy paper and buy one book each per year, and only 1 person buys digital but buys 200 books per year, then digital sell twice as many copies. The relative profits depend on pricing strategies.

      • I’m willing to read both, but I prefer digital.

        Recently I ordered some print books because they did not have any e-book conversions and I really wanted the books.

        However, the print was way too small and my eyes aren’t what they used to be.

      • I read both. If I’m getting my favorite trad-pub writers, I almost always buy those in hardcover or the occasional trade paperback. Indie writers I mostly get as ebooks.

        My sister is almost exclusively ebooks. My mother and stepfather, on the other hand, are huge readers and refuse to switch to ebooks. They have iphones, they have tablets, they don’t read on them.

        I think we – writers and the readers at TPV – are not exactly a representative sample when it comes to ebooks. As a group, we seem to be more heavily tilted towards digital than what I see elsewhere.

      • I read digital for all fiction and nonfiction that doesn’t involve a lot of pictures or charts.

        But I do prefer paper for stuff like cookbooks and picture books and things that are heavy on inclusions like photos and graphics and whatever. If a color e-ink device ever arrives, I’ll probably make the switch completely, but I don’t like reading on the Fire or other tablets. 🙂

      • There’s also the fact that many, many books just aren’t available as ebooks. I don’t read a lot of newer books (and pretty much never read new releases) but I read a lot of older books, classics that aren’t yet in the public domain, or obscure books that went out of print long ago. There is a curious desert of ebooks, for instance, in the genre of Fantasy (which is most of what I read). After you get past the public domain books, there are several decades where you can only find ebooks for the really big sellers and about half of the books are only available used in print. So if you want to read them your options are print or nothing. (I don’t know if it’s the same in other genres.)

        Personally, I can easily pass over the over priced new releases, but I can’t pass over the classics that I see highly recommended. So I either get them from the library or often enough when the library doesn’t even have them I get them used on Amazon. I also do the same for newer (within the last few decades) books that are just too expensive as ebooks. I read a lot but my budget for books is small. My local library system has very few fantasy ebooks. So I resort to print simply because I have to. Someday, when everything I could ever want to read is afforable or available from the library as an ebook, I’ll read only ebooks. I do look forward to that day.

  13. “Although I do actually know other people who, like me, consume just about all their books on screens, we’re a minority who are not really looked upon by those who have stuck with paper as the avant garde.”

    Mike needs to move out of NYC.

    • Who would hire him if he did?
      The Manhattan Mafia is his market and they only buy local.
      No chance of external ideas seeping in that way.

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