2016 Disappointments

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From Kristine Kathryn Rusch:

As I write this in early January, fourth quarter numbers for all big businesses are just starting to trickle in. The whining about 2016 has commenced, some of it justified, some of it not.

The numbers aren’t just in for the major publishers; the numbers are in for indie writers as well. And the writers who crunch numbers are having varied reactions, often depending on years of business expertise.

I have a hunch that when all of the numbers arrive toward the end of this month or so, we’ll find out that 2016 was truly a mixed bag.

Which is what we should expect from a healthy publishing environment in transition.

. . . .

Self-published writers who remain in the business have become independent publishers in their own right. Which is why from now on in this post, I’ll call it indie publishing.

Even though ebooks have existed for decades, the Kindle made them a viable career path. Indeed, the Kindle and Amazon itself began a major disruption of the traditional publishing industry, a disruption all of us are living through.

Changes still happen almost daily. But a lot of us have worked on the indie side long enough now to take some things for granted. We’ve also worked in it long enough to have actual numbers. We can project this year’s earnings based on last year’s behaviors—kinda sorta.

I add the “kinda sorta” because, as I said, changes still happen daily.

As this blog goes live on my website (some of you got it early on my Patreon page), the Digital Book World conference is going on in New York. Data Guy is making a presentation that I’m sure will become public a week or two after the conference.

. . . .

Data Guy will be analyzing the digital market based on genre. But some of his findings have already gone public. He found—to the delight of traditional publishers everywhere—that indie book sales took a dramatic fall in the summer and early fall of 2016. (Writers have experienced this from the beginning.)

In the white paper, he notes:

In May 2016, verified self-published indie authors were taking home nearly 50 percent of all US Kindle author earnings. Now, as of early October 2016, the indie share has fallen below 40 percent.

As Porter Anderson writes in his introduction to the white paper, this rather steep decline brings indie sales back to their 2015 share of the digital marketplace. He adds,

No more can cordial skeptics like myself say that everything is always coming up indie roses at Author Earnings. The news of a downturn isn’t what the project’s chief admirers, the indie author corps, would prefer, obviously. But it helps lend a kind of real-world credibility to the effort: what goes up does not always keep going up in life as we know it.

Anderson is right: the downturn does show skeptics that Data Guy’s numbers are real and not just the product of indie “cheerleading” to use Anderson’s term.

Data Guy’s October numbers also show something that writers have been saying all summer: for many, their sales fell off a cliff. That cliff is composed of many things—the contentious U.S. election, the changes in Kindle Unlimited, a general overall retail downturn in the fall, and more.

I examined some of this in “Third Quarter Blues,” because as I learned when I wrote that post, that election downturns happen every four years in the United States—and some downturns are more prolonged than others.

However, the research told me (and the numbers later bore it out) that the U.S. retail economy would rebound after the election. The holiday season would set in with a vengeance, and consumers would buy more than they usually did in the last few weeks of the year to make up for time lost.

. . . .

Data Guy’s numbers are from October, before the holiday sales happened and during the election effect. I can’t wait to see his conclusions, because I suspect his spider, crawling through the various databases, will catch things we can’t see with the naked eye.

What we can see, though, is—I’m sorry to say—unsurprising in this kind of maturing traditional marketplace.

Some balance is coming back into the system. Consumers are getting used to a new way of doing things. Readers are getting used to a new way of doing things.

Readers still go to bookstores, yes, and some readers will go to the brick-and-mortar store first. But most readers go online first, even if they choose not to order the book there.

There’s an interesting piece from The International Council of Shopping Centers (which I found through the Marketing Land article). On January 3, the International Council of Shopping Centers released the results of a survey conducted after the holiday season ended. The survey had a relatively small sample size (1030 adults) , but the findings seemed to be backed up by the other data that’s coming in.

The survey found that 70% of the shoppers surveyed preferred shopping at a place with an online and a physical presence. That number was even higher for Millennials—81%. Part of the reason was the ability to compare prices, but some of it was—again—convenience. Since most shoppers waited until the last minute in 2016 to shop, they ended up looking online to see if what they wanted was at a store, and then they went to the store to pick it up.

Sixty-one percent of the people who went to the store to pick up the item they purchased online bought something else at that store (75% of Millennials.) Why am I harping on Millennials? Because they are the future of the next decade or so of retailing.

. . . .

What happened to books in 2016?

You’ve seen the traditional publishing headlines, right? Traditional Publishing Needs A Blockbuster, one newspaper wrote. And it’s true. There was no breakout book in the last part of 2016. The breakout books of 2016 were pretty small potatoes compared with previous years. In fact, single title sales were unbelievably tiny compared with…ahem…the 1980s or even the early part of this century. The week before Christmas, for example, John Grisham’s new hardcover sold “only” 71,000 copies.

Why do I say “only”? Because traditional publishing is set up so that the hardcover bestsellers sell best during the holiday season, and should rake in the bulk of the book’s profits by then. I quickly tried a like-to-like comparison with Grisham, using Google, and here’s what I found.

In 2002, Grisham released two novels—one in February (which I’m not using) and a non-traditional Grisham title, Skipping Christmas, which released on November 1. By the end of the year, Skipping Christmas had sold (shipped) 1,225,000 units.

Eight weeks left in the year when Skipping Christmas was released meant the book had to sell about 150,000 units per week. Clearly sales didn’t work that way—some weeks the book probably sold more than others. But book sales around the holidays are pretty consistent, and sometimes rise rather than fall.

In 2016, Grisham released a new traditional (legal thriller) Grisham title, The Whistler, and the hardcover “only” sold 71,000 copies in week seven after release. Of course, competing with that was the $14.99 ebook which—when I looked it up on the night of January 8—was #27 in the paid Kindle store. Price be damned.

. . . .

Mass market has declined because there are fewer mass market retail outlets. Most grocery stores have gotten rid of their mass market slots, many big box stores no longer carry mass market paperbacks, and many of the chain bookstores have closed. Mass market is dying from a lack of oxygen and shelf space, not because people dislike the format. Trad pub is killing mass market all on its own.

So what’s fueling the rise in print book sales? Availability. Traditional publishers never had a clue about what some of us called the book desert. There were large swaths of the United States where you couldn’t find a new hardcover book for sale on any shelf. Rural towns had mass market racks (sometimes) and libraries (often) but no bookstores. So rural readers were stuck buying books when they went “to town” or buying mass market off the truck stop rack or buying no books at all.

Now there is no book desert. Any rural reader with a mailbox and a debit card can order a book online and have that book delivered in any format in which the book is available.

. . . .

Perhaps the biggest retail story of 2016 came out last June where study after study showed that shoppers now make more than half of their purchases online. Remember when you knew a lot of people who refused to buy something online? Now, try to find someone who hasn’t ordered at least one thing online in the past year. If you’re dealing with people who have some disposable income (and aren’t living near the poverty line), then you’ll have a hard time finding someone who hasn’t ever bought anything online.

Consumers are moving between the digital world and the brick-and-mortar world with incredible ease. The transition is happening, folks, and we’re getting used to the new world.

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