Are eBook Authors Unwittingly Losing Sales?

In a recent article at his blog eBookAnoid, another blog that I regularly read, Tony Cole asked this question: “Do you remember the name of the ebook you have just finished reading?” Although I have not written about this topic before, I have often thought about how I rarely remember either the author or the book title of the ebook I am currently reading or have just finished.

My experience is that I can tell you the storyline of the ebook I am reading, and if it is particularly well-written, I can name and describe many of the characters. Some good examples are The Promises to Keep quartet by Shayne Parkinson and many of Vicki Tyley’s mysteries (see, e.g., On Books: Murder Down Under). Long-time readers of my blog know that I cannot say enough good things about the books written by Shayne Parkinson, Vicki Tyley, and L.J. Sellers (see, e.g., On Books: Detective Jackson Grows and Grows). These are three authors whose names and books I can still recall, even though, for example, it has been probably 2 years since I last read anything by Parkinson.

Yet since reading their ebooks, I have read hundreds of other ebooks. Out of those hundreds, I can recall the names of a handful of additional authors, but all the others, no matter that I enjoyed their work, I cannot recall. I could look them up and have my memory triggered, but that is not nearly as valuable as recall. The ability to recall means the ability to talk about.

I asked my wife if she remembers, and her answer mimicked mine. I then asked some other ebookers I know the same question, and got the same answer from them. It is not that they never remember; it is that 95% of the time, they do not remember.

When I read a pbook, I have to physically pick it up. It is usually in closed form with a bookmark indicating where I left off the day before. When I pick it up to continue reading, I can easily see the book’s title and author, which acts as a reminder of what I am reading. In addition, pbook authors and publishers learned decades ago — if not centuries ago — about the value of constantly reminding the reader of the author’s name and the book title, and so invented the running head (or foot), the place on every page of the pbook that information about what I am currently reading can be found.

In contrast, ebook authors and publishers tend to view the ebook as a continuous flow document and so disdain the use of running heads. True, there are some ebookers who also complain when an ebook has wide margins, blank lines between paragraphs, running heads, nonjustified text, indented paragraphs, and anything else that might make it easier for the reader to read the story. Because someone else (Tony Cole) openly asked the question, I realized that I am not alone in not remembering book titles and author names. That made me realize that ebook authors have missed an important lesson to be learned from pbooks (and marketing in general): You must remind the reader of what is being read and who wrote it constantly. That reminder, especially if the reader likes the ebook, will induce the reader to speak about the ebook and look for other ebooks by the same author.

I am aware that ebooks are not intended to mimic pbooks; if we wanted a duplicate of the pbook, the solution would be PDF. But that doesn’t mean that when creating the ebook, things that enhance the readability of the ebook and that act as good marketing should be ignored just because they are in pbooks. Rather, authors and publishers should be looking at pbooks, which have a long history of success and still constitute 80% of all book sales, to discover what important design elements should be adopted for the ebook. To my way of thinking, the most important element is the running head, which will constantly remind the reader what is being read and who wrote it.

It strikes me that the one thing any author wants is not to be anonymous. An author wants readers to remember their name and look for their books. After all, is not getting one’s work read the purpose of writing and distributing? Yet ebook authors fail to do the one simple thing that would reinforce their “brand” (i.e., their name) to their audience — they fail to include (or insist that they be included) running heads in their ebooks.

Okay, as I noted before, some ebookers will complain (although I suspect that the vast majority would not). But so what. To complain about your book means they remember it and they are speaking about it. Few people would refuse to buy an ebook because it has running heads; fewer people would likely give much weight to a complaint that had nothing to do with the story or the writing as opposed to because it has a running head.

Authors need to sell themselves constantly. They need to do those things that make people remember them. Most authors are not going to write that ebook that everyone praises for clarity, style, craftsmanship, and the like; rather, they are more likely to write what is a good read that numerous readers can enjoy — think of it as the difference between To Kill a Mockingbird and The DaVinci Code. In the case of the former, the author and book are remembered because of the craftsmanship; in the case of the latter, the book and author are remembered because the book was a popular read even if not particularly memorable.

Adding a running head that repeats the book title and author name is an easy and proven method for getting readers to remember what they are reading and who wrote it. It is good marketing. I suspect that authors are losing sales because readers do not remember their name or the ebook title. This one little step could make remembering happen.

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Amazon’s Assault on Intellectual Freedom

Several weeks ago, I wrote Breaking News: Amazon vs. IPG, which was followed by Worth Noting: Amazon is an Author’s Friend — Or Maybe Not. The first article was picked up by other blogs and at one of those blogs, Bryce Milligan, publisher and editor of Wings Press, as well as an award-winning poet and author of books for children and young adults, posted a comment that caught my eye. I asked Bryce to write a guest article expanding on his comment. That article follows.

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by Bryce Milligan

There is an undeclared war going on in the United States that threatens the linchpins of American intellectual freedom. In a statement worthy of Cassandra, Noah Davis wrote in a Business Insider post last October, “Amazon is coming for the book publishing industry. And not just the e-book world, either.” When titans battle, it is tempting to think that there will be no local impact. In this case, that’s dead wrong. Amazon’s recent actions have already cut the sales of the small press I run by 40 percent. Jeff Bezos could not care less.

One recent battle in Amazon’s larger war has pitted it against a diverse group of writers, small publishers, university presses, and independent distributors. It is a classic David-and-Goliath encounter. As in that story, however, this is more than just pitting the powerful against the powerless. In this case, the underdogs have the ideas, and ideas are always where the ultimate power lies.

Wings Press (San Antonio, Texas) is one of the several hundred independent publishers and university presses distributed by the Independent Publishers Group (IPG), the second largest book distributor in the country, but still only a medium-sized dolphin in a sea of killer whales. In late February, IPG’s contract with Amazon.com was due to be renegotiated. Terms that had been generally accepted across the industry were suddenly not good enough for Amazon, which demanded discounts and practices that IPG—and all of its client publishers—could only have accepted at a loss. Yes, that does mean what it sounds like: To do business with Amazon would mean reducing the profit margin to the point of often losing money on every book or ebook sold.

IPG refused to accept the draconian terms and sought to negotiate further. In what can only be seen as a move to punish IPG for its desire to remain relevant and healthy, Amazon refused to negotiate and pulled the plug on all the Kindle ebooks distributed by IPG, marking them as “unavailable.”

Not a big deal? Imagine that Walmart controls everything you eat, and Walmart decides to stop selling fish because it thinks that fishermen are making too much profit. Amazon is the Walmart of online bookselling. The dispute between Amazon and IPG will affect every literate person in America. It is a matter that goes to the heart of what librarians have termed “intellectual freedom.” In other words, the resolution of this dispute, one way or the other, will affect every individual American’s access to certain books. It will affect your ability to choose what you read.

Restrictions on access to literature generally have more politically motivated origins. The banning of certain Native American and Mexican American authors and books in Arizona, for example, is purely political. Attempts in the past to ban literature based on its “moral content” were largely political in nature. This dispute is purely capitalistic, and is much more difficult to fight.

A single practical example. Wings Press had offered up one of its Kindle titles, Vienna Triangle by California novelist Brenda Webster, for the Amazon daily deal— a limited time offer of 99 cents per download. The book zoomed to the top ten of one of Amazon’s several bestseller lists. While it was still listed as a bestseller, Amazon suddenly marked the title as “unavailable.” The trail of loss increases in impact as it descends the food chain: Amazon doesn’t notice the loss at all. IPG sees it as one of its 5,000 Kindle titles that vanished. Wings Press sees it as one of its 100 Kindle titles that vanished. The author sees it as the loss of her book, period.

Lest one think that eliminating a single ebook novel is a loss of little consequence, Wings Press also publishes the works of John Howard Griffin, including Black Like Me, one of the most important works of the civil rights movement and widely considered an American classic. Amazon’s refusal to sell the ebook of Black Like Me should be of serious concern to every American.

Ebook sales have been a highly addictive drug to many smaller publishers. For one thing, there are no “returns.” Traditionally, profit margins for publishers are so low because books that remain on shelves too long can be returned for credit—too often in unsalable condition. No one returns an ebook. Further, ebook sales allowed smaller presses to get a taste of the kind of money that online impulse buying can produce. Already ebook sales were underwriting the publication of paper-and-ink books at Wings Press.

It has been increasingly obvious to independent publishers for the last two years that Amazon intends to put all independents out of business—publishers, distributors, and bookstores. Under the guise of providing greater access, Amazon seemingly wants to kill off the distributors, then kill off the independent publishers and bookstores, and become the only link between the reader and the author. The attack on distributors like IPG and on some larger independent presses is only part of the plan. Amazon has also been going after the ultimate source of literature, the authors.

Having created numerous (seven or more) imprints of its own, Amazon has begun courting authors directly by offering exorbitant royalties if the authors will publish directly with Amazon. Among the financial upper echelon of authors, Amazon is paying huge advances. Among rank-and-file authors, not so. Here they are offering what amounts to glorified self-publication. The effect is to lure authors away from the editors who would have helped them perfect their work, away from the publishers and designers and publicists and booksellers who have dedicated their lives to building the careers of authors, while themselves making a living from the books they love. Even the lowly book reviewer has been replaced by semi-anonymous reader-reviewers. All these are the people who sustain literary culture.

For Amazon to rip ebook sales away from independent publishers now seems a classic bait-and-switch tactic guaranteed to kill small presses by the hundreds. Ah, but predatory business practices are so very American these days. There was a time not so long ago when “competition” was a healthy thing, not a synonym for corporate “murder.” Amazon could have been a bright and shining star, lighting the way to increased literacy and improved access to alternative literatures. Alas, it looks more likely to be a large and deadly asteroid. We, the literary dinosaurs, are watching closely to see if this is a near miss or the beginning of extinction. Fortunately, this generation of dinosaurs is a little better equipped than the last one to take measures to avoid such a fate.

One can choose to buy ebooks from Barnes & Noble (bn.com) or from almost any independent bookstore rather than Amazon. One can buy directly from IPG. A free app will allow one to read those books on a Kindle. The resistance has already begun, and it starts with choice. I invite you to sign the petition at Change.org.

The Business of Books & Publishing: Changing the Pattern

We see a lot of new ebooks being released that are riddled with editorial and formatting problems. From the publisher’s side, the problem is that to proofread ebooks after conversion, especially after OCR (scanning) conversion, is expensive — contrary to what the naysayers believe, it is not a job for a high school graduate who thinks Twittering is the be-all and end-all of language literacy, but a job for a skilled professional — especially when it cannot be known with certainty how many ebook sales will be made.

Perhaps the time has come to rethink how and what gets published. I don’t mean which books but which formats. Perhaps the time has come to publish only hardcover and ebook formats, dropping the mass market paperback from the mix and keeping the trade paperback for those pbooks that do not justify a hardcover print run (although considering that the cost differential is slight between paperback and hardcover, I see no particular need to retain even the trade paperback).

Before the coming of the paperback, books were available in hardcover only. That limitation was the impetus for several innovations, including the public library. But the limitation served a good market purpose. It kept the price high relative to incomes; created an educated class to which people aspired; allowed nearly all print runs to be profitable; created the first commercial publishing class (as opposed to scholarly class) of books; created the respected profession of editor; and limited the number of books available for purchase. As a side effect, it created secondary and tertiary markets for books: secondary being the used-book market and tertiary being the collector’s market.

Today, the publishing world runs wild with no discipline imposed either directly or indirectly on the publishing world and process. Consider the growth of books published in the United States alone in the past decade: In 2002, 215,000 books were published traditionally (which largely means through the old-style process of vetting, editing, and so on by an established publisher) and 33,000 nontraditionally (which largely means self-published). Jump ahead a mere seven years to 2009 and the numbers are 302,000 and 1.33 million, respectively. One year later, 2010, the respective numbers are 316,000 traditionally published and 2.8 million — more than double — nontraditionally published! I’m not sure I want to know the numbers for 2011.

The jump in nontraditional publishing numbers is simply a testament to the rise of the ebook. The numbers do not imply or correlate with sales, quality, price, or anything other than raw numbers of suddenly available books. If I read one book a day, every day, or 365 books a year (vacationing from reading only on the extra day in leap years) for 60 years, I could read 21,900 books, which represents a mere 0.0078% of the 2.8 million nontraditional books published in 2010. The likelihood of my being able to read a significant percentage of all books available to me is nonexistent.

How does this tie into the idea of dropping paperbacks? It runs a convoluted course like this: As I cannot possibly read all of the books published in 2010 alone, I would prefer to march publishing backward and be less egalitarian and open access and more unequal and closed. I want to make what reading I do count with minimal search-and-find effort on my part. I want to see more profitability for authors and publishers in exchange for better vetting of books and significantly better production quality control. One way to do this is to control market access.

eBooks are already eroding pbook sales, so let’s help that erosive process by guiding it. If a person must read or buy a pbook, make the only pbook version available the hardcover version. Book buyers are already accustomed, from centuries of ingrained experience, to paying a premium price for a hardcover book. Book buyers perceive value — whether that value is real or not makes no difference; buyers believe it exists, which is sufficient for it to, in fact, exist — in hardcover versions. One side effect of that perception is that buyers of hardcovers tend to treat the books more carefully than they treat paperbacks, thus creating a secondary market with some value. Thus, let’s satisfy the pbook market need by providing a better-quality hardcover.

By limiting the pbook to hardcover only, we are also changing the secondary market. A used hardcover will now have more value because there is no pbook alternative. And it wouldn’t take a great deal of effort to figure out a way for authors and publishers to receive a small royalty from secondary market sales. Eliminate the paperback and there will be more incentive for that solution to be found.

The other benefit of eliminating paperbacks is that the ebook can easily replace it. More effort and money can be put into production of the ebook version and a more realistic price can be charged. Right now, much of the price grumbling about ebooks is a result of comparing the ebook to the paperback. Why should an ebook cost more than the paperback version? (The question is rhetorical here.) Eliminating the paperback removes the yardstick against which the ebook price is currently measured. The market will settle, just as it did for paperback pricing, around a few price points for ebooks, which will be less than the hardcover price. Within a relatively short period of time, that price stabilization will be accepted by most book buyers and what we will see is the return of the market we had before ebooks, but with ebooks in the role of paperbacks.

One other consideration is that by eliminating the paperback, traditional publishers are eliminating a major debit to their balance sheets. To offer a paperback version means you actually have to do a print run — the product has to be available in that form — which also means that the direct and ancillary costs (e.g., returns, warehousing) have to be incurred. And if the paperback is a decent seller, it means that the costs have to be incurred multiple times. In contrast, with an ebook production costs only have to be incurred once; any cost of duplication of the electronic file, once perfected, is minimal.

Will elimination of the paperback cause pain in the market? Sure it will, just as any established market change and upheaval does. But this is an opportune moment to make that change. Publishers need to move paperback readers to ebooks. They also need to enhance the value of both ebooks and hardcovers in the consumer’s thoughts. The easiest and most effective way to do this is for publishers to take their lumps now and eliminate the paperback from the equation (think of the shift from videotape to DVD and vinyl record/audiotape to CD). The period of rapid growth of ebooks is the time to reshape the market, not when the idea of coavailability of the three formats is entrenched.

Are eBooks a Bargain?

A common conversation point in recent months in discussions about the merits and demerits of ebooks has been “ebooks are a bargain.” Are they really?

I grant that my reading habits are probably atypical. It has been at least a dozen years since I read a book from the top 10 general fiction bestseller lists. (I have no idea whether any of the science fiction or fantasy books I have read were on bestseller lists in their categories.) So when the pricing wars were on and bestsellers were selling for $9.99, my response was a decided ho-hum.

Besides, what makes a bestseller? It’s the number of copies wholesaled to bookstores, not the actual number of copies sold to consumers. Granted that sometimes there is a correlation between the two, which becomes evident when you can’t buy a first printing copy and need to settle for a 13th printing edition. But most books don’t get out of the first printing — bestsellers or otherwise — and the bestseller lists are momentary lists, that is, they don’t reflect the fact that many of the books printed end up on the bargain/remainder tables within a couple of months of release.

I, for one, would be much more impressed with bestseller status if I knew that the status reflected consumer buys and not bookstore borrows. And my time is coming because of ebooks.

eBooks don’t require print runs. A single digital file given to Amazon substitutes for the 5,000 print copies. Consequently, one day bestseller lists will be more meaningful because they will reflect sales to consumers.

This has been a roundabout way of getting to the question at hand: Are ebooks a bargain? Like what is really a bestseller, ebooks equaling a bargain is a complex question. The answer is a resounding maybe. Let’s set aside all the limitations of ebooks that do not encumber pbooks, such as first sale impossibilities, DRM, the inability to share with acquaintances, lack of permanence — all attributes pbooks have over ebooks — and concentrate on the price question.

Dollarwise, ebooks that are not published by the upper tier traditional publishing houses can be significant bargains. I don’t see it as a bargain if a book published by Del Rey or Bantam sells for $8.99 as a pbook and $7.99 as an ebook. On the other hand, when I buy a book at Smashwords for $2.99, I view that as a bargain if the book is readable. And that is a key consideration — readability. I assume, and not always correctly, that a Bantam book is at least readable. I might not like the book, but the book is readable. I don’t have to recognize that the author meant “there” not “their” each time “their” appears in the text. That is, I don’t have to act as interpreter.

Increasingly, that is becoming less of a problem with the ebooks I find at Smashwords. It’s not that the problem has disappeared — it hasn’t — just that it is less. Of course, when I spend only $2.99 for an ebook, I have to be prepared to do a little of the work myself. It is the tradeoff. I suspect that the quality of less expensive ebooks will continue to rise (certainly, they cannot decline very far) as readers turn away from the expensive to the inexpensive ebooks.

I expect to see a dichotomy in the publishing world. I expect to see fewer fiction pbooks published in coming years, with the concentration for fiction being in ebooks. I also think that nonfiction books will be the primary pbooks, at least for the next decade, until the devices used for ereading are capable of handling the demands of more than text. I am aware that ereading-capable devices like the iPad may be suitable for nonfiction, but are these the devices that serious readers who sustain the nonfiction market will want to lug around? I think devices capable of straddling the needs of readers and nonfiction books are still in the planning stages.

With that shift of fiction to ebooks and away from pbooks, ebooks will become bargains. But until that shift occurs, the bargain ebooks are ebooks not published by traditional publishers; they are the ebooks published by authors directly to consumers and by small ebook-dedicated publishers.

It is possible to spend a lifetime reading ebooks that cost less than $2.99; in fact, it is possible to spend a lifetime reading ebooks that are available free. All you have to do is not want to read either pbook “bestsellers” in ebook form or not read ebooks by the traditional top-tier publishers. From experience, I can tell you that it is easy to avoid those high-priced ebooks; I rarely spend more than $2.99 for an ebook and have been quite pleased, overall, with what I have purchased.

To answer my question, yes, ebooks are a bargain if you buy smart.

The Lure of eBooks: Gotcha!

eBooks are like a good spy: seen but not truly noticed until the last minute when it is too late — at least that was the case for me.

As each day passes, I find that I am more inclined to read an ebook and less inclined to read a pbook. This was finally hammered home to me with the release of two new fantasy novels, Terry Brooks’ Bearers of the Black Staff and Brandon Sanderson’s The Way of Kings.

I wanted both of these books for my library, so I bought them in hardcover when they were released (just in the past few weeks). I finished an excellent mystery in ebook form (Vicki Tyley’s Thin Blood, a great buy at $2.99 and an excellent read) and decided to next pickup the Brooks book. My habit is to be reading 1 or 2 nonfiction books and 1 fiction book (usually an ebook) concurrently. So I put down my Sony Reader and picked up the Brooks hardcover and got as far as the copyright page, when I realized that I didn’t want to read the book in pbook form; I wanted to read it as an ebook. I also realized that I felt the same about the Sanderson book. So I bought both books in ebook form and put the hardcovers on my library shelves. For once, the publishers got me twice.

Combine this with my struggling to get through any nonfiction book in recent weeks because I really want to pick up my Sony Reader rather than the hardcover, and a dawning occurred — I finally realized that given a choice between an ebook and a pbook, I really do prefer to read an ebook on my Sony Reader.

The preference for ebooks stealthily snuck up on me. Unfortunately, I also recognize that my preferred books to read are nonfiction and ebooks aren’t quite there yet if the nonfiction book is loaded with illustrations and notes (perhaps the new readers will be better; I plan to try a nonfiction book on the Sony 950 when I get it). So I’m in a quandary: on what do I compromise? Do I forego the footnotes (99.9% of which are useless anyway and are present only to impress readers with the extent of the author’s “research”) and illustrations (many of which help explain the text) and read nonfiction in ebook form, or do I forego the pleasure of reading on my Sony Reader and continue to read nonfiction in pbook form? I suspect that the latter is what will happen for the most part, although I will start buying nonfiction ebooks when possible.

Of greater concern is whether I am seeing a new phase in my buying habits, a phase where I buy the hardcover for my library and the ebook to actually read — format double-dipping. Double-dipping could become a mighty expensive proposition, and as much as I love books, double-dipping makes no sense, especially as I do not truly “own” the ebook versions of the books that I would double-dip.

Here is where willpower comes into play. I am resolute (at least for the moment) that the Brooks/Sanderson double-dip will not be repeated. How resolute I am is yet to be tested, especially if the new device meets my hopes as regards the reading experience. (Wouldn’t it be nice if publishers said buy the hardcover and we’ll give you the ebook for a token price?)

The problem is ebooks and the very positive reading experience, at least on my Sony Reader (I don’t feel this same lure when reading books on my desktop or laptop; then I can’t wait to go to the pbook). eBooks are seductive. First, they are convenient — I love the ease of carrying my Sony Reader everywhere, such as while my wife shops. Second, 95% of the ebooks I buy are significantly less expensive than a pbook, in fact they are usually less than $3 and rarely more than $5. Additionally, ebooks can be better reads than many pbooks, as Vicki Tyley’s Thin Blood, mentioned earlier, and Shayne Parkinson’s Promises to Keep quartet, which I reviewed here and here, deftly prove. Each of these books cost less than $3 yet are exceedingly well-written and captivating.

But as seductive as they are, ebooks, for me, lack the permanence of hardcovers and the ability to pass down to children and grandchildren (which means that I value books, just as publishers want me to do; so why do publishers make it so hard to value ebooks? and, yes, I know I can strip DRM but I prefer not to), just as they lack the price of hardcovers (the great tradeoff). I have yet to surmount the peak where I am willing to forego adding hardcovers to my permanent library and only buy ebooks; I find that I look forward to giving my grandchildren my library. I expect the day is coming, however, when I buy only ebooks, but I do not see it in the immediate future and thus my need for great willpower. At least that willpower only needs to be exercised with fiction (for the moment) and I do not buy many hardcover fiction books. (I much prefer my fiction to be in ebook form so I don’t feel bad about starting a novel and deciding that it was a waste of money and time; ebook fiction is easy to delete and doesn’t take up precious space. I also generally prefer to buy from the independent authors I find at places like Smashwords, which is where I found Tyley and Parkinson.)

eBooks have captured me. Everything is right about fiction ebook reading, assuming, of course, that the book itself isn’t one of those that falls into the Give Me a Brake! or Truman & MacArthur & Why a Good Editor is Important category, which, sadly, an increasing number of pbooks are doing these days. Additionally, what is right about ebooks and ebook reading seems to get “righter” with each passing year, especially as devices get better and authors and publishers more careful and concerned.

I guess this needs to be viewed as a warning to all those yet to be initiated into the addictive pleasure world of ebooks. Once you stick your toe into the ebook waters, you will be captured because the reading experience is excellent and keeps getting better as publishers take ebooks more seriously. This is one of those experiences that compel you to go forward, that does not permit backward movement. Just remember to keep control of your pocketbook so you don’t end up like me: buying the same book twice; instead buy more ebooks, which is something else I do because I find I read significantly more books than ever before since I was captured by ebooks.

Who’s on First: eBooks, Hardcovers, Paperbacks?

The big news this week in eBookland was Amazon’s announcement that ebooks outsold hardcovers 1.8:1 in the last quarter. That set tongues awaggin’ and has prompted hundreds of articles, blog posts, and comments, now including this one. So that raises the question: Who’s on first?

One of the best comedy routines of all-time was Bud Abbott and Lou Costello’s “Who’s on First?” routine and Amazon’s announcement brought the routine to mind after many years of having been forgotten. For those of you unfamiliar with the routine, here it is:

Isn’t this really the story — and value — of Amazon’s announcement?

As many other commentators have noted, there is a lot of information missing from the announcement. Perhaps the most important missing tidbits are these:

• Were fewer hardcovers sold or just more ebooks?
• Why compare to hardcovers when the natural competitor to ebooks is paperbacks?
• How did paperback sales compare?
• Do the numbers represent unit sales or dollar volume?
• What was the average hardcover price? Average ebook price?

And the list goes on of unanswered questions, a typical Amazon ploy.

Ultimately, the most important unanswered question is this: Are pbooks being forsaken for ebooks or are ebook sales complementary to pbook sales — that is, who’s on first?

This question is particularly important in light of other recent data disclosures by others in publishing that indicate that pbook sales increased in the last quarter. It is also important in trying to determine whether ebooks are bring new readers to the table or simply shifting existing readers from one format to another. And it is also important for discovering whether the actual pool of readers hasn’t changed but that members of the pool are buying more. All of this brings us back to where we were months ago: publishers need to understand who their customers are and know more about them (see A Modest Proposal IV: A Radical Notion — Learn About Your Readers).

Amazon’s announcement doesn’t surprise me because it reflects (somewhat) my own buying habits. In my personal book world, I buy more ebooks than hardcovers by a significant margin, but to compare my ebook purchases with my hardcover purchases is to compare apples with oranges. An unscientific survey of a few friends and colleagues who buy both pbooks and ebooks illustrates that their habits mirror my habits.

In my case, I buy 4 times as many ebooks as I do hardcovers and I probably read 2 to 3 times as many ebooks as hardcovers. But none of that is meaningful. The ebooks I buy are rarely more expensive than $2.99 and are always throwaway fiction — read it once and delete, sometimes read it never and delete, often read a few pages and delete in disgust. In contrast, the average cost of a hardcover is $25 and it is almost always nonfiction (there are a few fiction authors whose books I only buy in hardcover) that I intend to keep and add to my library for future rereading or research. It takes 9 ebooks to match what I spend on 1 hardcover.

The economic implications are significant for publishers and for authors, yet they are not well understood by anyone in the publishing industry, pundits aside. Just as publishers and authors are learning that there is a downside to the new 70-30 split given by Apple and Amazon, so there is a downside to pricing stratagems — largely because no one really understands the bookbuying consumer. For too long the emphasis has been on the middleperson rather than the end consumer, and ebooks are now forcing a change.

Until a rigorous analysis is performed on the book market and on bookbuying habits, the question — Who’s on first? — will remain unanswered. This question needs to be answered because the true answer will have significant ramifications for everyone involved in books, from the author through the publisher and bookseller all the way to the bookbuying consumer.

Although Abbott and Costello parodied baseball, it doesn’t take much turn that parody into one about publishing.

Valuing eBooks: Is it a Sensory Problem?

This topic has been broached before (see, e.g., Valuing a Book: How Do Publishers Decide on Value?, On Books: Deciding to Buy or Not Buy (III), and The eBook Wars: The Price Battle (IV) — Value) and is likely to be broached many times in the future. It is a worthy topic that just won’t (can’t?) go away.

What brought it to mind again was the confluence of several events: I had to replenish my tea supply, a Smashwords July sale was being promoted, I read an article about the price of coffee, I went to see a terrible movie (and also a good movie), and a few other similar events.

Like many coffee drinkers who believe Starbucks is the barista and who are willing to pay $4 for a cup of joe, I like my tea with breakfast and the newspapers, and I don’t hesitate to spend a premium price for a premium cup of tea. Yet the pleasure that the coffee/tea brings is fleeting. A few moments after imbibing and the thrill is gone (as B.B. King would say).

Similarly, I saw 2 movies over the holiday weekend, one very good and the other exceedingly poor, yet these, too, were fleeting entertainments.

Yet, books are different. The thrill of a good read doesn’t disappear after an hour; a good story can captivate us for many hours — not only as we read the story but as we think about it long after we have finished reading it and as we discuss it with friends or recommend it to others. Nonfiction books may be books that we regularly return to for some factoid. Books do have a fading quality, but that fade occurs over a long period of time, unlike that luscious cup of tea with breakfast that fades quickly.

We all recognize this, even if only subconsciously. We often think about a book we read as a child or in high school, and we can still recall some of the characters and much of the plot — even if we haven’t reread the book in 50 years.

But in the pricing scheme of things, books, particularly ebooks, are significantly more price sensitive than our coffee. We who are willing to spend $10 a day on a couple of cups of coffee, hesitate to buy an ebook for $10.

There are lots of excuses — who knows if the ebook is really any good, the ebook has DRM (Digital Rights Management) that limits our use of it, publishers are greedy, and on and on. Aren’t the same excuses, however, applicable to that cup of coffee? How do we know in advance that the coffee isn’t too strong (or weak or burnt)? Isn’t our drinking the coffee like DRM — once drunk you can’t share it with a friend? Isn’t $4 for a cup of joe a greedy price when once can buy other coffees for half that price? And, besides, we know it doesn’t cost $4 to make that cup of coffee.

Doesn’t the same hold true for movies? Even the price of a movie rental is often more than the price that many ebooks. And we rarely go to see a movie alone, so the cost really adds up. And we willing pay the movie price — whether box office or rental — even though we know we can’t duplicate the movie, we can’t share it with friends over the Internet, and we can’t watch again in 3 weeks without paying again, and paying the same price as we did originally.

What makes ebooks different? That’s what I don’t understand. If anything, I would think the values should be reversed. The transience, for example, of the cup of tea versus the long-life of the ebook should indicate a reversal. But it doesn’t.

There was a time when books were so valuable that only the very wealthy could afford them. The books were gilded in gold and silver, painstakingly hand crafted, and highly sought objects of art. Although this esteem diminished with the advent of the mass-produced hardcover followed by the even more mass-produced paperback, the aurora of esteem didn’t wholly disappear — until the Age of eBooks and the inability to of a reader to see a finely crafted book and to hold it in his or her hands.

Perhaps that is the problem — ebooks lack a sensory touch. The cup of coffee exudes smell, a smell that pleases (hopefully), along with a taste that pleases (again, hopefully). Plus there is the sense of touch, of holding the cup in our hands and knowing that we are holding a cup of coffee that is desirable. Similarly, movies appeal to our visual and aural senses. But to what sense does an ebook appeal?

Really none. The traditional sensory reactions that we have toward a print book — the smell, the feel, the sound, the look — all disappear in the current incarnation of ebooks. Most readers agree that cover design and interior design of a pbook are important parts of the experience of reading, yet both are missing from the ebook experience.

I’ll grant that it shouldn’t matter — after all, aren’t we reading for the pleasure of reading and stimulating our mind — but the lack of the traditional sensory experience, the sensory experience that we grew up with, is, I think, the cause of our discontent with ebook pricing. All else, I suspect, is just our way of expressing that discontent because we don’t really recognize the root cause.

Of course, this will change over the next decade or two as ebooks become the standard reading method and readers lose their connection to the print book, but for those of us trying to make that transition, I expect we will continue to undervalue ebooks (and concomitantly overvalue other transient experiences) because we miss the sensory experiences we have become accustomed to associating with reading. I think readers need to become more accustomed to the ephemeral experience of ebooks. Once readers do and once readers recognize that ebooks are valuable simply for the mind stimulation they provide, then ebooks will be valued in the marketplace as they should be, with a lessening of the pressure on very low pricing.

eReader Economics: Buying a Reading Device Is Economical

Several times in recent months people have sidled up to me as I have sat reading on my Sony PRS-505 e-reading device to inquire about the device and the reading experience. After going through a demonstration and letting them “play” with it a little, the final question comes: “How expensive is it?” It used to be that once they heard the price, they couldn’t wait to move on. But with recent price lowerings, people are becoming more interested.

I understand the sticker shock. My Sony cost $300 two Christmases ago, to which I added another $70 for a 3-year extended warranty that covered all contingencies (a warranty that, I should add, has given me peace of mind but which has never been used) — roughly $400 for a device to read books, which I could do already without the device. Although my particular model is no longer available, you can buy a similar Sony (the PRS 300) for about $150 (the primary difference is that my Sony has a 6-inch screen and the 300 has a 5-inch screen) or the Sony 600 for $199 (it has a 6-inch touchscreen). (Also worth noting is that Barnes & Noble lowered the price of its nook, Amazon lowered the price of its Kindle, and the Kobo is also available at a relatively low price.)

But the economics of these devices actually argues, depending, of course, on what you like to read, for the “reasonableness” of the cost — whether that cost is what I originally paid or today’s prices (and tomorrow’s likely prices). If your reading consists only of books that appear on the bestseller lists, then the reader is convenient but probably not very economical. If your reading habits tend to be closer to mine, then the economic arguments in favor of owning one far outweigh those against.

I have always been an avid reader. As a kid, I used to take out 6-10 books every week or two from my local library. As an adult, my reading habits continued except that I now buy more books than I will ever get read. In addition to quantity, I have a relatively broad reading interest when it comes to nonfiction, and a narrower interest when it comes to fiction.

What I have discovered since I received my Sony Reader is that the quantity of books I read has increased and my range of fiction topics has widened. The Reader makes it easy to enjoy reading.

But little of that has to do with the economics of the reading devices. The question is how does the cost of the reader balance against the cost of buying books? For me that balance definitely tips into the positive side of the scale. First, thousands of very good books, including many, if not all, of the classics, are available for free. If I spent an average of $8 for a paperback that I read once and I spent $200 on a reader, just 25 free books would negate the cost of the reader; the 26th book would start the scale tipping to the positive side.

Finding 25 free ebooks to read is easy. There are many sources. Granted, none are the current New York Times bestsellers, but does that really matter? My Sony Reader has also opened me to the world of the independent author and the small (need I say micro) press. Before my wading into the ocean of ebooks, the only way I would find a book to buy and read was by going to my local bookstores. How many of us can go to such a bookstore and find independent authors and small press books easily?

eBooks have changed that equation. And the advantage is that many thousands of ebooks are available for less than $3. If I only bought ebooks at $3, I would have to buy 67 of them over the life of my Reader to balance out the initial $200 purchase price. Not a difficult task for most of us; for many of us that amounts to no more than 2 years’ worth of reading, and often less than 1 years’ worth. And if I mix free with ebooks costing $3 or less, it simply won’t take long to recoup that investment.

It should also be noted that many of the available free ebooks are contemporary and well-known author ebooks; that is, not just self-published or indie authors. For example, these ebooks are available for free: John Gilstrap’s No Mercy, John Stross’ Overtime, Rachel Swirsky’s A Memory of Wind, John Miller’s Star Wars: Lost Tribe of the Sith, and Warren Adler’s American Quartet. Some inexpensive contemporary fiction examples are Heather Graham’s Ghost Memories ($2.84), Fern Michaels’ Fool Me Once ($4.75), Stephen King’s Riding the Bullet ($4.19), J.D. Robb’s Midnight in Death ($1.99), and Sherrilyn Kenyon’s Dragonswan.

The point is this: Buying a dedicated device to read books can be very cost-effective if you are an avid reader and not wedded to reading only what the bestseller lists proclaim are the reads du jour. If you haven’t looked into such a device, now may well be a good time to do so.

Do eBooks Make Brick-and-Mortar Bookstores Uninteresting?

I know the article title is a bit odd, especially having been written by a booklover, but the question has been bothering me the past several weeks.

In the past, I went to my local Barnes & Noble at least once a week, sometimes more often, and always walked out with 1 new book and often 2 or 3. But for the past couple of months I have had no desire to visit the store and the one time I did, I bought 2 books rather than the 5 I had originally picked up (i.e., I put 3 back on the shelf after first having decided to buy them). Even more telling, however, was that I had gone to the B&N only because my wife needed to pickup some B&N gift cards for neighborhood children; otherwise I wouldn’t have gone at all. And even more telling was that in the past I loved to browse the shelves looking for books; this trip I was impatient to leave.

I’m not buying fewer books; in fact, since I was given my Sony 505 Reader 2.5 years ago, I’m buying more books than ever. But what has changed in my buying habits is the number of fiction books I am buying — from a handful each year pre-Sony 505 to hundreds each year post-Sony 505 — and how I am obtaining them.

As those of you who have followed my On Today’s Bookshelf posts (On Today’s Bookshelf, On Today’s Bookshelf (II), and On Today’s Bookshelf (III)) know, I still buy quite a few nonfiction hardcover pbooks. But whereas before I would largely find them by browsing the bookstore bookshelves, I am increasingly discovering them through ads and reviews in The New York Review of Books, the New York Times Book Review, and the book review sections of various magazines to which I subscribe, such as The Atlantic and Smithsonian. If I read a review of a book that intrigues me or see an ad for one, I simply go online and order the book.

Fiction books, however, follow a different trajectory. For those few authors whose new books I buy in hardcover (e.g., L.E. Modesitt, Jr., Robin Hobb, Harry Turtledove, David Weber, Terry Brooks), I go to an online site, check the coming soon category for these authors, and preorder the books. For those fiction authors whose books I do not buy in hardcover, the process excludes the brick-and-mortar bookstore because these aren’t authors I am likely to find on the shelves — they are independent authors. And the largest growth area in published books is books by independent authors whose books are only available online.

I discover independent authors via online forums like MobileRead and by looking through the multiformat section at Fictionwise and Smashwords. At Fictionwise, I wait for the big sales because I am unwilling to spend too much money on an unknown author; I usually get to Smashwords via a recommendation at MobileRead and often with a discount coupon.

But even then independent authors are losing out — at least as far as my buying goes — because I simply do not have the patience to sift through lists of books. Neither Fictionwise nor Smashwords makes it very easy to scroll through their offerings. There is no way to stop for the day, return tomorrow, and pickup where I left off — I am forced to start from the beginning of the list yet again, which rapidly becomes tiresome. And it doesn’t help when what I see is poorly designed cover art; at least in the physical bookstore browsing is much easier. (See Finding the Needle in a Haystack of Needles (II): eBooksellers for an earlier discussion of my ebookseller frustrations.)

The brick-and-mortar (B&M) bookstore suffers from an inability to compete either in price or selection. Independent authors are increasingly (or so it seems) pricing their ebooks at $2.99 or less. Knowing this makes me reluctant to try a new author I find at the B&M bookstore; it is one thing to gamble $2.99 on an unknown author and quite another to spend $12.99 or more.

So what is there to attract me to the B&M bookstore? As each week passes, I find it a greater struggle to want to go to the B&M bookstore. I’m not interested in the pastries and coffee; I rarely ever peruse the magazines; I can buy the same books online for less (in Barnes & Noble’s case, its online bookstore undercuts its physical stores on pricing so why buy at the B&M version?).

Are ebooks quickly making B&M bookstores uninteresting destinations? In my case, yes, because there is little incentive to shop at the B&M store, especially for fiction. Unfortunately, the online ebooksellers aren’t making their sites must-go-to destinations either. I think there can be a great future for B&M bookstores, just not in their current guise. I’m not sure what guise they need to undertake, but it is certain that they do need to make the experience an interesting one and they must become must-go-to destinations.

Agency in eBooks: Just the Start?

With all of the hullabaloo lately about the shift to the agency model of pricing brought about by Apple and 5 of the big 6 publishers, the question of what this means for the future of all publishing has been sidestepped. (For those unfamiliar with the model, essentially it means this: publishers set the retail price for an ebook and every ebookseller sells the ebook at that price. The ebooksellers aren’t really sellers in this scheme; they are simply conduits — a funnel for money to go from buyer to publisher and for delivery of an ebook to the consumer. For their efforts, the ebooksellers receive a commission.)

Let’s assume that the publishers (and Apple’s) motive for the agency model in ebook pricing is pure as the driven snow before the dog is let outside. Let’s also assume that the move was necessary to preserve “quality” publishing by ensuring that publishers and authors receive a fair return for their work effort. And let’s further assume that publishers play and will continue to play an important role in getting “quality” manuscripts from the oven to the table.

Yes, I know that for some of you these are mighty big assumptions and that it goes against the grain, like a fingernail scraping across a chalkboard, to give any credence whatsoever to these assumptions, but their credibility really doesn’t matter in the real world. What does matter is what the agency model for ebooks portends for publishing as a whole, and here is where publishing may well meet its Waterloo (further discussion of publishing meeting its Waterloo is found in Will Apple’s iBookstore be Publishing’s Waterloo?).

If the agency model works for ebooks, why won’t it work for pbooks? What separates the ebook and the pbook in terms of preserving the value of the work? Why should one be treated differently?

Logically, there is no difference between an ebook and a pbook. Yes, there is a form difference and yes, there is a slight production cost difference, but there is no difference in the content — and isn’t content what is really being sold? If the sale is really the format and not the content, then why pay authors? Why not just sell gibberish? Every reader, every author, and every publisher knows that content is king — it matters greatly whether that novel was written by me or by Stephen King and it matters greatly how the same words are strung together (presumably Stephen King strings them better than me).

If the agency model is designed to preserve the value of the content of an ebook, shouldn’t it be used to preserve the value of the identical (except for format) pbook? (Further discussion of value is found in Valuing a Book: How Do Publishers Decide on Value?) Isn’t this where we are heading now that the floodgates have been opened?

The ramifications of the agency model haven’t really been thought out by any of the players. If it works for ebooks, it will work for pbooks. If it is imposed in pbookland, publishers will, in one fell swoop, eliminate their largest headache — returns (for a discussion of returns, see It’s Raining, It’s Pouring: Returns in an eBook Age). It will also stabilize pricing — no more battles based on price between Wal-Mart, Amazon, Target, and Barnes & Noble, for example.

If agency pricing works with consumers (still unknown), publishers will be able to raise pricing on paperback books — after all, if an ebook that the buyer leases sells well at $14.99, why sell a paperback that the buyer owns at $7.99?

And if agency pricing works, why not further consolidate and eliminate booksellers altogether? Oh, that can’t be easily done tomorrow because consumers like the one-stop shopping that bookstores and ebooksellers provide, but it is only a matter of putting some thought to the problem to figure out a solution, a way for the publisher to reap 100% of the money — no need to split with an agent who provides minimal service.

Apple is one culprit here. Blinded by its dislike for Amazon (among other companies that Jobs seems to have a fetish about), Apple offered publishers what seems to be the ideal solution to Amazon’s power grab. Amazon is the other culprit in this story. Blinded by its desire to dominate the nascent ebook market like Apple dominates the emusic market, Bezos made several strategic blunders, each inflaming the publishing industry and fanning a belief (a well-founded belief, I think) that the enemy is Amazon and it must be brought to its knees. Unfortunately, the ebook consumer became the first casualty in this war and, ultimately, all readers are likely to become book war casualties.

The ultimate question for publishers, however, is will the agency model actually work to the industry’s benefit? What benchmarks have the big 5 set to evaluate the effect of the agency model on ebooks? How dedicated to book buying is the reading public? Have ebookers become so enamored with pricing wars that they will forsake agencied ebooks? There are lots more questions that need asking and answering, but I suspect that the big 5 are unprepared to either ask or answer them — at least not objectively. In the end, I think the near-term winners will be Random House and those indie publishers who forsake the agency model.

Which leads to the final question to be answered: What will publishers who have agreed to the agency model do if the iBookstore turns out to be a small molehill at the foot of a mountain rather than the expected mountain? Someone who buys a Kindle or a Sony Reader buys one because they are a reader; who knows why an iPad was bought. It’s the difference between buying a dedicated device and a multifunction device. Hard to tell which of the multifunctions was the impetus for buying the device and which functions are secondary or tertiary considerations, if considerations at all.