Tipping Point or Quitting Point?

by Amanda S. Green

This week has been a typical week in the industry.  There’s been good news, bad news and news no one is quite sure how to interpret.  All of it does, in my opinion, show the state of flux in publishing and just points out that no one knows — yet — where things will finally settle.

First up, reaction to the new line of kindles from Amazon continues, especially on the kindle boards and most especially with regard to the new Kindle Fire.  For those of you who aren’t familiar with the Fire, it is Amazon’s entry into the tablet market.  Whether it is the iPad killer some have forecast or not, I don’t know, but I doubt it.  Amazon has taken a very clear stand that the Fire is a media tablet, built for reading, music, video and apps.  It is smaller, a 7″ screen, doesn’t have a camera or 3G capabilities.  It also has a much lower price than the iPad, coming in at $199.

Still, all you have to do is go to the Kindle boards and you’ll see thread after thread of people wanting to know why Amazon isn’t offering the Fire with 3G capabilities.  No, not just 3G but FREE 3G.  After all, some of the Kindles have free 3G.  Sure, you pay a bit more for it, but it’s free.  So why isn’t Amazon offering it for the Fire.  They’re being mean, not giving away something that will make it easier to surf the web free and stream videos and play online games, etc., etc., etc.

What all these folks demanding free 3G seem to forget is that it isn’t free.  At least not for Amazon.  The company has to pay for it.  Putting it onto Kindles that aren’t built to really surf the web easily and that aren’t capable of streaming videos is one thing.  But to put it onto a tablet that is optimized for surfing the web and streaming video would be a potentially very costly move for Amazon.

Could they have put 3G capabilities onto the Fire, sure?  But that would then be like the iPad with 3G and a data plan would be needed.  Can you hear the cries of FOUL! that would have risen because now Amazon was charging for something that had been free in the previous incarnations of the Kindle?  I can.  All those entitled folks would have protested loud and long and just as foolishly as they are now when they complain because there is no free 3G with the Fire.

And this brings me to the latest figures from the AAP.  If you read the figures one way, it looks like e-books sales are cooling, justifying certain publishers’ belief that they have merely been a flash in the pan.  This is especially true if you look at the sales of hard covers with the same rose colored glasses.  After all, e-book sales ONLY increased by 105.3% in July.  That’s the smallest increase in e-books sales all year.  At the same time, hard cover sales increased 33.9%, one of it’s best performances this year.

So let’s look at that in solid figures.  E-book sales accounted for $82.6 in July.  For the same month, hard cover sales accounted for $91.2 million.  There are several things I believe are important in these figures.  First, e-book sales continue to grow in triple digits each month.  I don’t feel the fact these sales ONLY increased by a little more than 100% in July is indicative that e-book sales are cooling.  July is the middle of summer vacation and most folks are not spending their free time reading.  For another, one month a trend does not make.  But there’s something else to look at.  That mere doubling of sales has brought e-book sales to near parity with hard cover sales.  That’s something traditional publishers have been fearing.  So that knocking you hear right now are the knees of legacy publishers trying to figure out what they’re going to have to do to survive.  Finally, it is important to keep in mind the fact that e-book sales for the year (through July) are up 152.8% while hard cover sales are down 17.8% for the same time frame.  Like it or not, e-books are here to stay and, in my opinion, the tipping point is here.  That will be confirmed as we see the sales figures for the rest of the year.

What would be interesting would be to see the number of units sold, and from what publishers, and not just the total dollar figure.  The reason I’d like to see it is because I want to see how the legacy publishers using the agency model of pricing v. those who follow the philosophy that you don’t have to charge as much for e-books as you do for hard covers.  I’d also like to see the breakdown between how many e-books are sold at the higher agency pricing v. the number of those same books sold when the price is lowered after the paperback version of the book comes out.  Until we see those figures — and I’m not holding my breath — we really won’t know the full impact of e-book sales on traditional publishers.

Finally, there’s this post from Publishers Weekly about the increasing market share of e-tailers v. physical bookstores.  True, part of the decline in brick and mortar sales comes from the fact Borders has gone belly up.  But, as I said many times in the months leading up to Borders’ dissolution, a large part of the problem was the influx of the big box bookstores.  They drove many of the mom and pop indie stores out of business.  That wasn’t necessarily all bad.  But the problem came from the fact that the big box stores didn’t adapt to the changing market.  They kept doing things the way they always had.  Worse, they started demanding concessions from publishers to help them maintain a money losing business.  Now we’ve lost Borders and publishers are hurting – badly.  Indie bookstores are few and far between.  But, what I anticipate happening (and I’m already seeing signs of it) is that we will see a return of indies.  These will be specialty stores for the most part.  They will be manned by people who love books and who know their stock.  These employees will interact with their customers, get to know them.  Sure, there might be a coffee shop or bakery or wine bar attached.  After all, readers are spoiled now.  They want their triple soy latte or whatever as they browse the shelves.

But it will be more than that.  These indies, if they are smart, will also work with small e-publishers and self-published authors.  They’ll sell download cards or codes for these e-partners.  Not only will that help service those readers who have gone digital, but it will get money in the pocket for the store owners.  They’ll carry print versions, often from Lulu or Createspace or several other POD publishers, for these same digital authors because not everyone wants an e-book.  Author events will be back as will partnerships with libraries where the store helps with library events.

Finally, for those who haven’t heard, an author who for a very long time was the lone voice in the forest promoting the benefits of digital self-publishing has decided to go on a blogging hiatus.  Joe Konrath announced his decision to take a break from his very successful blog, A Newbie’s Guide to Publishing, a week ago.  He isn’t planning on shutting the blog down permanently.  He just doesn’t know how long he’ll be gone.  However, his departure, for however long it might be, will be noted.  Here’s hoping his blogging batteries get recharged soon.

So, have we reached the tipping point for e-books?  I think so.  Not only are e-book sales almost matching those of hard cover sales, but e-book readers are now very affordable.  For the price of dinner for two a then a movie, you can buy a Kindle.  The loss of Borders and the lack of bookstores in many areas means more and more people are having to turn to internet stores for their books.  I can’t help but think that will bring about more readers buying e-books, especially when the home page of Amazon touts the new, lower priced Kindles as well as the Kindle Fire.  But don’t leave B&N out either.  Their homepage features the Nook models prominently.  But, maybe I’m wrong.  What do you think?

17 comments

  1. I suspect we’re all wondering this. I’ve just started with pubbing in e-book format, and only reprints so far, but I’ve been pleased with my ‘sales’. I believe it’s worth the effort in the long run….

  2. What I’m hoping for is that more authors will release their older books in e-format. I just purchased from the Kindle store Teresa Edgerton’s _Goblin Moon_. Nice light read and I’m looking forward to more of her books coming out.

    1. Paul, I hope more authors do bring out their back lists. The problem is that more and more legacy publishers are refusing to revert rights, using all sorts of imaginative accounting and contract interpretations to hold onto them. I have a feeling we’re going to see more authors banding together and taking these same publishers to court not only to get their rights back but to have a full accounting of their past sales. If that happens, I think we’ll see some of the houses tumble and crumble.

    2. I have most of her novels but I’d gladly buy them again as ebooks just to avoid breathing dust and maybe ruining my decrepit paperbacks.

  3. I’m not sure, even at this date, whether publishers (With the ever-glorious exception of Baen.) have “gotten” eBooks. Two incidents of (very) recent vintage come to mind.

    1. The new Rick Riordan eBook costs $10 under the “agency” model, and is so riddled with errors it’s almost unreadable unless you can figure out, on the fly, that, for example, “trus thim” was intended as “trust him” WITHOUT it distracting you from the story. (Note, the paper edition I checked in a bookstore was properly set up.)

    I can’t figure out whether this was an accident or a deliberate attempt to spit in eBook readers’ eyes and force us to buy (Ugh) paper.

    2. I discovered, by accident, that some of Poul Anderson’s older books I’ve wanted for years are available as eBooks. In England. With NO way to buy them legally on THIS side of the pond. So much for “global marketing.”

    3. Nobody has an electronic mailing list where you can request notification when a new (or reissued in eBook) edition of an eBook has been released. I’ve managed to miss books by (wanted by me) authors for months because you have to go out and look, on your own, on an author-or-title specific basis.

    1. I hadn’t heard about the Riordan book, but there’s a thread on the Kindle boards about PTerry’s latest, Snuff, being so riddled with OCR errors that it had to be pulled for correction. What gets me is the sort of errors you report ARE OCR errors. That means the publisher is either scanning the hard copy or trying to convert from the PDF, which can render the same sort of problems if you don’t use the right conversion program. Either way, it means they aren’t doing any sort of quality control.

      With regard to Anderson’s books, that might also be a rights thing. Right now, unless an author or their estate grants world English rights, etc., to a publisher, it is limited to geographic rights. I don’t like it and think it’s really rather foolish in this day and age of the internet, but publication contracts and rights don’t move at the same speed as tech.

      As for the mailing list, I’m not sure how that could be done, especially since a lot of the e-books would be released by the authors, or their estates, and not by a publisher. Maybe it’s something to be considered.

      1. I should think that Amazon’s marketing folks could be prodded in that direction, if the market told them it was needed. They already have a “Wish List” function based on existing products, don’t they? Adding a layer to that function, giving the buyers a place to identify specific authors/series they’re watching, which tells Amazon a little about “assured sales” for those authors when the next listing arrives? I think they’d go for that, if enough buyers ask.

      2. The errors in the Riordan are not OCR errors, as far as I can determine. The words are always the correct ones, just banged-together or split. I don’t know whether it was just “Who cares, it’s only an eBook?” or a deliberate attempt to spit in my eye and force me to buy paper if I don’t want my brain to itch while I read.

        I saw a followup note on Amazon this weekend that the publisher had supposedly apologized and put up a corrected edition, but I re-downloaded by B&N edition and the errata were still there.

        It’s pretty clear to me that, with the glorious exception of Baen, eBook readers are still second- (or even third-) class citizens as far as the publishing industry is concerned.

      3. Until the great Amazon-Publisher War, fictionwise had a setup whereby, whenever a new book by a particular author showed up, you could get an email announcing the fact.

        THIS IS NOT ROCKET SCIENCE, PEOPLE! (Sorry for shouting, but if FW figured that out ten years ago… With the death of Stanza, I’m a tad frustrated…)

    2. Edward,
      I agree that the “rights” issue is a confusing mess particularly when the rules are applied to ebooks. I see it from the other side as I’m in England and am regularly told “this ebook is only available to customers in the US”. It is very frustrating. Hopefully ebook rights will be sold on a world wide English language basis in future, but I suspect the problems with backlist rights will take a while to sort out .

      On the Poul Anderson front, some of the ebooks are available for the Kindle in the US on the Amazon.com site, and some have recently been republished as omnibus collections in paper and ebook format by Baen. See http://www.webscription.net/s-2-poul-anderson.aspx

      Melvyn

  4. Amanda — is there a way (I really have no idea bout this) to parse those hard-cover numbers further, to see how much, if any, of that up-tick came from discounted h/c’s from the Borders liquidation? That started in July, if I remember correctly.

    My favorite of the local indie stores (I’ve mentioned before that Norfolk/VaBeach have a disproportionate number of surviving ones, due to some idiosyncracies of this market) has a huge second-hand-stacks room. For the types/genres of books they have on the shelves in front, the staff generally also have at least a rough working knowledge of what related material is also on the shelves in back. (As in, “Oh, if you like this, we generally have a couple copies each of these three earlier ones by this author that are all out of print now.”) I could totally see them adding a layer of, “If you like DST, you might consider the Shifter series. The first is out of print, but here’s a card for a site where you can buy the e-book. Then, if you like that, we have ‘Gentleman Takes A Chance’ right here on this shelf …”

    1. Steve, I saw some rough figures last month — I think — which took the Borders liquidation sales into account. There weren’t hard figures, but the author of the piece did comment that there was evidence to believe that the increase in sales was because of Borders and how ironic and sad that was. I think we’ll have a better idea when the figures for this fall start coming in. Plus, I suspect we’ll see another kick up in e-book sales in November when the Kindle Fire comes out.

      Your indie store sounds a lot like what the new crop of stores are trying to be. I really do hope we see more of them cropping up and filling the hole left by Borders’ bankruptcy. I do think we’ll see more in the coming year or two, but they will be specialty shops, on the whole, and not all-purpose bookstores.

      1. The figures from Borders had a truly scary effect on my own paper figures – increasing them to double – and then – at the end dropping them to 1/10.

  5. Dave, I’ve heard other authors saying the same thing. From what they’ve said, it looks like Borders had a huge stock of books they’d never put out on the shelves that suddenly hit the floor and were bought. So numbers soared and then sank like a rock. What concerns me is that all those books were out there and not being sold for who knows how many weeks/months so numbers were skewed how badly for who knows how long.

  6. (sorry for the late reply but this one of my hot buttons)
    The sad thing is, Amazon HAD a great alert function for years. Mine ran to something like 20 authors and topics. They quietly killed it some years ago. I’ve never been able to keep up with my “midlist” authors since then. I can barely keep up with my top list authors . The big publishers have alerts but they’re pathetic. iTunes alerts seem to work ok but they only have modern name authors.

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