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Publetariat Dispatch: Game Changer – JK Rowling’s Pottermore & Ebooks Without A Publisher

Publetariat: For People Who Publish!
In today’s Publetariat Dispatch, Alan Baxter takes a closer look at JK Rowling’s new Pottermore undertaking, and what it could mean for the future of publishing and sales of ebooks.

The internet has been abuzz lately since mega-billionaire-super-author, J K Rowling (of Harry Potter fame, in case you’ve been a monk in a cave for more than ten years) announced Pottermore. In a nutshell, it goes like this:

After seven books and eight films and more merchandising than you can fit in George Lucas’s ego, Rowling has now announced a website which will be a complete interactive experience for all ages based on her stories. Along with that she’s announced that for the first time ebook editions of the Harry Potter series will be made available. Well, legal ebook editions that is. Rowling truly is the master at monetising her ideas and characters, having turned some books about wizards at school into an international behemoth across all media.

With Pottermore, as the press release says:

For this groundbreaking collaborative project, J.K. Rowling has written extensive new material about the characters, places and objects in the much-loved stories, which will inform, inspire and entertain readers as they journey through the storylines of the books. Pottermore will later incorporate an online shop where people can purchase exclusively the long-awaited Harry Potter eBooks, in partnership with J K Rowling’s publishers worldwide, and is ultimately intended to become an online reading experience, extending the relevance of Harry Potter to new generations of readers, while still appealing to existing fans.

It’s a pretty inspired concept. Of course, Rowling with her riches and business partners is the kind of author with the kind of clout you’d need to make something like this happen.

The real game changer among all this, however, despite the partnership comment above, is that the ebooks will be essentially self-published. Her publishers, Bloomsbury, Scholastic, etc., don’t own the eletronic rights – and I bet they’re really happy about that. So Rowling is planning to make the ebooks available directly through Pottmore. Of course, when Rowling self-publishes, she’s has a team of people behind her and her own company on the case, so it’s not like she sits there on her own and uploads files to Amazon. But the key here is the lack of a third-party publisher.

The Kindle will accept epub format ebooks soon and the announcement that the Harry Potter ebooks will be available from October seems to fit in with that, so it’s likely the books will be in epub. That certainly does seem to be the prominent format and, aside from Amazon’s mobi format, has been the industry leader all along. Once the Kindle accepts epub too, we have the first stage of industry standardisation and that’s a good thing for all of us. Perhaps we have Rowling to thank in part for forcing that change – who knows who talked to who while this was getting off the ground.

Authors leveraging their existing print success to manage their own ebook releases is nothing new – just see J A Konrath’s example for one. But nothing on this scale has happened before and we can see things shifting a little more on the axis. I’ve said it before – we’re living in exciting times in writing and publishing and the ride ain’t over yet. I wonder how many kids will get an ereader with a set of Harry Potter books on board for Xmas this year? This will be a big step in mainstreaming ereaders, which are becoming more and more mainstream anyway. On a recent flight to Melbourne I noticed several people reading from Kindles and Sony Readers while waiting for my plane.

The kind of cross-media storytelling and promotion which Pottermore represents is certainly not new, but we’ve seen nothing on this scale before. Just the official announcement video is better than any book trailer a lowly author like myself could hope for. I wonder where we go from here?

Here’s the official release video from Rowling herself.

And here’s the Pottermore site.

Interesting times indeed. What do you think? Is this a good thing or not? Where do things go from here?

This is a reprint from Alan Baxter‘s The Word.

Publetariat Dispatch- Interactive Novels: Not So Much.

Publetariat: For People Who Publish!In today’s Publetariat Dispatch, Publetariat founder/Editor in Chief and indie author April L. Hamilton explains her reservations about interactive novels, such as those offered for the iPad.

I love books, but I am not a particular lover of paper. For years now, most of my "reading" (where fiction is concerned, at least) has been done via audiobooks. I am also receptive to ebooks, and feel that certain books actually offer much more functionality in electronic form than in hard copy: travel guides, tech books, pretty much anything where the ability to easily jump to a specific topic of interest is desirable. With the advent of the Vook and book apps for the iPad and iPhone, I’ve looked forward to seeing what an "enhanced" novel might have to offer. The answer to that question—at the present time, at least—is disappointment.

For my first foray into the world of book apps, I decided to go with an award-winning, best-of-breed title: Dracula: The Official Stoker Family Edition, produced by Padworx Digital Media, Inc. I’d read many glowing reviews of this book app online, and since I’ve also read the book in the old-fashioned, paper-pulp format, it was an ideal candidate for comparison and evaluation.

First off, let me say the book app is beautiful to look at and the music is both lovely and entirely suitable for the subject matter. There are interactive elements on many pages. In one instance, you must move a virtual lantern around over a darkened page to read it. In another, you can bring a background illustration into better and brighter focus by touching it. In yet another, you must move a crucifix necklace about where it hangs over the page in order to see the text beneath it. Sounds cool, right? Well, these interactive features ARE cool, but they also pulled me right out of the story.

The experience of reading the book very quickly devolved into an exercise of hunting for "easter eggs", the term used for hidden bonus features in computer programs, on DVDs and Blu-Ray discs. You can’t always tell by looking at a given page of the app whether or not it contains interactive elements, so I found myself reading the text and then tapping all around on the screen to check for those elements. On the pages that don’t have them, all the tapping is for naught.

The experience ends up falling somewhere between playing a video game and reading an ebook, but it’s not a very good experience of either one. If the app were a full-fledged video game, I’d want interactivity on every page and I’d want it to be more extensive in terms of controlling my experience of the content. When I play a video game, I want my choices and actions to have consequences beyond causing formerly hidden images to display and being able to move objects around on a screen. Conversely, in an ebook, I want to feel immersed in the story world, to lose my awareness of the device on which the ebook is displayed; if you must tap or click all around on each screen to expose and enjoy the interactive elements, this is impossible.

 I thought this might be a case of this specific book app not being my cup of tea, so I also decided to check out another much-lauded title, the War of the Worlds book app from Smashing Ideas, Inc. Again, as a literary classic I’d read previously, it seemed a terrific pick. And again, I was disappointed.

With the WotW app, the interactive illustrations are not as numerous as in the Dracula app, though they are just as beautiful. However, I still had to tap around on them to find the hidden goodies, which was kind of annoying and again, took me right out of the story.

I’ve pondered how this issue might be overcome, and I’m stumped. Even if some sort of indication were given as to the location of the interactive elements (as is the case for some of the Dracula app content), the moment you’re tapping the screen and thinking, "Cool!" at whatever happens, you’re no longer gripped in the terror of Castle Dracula or an alien invasion, you’re admiring the technology.

The good news is, I think the book app is still very much in its infancy and publishers and developers just don’t know quite what to do with the capabilities of the technology yet. My prediction is that where novels are concerned, the book app will find its full flower in a sort of purposeful hybrid of book and video game. And yes, the words will no longer be the stars of the show in most cases, much as it is with movies. Every year there are those few, standout examples of films that are worth seeing for the sake of the whip-smart and insightful script alone. The Social Network is an example of that type of film. But most often, moviegoers are satisfied to be thrilled by action, wowed by special effects, or cracked up by comedy.

Such entertainments are largely disposable, and while it pains me to say so, I’m afraid this may prove to be the future of literature. Every year there will be a handful of new books that are worth actually reading, simply as words on the page, and for these the experience will be one of good, old-fashioned theater of the mind. But for the rest, consumers will come to expect the play to be delivered not only pre-scripted, but with the cast, costumes, sets, stunts and special effects already in place, with the reader empowered to act as director of the entire production via its interactive elements.

But this raises another, and I think thornier issue: in the case of a completely original interactive book app (as opposed to the re-imaginings of literary classics examined here), assuming a team of people were involved in creation and production of the app, who is actually the Author? I’m not sure that title will be apt for anyone involved in such a project, since the consumer’s eventual experience of the content will not be limited to the written words, but driven just as substantially by the multimedia and interactivity of the app. I suspect it’s more likely that the person we used to think of as the author will be given a "Written By" and/or "Story By" name check in the credits of the app.

If I’m right about that, it’s a double-edged sword. On the one hand, there should be more and better opportunities for writers to see their works produced and brought to an audience; maybe aspiring authors should start querying book app companies like Smashing Ideas and Padworx right alongside agents and publishers. But on the other hand, those writers won’t get quite the same level of recognition and prestige as in the past. Is this a good thing, or a bad thing? As of yet, I’m uncertain.


This is a reprint from April L. Hamilton‘s Indie Author Blog.

Amazon’s Sunshine Deals May Influence a Wider Range of Publishers’ Prices on Kindle … and That Would Be a Good Thing

Originally posted at BookGorilla.com

Over at his Kindle Review blog Abhi has been doing his usually fine job of following events in the Kindlesphere, and he turned his focus today on something we’ve been thinking about too: the effect of the Kindle Store’s wildly popular Sunshine Deals promotion on ebook prices generally.

In case you are wondering, our sister blog Kindle Nation Daily pretty much summed up Sunshine Deals with a June 1 bargain alert that said:

SUNSHINE DEALS at Kindle! This may be the biggest sale ever on desirable bestselling and backlist Kindle titles!

Bargain Alert! SUNSHINE DEALS at Kindle!

The summer reading season has officially begun with over 600 great Kindle titles for just 99 cents to $2.99 each at http://amzn.to/SunshineDeals!

It’s been natural enough to wonder how the Big Six price-fixing agency model publishers would respond to the Sunshine Deals initiative. Why should they respond? Sunshine Deals is just one more salvo in Amazon’s very effective multi-pronged strategy to provide customer-friendly Kindle Store prices — which to Amazon means prices at $9.99 and below.

As long as the Big Six publishers try to fight back by insisting on higher ebook prices, it’s not much of a fight. Sure, the publishers can get those $12.99 prices for ebooks by a few big-name bestselling authors, but as long as they hold prices at those levels for second-tier new releases, the overall result is that they are losing market share to ebooks whose prices hit Kindle readers’ sweet spot in the range from $7.99 all the way down to 99 cents.

Those very popular but less expensive ebooks are being offered up in increasing variety and selection by a growing range of authors and publishers, including:

  • thousands of direct-to-Kindle authors who range from new indie authors to bestselling traditionally published veterans like Ruth Harris and Paul Levine;
  • growing legions of small-press indie publishers;
  • relatively new publishing ventures such as RosettaBooks and Jane Friedman’s Open Road Integrated Media; and, of course,
  • Amazon itself and its growing list of publishing imprints such as AmazonEncore, AmazonCrossing, Montlake Romance and, for suspense fans, Thomas and Mercer.

Through most of the past year it has seemed as if the Big Six publishers would figure all of this out at roughly the same time that the last of them to leave their expensive Manhattan headquarters reached for the light switch on the way out. But now, finally, Abhi’s post today suggests that at least some publishers are embracing price competition in the real world:

“Publishers are waking up to the fact that someone other than them is selling a ton of books (at least if the rumors are true and Sunshine Deals really do exclude most of the Big 6),” he says, and points out that suddenly “there are a ton of Harper Collins novels on sale at $2.99 and $4.99.”

Could be a good sign. And we’re happy to hear that smaller, more nimble publishers like Twilight Times Books are stepping up to the plate, too!

“We appreciate our readers. 50 award-winning ebooks are on sale from Twilight Times Books for $2.99 via Amazon Kindle until June 15th. Historical, literary, mystery, SF, YA and more,” said Twilight Times publisher Lida E. Quillen in an email to Kindle Nation earlier today. Here’s a link to the entire Twilight Times Books catalog in the Kindle Store, featuring the bargain books just mentioned as well as quite a few others priced between free and $2.99!

I was especially pleased to see The Solomon Scandals by old pal and colleague David Rothman available from Twilight Times for 99 cents. It’s a terrific read.

Publetariat Dispatch: The Ebook Quandary

Publetariat: For People Who Publish!
In this week’s Publetariat Dispatch, indie bookseller Bob Spear offers a survey of different ereader devices and comments on ebook pricing trends from the bookseller’s perspective.

 
Last week marked the occasion for the 6th annual Winter Institute presented by the American Booksellers Association for their independent bookseller members. There was a lot of important information shared. I’d like to address how the technology and concepts of e-books are affecting the book industry. First, lets compare the different e-readers from the perspective of independent booksellers.
 
 
iOS-based (iPad/iPhone/iPod Touch:
Price= from $499 (iPad) from $99 w/contract (iPhone) from $199 (iPod)
Availability: Apple Store, AT&T, Best Buy, Walmart, etc.
Google Ebooks Compatible: Yes – Google Books App available through App Store
Ingram Ebooks Compatible: Yes – Palm/iPhone format compatible with eReader app (available thru App Store)
Should I recommend it? PROS: Best experience for indie ebook buyers. Both Google and Ingram offer easy access paths to eBooks on iOS devices. Huge existing install base. CONS: Expensive.
 
 
Android-based (Motorola Droid, Samsung Galaxy Tab, etc.)
Price= from $49 with contract (DROID) $169 (Galaxy)
Availability: Various retailers, online
Google Ebooks Compatible: Yes – Google Books App available through Android Marketplace
Ingram Ebooks Compatible: Yes – Palm/iPhone format compatible with eReader app
Should I recommend it? PROS: Inexpensive, availability of Google. Books app means easy access for your customers. Early reviews are good. CONS: Not as many of these in the wild yet, and few being used as e-readers. Expect a lot of growth in the # of these devices in 2011.
 
 
Nook, Nook Color
Price= $149 (Nook) $249 (Nook Color)
Availability: B&N, also Best Buy, Target
Google Ebooks Compatible: Yes – Use Adobe Digital Editions Download option
Ingram Ebooks Compatible: Yes – Adobe Digital Editions format
Should I recommend it? PROS: Both Nook versions have received good reviews. Customers who prefer a dedicated e-reader will find much to like. CONS: Adobe Digital Editions is not nearly as easy to use to sync indie ebook purchases as iOS apps. Wireless download is B&N only.
 
 
Sony Reader
Price= from $149 (Pocket Edition)
Availability: Sony Store, Best Buy
Google Ebooks Compatible: Yes – Use Adobe Digital Editions Download option
Ingram Ebooks Compatible: Yes – Adobe Digital Editions format
Should I Recommend It? PROS: Some unique features (smaller size, touch screen). CONS: Some say these are difficult to use. Adobe Digital Editions sync. Wireless store (on Daily Edition) links only to Sony.
 
 
Kobo
Price= $139
Availability: Borders, other retailers
Google Ebooks Compatible: Yes – Use Adobe Digital Editions Download option
Ingram Ebooks Compatible: Yes – Adobe Digital Editions format
Should I Recommend It? PROS: Inexpensive. CONS: Limited market penetration, Adobe Digital Editions sync.
 
 
Other ereader devices (e.g., Pandigital Novel, COOL-ER, etc.)
Price= Varies
Availability: Varies
Google Ebooks Compatible: Most do support Adobe Digital Editions. For a complete list, see: http://adobe.ly/cgNsDr
Ingram Ebooks Compatible: Same
Should I Recommend It? PROS: Some could be extremely inexpensive. CONS: Wildly varying user experience. Some devices may be buggy. ADE sync.
 
 
Amazon Kindle
Price= from $139
Availability: Amazon, Best Buy, Target, Walmart
Google Ebooks Compatible: NO
Ingram Ebooks Compatible: NO
Should I Recommend It? Customers will not be able to buy books from you for their Kindle.
 
One important factor of the above comparisons is that the very popular Kindle has been purposely limited to Amazon ebook formats only. Obviously this works just fine for Amazon. Last year Amazon sold more ebooks than print books. Another important factor for publishers is that you need to produce your ebooks in all the above formats. That can be expensive if you have to purchase all the format translators. A better way to go is with SmashWords.com. They have a translation software that takes a Word file and automatically translates it to 7+ ereader formats and then distributes them to Amazon, BarnesAndNoble.com, Apple, etc.
 
 
The major publishers have jumped on the ebook bandwagon in a big way. Let’s see who the major players are:
 
Random House 22%
HarperCollins 15%
Hachette 13%
MacMillan 13%
Simon and Schuster 13%
Other 24%
 
 
The top categories are:
General Fiction 12%
Literary Fiction 11.5%
Mystery/Suspense 8%
Sci Fi/Fantasy 7%
 
 
The Average Price Point was $10.83

Pricing of ebooks by publishers has become a major issue arising in two approaches. The Wholesale Model is the traditional approach where the publisher sells to distributors and booksellers at a discounted wholesale price, who in turn resell it. Instead, some publishers are using the Agency Model, where the publisher sells directly to the public and gives an agent commission to the booksellers enabling the sale. Here is how these two models split out last year:

Agency= 55%

Non Agency Discounted= 15%

Non Agency Full Price= 30%

The top ten bestselling ebook titles last year were:

  1. Freedom (MacMillan)
  2. Autobiography of Mark Twain (University of California Press)
  3. Cleopatra (Hatchette)
  4. Squirrel Seeks Chipmunk (Hachette)
  5. Unbroken (Random)
  6. The Girl Who Kicked the Hornet’s Nest (Random)
  7. Moonlight Mile (HarperCollins)
  8. Object of Beauty (Hachette)
  9. Crooked Letter, Crooked Letter (HarperCollins)
  10. Room (Hachette)

Competition is driving some interesting steps forward for ebook selling. Now giant Amazon is being directly challenged by giant Google with their 3,00,000 ebook titles. These will be sold by independent booksellers who use the American Booksellers Association IndieBound.com web hosting system. Ingram is being challenged by their major rival, Baker and Taylor Distributors, who will be selling ebooks within the next two months.

Up till now, small presses and self-publishers have had a fairly clear playing field because their non-traditional capabilities to react to developing technologies quickly. Now the big boys have waded in and are trying to recapture market control. Still, the big guys are still flailing. As a proponent of long-tail marketing, I think the little guys still have the advantage in supporting niche markets. The secrets of future small press successes will be to: keep on top of developing technologies and continue to take advantage of your quick reaction time to industry changes. Indie booksellers have a much more difficult challenge to keep providing beloved print books while figuring out how to sell ebook downloads against Amazon et al.

This is a reprint from Bob”>http://www.sharpspear.com/BobSpear.html”>Bob Spear‘s Book”>http://bobspear.wordpress.com/2011/02/01/the-e-book-quandry-by-bob-spear/”>Book Trends blog.

Publetariat Dispatch: Fiction vs. Nonfiction Ebook Pricing in the Kindle Store

Publetariat: For People Who Publish!
This week, the folks at Publetariat bring us a post from Joel Friedlander, AKA The Book Designer, on the topic of ebook pricing. Why does fiction generally cost less than nonfiction, and is that okay?

Pricing of e-books is a constant source of discussion online, and we’ve seen the rebellions in the Kindle store when publishers were allowed to start setting their own prices last year.

Some books went up in price, as traditional publishers tried to bring e-book pricing more in line with print book pricing. On the other hand, readers keep looking at the lack of reproduction costs in e-books and often moved to lower-priced alternatives.

Three other factors that seem to be driving the instability of the e-book pricing situation:

  1. The tremendous increase in the volume of sales as the price declines toward $0.99, the lowest price (other than free) in the Kindle store; 
  2. The shift of royalty payements, which are 70% for books above $2.99, and 30% for books below that price; and 
  3. The ease of changing prices on your Kindle books, combined with the ease of tracking your sales on a daily basis.

To get an idea of where pricing is today, I went over to the Kindle store to have a look around.

Amazon says there are 659,063 nonfiction books in the Kindle store. I took a look at just the top 10 best sellers as of yesterday to see what the pricing looked like. Here’s what I found:

Top 10 Nonfiction Full-Length Kindle e-Books

  1. $6.13 Heaven is for Real by Todd Burpo, Sonja Burpo, Colton Burpo and Lynn Vincent,
  2. $12.99 Unbroken by Laura Hillenbrand,
  3. $11.99 The 17 Day Diet by Dr. Mike Moreno,
  4. $9.99 Be a Dividend Millionaire by Paul Rubillo,
  5. $9.99 Allies and Enemiesby Anne Maczulak,
  6. $12.99 The Dukan Diet by Pierre Dukan,
  7. $9.99 The Immortal Life of Henrietta Lacks by Rebecca Skloot,
  8. $9.99 Winners Never Cheat by Jon M. Huntsman and Glenn Beck,
  9. $9.99 Leading at a Higher Level by Ken Blanchard,
  10. $9.99 The Gospel of Ruth by Carolyn Custis James,

The average price of these e-books is $10.40. None of these e-books is self-published, by the way.

Then I went to look at the fiction titles, since this is the land of the $.99 bestseller. Here’s the way the top 10 look, pricewise:
 

Top 10 Fiction Full-Length Kindle e-Books

Amazon reports they have 267,838 fiction e-books in the Kindle store:

  1. $4.17 Water for Elephants by Sara Gruen
  2. $7.99 The Lincoln Lawyer: A Novel by Michael Connelly
  3. $9.99 Walking on Broken Glass by Christa Allan
  4. $3.82 A World I Never Made by James Lepore
  5. $9.59 Divine by Karen Kingsbury
  6. $0.99 The Innocent by Vincent Zandri
  7. $0.99 Vegas Moon (A Donovan Creed Novel) by John Locke
  8. $7.99 Shattered: A Daughter’s Regret by Melody Carlson
  9. $4.58 Deadworld by J.N. Duncan
  10. $12.99 The Fifth Witness by Michael Connelly

The average price of these books is $6.31.

This means that the average fiction e-book that’s in the top 10 in the Kindle store is retailing for a full 40% less than the average top-10 nonfiction e-book. That’s a huge hunk of change.

Does this mean it’s better to be a nonfiction author, if making money is your aim?

Yes, it does. Self-publishing has traditionally worked best for nonfiction authors with solid information-based books. There is no disputing that a new world of bookselling is upon us, and all the old rules will be scrapped or at least reexamined in the light of new realities.

Are we seeing a rebirth in fiction reading, arising from the easy availability of inexpensive novels? From anecdotal evidence, it seems so, and that is certainly a good thing.

What Price is Right For You?

I think there’s no formula that will help you set your prices. If you’re a novelist, by all means keep track of the experiments of authors like JA Konrath and Zoe Winters and Joanna Penn, you’ll learn a lot.

But this seems to be an area where you have to be willing to experiment to find the right spot for your books. Many novelists have reported selling more and more copies as they gradually lowered their price, to the point that giving up the 70% royalty, when you go below $2.99, just didn’t matter as much as the volume of sales rose. As Konrath says about his title The List, when he lowered the price from $2.99 to $0.99, he sold 20 times as many books.

Here’s what Joanna Penn had to say in her recent article on the e-book pricing situation. Joanna publishes both nonfiction and fiction, so it’s interesting to get her perspective:

I pay far more money for non-fiction books that will help me in a tangible manner than I will for fiction which I read once and then (often) forget. It’s not that I don’t value fiction writing, but the price you pay for entertainment has to be representative vs the price you pay for actionable content.

The answer? Since we are all, in a sense, direct marketers now, we should take a lesson from the direct marketing world: test everything, track the results, adjust your pricing if necessary, and test again. You will become an expert on your own book’s pricing, and this experience will be invaluable as you continue to bring more books to market.

I took this all into account when setting the price of A Self-Publisher’s Companion in the Kindle store at $8.99. Is it the right price? I’m not sure, since the book has been out just a few weeks. Will I experiment with the price? You bet I will, just like all you other direct marketers.

What have your experiences with e-book pricing taught you?

This is a reprint from Joel Friedlander‘s The Book Designer.

Introducing A New, Weekly Feature: Dispatches From Publetariat.com – Beginning With Advertising In Ebooks: An Inevitable Outcome

Publetariat: For People Who Publish!Since its launch a little over three years ago, Publetariat.com has become the premier online news hub and community for indie authors and small imprints. Ebooks are a major component of most indies’ publication strategy nowadays, and the ebook news and commentary Publetariat shares is often of interest to readers, as well. With that in mind, beginning today Kindle Nation Daily will be sharing weekly cross-posts from Publetariat. Let’s kick it off with a post from indie author and small press owner Alan Baxter.

Advertising In Ebooks: An Inevitable Outcome

I made a passing comment on Twitter yesterday that led to some heated discussion. My comment was this:

Ebooks will soon carry links, photos, video, etc. They will also, in order to really monetize the medium, contain ads.

Which I followed with this tweet:

Your ebook will start in 60 seconds, after these messages from our sponsors. #wontbelong

Man, that triggered some visceral reactions from a lot of people. Particularly the advertising part. I think multimedia ebooks are inevitable too, but they’re already showing up in some guises. It’s a matter of ereaders catching up that stands between the standard ebook as it is now and the future ebook full of other media.

But when it comes to advertising in ebooks, I think it’s something that people need to accept. There are many reasons, not least the desire to monetize the ebook and keep “cover” prices down. I’m a big fan of ebooks, but I believe they need to be a lot cheaper than print books. I know all about the general production, formatting and so on, but the same applies to print books. The simple fact is that a person doesn’t get a physical object and the price needs to reflect that. Also, with ebook retailers, the margins are much wider. I make a bigger royalty on a Kindle version of RealmShift, for example, than I do on a print version, even though the Kindle edition is $2.99 and the print edition $9.99. But it’s obviously in everyones interests for publishers to make a healthy profit as well as authors. The more money a publisher has, the more authors they can take on and the more books they can produce. The more authors and books a publisher has on board, the more choice and variety the reading public have. It’s a win for everyone. But how to make it happen?

Kindle ad Advertising in ebooks   an inevitable outcomeIt’s a simple fact that we live in a capitalist society. If anything is going to work, someone needs to be making money. Ideally, everyone is making money except the people buying the product, and those people are happy with what they get for their outlay. In that environment, other than producing a quality product, a lot of profit comes from advertising. And is it really so bad to have ads in ebooks?

A lot of people on Twitter yesterday complained about ads interrupting the reading experience. I agree that if ads suddenly popped up when you turned a page, that would piss me off no end. But that’s not how it has to work. When you buy a DVD, you put it in and you get some ads and trailers before the film starts and maybe some afterwards as well. The movie experience itself is solid and uninterrupted. I see this as the way forward with ebooks. Hopefully consumer demand will force that to happen. If publishers start putting ads in the middle of books, customers should rightly voice their rage and refuse to buy from the publisher any more. But if you have to flick through a few pages of ads before the start of chapter one, it’s a slightly annoying but overall not very debilitating chore. Especially if the presence of those few pages of ads means the ebook is a reasonable price and the author and publisher are making money. Obviously, with the presence of ads, it’s the publisher that stands to make the most, but don’t forget my point above about publishers with good profit margins taking on more authors and giving readers more books.

I even see a time when an ebook might open with visual or video ads that you have to endure before the book itself starts that aren’t just the publisher promoting their other books, but third party advertisers buying space. Imagine an ebook of something by John Grisham, Dan Brown or J K Rowling. These are people that sell a lot of books. If their publisher sold advertising space in the opening pages of their books, that space could be sold at a premium. The publisher could stand to make a lot of money. Hopefully we’d see some of that money given back to authors in higher advances and royalties as well as being invested in future projects. I realise this is something of a utopian view and perhaps rather naive, but we can all dream. If the money is there, we can all lobby to see at least some of it spent right.

With most ereaders now utilising wifi and 3G technology, we could even see a situation where a different set of ads pop up every time you open a book. Ideally you’d only ever see ads at the start of the book, but if the advertising code used the wireless networks you might decide to reread a book a year later and see entirely new ads at the start. We’re already seeing video games where the billboards are updated with current advertising in-game. It’s no great stretch to see that happen with ebooks, thereby making that advertising space more profitable. Someone on Twitter (@NomentionofKev) even mentioned that the ereaders themselves might carry the ads, not the books. That risks a situation where every time you turn on the reader, you see an ad. For me, that’s going too far and I’d avoid that kind of reader. But it’s quite possible that we’ll see that situation before long.

Someone else (@Cacotopos) said that they have a demand list for ebooks – 1) no DRM 2) .ePub 3) no intertextual ads. And they noted that price wasn’t even on their list yet. I tend to agree with their list, but I would definitely add 4) Never more than $5 RRP.

Advertising annoys all of us, but it’s a necessary evil in a capitalist society. Sure, it would be great to have an ebook with no advertising, but isn’t it better to suffer a bit of advertising and have more choice of books, more new authors given a chance to get their work out to wide audiences and cheaper ebook purchase prices? I’m convinced that ads in ebooks are inevitable. It’s down to us to think about that and start voicing our opinions now so that we can hopefully help to shape the way that advertising is approached from the outset.

What are you thoughts on the matter?

This is a cross-posting from Alan Baxter‘s The Word.

Kindle Pricing: Listings Over $9.99 Down 5.3% in the Kindle Store! 4.5% Gain in Titles Under $3! 253,000 Kindle Books Priced Below $3, and They Account for 37% of the Top 100 Kindle Bestsellers, But Big Publishers Still Getting Top Dollar for a Handful of Big Names

The book business in 2011 is a complicated world, and there’s no single proposition that explains Kindle Store pricing. Big Six publishers and indie authors are going to opposite extremes, and our latest analysis of Kindle pricing shows a tale of two very different pricing strategies. 

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At the lower end of the pricing spectrum, the number of Kindle titles priced below $3 has grown by a very substantial 4.5% in the past 10 weeks, led by a doubling of both free contemporary tiles and free public domain titles. There are now over 253,000 books in the Kindle Store that are priced between 0 and $2.99, inclusive, for over a quarter of the overall selection, and these titles — the vast majority of them by indie authors publishing directly on the Kindle platform without traditional intermediaries — hold 37 of the top 100 spots on the Kindle Store paid bestseller list.
At the other end of the spectrum, the Big Six agency model publishers seem to be learning the hard way that most of their offerings will fail to thrive at prices over $9.99. The overall proportion of Kindle books priced at $10 and up continues to fall, with a steep decline of 5.33% between March 7 and May 17. However, at the same time, these same big publishers and their highest selling elite authors may be cheered by the fact that they seem to have gained a countervailing foothold with 35 books priced at $10 or more in the same Top 100 Kindle bestsellers list. 

The question that will eventually by answered — perhaps by the number of headstones in the publishers’ cemetery or by the number of authors who jump the publishers’ sinking ships for the world of direct publishing — is how quickly these publishers are losing overall marketshare due to their insistence on what are, for the vast majority of ebooks, unsustainable prices.

Perhaps most importantly, Amazon’s own pricing strategy is very clearly tilted toward offering many quality titles from its own relatively new and expanding group of publishing imprints in the price range from $1.99 to $4.99. Since Amazon knows more about its customers’ behavior on pricing matters than anyone in the world, it is clear that Amazon doesn’t think that the Big Six are hitting the sweet spot when they price books at $12.99 to $14.99.
As Kindle owners who have been known to buy and read vast quantities of ebooks, we pay attention to price. We’re savvy consumers, and when we decide that we want to read something it’s a very natural process for us to look at how its price compares both to the actual prices of other ebooks and to our theories about what we believe prices should be, and to make a purchasing decision accordingly.
So, in order to help keep our readers well informed, every few months here at Kindle Nation we conduct an analysis of Kindle ebook prices and share the results. We look both at the actual prices of all ebooks in the Kindle Store and also at the prices of the ebooks that populate the list of the Top 100 Paid Bestsellers in the Kindle Store. Our most recent survey took place on the evening of Tuesday, May 17, which allowed us to compare Kindle prices that we found in our last survey about 10 weeks ago on March 7.
Beyond the headlines above, here are the questions we always try to answer with these price breakdown posts, and here’s what we found:
Q1. What’s the overall size of the Kindle catalog and how does it compare with that of other ebook retailers?
A1. The overall count of Kindle books has been continued to grow by about 1,000 books a day over the past 10 weeks and currently stands at about 989,000, up from just above 898,000 titles on March 7. Since that figure includes only about 36,300 public domain books, that means there’s no other ebook retailer that comes close to that count for commercially offered ebooks. Barnes and Noble inflates its Nook count with over a million public domain titles, and Apple is rumored to be preparing a TV commercial with a voice-over that says “If you don’t have an iPad, then you don’t have access to the world’s smallest ebook catalog, with fewer than 150,000 commercial titles.”
Q2. How successful has Amazon been in herding prices into its preferred corral between $2.99 and $9.99, inclusive?
A2. The number of titles priced in this range is at 66.01 percent, so that it has actually fallen slightly in the past 10 weeks, from 66.13%.  But the percentage of books at $2.99 is up 17% during this period, so in keeping with the headlines above, there’s a somewhat more marked decline in the percentage of titles priced from $3 to $9.99, an entire percentage point (about 10,000 books in raw numbers) from 61.06% to 60.04%. 

As a percentage of the overall catalog, titles in the $2.99-$9.99 range are up 3.25% since we checked in December, while there are proportionally 10.2% fewer titles priced under $2.99 and 1.5% fewer titles priced at $10 and up. The growth of titles in the $2.99-$9.99 range has been supported both by the fact that Kindle pays indie authors who conform to this pricing range almost twice the royalty rate that is otherwise available to them and by the frequently stated resistance of many Kindle customers to prices above $9.99. Again, the largest area of growth has been for titles priced at exactly $2.99. After growing from 18,804 to 29,042 between September 5 and December 2, this group expanded to 45,528 in our latest look-in.

Q3. How successful have the big agency model publishers and their Black Knight, anti-reading crusader Steve Jobs, been in raising Kindle Store prices above $10?
A3. The Agency Model, if you’ve come a little late to this party, is a baldly anti-consumer price-fixing conspiracy (I wish I didn’t have to use that word, but sometimes a conspiracy is just that, a conspiracy) that was hatched at the beginning of 2010 by some combination of Steve Jobs and executives of five of the Big Six publishers, with Random House abstaining at first and finally going over to the dark side in February of this year. The stated goal was to mandate retail prices for Kindle books, and all other ebooks under the agency model publishers’ control, at levels that would be 30 to 50 percent higher than the $9.99 price that Amazon had previously set for Kindle Store new releases. The more important obvious but unstated goal was to slow the migration of readers from print books to ebooks. (Retailers had always had the freedom to discount as they saw fit from the publishers’ suggested retail prices in the past, and Amazon had in fact been selling many Kindle titles as loss leaders.) Since the Agency Model went into effect on April Fool’s Day 2010, the percentage of the Kindle Store catalog priced in agency-model heaven at $10 and up has fallen from 21.7% to 19.2% on May 22, 18.8% on June 14, 18.1% on July 18, 16% on September 5, 15.3% on December 2, 15.04% March 7, and 14.3% this week. 

How’s that goal of slowing the migration to ebooks working out for publishers? Amazon announced this week that its Kindle ebook sales had tripled over 2010 levels and had surpassed its print sales, despite the fact that Amazon’s own print sales continue to grow. How long will publishers continue to posture as if they have an adversarial relationship with a company that is marching inexorably toward having a 50 percent market share for all books sold in all formats in the United States by the end of 2012?

Q4. Has there been a significant change in the title count for Kindle books priced under $2.99 since Amazon began paying a 70 percent royalty for books in the $2.99 to $9.99 range?
A4. The proportional representation of Kindle books at every price point under $2.99 (free, 99 cents, under 99 cents, and $1.00 to $2.98) fell  dramatically from December to March, but in the past 10 months the percentage of titles at these price points as indie authors have discovered that pricing books at these levels can, in many cases, create so much attention that it more than makes up for the far lower royalties.
Q5. Overall, are ebook prices going up or down or staying about the same?
A5. Lower prices are clearly winning, for all the reasons described above.
Q6. Are there changes in the price composition of the Kindle Store’s key bestseller list, the Top 100 Paid Books?
A6. With the launch of the $114 Kindeal (the special offers Kindle) that has recently become Amazon’s #1 bestselling product with, probably, over a million units shipped to date, we’re seeing a bit of the usual post-Christmas phenomenon for the Kindle Store, with a swell of new Kindle owners rushing to fill their Kindles with the books they want. This tends to stimulate sales and downloads at both ends of the pricing spectrum, with bestseller-driven customers buying big name books and savvy consumers snatching up the best deals — and there’s nothing to say that these are not the same customers at both ends of the spectrum. The natural consequence of this surge is that the number of Top 100 bestselling titles in the middle, priced over $3 but under $10, has fallen from 40 to 33 since March 7, while the number of titles in the other categories has risen from 30 each to 32 and 35. 

One interesting phenomenon that I couldn’t help but notice is that readers already seem to have gone lukewarm on the Kindle wunderkind of late 2010 and early 2011, former indie author turned newly signed St. Martin’s Press property Amanda Hocking. Just a few months ago she had half a dozen of the top 30 titles in the Kindle Store at prices ranging from 99 cents to $2.99, but Kindle readers seem to be anticipating the likelihood that her forthcoming ebooks will have to be priced in the $9 to $15 range to please the St. Martin’s bean counters. They have kicked Hocking to the curb for John Locke and a group of Top 100 bestselling indie authors who just happen to be Kindle Nation faves and past sponsors, including Julie Ortolon, Scott Nicholson, David Lender, Elisa Lorello, Anna Mara, and Michael Wallace. Hocking’s still holding onto Top 100 status, with two titles in the 80s and 90s.

Q7. Are there any noteworthy trends with respect to free books in the Kindle Store?
A7. Don’t look now, but the number of Kindle freebies are surging. Both public domain titles and free contemporary titles have doubled, and Amazon has finally cracked open the door to allow indie authors to offer their titles free … even if it is not the front door.