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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.
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.