Friday, January 13, 2012

Ebooks Take Over USA Today Top 50

This is part of a new graphic put out by USA Today this week, showing the rise of ebook sales up the bestseller charts. The full chart shows dates running back to July 2009 when Amazon's ebook sales were first added to the bestseller charts, but entries in the top fifty were essentially non-existent until last January, so I haven't included that portion of the chart here. However, you can click though on the image to view it over at USA Today.

The only important points missing from the truncated chart above are the inclusion of Barnes & Noble ebook sales in December of 2009, and Sony's in February 2010, plus the singular event when I, Sniper by Stephen Hunter became the first ebook to crack the top 50, coming in at #48 on January 1st, 2010.

Points noted on the chart above include:
  1. First ebooks crack the Top 10 as post-holiday sales explode
  2. Kobo ebook sales added (no significant impact in the U.S.)
  3. Ebook sales begin to dip as holiday shoppers buy print books as gifts instead (and a whole lot of e-reading devices)
  4. Ebooks outsell print editions for every title in the Top 10, including 42 of the top 50 best selling titles
As with this week last year, ebook sales have increased exponentially after a holiday season in which literally millions of new e-reading devices were received as gifts. Forrester Research estimates that Amazon has sold some five million Kindle Fires since its launch in mid November, with Barnes & Noble adding two million new Nook Tablets to the fray. Apple, meanwhile, sent out around forty million iPads last year, although it's difficult to determine how many will be used to read ebooks. 

With digital editions overtaking print for the top spots on the bestseller charts, print is destined to decline even faster in the coming year, as print sales have largely been held up by the million-selling titles. Initial figures from the U.S. Census Bureau show that print sales fell by 9% in 2011, due in part to the demise of Borders, who sold their final book in September. But if post-holiday ebook sales remain as stable this year as they did throughout the past year, ebooks might well achieve market dominance this year.

Thursday, January 12, 2012

Amazon Reveals Library Loan Royalties

In a somewhat unprecedented move, Amazon has publicly revealed some very specific financial figures in a press release today. These concern the Kindle Library Lending Program and its fledgling counterpart, Kindle Select, in which authors are given a share of a half million dollar pot each month for every ebook they have enrolled in the program that is borrowed, based on the total number of loans that month.

December was the inaugural launch of the Kindle Select program, and until today no one knew how much to expect each loan to earn, as there were too many unknown variables, such as how many total loans there would be, how many titles would be enrolled in the program, and how those loans would be distributed among the current offerings. Would the top ten ebooks get the lion's share? Would everybody get a little? And how would anybody really know if Amazon never offered up the numbers? I floated some estimates in a post last month, but made no predictions. Amazon used the figure of 100,000 ebooks borrowed for their example.

The actual figure was 295,000. Thus, dividing the $500,000 pot by 295,000 loans results in a payout of $1.70 per ebook borrowed. And thus ends the speculation.

Now let me put that in perspective a bit. On a $2.99 ebook with a 70% royalty, an author receives $2.09 for each book sold, minus the download fee, which is .10 cents per megabyte. My "Complete Edition" ebook is 2.31 Mb, so .35 cents is taken out, leaving me with $1.74 - only four cents more than I now make when the book is loaned instead of purchased. This effectively increases my revenue, and brings new readers to my work. It's a win-win situation.

Let me put it in even more perspective. On a .99 cent book with a 35% royalty (the only royalty allowed for that price point), the author receives .35 cents. Total. But for each time that same ebook was borrowed in December, they will receive... yep, $1.70. More than the cost of the ebook. Nearly five times the royalty paid out for asale of that same ebook. Thus, rather than having to sell 100 books you can now loan out just 20 and make the same amount of money.

Now let me put this in another light. The average royalty for a traditionally published author is 10% on hardback sales up to 250,000 copies (12-15% for higher sales volume), and 6% for paperbacks. Minus 15% taken by the agent. Thus, for a $25 hardback the author receives $2.13 per copy sold ($2.50 minus 15%), but only when and if their advance has earned out (a $20,000 advance, for example, would require sales of over 9390 copies to start paying royalties; until then the author receives nothing beyond the advance). For a hardback book sold to a library to loan out innumerable times, that author receives... yep, $2.13. Total. Regardless of how many times that book is taped back together and checked out of that library. And that hardback is only available for sale for a short period of time, giving them a small window of opportunity to make that advance. After the paperback comes out our same author receives an average royalty of 6%, which on the average $6.50 title is just .39 cents... $1.31 less than our ebook author has just received for loaning out their title via Amazon.

For anyone that doesn't understand what Amazon is doing here, let me spell it out: they are buying authors. They are drawing authors in and stocking their shelves with exclusive content by paying out the best royalties in the business, giving them the best terms, the best tools, and the best distribution platform you could ever want: instant access, everywhere. Because of this, 75,000 titles are now enrolled in the Kindle Select program, up from 5000 available on launch. Exclusively. Meaning, you can't get those ebooks elsewhere. That is a requirement of the program.

And, just to make it more enticing, they have now just sweetened the deal: $200,000 more has been added to the pot for January, bringing the total to $700,000 that will go out to authors enrolled in the Kindle loan program this month. That would bring the royalty for those same 295,000 borrows to $2.38 instead of $1.70, more than the average traditionally published authors earns for selling hardbacks.

Of course, the more hardbacks an author sells, the more they earn. In this case, the more ebooks are loaned out the less each one earns. But for those that are loaned out in large numbers, the paycheck can be quite nice. Today's press release offered a few examples:
  • The top ten borrowed authors earned a total of $70,000 in December
  • Paranormal romance author Carolyn McCray received $8250
  • Romance writer Amber Scott's paycheck will be $7650
  • 16 year old children's book author Rachel Yu will get $6200
  • Plus, sales for KDP Select authors have risen by an average of 26%
Other publishers and book distributors are going to have a really tough time competing with this kind of stuff. Complain all you like about the megalithic empire that is Amazon, I defy you to name a single other entity that has done so much to get so many books in front of so many readers, and pay those authors for it.

Oh, and by the way, my payday will come to just a little over twenty dollars.

Wednesday, January 11, 2012

KF8 & KindleGen2 Released

Amazon today finally released to the public the long awaited and much anticipated tools to produce ebooks in the new KF8 format, including a new Kindle Previewer, an upgrade to KindleGen 2, and a plug-in for InDesign that allows for KF8 export (minus a few of the enhanced features, such as Text Pop Ups and Panel Views). Links to each of these are provided below, as well as the associated documentation.

In addition, Amazon sent out a new survey to self-published authors today, which seeks to gather data on what they are looking for in a self-publishing service, what their past experiences have been, if any, with their own or other services, and asks for ratings of Amazon's offerings in this area if any have been used. So collectively it appears as if Amazon are poising themselves to actively champion the self-publishing cause, via a new enhanced format, new devices on which to distribute them, the tools with which to create them, and information on how best to serve the needs of content creators. I have, of course, completed the survey, with ample notes and commentary.

With the new format specs and tools having just come out today, it will take me a few days to sort through it all and test it out. I have nearly completed an iBooks fixed layout edition of my opening sample chapter, which I plan to upload early next week for your perusal, and as soon as I work out how to create an accurate KF8 version I'll upload that as well. Meanwhile, here are the links Amazon provided today, should you wish to go cavorting through some ebook code yourself...

More info will be posted as I have it.

Tuesday, January 10, 2012

The Growing Value of Reader Reviews

Carrying on from where I left off yesterday, it has become increasingly apparent that with the mass influx of new reading material on the market the average reader is rapidly becoming overwhelmed with choices. In a sea of three million new titles sorting out what's good from what is utter dreck is getting harder every day. This is the primary reason people tend to read the same few authors and titles that everyone else is reading, which is to say, what's currently being promoted heavily by the major trades via talk shows and magazine ads. It helps us sort through the ever-growing pile of work of only minor value or peripheral interest, works for which in business terms the potential return does not justify a large investment to promote. Consequently, more mainstream books are promoted, and works of "lesser interest" are left behind to wallow in obscurity.

Of course, many of those "minor" works are truly great. Not every great book has a huge potential audience: some genres and subjects are by their very nature smaller than others. But that does not imply no good work can be written on those subjects. Young adult vampire novels, for example, have a very large audience, while stories about, say, Sumerian mythological deities do not. That does not imply that all vampire novels are inherently excellent, and all (if there are any) newly written fiction concerning ancient Mesopotamian myths and legends are inherently bad. The latter will just never be read (or likely even published) because no viable publisher would ever put much effort into promoting it (unless it's been turned into a modern-day archaeological thriller by a major author, that is). Because of this, subjects of significant literary interest have become very narrow and overburdened with replicated content (much of it utter rubbish), while subjects with just as much potential literary value have been ignored and overlooked, even while some of it is extremely good (and often more imaginative).

This has been the state of affairs for much of the modern era, with a few narrow subjects such as crime thrillers and horror stories being promoted with lavish budgets and high praise from mainstream book reviewers while the vast majority of subject categories go unnoticed, aside from a handful of literary book reviewers who might take a fancy to a work of a more quirky nature. There has been, for example, an earnest and heartfelt effort to support small press publishers who produce works of social or personal drama, with the occasional Oprah selection of the month gaining incandescent notoriety. In general, though, the bestseller lists are populated with the same old dreck just written with different words.

That condition has been exacerbated by the literal flood of unfiltered material now inundating the world through self-publishing venues, much of which is drivel, but some among it bound to be quite good, if not astounding (while also odd, unconventional, or geared toward a rather narrow audience). Until now, one could place at least some minor faith in the traditional system which gleans (however inefficiently) through a virtual mountain of submissions to filter out the "best" of what's been written. Or so we would like to think. Define "best" how you like, but for the major trades this means "most potential return on investment" since they are, after all, first and foremost a business. However that may be, the enforcement of that filter has now been removed altogether (or rather, bypassed, as it were), and a veritable landslide of literary muck has been unleashed upon an unsuspecting public.
The question then, is how do we now discern what is of value when the traditional system has been usurped? Of course, the traditional system is still there, slogging away, so one answer is simply to keep doing what we've always done, and read what everyone else is reading, which is to say, what the six main publishers promote. Eventually all this other stuff will go away if no one pays it any mind, and we can go about our business knowing greater minds are deciding what is best for us in a comfortably Brave New World (ironically, Huxley postulated a world in which "the truth would be drowned in a sea of irrelevance,"* where the general populace, unable to distinguish literary value for themselves, are reduced to passively accepting what is given them) [*Neil Postman, Amusing Ourselves To Death, 1985]. Sadly, that is not too far from the truth today.

But there is an alternative. There is another system already in place that can help us with our burden. It is built upon that most sacred and cherished of all commodities we possess: our own opinions, and those of others like ourselves. This system is made functional and relevant via the vast network of reader reviews on public sites like Goodreads, LibraryThing, book review blogs, and most importantly, online book retailers such as Amazon, whose reader review and recommendation engine is unparalleled. The more you read, the more you rate and review, the better the recommendations you receive. Social circles such as Goodreads help you discover books by seeing what others with interests similar to your own have read and rated. And of course, blogs that review books are a fundamental source for learning what is good and why.

In a world where every reader rated or reviewed each book they've read no good book would ever go undiscovered. Even in a year with over three million titles published, very few of those will go entirely unread by someone. But a great many of them will remain unreviewed, leaving the rest of us to wonder as to their quality, and casually pass them by.

The value of a book review is difficult to understate (and here I should specify that I mean reviews by readers unaffiliated with, and thus uninfluenced by, the publishing world, which casts a wide shadow over the media empires they control, including periodicals and TV stations). Even a simple one-to-five star rating tells the next potential reader much, particularly when it's an average based on a larger number of ratings. It also helps the author quite considerably in determining how their writing is received, and thus in trying to decide whether or not to bother writing another. A book that has no stars and no reviews is a book that few will ever read. It's an unknown quantity, an unnecessary risk in a world of opportunity, a gamble with those two other great commodities most of us have in short supply: our time and our money. But a minute spent rating a book that you've just read can save another reader (or yourself when selecting a book that others have rated and reviewed) a week or more of wasted time reading something that should never have been released in the first place, self-published or otherwise.

The days of benevolent gatekeepers looking out for our literary welfare are long gone. Regardless of whether it's independent or traditional, there is no one now evaluating the actual merit of what is being published but ourselves. Trade publishers tend to look at monetary rather than literary value, and self-published works are released regardless of value. Any given book published today can span the gamut of value, both monetary and literary. There is no real way to know unless someone has actually read the book and made the effort to give it an honest review.

And lest you think perhaps nobody pays attention to reader reviews, let me offer this bit of wisdom from personal experience: when Amazon recently added U.S. reviews to their U.K. site, my sales multiplied virtually overnight. No one in the U.K. had bothered to add a single review or rating to my debut novel, even though I'd sold well over a hundred copies there last year. With my U.S. reviews now available on the U.K. site my sales increased sevenfold, and I am currently on track to sell 780 copies this year just in the U.K. alone. Of course, some of that increase is likely due to holiday Kindle gifts that would have occurred regardless, but the effect was immediate and obvious when the reviews first appeared: seeing the increase in my sales report is what caused me to go looking at my book page on Amazon UK in the first place, to see if they had put the book on sale or something. They hadn't, but by adding the reviews they were helping to promote it in a very significant way.

So please, for your own sake, and the sake of every dedicated reader out there, take two minutes to rate each book you read this year, so that all of us can gain a better sense of what is out there worth our time. Better, take ten minutes and write a short review, describing what you liked or disliked, and why. This is particularly important for books with few or no reviews, as your opinion will carry a lot of weight with future viewers of that page. That being said, the opposite is true: if there are already over a hundred reviews don't bother adding your own as it will only be drowned out by the cacophony of voices, and clearly one more opinion is not needed. Certainly write one if you feel you have something of value to add to the conversation. But one more review of The Hunger Games won't convince anybody one way or the other, so save that for the fan sites. Instead, spend the effort posting your reviews of lesser read material, whether good or bad. Who knows, maybe you'll discover the next great work and start a literary landslide.

P.S. To all the book review bloggers out there, my heartfelt thanks and keep up the good work. You're serving a critical social function that's becoming more important every day.

Sunday, January 8, 2012

Book Publication Statistics 2002-2010

Just ten years ago, in 2002, a total of 247,777 new books were published in the U.S. That figure was well over double the 104,124 titles published nine years earlier in 1993. A virtual literary boom one might say. Until one compares the statistics of today.

According to the running tally over at Worldometers, 23,653 books have been published worldwide thus far, in just the first 7 days of this year. In the U.S. alone total book publications for 2011 are estimated to have reached a staggering 3,092,740, according to Bowker's latest ISBN registration data. And that's just for titles with official ISBNs: a large percentage of self-published titles released via Amazon and Barnes & Noble (among others) are never assigned an ISBN, and thus are not tracked by Bowker or included in these figures. Meanwhile, aggregators such as Smashwords hand out ISBNs like Halloween candy to anyone that wants one: Smashwords alone produced 92,500 titles last year, up from 28,800 in 2010.
*Non-traditional consists largely of reprints, often public domain, and other titles printed on-demand.
The chart above is taken from the latest Bowker stats, which I've truncated from a larger version showing every year from 2002-2010 (available in pdf here) to highlight a few major points along the way. From 2002 to 2006 book production was fairly flat, remaining below 300,000 titles released each year. But in 2007, the year the first Kindle was released, new book titles jumped to 407,646, skyrocketing within two years to well over a million for the first time, and nearly tripling again just a year after that, bringing us to our current state of affairs: a market literally awash in literary matter. Thus, in just a single decade the number of books produced annually has increased by 1148%, most of it in just the last two years.

But even more telling is the second line from the bottom on the chart, which shows the number of "non-traditional" books produced, a figure that has leaped exponentially from just 32,639 titles released independently ten years ago to a mind-boggling 2,776,260 last year - an 8406% increase! According to Bowker's note, while many of these are public domain and back-list titles being hauled out in new editions (mainly in ebook format to take advantage of the Kindle/iPad boom), a great many are new self-published works being released for the first time via ebook or print-on-demand services such as CreateSpace and Lightning Source. If you compare these numbers with the total figures for each year (or the subtotal on the line above) you'll see that they make up the lion's share of growth within the industry: traditional print accounted for only 316,480 titles released last year (just 47% growth over 2002), compared to 2.7 million non-traditional titles.

Of course, these are unit figures, not sales statistics. While traditional print publishing is in decline (see my last post for stats on that), it still accounts for a large majority of book industry revenues. But that is changing rapidly as well. If each non-traditional title published last years sells on average just five copies each, that's nearly 14 million books sold, which is nothing to scoff at. And that is something Amazon clearly understands: they don't care who wrote them or produced them or who gets the royalty could be one publisher or half a million different ones, it's all the same to them. A million candles burning steadily make a great deal of light, while the scattered illumination of random bonfires burning here and there cast fleeting brilliance that soon fades.

And that's something career authors also understand. The retirement fund won't come for most of us from selling millions of a single title or from small advances that won't ever pay out, but from slow and steady sales on a growing catalog of backlist titles you control and a fan base that will read each new book you put out. Looking at the numbers from this chart would seem to suggest the plight of independent authors is hopeless as their small output is swallowed up by an ever-growing sea of titles readers have to choose from. But in fact, just the opposite is true, because ten years ago the hope most authors had of being read was even less. It's estimated that the odds of getting published via the traditional submission route are less than 1% (the average literary agency receives 150-200 queries a day, follows up on less than 50, reads no more than the first three pages of most, and accepts no more than one per agent per week to represent, of which a good agent can sell 1 in 4, meaning the average agent sells less than twelve manuscripts to publishers each year). That leaves roughly 99.5% of manuscripts to rot away in the slush pile, unread.

But America is now the great slush pile, and the reader is the literary agent who buys or passes on a manuscript. Traditional publishers are no longer the arbiters of literary opinion, as the end user has the final say, literally, via online book reviews and ratings. I had originally intended to title this post "The Growing Value of Book Reviews" ... or, "The Increasing Importance of Reader Opinions" or some such, and talk about how the end consumer has now become the great literary filter of our culture. How at last it is the readers who decide what books are worthy of their time and attention (and their hard earned pay). How every author has just as much opportunity to reach an audience as any other, and will succeed or fail based solely on the merit of their work. But I'll save that for another day, as this post has gone on long enough, and I've got another book (or two) to write.

Thursday, January 5, 2012

Print Book Sales Continue to Decline

Neilsen BookScan have reported their final print book figures for 2011, and as you can see by the numbers in the column on the right, it's not good news for traditional print. Overall decline was double that of last year's 4.5%, in large part due to Borders closing. A slight pre-holiday rise in print sales was offset by a 30% decline in the final week of 2011 as owners of new e-readers turned their attention to ebooks.

Hardest hit this year were Adult Fiction and Mass Market Paperbacks, with each declining by double digits, at -17.7% and -23% respectively. These are, of course, the categories with the largest increase in digital sales. We should see the AAP stats in the coming weeks, which will give us the figures for ebooks. This will tell the other side of the story, which should all be positive.

BookScan data represents roughly 75% of the book trade, with a quarter of the market not reporting. Aside from total income, non-corporate entities are not required to report their sales data, so these figures don't include the tens of thousands of indie publishers out there. However, they do account for the majority of book sales and consequently tell us much about the current trends and trade winds.

Those winds are blowing fiercely in a fairly consistent direction. According to Publisher's Weekly sales of Mass Market Paperbacks have fallen 60% since 2008. Meanwhile, this summer's BookStats report showed ebook sales had grown by 1039% between 2008 and 2010, with revenue increasing 1274%. And 2011 will likely add a fair amount to that.