Follow the ebook numbers. Unit numbers, that is. A close look at the numbers indicates that those authors who continue to publish via traditional publishers might be harming their long term career prospects.
Most ebook market watchers fixate on dollar sales, which, while important, mask the true tectonic shift now underway in book publishing.
In 2012, ebooks in the US will likely approach 30% of trade book sales measured in dollars, up from about 20% in 2011, 8% in 2010, 3% in 2009, 1% in 2008, and 1/2 of 1% in 2007.
These numbers understate the unit market share of what people are downloading and reading, because ebooks are priced lower than print. At Smashwords, the average unit price (not counting free downloads) of customer purchases is $2.99.
Back in April at the RT Booklovers convention in Chicago, I presented data (click here to access the presentation deck) that examined how price influences unit downloads and overall earnings for indie authors. It wasn’t a surprise that free books generated the most downloads, and lower priced books sold more units than higher priced books.
One surprise, however, was that we found $2.99 books, on average, netted the authors more earnings (profit per unit, multiplied by units sold) than books priced at $6.99 and above. When we look at the $2.99 price point compared to $9.99, $2.99 earns the author slightly more, yet gains the author about four times as many readers. $2.99 ebooks earned the authors six times as many readers than books priced over $10.
If an author can earn the same or greater income selling lower cost books, yet reach significantly more readers, then, drum roll please, it means the authors who are selling higher priced books through traditional publishers are at an extreme disadvantage to indie authors in terms of long term platform building. The lower-priced books are building author brand faster. Never mind that an indie author earns more per $2.99 unit sold ($1.80-$2.10) than a traditionally published author earns at $9.99 ($1.25-$1.75).
The picture painted augurs well for indie ebook authors, but indicates that authors who continue to publish with traditional publishers might actually be damaging their careers. Look no further than the bestseller lists at Apple, Amazon or Barnes & Noble to see that indie ebook authors are taking eyeballs from the authors of NY publishers. As I write this, seven of the top 30 bestsellers in the Apple iBookstore are distributed there by Smashwords.
The Apple iBookstore bestseller list is interesting because, near as I can tell, its rankings favor unit sales over dollar volume (unlike the bestseller list at our small Smashwords store, which measures aggregate dollars spent). Look at the Apple bestseller list and you’ll see which authors are building their brands the fastest with readers.
Although a good publisher of high-priced ebooks can benefit authors in other ways, it’ll become tougher and tougher for good publishers to do for authors what authors cannot already do for themselves. The tools and knowledge to professionally publish are becoming ever-more democratized. Authors need not spend a king’s ransom to produce, distribute and sell a professional quality ebook.
Now back to print, and how the decline of print further disadvantages traditional publishers and their authors. As ebooks as a reading format take share from print, print distribution to brick and mortar bookstores becomes less valuable to authors. Back in the dark ages of publishing five years ago, if an author wanted to reach readers, they had little choice but to work with a traditional publisher, because not only did the publisher control the printing press, they more importantly controlled access to brick and mortar bookstore distribution.
With ebooks, and ebook publishing and distribution platforms like Smashwords, the printing press and distribution have been opened up to all authors.
As ebooks continue to become more important, and print becomes less important, we’ll see more traditionally published authors joining the ranks of indie authors. I talk about some of these issues in this new Forbes interview out today, conducted by Suw Charman-Anderson.
There are signs that some publishers are beginning to realize they need to implement strategies to bring indie authors back into the traditional fold, as witnessed by Pearson’s acquisition last week of Author Solutions, Inc., which will be operated under its Penguin imprint. I’m still scratching my head over this.
Does Pearson think that Author Solutions represents the future of indie publishing? Author Solutions is one of the companies that put the “V” in vanity. Author Solutions earn 2/3 or more of their income selling services and books to authors, not selling authors’ books to readers. Does Pearson think so little of authors that they’ve decided they can earn more money selling them services than selling their books? Don’t get me wrong, I have no qualm with indies investing in professional editing, proofreading and cover design. I encourage that. There’s just something about this that feels icky.
For months, blogger Emily Suess has been challenging the business practices of Author Solutions, and her posts make for some fascinating if not disturbing reading. How will Pearson prevent Author Solutions from tarnishing the Penguin brand? Seems to me Lulu or Blurb would have been a smarter acquisition if Pearson wanted a reputable print self-publishing firm.
Surely, they didn’t acquire Author Solutions for their ebook revenues, which accounted for only $1.3 million in 2011 sales, or 1.3% of their nearly $100 million total, according to a story in Publisher’s Weekly by Jim Milliot. Smashwords ebook sales this year will do 10 times that $1.3 million, and with only 16 employees here in California as opposed to 1,600 employees at Author Solutions, 1,200 of whom are in the Philippines. I’m making an unfair comparison, though, because Author Solutions is in the print business, and we don’t touch print. Compared to ebooks, print production and distribution is more complicated, more expensive and less rewarding for indie authors.
So, will someone please tell me, if print isn’t the future, and vanity isn’t the future, then why did Pearson pay $116 million for Author Solutions? Do they think Author Solutions offers authors a more compelling print solution than Amazon’s CreateSpace, or Lulu? Does Penguin think the imprimatur of the Author Solutions brand will help it retain its most precious authors?
The good news is that publishers are beginning to realize that the power in publishing is shifting to authors. The question remains, however, how they’ll keep authors in the traditional stable now that the gates are torn down and greener pastures abound.