Kindle Unlimited, the Content Glut, and the New eBook Market

As 2014 draws to a close indie publishing finds itself at a crossroad. There's a growing consensus that the supply of indie ebooks is beginning to exceed demand, leading to the textbook microeconomics result.

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The idea that indie revenues were falling was brought to the fore a month ago by HM Ward when she revealed that she was pulling out of Kindle Unlimited, and why. This lead authors both in and out of KU to say they were also taking a hit in the pocketbook.

This led many who didn't look too closely to conclude that KU was a bad idea for indie authors, but it wasn't until this week that some, namely me, started a public discussion about the underlying causes. On Sunday I raised the question about what this meant in terms of consumer behavior, and within minutes Bob Mayer suggested the explanation which had been staring us in the face all along:

To me the bigger problem than KU is the content flood which isn’t going away. I think most authors, indie and trad, are going to see a flattening of sales as readers simply have so many more choices.

I still don't feel that I have enough market data to prove it, but I think he's right.

And so does Mike Shatzkin, who posted on this topic today:

What a long list of indie authors has proven in the years since Kindle was invented is that there is a substantial market willing to try storytelling from unknown writers if it is offered at a relatively low price. As a result of that and of Amazon — joined by all the other ebook platforms and a legion of service-providers like Bob Mayer — making it relatively easy to “publish” a manuscript, many tens of thousands of authors have published hundreds of thousands of ebooks that way.

... Ever-growing supply and stable demand is a toxic formula for the prospects of each successive ebook published for that market. My own hunch is that Kindle Unlimited is simply the straw that broke the camel’s back.

3707196312_24ae4ee883_z[1] Yes, I did agree with Mike Shatzkin, and no, the sun won't be rising in the west tomorrow.

So where does the industry go from here?

I don't know, but I do have a few thoughts.

One, the days of releasing the first title in a series as permafree have passed. All that accomplishes now is to flood the market and make it harder to sell ebooks.

Two, the idea of writing and publishing your next book as the best marketing strategy is also going to have to be reconsidered.

Three, getting in to or out of Kindle Unlimited isn't nearly as important as some thought it was a few weeks ago. As I noted when I first reported on this story, this problem is affecting authors both in and out of KU.

What do you think?

images by net_efektsolarisgirl

About Nate Hoffelder (11598 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

42 Comments on Kindle Unlimited, the Content Glut, and the New eBook Market

  1. There isn’t anything uniquely related to books in all this; it’s classic market economics. When barriers to entry decrease and producers have to do something to claim secure market share. One classic route is cartelization to divide the market and exclude newcomers. The Big 5 would undoubtedly like to go back to that, but presumably even the present Supreme Court would not smile on it. Another is price-cutting and a third is product differentiation. The last two have been very prevalent in the electronic device market for the past two decades and more and ought to be quite familiar to most readers of this blog.

    Publishers of all kinds, large and small, are going to have to decide whether they want to sell “commodity books” (e.g. a great deal of genre fiction) based on price (the KU approach) or pursue product differentiation on one form or another. There is no set answer.

    So Happy New Year to publishers all.

    • Interestingly, after a month of post-KU detox my sales have improved markedly and are now back to pre-KU levels. One case doesn’t prove much, except that kicking KDP Select doesn’t mean sure death.

  2. Many indie authors are reporting substantial increases in their sales on other platforms while Amazon sales stagnates. that doesn’t argue for a glut per se, just an issue with Amazon.

    The reasons KU authors have seen their sales fall across the board are a) because by jumping into KU they shafted loyal readers buying from other retailers, and b) some of those readers at other retailers signed up for KU so got those authors’ works with the authors being paid a pittance in return.

    When Holly Ward saw a 75% drop in income it didn’t happen because suddenly there was a glut of books that didn’t exist the month before. Her real sales dropped because they were cannibalized by borrows and her income fell off a cliff because those borrows earned far less than the sales would have. No glut required to explain that.

    That’s not to say there is no glut. But that glut did not suddenly materialise after five years, just at the moment KU launched. It’s been building slowly and steadily, no question, and will continue to do so, and is having a slow but steady impact across the board.

    Nor is that just the fault of indies. Trad pub has been digitalising its backlist month after month after month and flooding the market too.

    As trad pub backlist prices come down, the advantage indies had in being able to price themselves into the market as unknown names is history. When readers can buy authors they’ve heard of for less than what many unknown indie authors are asking, then its a no-brainer to play safe.

    Go to indie-free ebook stores like Sainsbury and Tesco Blinkbox and you’ll find countless trad-pubbed titles at 0.99, 1.99 and 2.99, or even free. Go to publisher sites like HarperCollins own UK ebook retail store and there are any number of titles available at 0.99. It’s no wonder indies are struggling.

    There has always been far more books available than demand to buy them. But in the old days the ones that didn’t sell were removed from the shelves and pulped. Now the ones that don’t sell stay on the shelves and create a barrier to finding the ones that might sell.

    Discoverability of quality works gets harder and harder not because of a glut per se but because curation is conducted by bots based on triggers that have no bearing on content quality.

    2015 is going to be a whole lot harder for everybody.

    And it could get even worse if, as we explored on our blog this week, Amazon forces all KDP titles into Kindle Unlimited and makes Kindle Unlimited free for Prime members.

    https://ebookbargainsuk.wordpress.com/2014/12/29/as-the-ku-exodus-grows-how-much-longer-before-amazon-puts-all-kdp-titles-in-kindle-unlimited/

    • “And it could get even worse if, as we explored on our blog this week, Amazon forces all KDP titles into Kindle Unlimited and makes Kindle Unlimited free for Prime members.”

      Maybe this will make things better and not worse, since authors who have books in KDP that are not popular in KU will leave KDP and go elsewhere–reducing the glut of books while preserving those that people want to borrow. Too many books in KDP are bought by readers on impulse and the readers discover the books are junk. In KU only books that get read past 10 percent produce royalty to the author. Having all KDP books in KU, plus an increase in the royalty per read to the author to make the royalty hover around $2.00 per read borrow would be a substantial improvement and weed out authors who have little or no KU borrows, since the authors will withdraw from KU and move elsewhere. Authors who do sell well in KDP will likely make more with KU than without KU. As for making KU free to Prime members, it’s unlikely because the monthly KU subscription fee must at least cover Amazon’s payout to authors. My guess is the montly payout to KU authors will rise to close to $2.00 in the near future, as Amazon adds more to the monthly pot.

    • One consideration that has been mentioned elsewhere in other places but maybe needs repeating is that if a reader buys a KDP book, the author gets the royalty no matter if the reader never gets past the first few page. But if a KU reader borrows a book, the author gets a royalty only if the reader reads past the first 10 percent. Now consider a KDP author whose ebooks usually run 300 to 400 pages. Many readers might buy those books based on the author’s marketing, etc., without reading more than a few pages of the Look Inside feature. They buy the book but by the second chapter they are already bored and they never continue reading. The author, however, gets a royalty anyway. In contrast, if a KU reader borrows the book and stops reading after the first chapter or so, reading less than 10 percent, the author will not get any royalty. So this becomes a scenario where an author does well in ordinary sales based on marketing but her books are not read much beyond the beginning. If her new KU readers would once have bought her books, she will soon start losing money because KU borrowers do not read past 10 percent of her books. That is one way for KU to cause authors to lose money–the people who borrow the books of this author do not read past the 10 percent point and the author does not earn a royalty for that borrow.

  3. There is an ongoing pundit fallacy that needs to be considered seriously: the fallacy is that all books are the same and that there is only one audience. Both authors and analysts talk about books as if category romance and category thrillers are the same as serious fiction and how-to dreck the same as serious nonfiction. One gets the impression that the authors and pundits who talk like this are inexperienced authors who are not serious readers and pundits who are not authors and also not serious readers. Who else would promote such a fallacy about books? Maybe the real problem is that too many people feel it necessary to produce content analyzing the ebook business–either for ego enhancement or for content to be framed by advertising. Fuggeddaboutit. Too many people are looking at individual trees and not seeing the forest. Is it really that important to have instant analysis of the strengths and weaknesses of KU? There are many thousands of authors in KU making serious money from their titles being lent by borrowers. And there are many thousands of authors who do not write the sort of content borrowed in high volume by subscribers. So what? What is the point of all this cud-chewing by people other than the authors in KU who are well-satisfied with the lending library model? Too many people who watch sports think their opinions about a sport are more mportant to the game than the players they watch. So this or that author has left KU. So what? Happy New Year and good luck.

  4. I found lots of the reasons stated already that help explain the flattening of sales for (mostly) previously better selling authors (I just had the best month in years in terms of revenue, 95% of it through KU).

    I do think there’s a huge increase in title availability. Merely through market forces, as Mr. O’Neil points out.

    But, as eBook also points out, “that glut did not suddenly materialise after five years, just at the moment KU launched. It’s been building slowly and steadily, no question, and will continue to do so, and is having a slow but steady impact across the board.” And he adds that trad pubs are also digitizing huge numbers of back list, adding even more selection.

    And as Daniel points, to most readers, not “all books are the same and that there is only one audience.”

    I don’t have “the” answer for a general flattening of sales.

    But I would add two more, I believe, crucial elements.

    One, is libraries. They are digitizing rapidly, with everything possible available. Yes, there can be long waiting times for a title. But there’s a huge other selection ready and waiting, and I know many folk who use libraries exclusively that continually find new work to read while waiting for a favored title.

    Which leads to what I think is the main reason there’s a flattening of sales. Discoverability.

    Finding new work of similar interest, or new different work to try out, is the number one reason I gave early last year for being glad Scribd and Oyster were coming on line.

    Kindle Unlimited, I believe, just accelerated that.

    And I don’t think it matters where bots and algorithms take a reader, a person can simply search and sample categories of interest. Discovering new writers, trying them out.

    Plus, there’s a HUGE number of groups springing up on FB and other ways that cater to showing readers, and writers, new work by new authors.

    There is, after all, no sales happening in KU. There’s a transfer of sales to other writers.

    Like what happened when ebooks came into existence via Amazon and took sales away from print. New unheard of writers became known. Some of those, now, are unfortunately experiencing the same thing print mid list writers saw when ebook sales exploded.

    I anticipate, when Apple finally works LampLight into their system, we’ll begin to see an even more advanced discovery of writers by readers previously unknown. Bots or no bots.

    And I’ve no doubt Amazon is acutely aware of this, and – maybe – the current KU is an experiment is seeing how they will full respond to that.

    Meanwhile 🙂 happy new year all. We need it!

    • There’s no “sales” of ebooks happening anywhere. The license scheme has made sales virtually indistinguishable from borrows. The reader has few if any rights to do anything but read the content. This has been a problem from the beginning but near everyone in the industry has had their heads in the sand, acting like tangibly taking rights away from consumers is some sort of inalienable right. If sales are indistinguishable from borrows in real effect, why is anyone surprised those faux-sales will decline when a lower priced option that offers nearly the identical features of a buy becomes more mainstream? Change the conditions so consumers have a real ownership stake in the product and you differentiate value between a sale and a borrow based on something other than the lowest price. Continue with the software license scheme as a “sale” and revenue per use will continue to decline. After all, KU, Scribe and Oyster and simply cheaper versions of subscription services you’ve already been participating in the entire time. Stealing rights from consumers has consequences.

      • Maybe not so. If you ” buy” an ebook at Amazon, the ebook will be archived and available to you forever. If you “borrow” an ebook at Amazon as a KU subscriber, when you have borrowed 10 ebooks, you cannot borrow an 11th ebook until you return at least one ebook. So the “holding text” arrangement is quite different. In one case you possess the text on any device(s) forever, but in the borrowing case your possession of the text is limited. The difference is significant for people who want permanent possession of many texts so that the texts are always available.

      • There have been no absolute sales of books of any kind since the coming of copyright three centuries ago. All you can legally do with a print book is read it and keep it in your possession to read again. The only significant difference to an e-book is that you can re-sell your limited rights to the print book more readily.

        • That’s not true. With a print book I bought, I can loan it, I can sell it, I can rent it. I just can’t reproduce it. With an ebook, I can’t resell it or rent it. I can loan it but only under the very specific restrictions of the retailer I paid for access to it. And to the comment above, I don’t think forever means what you think it does. Even with the actual files, stripped of DRM or not having it, they’re only useful so long as there’s applications that read that format. And their availability from Amazon or other retailers totally depends on them continuing to offer support for that format, to say nothing of what happens should Amazon (or B&N) one day go under. I think we’re going to find forever to have a shelf life of about a decade or two at most.

          • You simply do not have any understanding of the legal issues you are referring to so there’s no point in continuing the discussion. I would point out that it’s no big trick to translate a Kindle, for example, into another form if you’re not concerned about the legal issues.

        • Explain it me. Because if you’re saying I can’t do those things legally with a print book I purchased, there’s a huge number of used book stores, libraries and second hand stores all over this country breaking the law every day.

          • You cannot sell a book because you do not own its intellectual content (unless it’s in the public domain). You acquired a certain bundle of rights that are tied to the physical copy you bought, but these exclude the crucial rights to copy or reuse the text. You have fairly broad latitude in transferring your rights, but since they are quite limited the amount of money you can get from them is slight. When you buy an e-book you get a broadly similar bundle of rights, but more limited latitude to transfer them (or at least to do so legally). On the other hand you pay less for the e-book.

        • I’m not sure the limited bundle of rights has as much to do with the money you can get than the fact that there’s just so many of them and the demand for any one particular book at that point is pretty small. I’m sure you’re right that the rights a person gets when paying for an ebook are pretty similar to the rights to the content in a print book they buy. But the practical reality is that ebooks can be a lot more restrictive. There’s no legal impediment to me buying a book right now, turning around and selling it to someone else. I absolutely can’t do that with an ebook in any capacity. In that sense, I guess I mean the rights being lost by the consumer are related to the physical container of the book, not the rights to the IP itself. But the IP and the container have been figuratively and quite literally, inextricable for so long, they’ve become one in the same in perception, if not law. The perception of the consumer will almost always have a bigger impact on their buying choices than the specifics of the law.

          I also am not sure ebooks, in totality, are actually cheaper. If you’re looking at somewhat new release hardcovers vs ebooks, sure they are. But there’s a rack of new trad pubbed books up the street from me priced at $1, $2 and $3 with the price printed on the cover. I bought a hardcover Stephen King there for $4 a couple months back. Again, the price was printed right on the dust jacket, it wasn’t a store selling heavily discounted remainders. I can buy used paperbacks by the truckload for a quarter a piece or less. My perception has always been that ebooks are cheaper, but the more I look at the back end underbelly of the print market, the more I’m realizing that print books overall have always been a lot cheaper than I realized.

          • The point is that when you buy a printed book you are buying only the paper and the ink on the paper, not the words themselves. The words are owned by the copyright owner unless and until the book is in the public domain. You imagine you own the “book” but what you own is paper and ink and not the content. The fact that you can sell your single copy is trivial. You cannot make a copy of that copy without breaking the law. When you buy an ebook, you buy a license to open a file–but you don’t own the words in that file, they are owned by the copyright owner and the license to open the file you downloaded is owned by Amazon–if you bought the book at Amazon. The confusion arises because of the difference between content and the medium in or on which the content is expressed. In the fine arts, for example, if you buy a lithograph, one of 200 run off, let’s say, you own the paper and the ink, but you have no right to make a copy of the lithograph, so in truth you do not “own” the lithograph, you own a copy of the original drawing and not the drawing itself.

          • Another very important consideration is that if your house burns down completely all your printed books are lost but none of your ebooks are lost, since in your new house with your new devices, your entire ebook library can be dowloaded again at no cost to you. Your ebook library exists forever–your print library lasts only as long as the physical books (paper and ink) last.

          • And if the retailer shuts off the DRM servers, your ebooks can be lost forever as well (MSReader, eReader, Mobipocket, Fictionwise, Diesel eBooks, BooksonBoard).

            Also, this is simply misleading:

            Your ebook library exists forever–your print library lasts only as long as the physical books (paper and ink) last

            I have yet to own an ebook which has outlasted the print edition, but I have dozens of print books which have outlived various ebook editions.

          • Yeah, well… I have 3000 printed books in my house and they flood the place, bookshelves and floors and tables. And I also have 1000 ebooks in my house and they sit in a computer and take up no space at all–only a small fraction of a hard drive. So to each his own… In general, if you think the future is NOT ebooks, your crystal ball is covered by smoke.

        • I can’t even get a smartphone to last two years before I start having problems with it. You seriously think today’s ebooks, in a software format designed for today’s equipment, are going to last forever? Ebooks are a format dependent on current technology and support from third parties like Amazon, which is ever-changing. Do you see many people listening to 8 tracks these days? They’re permanent too, so long as you can find equipment that will play them. As soon as there’s no useful reason for companies to create equipment to support that format, it dies out. Ink and paper has a far greater chance of long term survival than an ebook I buy from Amazon today. The IP can live on so long as it’s transitioned to whatever the next format is, and so on. But I’m pretty sure someone will be charging me for the story in that format. I’m not getting it for free because I bought an ebook 10 years earlier. Nothing is forever, and ebooks are even less “forever” than print.

        • @Daniel Vian So I own the paper and the ink but I don’t own the pattern the ink is printed in on the paper? In the abstract I agree. But in reality, the content in that book is what’s being sold. It’s clearly acceptable to do so as long as that content stays in the context of the physical object of the book. I can’t extract that content at all but I can certainly sell it in the context of the physical object it’s printed on. Otherwise, every second hand book sale is fraudulent. No one is simply buying the paper and ink. No one is buying a full container without knowing what’s in it. Walk into a used book store and what’s the first thing you see? All the books are arranged on stacks based on the topic or genre. The entire enterprise is based on selling what’s in the books, bundled with the physical wrapper. At the very least, the laws regarding resale of physical objects trumps the laws regarding resale of IP, or else copyright would have been a bar to used book sales long ago, which it hasn’t been. It also has not been used to block library loans, used CD sales or video store rentals either (although it was tried and failed at different points with all of the above.) The pattern of ink on the paper is inextricably part of the physical product, inseparable from it, just like the pattern of ink on the paper in the lithograph you mention. You certainly can’t reproduce it but you can absolutely sell the copy of it you own, content and all, with no legal repercussions.

    • Lest we all panic overmuch, the good side of the “goldrush” coming to an end is that the get-rich-quick content scrapers, the snowjobbers publishing six-page ‘novels’ to exploit KU borrow criteria, and the bucket-list authors (“I’ve always wanted to publish a book, so I did, now I’m going to go climb the Matterhorn and learn underwater basket-weaving”) have all enjoyed the crashing of the gates.

      Now that the work will become harder and the insta-successes fewer and further between, the crap-peddlers can find some other industry to exploit, the bucket-listers can go create their scuba-storage masterpieces, and the snowjobbers can go back to sending Nigerian prince spam.

  5. And yet I find it extremely hard to find books that I enjoy. I thought I was becoming bored with books, so I picked up an old classic I read years ago. I couldn’t put it down. So does this mean I’m bored with books, or the books I’m finding are boring?

    • The books you are finding are boring. “Classic” books are labeled as such because they have stood the test of time, not just because they are old. Most old books are mediocre and not considered “classic.” Look at the recently added collection at Project Gutenberg- an awful lot are mediocre. Similarly, most recently published books will be mediocre.

  6. I think KU users are likely different from other readers who tend to buy. I doubt very much they would have bought these books anyway, which I suspect the data will eventually demonstrate (I certainly have no data to back that statement up).

    I don’t subscribe to the argument that a “glut” of ebooks is a bad thing for authors, either or makes a writing career less viable. The numbers aren’t what matter and it’s important not to confuse tactics for strategy. When you walk into a Barnes & Noble, you’re confronted, at once, with approximately 120,000 titles. If too many books were a problem, you’d have to look at each one before finding one you’re interested in. But that doesn’t happen, of course. You have natural mechanisms to sift through them–your preferences for one genre over another, recommendations from friends, etc. Amazon is even more efficient at cutting away books you’re unlikely to be interested in with “also bought” functions. You go onto Amazon or enter a bookstore already eliminated most of the “glut” in front of you. The numbers that really matter are the micro-markets, if that is a term. But the aggregate numbers aren’t as important.

    Then as now, authors need to find their niche readers and connect to them. It’s a long game. The pie is getting larger, but most of these authors wouldn’t be publishing at all under the old model in which subjective “curators” decided who was and was not worthy of even being available to readers for consideration. And at least in genre fiction, readers will always consume more than writers can write.

  7. Author: My ebook has no sales. What do I do?
    Marketeer: Try lowering the price.
    Author: I tried that. It doesn’t work.
    Marketeer: What’s the book about?
    Author: It’s about how to raise goats in North Dakota.
    Marketeer: Try adding illustrations.
    Author: I tried that. It doesn’t help.
    Marketeer: Change the cover.
    Author: Tried that. Makes no difference.
    Marketeer: Advertise. Use social media.
    Author: Tried all those things. No change.
    Marketeer: Drop out of Select/KU and try B/N and Kobo.
    Author: So I’ve done that. Still no sales.
    Reader: How many people in North Dakota?
    Author: There’s me and a few others.
    Reader: Try writing a book for people who don’t live in North Dakota and who have no interest in goats.
    Author: Good idea. I never thought of that.

  8. So, very soon everyone who has been making money on You Tube will stop making money because of the glut of content. Why on Earth did Disney buy Maker Studios for $500 million? Oh, well, they were wrong about Pixar too, everyone is making digital animation and that market completely evaporated.

    Meanwhile, Hollywood studios are about to see the last year of giant box office results because of the glut of independent films that are available for free all over the internet. Seems everyone with a video camera thinks they can make a movie and put it up on the internet. Well, that won’t last.

    Ebay is just about to collapse, because there are just too many people trying to sell things on it. Etsy worked for a little while selling hand made stuff, but then vanished when too many people tried to sell stuff on it. It’s sad for those little stuffed bears.

    Blogging, of course, disappeared long ago because too many people were blogging and no one could make money.

    I was sad when Beyonce stopped making music because no one can make money on iTunes anymore because too many people were making music.

    I used to listen to Podcasts about how the internet worked, and how old business models didn’t apply, but unfortunately, everyone stopped making Podcasts. Because, you know, there was just a glut of them. Last I heard, that Leo Leporte guy who produced This Week in Tech and about twenty other podcasts had to go back to his day job.

    Why Apple didn’t put a cap on the App Store before it vanished is another mystery. I mean, anyone could see that allowing thousands and thousands of people to sell and even worse give away apps for the iPhone and iPad couldn’t possibly work. Very quickly there would just be too many and no one could find them or make money. Sadly, Google didn’t learn that lesson with it’s App store and is also doomed.

    • Maker Studios is the equivalent of a small book publisher network, and not a self-pub author. That would be Charbax, who actually is making a living off of it.But how many other single Youtubers are making enough to earn a living?

      And as for digital animation, that’s still hard to do and requires both technical and artistic skill.

      “Blogging, of course, disappeared long ago because too many people were blogging and no one could make money.”

      Speaking from personal experience, it’s damned difficult to make money blogging. Most bloggers have a day job, and that often includes running the store attached to their site or other non writing activity.

      Why Apple didn’t put a cap on the App Store before it vanished is another mystery. I mean, anyone could see that allowing thousands and thousands of people to sell and even worse give away apps for the iPhone and iPad couldn’t possibly work.

      It works for users but not for developers. There are whole categories of apps where it is simply not economical to develop a groundbreaking or awesome quality app. There’s no possibility of long term sales helping the investment pay off.

      • It’s hard for people who were born in one economic class to move up to another. That’s sad, but true. It’s also true that there are a lot more poor people in the world than rich people.

        Unless you are independently wealthy or come from a socio-economic group that gives you a real leg up, you’re going to have to work hard to make a living regardless of what you try to do.

        Making money selling apps is hard. But lots of people are doing it, more than before because the market grows (and that means more apps created by more people).

        Ebooks is not the solution to most people’s desire to make a good living. It never was and never will be. That has nothing to do with whether there is a glut of product driving down prices.

        If you’re worried about paying your next months rent, don’t try to get into ebooks or blogging. However, there is no evidence that the number of people blogging or writing ebooks is hurting the incomes of those who can do it successfully. And, in fact, it seems clear that the larger audience is a plus for those who are able to profit from it. That there will only be a very small percentage of people who make real money is true, but the bigger the market, the more people who will be in that percentage.

        What is the business example that people can point to to say that a glut of ebooks will lower the income of all writers? The Tulip craze of 1841? The fact that the price of corn goes up and down based on supply and demand? What really is the internet equivalent? I can’t think of one.

        You Tube is a great counter example. You want individuals who have made money? Have you ever seen “Charlie Bit my Finger?” The profits from that one video are estimated to be over $500,000. Oh, but that was a once in a lifetime thing.

        Well, how about this link to the twenty biggest You Tube stars:

        http://www.businessinsider.com/richest-youtube-stars-2014-3#

        Poor 7 year old Evan is struggling at the bottom of the list because he only makes between a $134,000 and $1.32 million a year with he videos he makes on what started as a father/son bonding project. (I now hate my father, who didn’t bond with me for six to seven figures a year.)

        There are twenty others listed. And I’m sure many more that could be discovered. And I’m sure there are some people who only make a few thousand dollars a year. And millions more that make nothing.

        So is You Tube a failure because everyone who makes videos can’t quit their day jobs? If you have a passion for making videos, should you not bother because you can’t compete with Evan?

        Do you think that Evan is waiting for the bottom to collapse out of the market because… too many people are making videos?

        The internet simply doesn’t work the way people are trying to predict with ebooks. eBooks are not corn, they aren’t tulips or beany babies. The market has a lot more room to expand, and even when it stops expanding, what will happen is that some writers will make a ton of money, and a lot will make nothing. But many more writers will be able to make a living than did under the old systems.

        Let’s just be honest here, this meme is being repeated over and over again by people like Shatzkin because the traditional publishing scene is terrified. They are desperate to convince people that self-publishing can’t work. And it does.

        Did you read about how more first time writers are being offered million dollar advances than before? Is that because of the “glut” of product? Or is it because the best writers know they have other options? No guarantees of income, but promising options.

        • So the point you were trying to make (which was lost in the overwhelming sarcasm) is that life is difficult everywhere, no matter what you do.

          This is true, and I would have acknowledged that sooner of your excess of sarcasm hadn’t made me miss the point of your post.

          • Err… maybe my sarcasm is confusing you.

            It’s not just that life is tough. It’s that I simply don’t believe that more writers is a bad thing for ebooks. I don’t believe more writers means less money. Or even less money per writer. I believe it will create more competition and also bigger winners. No one can win forever, so some of the big winners will have big falls. But those falls do not mean there aren’t other winners.

            The market forces that effect things on the internet are different than those in the old markets. The market forces that effect the creative arts are different than those for basic commodities like corn or bacon futures.

            Anyone with any brain knows that the fact that a lot of kids grow up wanting to be pro basketball players, and that some even try, is a good thing for the NBA. Most won’t get past high school sports and then only a few will make it past college. But they are some of the people who buy tickets to the games and pay for merchandise. The winners who make it to the top will make a lot of money off the losers (and other fans). If kids stop playing basketball in their driveways, and the audience shrinks, the people at the top will stop making as much money.

            That basic logic, that the creative (and sports) markets require fans, is very much expanded by the business effects of the internet. The biggest issue for ebooks is demand. Demand means readers. Readers means people interested in books. That means some people will dream of being writers. Those people BUY BOOKS.

            All the wannabe writers are part of the solution, not the problem.

      • There’s never *not* been a glut of writers out there. The slush piles at the Big 1065 pi in the days of paper manuscript submissions are still legendary, and the reason why Big Publishing lives in New York, on bedrock that can support the weight of all that literary stress on the geography.

        Ebooks/YouTube/Ebay/Etsy/AppStore have NEVER guaranteed meteoric success for all their users. They’ve simply removed the barriers to TRY. Epublishing was never a sure thing for everybody who put pen to paper, all it did was open the field for a lot more people to try. And it, like YouTube, Ebay, and the AppStore, has placed much more power to determine success in the hands of the consumer, rather than a middleman (for good or ill, and probably both).

    • And there’s a point which I wanted to emphasize after reading your comment.

      While many are generating some revenue from those sources, few are earning a real living from any single source. That’s what we could be seeing happening in books, which tends to support the suggestion earlier in this comment section that authors need to diversify.

      • We all need day jobs.

        I just stumbled upon a fascinating new book in my niche, sailing, on Smashwords. It’s well-written and the subject matter – sailing in Nova Scotia and Newfoundland – is a little off the beaten track. I emailed the author to let him know how much I had enjoyed his book, and he emailed me back, thrilled that he had made his first sale. He told me that even if it was the only sale he made, it was fun to have written the book and gratifying to know that someone other than friends and family had read it.

        His day job is computer programmer. I don’t see this as being a problem. I don’t see it as taking the bread out of the professional writer’s mouth. I think it has always been true that, except for a very few mega-stars, writing has been a poorly-paid profession. So if making money is your aim, try accounting or programming, or if you’re really in for the big bucks, chemical engineering or actuarial statistics. Write on the side.

      • Even people working straight day job often can’t “earn a living” (whatever that means) from a single income source. The single income home has been dying out for 40 years now. I’m not sure what’s going on now is a bad thing for indies in the long run. A lot of folks are getting a lesson in economics and business right now. Whether many of them learn from it or not, only time will tell. What I see is a whole lot of people who don’t seem to understand or have any experience with the cyclical and often tenuous nature of revenue from publishing, they saw a little success at dollar figures that seemed huge compared to day to day paychecks, extrapolated that out in ways that were unrealistic to say the least, and made rash choices to bail on income sources that were more stable. I’m not one to criticize someone for bailing on a job, I’ve done it myself several times, but I’ve always had three or four things I brought money in on the side burners ever since I was 14 and realized I had a choice between earning money on my own or working at McDonald’s. Multiple streams of income isn’t just a preferred path we should consider now, it’s absolutely essential. Part of that, too, is controlling your spending. My bills are low so the amount of money I need to comfortably “earn a living” is far less than my friend who has two kids, a big mortgage and two car payments. I can’t help but wonder, these folks who quit their day jobs, what kind of debt loads are they carrying and did they change any of their spending behavior or just keep on keeping on? One mistake I make when I write about this stuff is that I probably don’t give enough thought to whether people whose only experience with income is depositing a bi-weekly, taxes and insurance deducted paycheck can handle raw income coming in inconsistent fits and surges.

    • The biggest mistake I see many indies making is continuing to imitate the traditional model, which was built on scarcity. We longer live in a world where scarcity is even a factor in entertainment media. You can try to artificially manufacture it, but that’s little more than a holding action that will be less and less effective as time goes on. Stop imitating the old model if, for no other reason, the foundations that support that model are currently or already have crumbled away.

  9. I don’t think making the first book in a series free as a way to sell the other books in the series is completely over, but I think that trend has slowed down considerably. A free taste can still sell the meal, but (unless you’re already a name) you need to do some marketing to get the word out about the free book if you want to sell a lot of books. I still give away a few dozen copies of my free book each month, and while I sell more copies of the sequel than any other title, it’s still not a lot of sales.

    I am wondering if the self-publishing trend will be able to continue in the long term, in that there are people joining in every day. Since it doesn’t cost anything to keep ebooks for sale, the amount of books for sale will grow and grow as nothing goes “out of print.” In 10 years or so, I can see retailers like Amazon setting a limit on how long they will keep a book available without it selling any copies.

    • There may be people joining every day, but there are also people dropping out every day, and what’s happening, at least in the AMZ Almighty Algorithms, is that once you dip below a certain threshold, you never show up anywhere. AMZ will likely always be happy to hold your pixels for you, but they won’t go out of their way to serve them up unless they have something in there that the customers want.

      Free books as marketing seems to be getting less effective and more costly in the aggregate–not only do you now have to give away your work, you also will have to pay to let people know about that giveaway. Taken as a tool in a large toolbox of options for indie authors to use, it can still serve its purpose. But it won’t be a guaranteed success, nor an effortless one.

  10. I buy books, e-books for a cheap, quick, short story ($-€0-99) read. I only buy quality paperbacks and then only novellas. It’s a shame that all those paper books are being discarded, ignored for ever. Has the quality of reading sunk so low – yes, it has. And who is to blame … yes, amazon. The quality of reading has sunk along with the quality of writing. Is amazon prepared to dispose of all those awfully-written, convoluted, syntax awry, over punctuated, homophonic crap – No. Why? Cos theys don’ no ow.’ Pathetic is another way to describe the world’s LARGEST SLUSH_PILE.

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