Sunday, August 17, 2014

Konrath's Advice to Publishers

Over four years ago I wrote a blog post about ebooks:

Joe sez in May 2010: I'd always assumed that print publishers would begin to lose market dominance once ebooks took off in a big way, and they'd have to either restructure or die.

But now I'm predicting another death for them.

What is going to happen when authors stop sending their books to publishers?

If I know I can make $100,000 on a self-published ebook in five years of sales, and I have the numbers to back up this claim, why would any informed writer--either pro or newbie--ever settle for less?

The dominance of ebooks is coming. I have no doubt. But I always thought it was the readers who would lead the charge, based on cost and convenience.

Now I'm starting to believe that the ones with the real power are the ones who should have had the power since the beginning of publishing. The ones who create the content in the first place.

The authors.

It's a wonderful, dynamic, empowering time to be an author. For the first time, we can command our own ships.

We're the ones who write the books. We can reach readers without any gatekeepers at all. And we can make money doing it.

The print publishing industry's biggest fear shouldn't be the eventual dominance of ebooks over print.

Their biggest fear should be not having any books to publish in any format, because the authors all wised up.

Joe sez in August 2014: This prediction hasn't happened yet. There are still boatloads of authors sending publishers their books.

But www.AuthorEarnings.com is revealing how many authors aren't going with legacy publishers. As a result, publishers actually believe ebook sales have plateaued.

Ebook sales haven't plateaued. They've plateaued only insofar as legacy publishers can track them.

The Big 5 are looking at their own sales and seeing plateaus (or at least that's what they're reporting). Major bestselling authors have already peaked with Kindle.

They believe this is universal, because their own data is limited. They can only rely on their sales, and Bookscan, which doesn't report sales without an ISBN. I've sold over a million ebooks without ISBNs. I'm not the only indie author who doesn't care about ISBNs. I'm part of a shadow industry that the legacy industry is ignoring at their own peril.

I foresee publishers collapsing. As ebooks continue to eat away at the paper market (again, this is happening even if publishers aren't seeing it and/or admitting it), a death spiral will occur.

1. Bookstores stock fewer books.
2. Publishers buy fewer books from authors.
3. Bookstores stock fewer books.
4. Repeat until bankruptcy.

Authors, slowly but surely, are wising up. Diehard legacy authors who snubbed self-pubbing have come over to the dark side and are making money (money that goes unreported to Bookscan.) Many authors, both newbie and pro, aren't bothering to submit to publishers anymore. There may still be enough submitting that publishers don't see a difference, but it really doesn't matter if they notice it or not. They've always rejected 99.99% of the books that come across their desks. If a publisher has 100 slots to fill in a given year, I'm betting it doesn't matter to them if they had 10,000 submissions or only 2000.

It does, however, matter to authors. Because every author that doesn't submit to publishers (or is rejected by publishers) then becomes another revenue stream that publishers haven't tapped into.

The market is getting bigger. Publishers aren't seeing it, because their sales remain flat. But in a growing market, that's almost the same as sales diminishing.

In short, their market share is getting smaller, bit by bit. Like the proverbial frog swimming in a kettle, not noticing that the water temp is going up one degree per hour. Froggy will eventually boil, and not understand what happened.

I personally don't believe publishers will survive. I can't see them moving to Jersey for reasonable rent, which I advised two years ago, let alone completely changing their business model to adapt to the changing tides. But, as a thought experiment, I wondered how I'd react if I controlled one of the Big 5.

Hugh Howie had some very smart blog posts earlier this year on this same topic, and he echoed a lot of things I've said in the past. His suggestion that hardbacks come with free ebooks (which Harpercollins is now doing) is something I said directly to HarperCollins editors at the Google Conference back in 2007). This was before Kindle, and before they were widely called "ebooks" (I called it "digital text"). Hugh discussed more favorable contract terms (I've pointed out at length the unconscionability of legacy deals in 2012), and about eliminating returns (I mentioned this in 2006, along with using POD and giving authors higher royalties.)

Hugh also mentioned some things I didn't, like instant access to sales data and monthly royalty payments, which I agree with. It's amusing that both Lee Child and Douglas Preston have admitted that they can contact their publishers at anytime and get their sales data, but the rest of us have to wait 18 months to get an accurate sales figure.

But besides everything I've said in the past, and the things Hugh has said, how would I save publishing? What would my business plan be?

1. Immediately abandon the paper midlist.  Unless the book can get into Wal-Mart, it shouldn't be published in paper via offset printing.

2. Separate the company into paper and ebook divisions. The paper division will have two segments: mass market and deluxe hardcover. The mass market can be sold anywhere. Deluxe editions will be priced as luxury items, $40 or more. They'll be printed on acid free paper with embossed covers, come with downloads for the ebook and the audiobook, and be the collectible than many readers demand.

The ebook, mass market paperback, and hardcover will all come out at the same time. No windowing.

3. Offer new or midlist authors a $10,000 stipend. This isn't an advance, and doesn't have to be reimbursed by the author. This is more like a signing bonus. In return, the author will sign an author-friendly contract that gives the publisher rights to ebook, paper, and audio for 5 years. As soon as the books start selling, authors start earning money. After the 5 year period, the rights revert back to the author, or the publisher can continue to publish the work if both parties agree and another bonus is paid.

4. Give authors 50% royalties on ebooks. Since midlisters and newbies won't get paper editions, they should get more for their ebooks. That, plus a $10k bonus, should keep plenty of quality authors submitting rather than self-publishing. POD can also be ordered by bookstores for all titles, with authors getting a 25% net royalty rate. 

5. Monthly payments and 24/7 access to sales data. Nuff said.

6. Ebooks are priced appropriately. If the ebook is no longer competing with paper, publishers should be able to find the sweet spot for sales.

But here's the really cool part:

7. When ebook sales hit a certain threshold, the author will be put into the paper distribution division. The books that do well will then get the current title (or the next title) into brick and mortar stores as mass market and deluxe hardcover editions. So authors are rewarded for decent sales with an additional revenue stream, and publishers will only offset print books by authors that the public has been proven to enjoy.

Right now, the only advantages big publishing offers over self-pubbing are the advance, and the ability to get paper books onto shelves.

This model eschews the advance for a signing bonus (and $10k is much less than a print run would cost so it saves the publisher money), and paper books are reserved for authors and titles that have been shown to sell.

Naturally, publishers should also do many of the things Hugh and I already said, like move to Jersey and eliminate non-compete. But this seven step program is the minimum publishers can do to save themselves. If they listen to me, they'll continue to attract authors. $10k isn't chump change, and the carrot on the stick is getting onto bookshelves everywhere.

Of course, publishers aren't going to listen to me. They're so busy worrying about holding onto their paper oligopoly, they're losing thousands of authors to self-pubbing, and losing a shit ton of money by inflating their ebook prices. Rather than let the customer choose the format they'd like to read, publishers are continuing to try and force the customer to read what they tell them to, at the prices they tell them to. In an open source market, this approach isn't sustainable.

What I predicted in 2010 is already happening, and the trend will continue. The pie is growing. Publishers' market shares are not. I don't see B&N being around much longer, and when they disappear the midlist will, too. Readers will be forced to accept ebooks if they want to read their favorite midlist authors, just like every household with a VCR had to get a DVD player to enjoy new releases when they stopped putting them out in VHS format. That will also shrink the bestseller paper mass market. Once a reader has a Kindle (or Kindle app on their tablet) they won't be buying from the bestselling paperback racks in airports or in supermarkets. The laggards who stubbornly refuse to give up dead trees won't be around forever, and we have an entire generation right now learning how to read on electronic devices who will consider paper quaint when they start buying books, like my generation views 8 track tapes.

Or maybe I'm wrong. After all, what do I know about predicting things?

123 comments:

Rob Gregory Browne said...

Amen. My last six books were never submitted to legacy publishers. What's the point? Unless they offer me a seven figure deal—which they wouldn't dream of doing—I'm perfectly content making six figures a year.

I don't need to be a megastar author. I just need to pay my mortgage and save for retirement. And that seems to be something that some people in legacy pub don't understand. Without them, I don't have that shot at fame and fortune.

And with them, I have absolutely not control and very little money.

caseyjp4 said...

"Amazon is trying to establish a business model in which content providers are amateurs not paid any significant amount; IT guys think like that, which is where Bezos came from."

---one of the "900" posted that in response to something I wrote (similar to your thinking regarding publishing).

This isn't some idiot (relatively speaking) out in the wind; this guy has been writing and publishing fairly successfully for years. I've seen this mindset in many "trad" authors, and wonder how they can still think that way without having blinders on.

Ian Pattinson said...

I reckon the book-as-beautiful-object is where print publishing is going, whether they follow your advice or not. As fewer books have the prospect of being worth printing, there'll be a push for premium editions.

It's a bit like vinyl. It's an outmoded technology, but it's seen a fair sized surge in sales in recent years, because there's something lovely about holding the piece of pressed plastic your tunes are on, rather than it being bits on one of your pieces of kit. (Vinyl also sounds better than MP3, though not some of the hi-res audio formats that are another growth area.)

Vinyl sales are also keeping turntable manufacturers in business, but I can't think of how to relate that to books....

Veronica - Eloheim said...

Joe, I really appreciate this post. Over on The Passive Voice, there was a big conversation the other day and Lee Child showed up to participate.

It turned into a long thread and got rather intense at times.

At one point, I said to him:

You call authors (Indie and Traditional) your brothers and sisters. Support us. Ask us how you can help us and then try to help.

and Lee Child replied

Give me your list. I’ll do anything I can.

I've been considering what to include in the email I'm composing and asking the community for input.

It's not easy to come up with specifics, yet YOU do it post after post.

Making a hard thing look easy...It's impressive.

******
I bet someone is going to ask, "What about the bookstores?" If you cut out a lot of print, bookstores will have to shift their models as well.

I know you have ideas about that too.

Joe Konrath said...

I bet someone is going to ask, "What about the bookstores?" If you cut out a lot of print, bookstores will have to shift their models as well.

I know you have ideas about that too.


I do, and I posted those ideas years ago.

http://jakonrath.blogspot.com/2011/05/indie-bookstores-boycott-konrath.html

Joe Konrath said...

It's a bit like vinyl.

A lot of new vinyl comes with digital music downloads. Best of both worlds.

James F. Brown said...

Joe,

All your "IF I Were A Publisher" bullet points are very valid, equitable, and sensible.

But I'm sure you realize they're all out of a Fantasy Island scenario. Ain't never gonna happen. Big Pub will never buy into such terms.

It a way, it's Darwinian biz-oriented natural selection: adapt or die. IMHO (and yours, too, I think) it will be die.

Harry Maxwell said...

Interesting and well thought out Joe. I was a photographer doing garage bands and some up and coming artists in the 80's. The record company's were willing to take my work for free if I sighed away the rights to it. Such arrogance is long gone in that industry. It is over for big publishers they don't know it. The time for independent authors has been here. As you say write something someone really likes and they will tell a few friends and so on. If anyone has any doubt about this idea just look over the career of Grumpy Cat, have another coffee and write away....

sashagirl said...

Joe,
off topic just a bit...What do you think of KINDLE UNLIMITED and how it might affect our (my) sales on Amazon KDP? I have 6 eBooks (15 more, now with a traditional publisher, to be added starting next year, one every three months) with KDP and was making great money (for the first time in my career) and now I notice in 18 days HALF of all my sale figures have gone to the Kindle Unlimited/LOLL column and I have no idea what I'll be making on them. I'm a little worried. What do you think? Can you PLEASE do a blog post on KU? Author of 20 novels, and a writer for over 43 years, Kathryn Meyer Griffith rdgriff@htc.net

Dan said...

Be careful what you wish for, indies.

I've made lots of money self pubbing since 2007 (I used to make more than Joe actually), precisely because of all the fools who continue to send their manuscripts to publishers and wait. Let them. They make their own choices, foolish or not.

If all those authors stopped worshiping the publishers, they'd flood the lower-priced indy market and it would be the end for all but the top 1% of indies.

Smell the coffee, 99%. Big name indies like Joe have a vendetta with these pubs that shouldn't interest the rest of us. I don't want the pubs to fail or change, or their sycophants to stop worshiping them, and few of us indies should.

pat said...

I think this is a great post, but I'd add two things.

First, on the 'printing collectibles' side, I'd take advantage of POD technology to let readers design their own collectible volumes -- choosing bindings, illustrations, etc. on a per-item cost basis. Amazon has made people more willing to wait for delivery of their book, making it less necessary to create a lot of identical hardcover volumes up front.

Second, on the supply end -- increasing royalties and returning rights are important, but even more important is providing the services that authors really want. That means marketing. I think it is the only task so loathed by so many authors that taking it off our hands would make us think publishers deserved their percentage -- yet it's the one they refuse to do.

Alan Spade said...

"I don't want the pubs to fail or change, or their sycophants to stop worshiping them, and few of us indies should."

I'm not sure. Big pub customer's are the bookstores, not the readers. If big pub stopped windowing and lowered the price of ebooks to the point that they would become a definitely better bargain than paperback books, big pub would altogether cease to be special partners for bookstores.

We could even imagine, in that scenario, that bookstores would stop boycotting Createspace paperbacks, and that other possibilities would open for indies.

Besides, the market is already swarmed with ebooks.

Joe Konrath said...

I don't believe ebooks are zero sum, Dan.

http://jakonrath.blogspot.com/2012/07/zero-sum.html

Flooding the market never happened with YouTube. Cool stuff still gets noticed. I believe readers will benefit from more choices, rather than authors lose sales because there are more choices.

Joe Konrath said...

Big name indies like Joe have a vendetta with these pubs

Vendetta? No.

This is A Newbie's Guide to Publishing. From the very beginning, this blog has been about sharing what I know. That's not a vendetta.

Right now, I know that the legacy industry isn't providing the same benefits that self-pub is, and it has a much higher cost. So that's what I blog about.

If publishers did as I suggested, they'd survive. But my advice isn't meant to help publishers, except in that it would benefit authors.

Michael Prior said...

Joe, one addendum to your idea. The publishers should also get POD rights (maybe non exclusive) and then help the bookstores purchase POD facilities.

Think about this: A small bookstore not kuch larger than an old Waldenbooks ot B Dalton. A few tables out front with best sellers and big name mass market paperbacks, periodicals up against the wall, and shoved in the back of the store a press. A store like this would have on hand 80% of what is sold onnhand and every other book written available in just a few minutes. They could even have enough room for a Starbucks and skalk waiting area.

Anonymous said...

I'm wondering why someone with business acumen hasn't come up with a way to get mass print only deals directly into places like Walmart. Something aimed at high end indies (such as H.M Ward) with low margin deals for the retailer:

Author and broker make a small percentage profit on sale of each unit to sales point. Author handles editing, covers etc. Broker handles printing & distribution. Seller get huge discount (as there are no BigPub overheads), but no returns.

Each step works to own strengths. It eliminates the last *big offer* legacy pub has, and gives indies with proven high sales the opportunity for the next step up to Child/Patterson/King level sales.

Would this idea fly?

Angry_Games said...

"If all those authors stopped worshiping the publishers, they'd flood the lower-priced indy market and it would be the end for all but the top 1% of indies."

Good. Then we'd all be on a level playing field.

But here's what you don't seem to grasp: Trad Pub authors flooding the market with low-priced ebooks won't hurt us indies at all. Low-priced ebooks mean customers can buy MORE books instead of less. If a trad pub author goes indie or his pub floods his books at $4.99 (instead of $9.99), then it means a customer can buy my book for $2.99 AND their fav trad pub author's book for $4.99, and still come out ahead of if they'd bought a single book at $9.99.

I keep seeing indies cry about how they want trad pub to keep screwing up and leaving their prices high because they too are afraid that low-cost ebooks will somehow hurt indie authors such as myself.

This is absolute nonsense. I'm not in competition with any author, whether Joe Konrath the indie or James Patterson the trad pub.

I write my books and I publish them and I sell them, and nothing that Konrath or Patterson or you or anyone else does is going to make or break me. Readers buy my books (and yours) because they like the way I tell a story, and they feel like they are getting their money's worth.

And I don't buy the "trad pubs can buy exposure that indies can't" because it's complete BS as well. Indies are revolutionizing the marketing world when it comes to finding new ways to turn readers on to their books. NY pubs still believe full-page ads in a newspaper have more effect than an indie author with 60k twitter followers and 25k FB fans.

John Ellsworth said...
This comment has been removed by the author.
Rob Gregory Browne said...

Big name indies like Joe have a vendetta with these pubs that shouldn't interest the rest of us.

Why should constructive criticism of the industry be construed as being some kind of vendetta? That's nonsense.

Joe and others criticize the industry because we care about it. We care about authors. We care about equity.

That's not a vendetta. And using such words is, at best, inflammatory.

Rob Gregory Browne said...

I'm wondering why someone with business acumen hasn't come up with a way to get mass print only deals directly into places like Walmart.

Is it really worth the effort? Maybe in the short term, but if you've visited Walmart recently you'll see that the book racks are shrinking, not growing. Same with Target and grocery stores.

Print is dying. I give it five years or so before it's gone on any grand scale. And I'm basing this solely on my observations of music and movies, which have pretty much been replaced by digital.

So while making a direct deal with Walmart might have some benefit for now, it's probably not worth it in the long run.

Joe Konrath said...

So while making a direct deal with Walmart might have some benefit for now, it's probably not worth it in the long run.

I doubt it is even worth it now. Machinery in place is one thing. Building new machinery is something else.

Last I heard--and this was years ago--paperbacks had a 70% return rate.

Publishers have blockbuster hits that pay for the costs of the misses. I'd be too squeamish to gamble with those stakes.

Walter Knight said...

The irony is that Amazon will save the Big Five by selling their paper books online, and selling their back-lists in E-book format. Welcome to the future.

Phyllis Humphrey said...

Joe:

I think you're right again. Some people still want paper books, so the printing machine in book stores or Walmart is a good idea. I still like to give a print book as a gift, but maybe not a $50 one.

Anonymous said...

I've been waiting for Joe's thoughts on Kindle Unlimited since they rolled it out last month. I'm curious why he doesn't talk about it at all, or at least devote one article to something that's such a gamechanger? All I keep reading are these fisking articles that just repeats the same thing. How many times can you say traditional publishing is out of touch and/or stupid? I'm pretty sure 99% of your regular readers already knows this stuff, Joe. There's no need to devote 50 more articles to fisking every idiot that comes down the pipe.

Now let's get serious: What are your thoughts on KU?

Liz said...

Anonymous 4:50 PM:

Joe has already said he's going to test out KU and then give his thoughts later. Be patient (and actually read the blog you're posting on).

Anonymous said...

The return rate I last saw was FAR lower recently, Joe. 20% or so was the number IIRC.

I don't think that's really the issue anymore.

I think the issue is a holdover from the return system thinking. If the guy selling cars down the street could just ask Ford to send him 25,000 cars and then return the 24,500 that he didn't sell for the quarter, he's going to do business a certain way.

His supplier is also stuck in a mindset and used to doing things a certain way. If your business model is print 4 books to sell 1 and it changes to print 5 to sell 4, you are still wasting product. You may be wasting less, but you;re accepting 20% waste as 'good'. Imagine if your local grocery store returned 20% of their merchandise to their supplier at regular intervals.

That supplier and the retailer have a bad habit that wouldn't be so easy to break. The supplier would struggle to shift it's pricing away from having to pay for producing 4 books to sell one. The retailer would have to get away from the idea that he can order tons and tons of shit without consequence.

I just don;t think most folk make that shift without a struggle. I'd like to think people are smarter than that, but just reading about the people who support legacy publishing gives me my daily reminded that it ain't so.

Matt said...

Anonymous said...
I've been waiting for Joe's thoughts on Kindle Unlimited since they rolled it out last month. I'm curious why he doesn't talk about it at all, or at least devote one article to something that's such a gamechanger? All I keep reading are these fisking articles that just repeats the same thing. How many times can you say traditional publishing is out of touch and/or stupid? I'm pretty sure 99% of your regular readers already knows this stuff, Joe. There's no need to devote 50 more articles to fisking every idiot that comes down the pipe.

Now let's get serious: What are your thoughts on KU?

4:50 PM


Grumpy Strandberg is that you?

As another poster answered, read the blog and you'll know the answer to your question. And I'll add, this blog post isn't a fisk. It' advice on how traditional publishers can survive. Very altruistic of Joe I will say.

Terrence OBrien said...

I don't believe ebooks are zero sum, Dan.

Agree. In a zero sum game, the loser loses the same amount the winner wins. If the winner makes $5, then the loser loses $5.

But market share is a classic zero sum game. If independents gain 5% in market share, then publishers lose 5%. If one independent author gains X% market share, then it must come from other authors. That is what we have seen happening.

Tom Simon said...

Terrence O’Brien,

Your analysis falls short because you focus on market share, which is a derivative, not a datum. Market shares are factitious; sales are real.

If one independent author goes from 1,000 sales per month to 10,000, that does not mean that 9,000 sales per month must come from other authors. It is entirely possible for those sales to be new sales, for the author to tickle the fancy of a group of readers who would otherwise have kept their money in their pockets, or spent it on beer, shoes, or video games.

Market share is not a zero-sum game, because it is not the game. Sales is the game, and that game is not zero-sum. Market share is merely a measurement that is rigged to be zero-sum because no matter how big or small the market, the percentages always add up to 100.

Rebecca J. Clark said...

I'm one of those authors who used to submit and submit and submit to the legacy publishers. Now, even though I'm making very little $$ from my self-pubbed works (so far), I still don't plan to submit to publishers other than myself in the future.

Curtis Manges said...

Joe,

You said, "The ebook, mass market paperback, and hardcover will all come out at the same time. No windowing."

I think that IS windowing. Once the MS is finished, it can go to epub at the speed of electricity, while the print editions take time to set up, print, package, warehouse, and distribute.

I understand the appeal of releasing in all formats simultaneously, but your suggestion introduces an unavoidable delay for the ebooks. I admit I don't know how much of a delay that would be. What is it? Days? Weeks? Months? Enlighten me, please.

Terrence OBrien said...

Your analysis falls short because you focus on market share, which is a derivative, not a datum. Market shares are factitious; sales are real.

There was no analysis. Simply a classification.

If one independent author goes from 1,000 sales per month to 10,000, that does not mean that 9,000 sales per month must come from other authors.

Correct. Did someone say it did?

Market share is not a zero-sum game, because it is not the game.

Market share is a zero sum game no matter what the game is. Use it or don't use it. It still remains a zero-sum game.

In a zero sum game, every gain by one player is offset by an equal loss by other players. Gains and losses sum to zero.

That makes market share a zero-sum game.

K1YPP said...

Good stuff Joe, as usual. One point that lost in the traditional pub vs. indie the age of the authors. I've been writing magazine pieces for forty years, but only published my first book four years ago. When I wrote the book I dreaded finding an agent/publisher/printer etc. It was daunting. Then I attended a local author's club (Sarasota Authors Connection, Florida) and a speaker there presented about something called Createspace. I went right home that night and started the process, and never looked back.
I was picking up readers like a bee does pollen. The readers kept demanding that I go ebook. I had no clue and didn't even have an e-device.
I looked into Kindle/Smashwords and in a short time had the book placed there. I now have tens of thousands of readers and am working on my next two books. As you've pointed out, I too never bothered with the traditional route. I was 63 when I wrote that first book, and I was looking at years from the time I wrote it, to the time it would have been published. The book is about my hike of the Appalachian Trail and having a six-artery heart-bypass operation in the middle of the hike. I figured my days were numbered and it was very possible that I would have never seen the book published...the days were adding up.
The indie publishing route has been “prayers answered,” for me, an indie. I don't think I'm unique, there are numerous boomers writing their first books, and some are fantastic, and some are not worth the pixels they're lighting up. They face all the same problems as the traditional publishing: they need a great editor, good cover and the book has to have something the reader can dig into, none of that has changed. What has changed is the ability to get that book out there quickly and into the hands of readers, without hurdles and gatekeepers. The readers will pick the winners and losers. As an older writer, I pity those publishing houses stuck in the old model. I'm a retired electrical engineer, and I still have my old Pickett slide rule, it's a great museum piece, but I stopped using it a very long time ago. Pickett is long gone, there is a lesson there for the publishers.

Loyd Jenkins said...

Terrence,
You do realize your market share could be cut in half and your income double. All it would take is for the total market to expand. I think the point was that the market share is not the right thing to be looking at.

Steven Zacharius said...

Some of your ideas are not that far fetched and many of them are actually already occurring.
The paper mid list has been reduced tremendously just because of economics. We all tend to call these books with low print runs mid-list when they're really "low-list". The publisher can't make money at low print runs so the number of titles has already been greatly reduced. Shelf space has already been reduced at every single retailer. Much of this has occurred because of the increase in ebooks. When the stores sell less print books, they'll give the space to another product instead.
Just because a book gets into WalMart doesn't mean it's a mid-list title. WalMart carries a big selection of titles. But publishers have already done what you suggested to a great extent. If we at Kensington Publishing don't think we can get enough print copies out to make financial sense, we'll publish the book in our digital only imprint.
I don't agree with the $10,000 signing bonus because there are going to be plenty of times that the publisher can't make money because sales are going to be low. Publishers are in business to make a profit. The advance should be against future earnings. Many digital lines are paying considerably more than the 25% of net receipts already, but not with a $10,000 signing bonus. There are houses that already pay 50%.
Monthly payments are nearly impossible unless it was a purely digital title and even then it's difficult to implement. We're not selling from one account like Kindle. We're selling to 25 ebook retailers and have to ingest the sales information and convert it into a common format. If the book has a print component to it, we have to factor in returns. It takes time to ingest all the data, verify it and then finally report it.
I agree with you that if a book is not selling well any longer that we should drop the price and we're doing that now if the royalty rate is based on net receipts. If it were based on list price, as many of the older contracts were, then that makes this impossible to do.
We strive to build an ebook debut author. Our goal is to get them into print. We've recently signed an exclusive deal with Books A Million to take some of our digital first titles and print them as trade paper exclusives for BAM. This is a traditional print run, not POD. Showing that we can get books that were digital first into print is a major draw to bring in new talent to our digital lines.
Your comments about the ebook with the hardcover have validity to them. It's not so far-fetched. A lot of the retailers don't have a way to handle this yet. I happen to still prefer to read hardcovers although I do read some digital books and we preview manuscripts on e-readers in the office when looking to acquire a title.

Tom Simon said...

Mr. O’Brien,

I repeat. Market share is not a zero-sum game, because it is not a game at all. It is merely a metric for one particular element of the outcome. You might as well say that baseball players were playing the game of batting average.

Tom Simon said...
This comment has been removed by the author.
antares said...

Numbers.

On The Passive Voice . . .

1) Lee Child said his publisher told him that his readers buy 4 books a year;

2) William Ockham said that the average power reader buys 40 books a year;

3) someone (I forgot who, and I did not find his post) said that power readers make up only 5% of all readers.

I do not know where these three got their numbers, but I assume they are all correct.

Casual readers: 95 x 4 = 380 -- 63.5% of books sold
Power readers: 5 x 40 = 200 -- 34.5% of books sold

This is acceptable for a first approximation. Especially given the provenance of my data.

So casual readers outnumber power readers 19 to 1. In the aggregate, casual readers buy twice as many books as power readers.

Selling to casual readers is not the same as selling to power readers. That is, they are separate markets.

Casual readers do not own Kindles or Kindle apps. They read spines. To them, visibility means the New York Times bestseller list.

Power reader own Kindles or Kindle apps. They read ebooks. To them, visibility means an Amazon algorithm. (Amazon emails me twice a day with book recommendations.)

Traditional publishers target the casual reader. They are sloppy, disordered, and haphazard at finding winners (bestseller authors), but once they find one, they ride that pony until he drops.

If the numbers I put up are even close, the trad pub approach is profitable and makes sense. That is, it works as long as the average casual reader buys 4 books a year and casual readers outnumber power readers 19 to 1.

If the ratio of casual readers to power readers falls to 9 to 1, it no longer makes sense.

I think there is a Black Swan coming that will change the game.

Terrence OBrien said...

I repeat. Market share is not a zero-sum game, because it is not a game at all. It is merely a metric for one particular element of the outcome. You might as well say that baseball players were playing the game of batting average.

Firms struggle against each other for market share. That is why it is called a game.

It is a struggle where a gain by one player demands an equal loss by other players. That is why it is a zero-sum game.

In a zero sum game, a positive loss by one is summed to a negative loss by another, and the result is zero.


Terrence OBrien said...

You do realize your market share could be cut in half and your income double. All it would take is for the total market to expand. I think the point was that the market share is not the right thing to be looking at.

Sure. That's how the math works. Market share can also double while sales fall.

There are multiple things to look at. Market share is one of them.

Terrence OBrien said...

In a zero sum game, a positive loss by one is summed to a negative loss by another, and the result is zero.

That was wrong, but I can't edit it. It should say,
"In a zero sum game, a positive GAIN by one is summed to a negative loss by another, and the result is zero."

Sorry for the confusion.

Anonymous said...

Joe, What convinces me you are right are the posts by Steve Zacharius and Deborah Smith on this and other sites frequented by Indies, particularly their posts on Mike Shatzkin's site.

There is no other possible explanation other than publishers know they are in trouble.

In response to Steve's post above -- Steve, I assume you are not offering significant advances for your digital only deals, which means that your cherry-picking of Joe's ideas leaves writers much worse off than ever. Joe's suggested model only works because of the 10K stipend. Why else would a writer turn over her rights in digital only for a pittance?

Anonymous said...

Terrence,

You might as well stop arguing. Nobody is disagreeing with the definition or behaviour of market share. They are saying there's no point in measuring market share, since it doesn't tell you anything useful (unless you're facing an anti-monopoly tribunal). In fact, in the specific scenario that is being discussed it will probably give you misleading results, as has also been pointed out to you.

I'm sure there are publishers that exist who implement some or all of your ideas, Joe. Whether we will see these publishers grow and flourish at the expense of the current market leader publishers is a question for the future...

Anonymous said...

As Anonymous@12:04 said, the 10k stipend is not an advance against earnings, it's buying the 5-year right to the author's works.

That does raise a question back to you though Joe... is that an exclusive right to those works for the 5 years? How would you handle the author already listing the work themselves in a particular retailer? What about listing in parallel in retailers you don't normally use?

adan said...

I think this is the best organized set of ideas from anyone yet.

Esp liked, "Now I'm starting to believe that the ones with the real power are the ones who should have had the power since the beginning of publishing. The ones who create the content in the first place."

The new ideas, like the author signing bonus, and printing on paper after it's known a work sells, are perfect examples!

And if one adds to "Once a reader has a Kindle (or Kindle app on their tablet)" : or an Apple app, or Scribd or Oyster app, or OverDrive, or any number of other reading apps from a huge number of other vendors, in addition to Amazon, well...

Jim Self said...

Joe,

I would add that there should be a paper version designed for libraries, something more durable than a paperback but not a luxury item. Libraries have a chance to evolve into what bookstores used to be, the place for readers to browse and lounge.

I think instead of a $10,000 signing bonus, publishers just need to give better royalties. Writers and publishers are business partners, so I think it's fair for a writer to profit as the publisher does. That demands honest bookkeeping from the publisher, though. Hard to trust a partner that doesn't let you see the books.

Stephen Zacharius,

I've been thinking of the hardback-as-luxury idea Joe mentioned for some time. I'd like to hear your opinion on that. It would require bookstores to fully transform into a very different kind of store, though. What do you think? Would they go for it?

Merrill Heath said...

I'll throw this out to Joe and Stephen Zacharias. Do you think books will ever move to a business model of other retail items where the publisher sells the books to the retailer for a set price, there are no returns, and the retailer has the freedom to price the books however they see fit in order to move the product?

Merrill Heath said...

BTW, Steven, my apologies for butchering your name in my previous post.

Anonymous said...

David said...
I don't agree with the $10,000 signing bonus because there are going to be plenty of times that the publisher can't make money because sales are going to be low.

The $10,000 signing bonus makes sense because it creates a dividing line between works that the publisher really believes in and those they are just trying to scrape out a few bucks on. It's not a matter of what 'makes sense' for the publisher in a bottom-feeding scenario. It's something future authors will simply require as an incentive to bother with trad pub.

Joe's strategy is forward-thinking: to become the publisher who sees the writing on the wall and does this first, thereby becoming the publisher of choice for these empowered authors of the future.

Anonymous said...

This is fascinating. I took a quick look at the entries over at Slushpile Hell from the period of June and July combined, starting in 2010. For those of you not familiar, these are submission letters to an agent that were hand-picked from the pile because they were so bad as to be funny. So he started posting excerpts from them for public consumption. (They are pretty funny.)

Anyway, here are the number of posts from the periods mentioned above:
June & July, 2010 - 28
June & July, 2011 - 6
June & July, 2012 - 9
June & July, 2013 - 5
June & July, 2014 - 4

Wow, look at that drop off trend. Not hard data, obviously, but anecdotally, can you imagine how much smaller that overall pile of submissions must be?

Keep in mind that only the really dumb writers make the cut, and considering the opportunities of self-publishing over the past few years, their percentage of the slushpile is almost certainly much higher than it was in the beginning. Which implies an even smaller overall pile to choose from.

I can't help but think this at least partially reflects what's happening to slushpiles throughout the industry. Does anyone really believe agent/publisher claims to the contrary?

Drew Gideon said...

Mr. Zacharius - the tech to deliver digital versions to print owners already exists; there are even iOS and android apps for it. One of my favorite authors has been talking about this app on her Facebook feed for quite a while now because her books are available through it, and her publisher is Harper Voyager. Kobo has a big hand in bringing this to market.
Here's the app:
http://techcrunch.com/2014/05/22/bitlit-makes-it-easy-to-gets-e-book-versions-of-physical-books-you-already-own/

A lot of the retailers don't have a way to handle this yet.
Why are publishers waiting for retailers to come up with this technology? Why make themselves even more dependent on a retailer?

Seems to me publishers should be developing their own solution.
If they can't do that, then they should at least be watching HarperCollins like a hawk and imitating every thing they do. Harper's pushing boundaries over there and looks like the best candidate to not just survive, but thrive in the digital revolution. As a reader, Harper's sites and social media interaction get me *excited* about their books, an they make it painless to purchase direct and keep up with favorite authors' releases.

Drew Gideon said...

and* they make it...
Darn typos. WTB edit function, Joe! When are you going to kick Blogger and get Wordpress? :)

Dan Meadows said...

When it starts, it happens fast. I was inside on many of these same arguments with newspapers and the powers that be made the same misguided choices based on wishful assumptions that the status quo would persevere. Five years later, half their ad revenue was just gone. Music, same deal. In five years, half their cd revenue was up in smoke. It's coming. I watched a ton of writers ground up because newspaper pubs were too obstinate to see the handwriting on the wall. Unfortunately, I think history is about to repeat itself for those who aren't paying attention.

Dan Meadows said...

Particularly when such a sizable piece of the market is almost entirely unaccounted for outside of Author Earnings.

Anonymous said...

Dan, I saw the same thing with the newspaper in my city (a major city in California). An acquaintance told me recently that she and a few other young reporters (20-something) kept trying to tell the newspaper execs (all men, over 55) that digital would take over newspapers.

They insisted that paper would remain dominant, and the majority of people didn't want to read their news on line. They kept calling meetings and asking the youngish reporters how to get young people to subscribe to the paper versions, dismissing the advice that they should go digital by pointing to their statistics and studies about how most people want to read paper newspapers.

Anyway, acquaintance left to have her babies, and 5 years later, she can't return because there are no jobs because, you guessed it, the newspaper is floundering now that so many people read their news online.

The newspaper is still in existence, but has almost no importance and is struggling to hang on.

Nirmala said...

Joe said, "Ebook sales haven't plateaued. They've plateaued only insofar as legacy publishers can track them."

Hugh posted about the recent earnings report from NewsCorp and it showed ebook sales were up 35% at Harper Collins: http://www.hughhowey.com/authors-are-getting-hoodwinked/

Ebook sales may not be plateauing at all.

Inkling said...

Quote: "Now I'm starting to believe that the ones with the real power are the ones who should have had the power since the beginning of publishing. The ones who create the content in the first place. The authors."

Actually, the real power in publishing will always rest with the readers. The role of everyone else is to satisfy them.

Joe Konrath said...

WalMart carries a big selection of titles.

Perhaps our definition of "big" differs. I wouldn't call 100 titles "big", which seems to be about what my local WalMart is currently carrying.

If we at Kensington Publishing don't think we can get enough print copies out to make financial sense, we'll publish the book in our digital only imprint.

My post is about incentivizing authors to sign with a digital imprint. I wouldn't let one of my titles go for less than seven figures. Currently, there are authors still submitting to publishers, but I don't see this continuing for the many reasons I mentioned.

I don't agree with the $10,000 signing bonus because there are going to be plenty of times that the publisher can't make money because sales are going to be low.

So Kensington makes money on every book it sells? Or are there already times it loses money because sales are too low?

If an author isn't getting a print run, they'd have to be desperate or ignorant to accept an advance and 25% (or even 50%) of net if they had to pay back that advance. It makes no sense.

Kensington, and other publishers, are going to need to offer authors something they can't get on their own. Advances are antiquated for midlist authors, who can begin making money on their self-pub titles right now. Why should they wait for a low royalty advance to earn out before they see steady income again?

It's like a high interest loan. I blogged about it in a previous post.
http://jakonrath.blogspot.com/2014/02/a-case-of-shatz-fisking-mike-shatzkin.html

We've recently signed an exclusive deal with Books A Million to take some of our digital first titles and print them as trade paper exclusives for BAM.

This is smart. But is it enough to tempt authors away from 70% ebook royalties on their own? Especially when they can also use CreateSapce for POD? (I made $1k-$3k a month via POD).

Your future will depend on showing authors that you can sell books better than they can on their own, to justify your cut. If you think you're going to continue to get quality submissions with what you currently offer new and midlist authors, you're not thinking ahead.

B. Walsh said...

Mr. Zaccharius, What about Joe's comment on marketing--because that for me is where traditional pubs could provide a value add. And not just for the shiny brand new books. I have five titles with your house through the recent Lyrical Press acquisition--wouldn't it make economic sense to try and promote those titles as well? As Joe says, e-books are forever so why not have a plan to promote existing titles? That would be good for the house and good for the author.

Joe Konrath said...

Do you think books will ever move to a business model of other retail items where the publisher sells the books to the retailer for a set price, there are no returns, and the retailer has the freedom to price the books however they see fit in order to move the product?

No.

Returns are a chronic disease. Bookstores will fight to keep that power until they fold. It's like a parasite refusing to leave a host even if they both die as a consequence. Happens all the time in nature.

Joe Konrath said...

That does raise a question back to you though Joe... is that an exclusive right to those works for the 5 years?

I'd say it is exclusive for US rights, or maybe world English. If a publisher isn't going to bother translating into Japanese, why should they get those rights too?

Joe Konrath said...

@Dan & Anon 11:29am:

I mentioned the death of newspapers five years ago as a corollary.

http://jakonrath.blogspot.com/2010/04/print-is-eternal.html

Joe Konrath said...

I have five titles with your house through the recent Lyrical Press acquisition--wouldn't it make economic sense to try and promote those titles as well?

Don't hold your breath. When I discussed backlist with Steve previously, he was of a firm opinion that new titles were the ones that publishers cared about, not old titles.

I offered him print-only deals for my backlist, and he demurred.

Since then, 6 of those backlist titles have cracked the Amazon Top 100--again. I do a promo, and an old title sells 5000 copies in a week and makes me a mint.

That's because there are no backlist titles anymore. Everything is frontlist to readers seeing it for the first time.

Good luck getting a publisher to understand this. They only push backlist titles if a movie or TV show based on the IP is coming out.

Patrice Fitzgerald said...

The tide has turned, and self-publishing is going to become the preferred method. I'm thrilled that I got into this in 2011.

Thanks for sharing your wisdom, Joe.

Nat Russo said...

I think some are missing the point on the 10k signing bonus when they say they'd prefer higher royalties instead. You can get those higher royalties by simply self-pubbing through Amazon.

If I'm reading Joe correctly, the 10k bonus is meant to entice writers to submit to publishing houses who would otherwise self-publish.

Rob Gregory Browne said...

Advances are antiquated for midlist authors, who can begin making money on their self-pub titles right now. Why should they wait for a low royalty advance to earn out before they see steady income again?

The advance for my first book with St. Martin's Press was $15K, spread out over a couple years.

When I self-published my first indie title, I made that amount in my first week of sales. Many self-publishers are doing even better.

Publishers are going to have to come up with a mighty enticing contract to convince authors to publish with them. And beyond a high six or seven figure advance, I can't think of what that would be. I can't even see 10 grand free and clear doing it.

Bob Nailor said...

I know of one publisher who put out the word they were looking for submissions. I was intrigued because they never mentioned "opened to submissions" but "looking for submissions" and to me, that is two different things.

James said...

This is the death I've been predicting for quite some time. Honestly, ever since I first started reading this blog.

Everything else, I think is just bluster. The publishers will change to meet the times. They're just milking out an old model because it still makes quite a bit of money.

But when authors can, themselves, become Publishing entities without any drawbacks -- Publishers are screwed.

The worst part of it for Publishers is that they are making it so easy for us. Right now the legacy guys are using self-pubbed indies to vet new talent for them without having to take any risk. But all too soon the time will come, when that new talent they see on the rise will look at what they have to offer, laugh, and say, "You want me to take a pay-cut and give up control to let you guys publish my book? Dream on."

The Stephen King's and James Patternson's of tomorrow won't look like the successes of yester-year. They'll look more like entrepreneurs and CEOs of companies built around themselves and their product.

B. Walsh said...

Thanks Joe, for your comment and for all the effort you put into this blog. I'm indie publishing an old title I got the rights back to along with a new title.

Rob Gregory Browne said...

They only push backlist titles if a movie or TV show based on the IP is coming out.

And even then they may not care. SMP showed no interest whatsoever when CBS bought and shot the Kiss Her Goodbye pilot. I could be wrong, but I don't even remember a congratulatory email. The book was old news by then.

William Ockham said...

@Steven Zacharius asked if bookstores would make the transformation to selling luxury goods. Not until B&N goes under. I have been saying for sometime that the future for bookstores looks like the present day for jewelry stores.

Mark Edward Hall said...

Joe said, "I do a promo, and an old title sells 5000 copies in a week and makes me a mint."

I'm just finishing up one of those promos on my novel Apocalypse Island. It's the fourth time I've run a promo on that particular book and I've made so much money that the idea of signing with a publisher is laughable.

Terrence OBrien said...

You might as well stop arguing. Nobody is disagreeing with the definition or behaviour of market share. They are saying there's no point in measuring market share, since it doesn't tell you anything useful (unless you're facing an anti-monopoly tribunal). In fact, in the specific scenario that is being discussed it will probably give you misleading results, as has also been pointed out to you.

It's not an argument. Market share is a zero sum game.

It's a zero sum game even if some authors don't pay attention to it.

It's a zero-sum game if other authors do pay attention to it.

Nobody needs permission to pay attention to it.

Joe Konrath said...

Market share is a zero sum game.

Not with ebooks.

It may be zero sum when choosing what to read at any particular time, but it isn't zero sum when choosing what to buy. Especially since many ebooks are priced reasonably.

I call it the buffet mentality. You load more onto your plate at a buffet than you'll be able to eat, because it's cheap/free/paid for.

So let's say I'm in the mood for a horror novel to read. I find one that looks cool, and I buy it. But as I'm about to check out, I see a link to another book that looks interesting. So I buy that as well. I didn't choose one over another. I chose both.

Ebooks have tapped into the human hoarding gene, more so than paper ever did because paper costs too much and takes up too much space. But now you can have a TBR stack of thousands. No zero sum when it comes to buying.

When it comes to reading, yes, because a person can only read one book at a time, and only has so much time in their life they can dedicate to reading. And people do have limited budgets, but with so much free and cheap the dollar stretches much further. We tend to pile our plates with more than we can ever eat.

Make sense?

Lower priced Lee Child or James Patterson ebooks would free up more consumer dollars to buy my titles as well. Not Lee or Joe. Lee and Joe.

Terrence OBrien said...

It may be zero sum when choosing what to read at any particular time, but it isn't zero sum when choosing what to buy. Especially since many ebooks are priced reasonably.

Sure it is. Pick any time frame. Add up all the sales. For any specific player divide his sales by all the sales for the time frame. That is his market share for that time frame. It is a percentage of the total market

Do the same for each player in that time frame. That gives each player's market share. They all have a percentage of the total market.

Now add up all those percentages. they sum to 100%

Now choose the next successive time frame. Do the same thing. The market shares for some players will increase. The market shares for others will decrease. Add the increases and decreases together and they sum to zero.

Note this is measured in percentages, so its computation doesn't consider changes in total sales.

It doesn't matter why people buy in the chosen time frame. Hoarding is OK. A buy is a buy. Doesn't matter why.

It also doesn't matter if people read the books. Market share is based on sales, nothing more.

Market share is based on totals. It doesn't consider any particular consumer behavior other than clicking the BUY button.

The price of Lee Child books may lead to more sales for you. OK. That gives you a bigger numerator in the computation. All that matters is total sales and a given player's sales. It doesn't matter why it happens.

Market share is one indicator. It isn't the only one, and it doesn't supplant any others. It is a tool many firms use.

It doesn't consider everything. It isn't meant to. Like any indicator, some find it useful, and some don't. Many firms employ multiple indicators in evaluating their business.

I think you have introduced competition and consumption. Those are important factors, but don't enter into calculating market share.



Tom Simon said...

You’re not getting it, are you, Mr. O’Brien? Market share is a derivative. Sales are the primary facts on the ground. As writers, we are not in the derivative business. The only thing market share could possibly tell us is whether we are approaching saturation – and no one writer is big enough, in either readership or output, to do that.

Selling is not zero-sum. You don’t increase your sales by taking them away from the other guy (though that may happen as a side-effect), but by making the customers interested in what you have to sell. Strategies designed for winning at zero-sum games are seldom useful for variable-sum games, and are often counterproductive.

Terrence OBrien said...

You’re not getting it, are you, Mr. O’Brien? Market share is a derivative.

Of course market share is a derivative. It is a ratio of two sales figures.

Sales are the primary facts on the ground.

Agree. That drives many things.

As writers, we are not in the derivative business.

OK. Do whatever writers are supposed to do. Other business people use a variety of methods to evaluate their businesses. Derivatives are among them.

Amazon recently used a derivative when is said price elasticity was -1.74 between $14.99 and $9.99. That is partial derivative of sales. (Change in units sold)/(change in price)

The only thing market share could possibly tell us is whether we are approaching saturation – and no one writer is big enough, in either readership or output, to do that.

Fine with me. Others find more uses.

Selling is not zero-sum. You don’t increase your sales by taking them away from the other guy (though that may happen as a side-effect), but by making the customers interested in what you have to sell.

Agree. Did someone say selling was a zero-sum game?

Strategies designed for winning at zero-sum games are seldom useful for variable-sum games, and are often counterproductive.

Many businesses pay attention to both market share and changes in sales. They manage to develop strategies to enhance both.

For example, Amazon has been very concerned with market share over the years. At the same time, they had to maintain sales to generate a free cash flow and nominal profit to finance business. Perhaps they tended to both?

There are lots of analytic tools available. Firms and individuals use them as they choose. Writers are fee to do the same.







Sales are the primary facts on the ground. As writers, we are not in the derivative business. The only thing market share could possibly tell us is whether we are approaching saturation – and no one writer is big enough, in either readership or output, to do that.

Terrence OBrien said...

Sorry. That last para above is from Tom Simon's post. My error in copy/paste.

Tom Simon said...

Again, Amazon can worry about market share, because when you are holding down 65 percent of a market all by yourself, you have cause to worry about saturation. No writer has ever been in that position.

But the market share is not the game for a writer, any more than the batting average is the game for a baseball player. It’s a metric and sometimes a useful one, but the fact that it is a zero-sum metric tells you nothing about how to win at the actual game.

Terrence OBrien said...

Again, Amazon can worry about market share, because when you are holding down 65 percent of a market all by yourself, you have cause to worry about saturation. No writer has ever been in that position.

Amazon was concerned with market share long before it achieved 65%, and long before saturation was a consideration. A primary objective for Amazon was building market share. They started at zero.

I agree no writer is in Amazon's place. But Amazon demonstrates markets share has a variety of applications and uses. The utility of market share isn't limited to large or small ventures. The derivative can be used by anyone.

But the market share is not the game for a writer, any more than the batting average is the game for a baseball player.

A writer's game is whatever he chooses it to be. His use of tools and resources is limited only by his own imagination. Innovation.

It’s a metric and sometimes a useful one, but the fact that it is a zero-sum metric tells you nothing about how to win at the actual game.

I agree market share is a useful metric.

There are many zero-sum games, and there is no reason to think that attribute alone makes any of them useful. The use and application of the metric determines its contribution to winning.

Joe Konrath said...

For any specific player divide his sales by all the sales for the time frame. That is his market share for that time frame. It is a percentage of the total market

But the total market is elastic. There can always be more to sell if the buyer is tempted. And this still doesn't show how one writer's sale is another writer's loss.

We may be coming down to semantics at this point.

Ann Voss Peterson said...

I think you guys are just amusing yourselves with this argument now. :)

In this biz, author rankings and book rankings are measures related to market share. Ranking shows how an author or book is performing in relation to other authors or books.

But it would be a mistake to pay more attention to rank than actual sales. Rank is a zero-sum game, but how many sales another author enjoys has very little to do with my sales. We certainly compete for rank. We don't compete for sales. And unless you're more interested in validation, sales are a much more accurate measure of success for authors.

Terrence OBrien said...

But the total market is elastic. There can always be more to sell if the buyer is tempted. And this still doesn't show how one writer's sale is another writer's loss.

SEMANTICS

I don't think we are dealing with semantics. It is a question of different units of measure.

DOLLARS

1. It is elastic.

2. One writer's sales do not have to come from another writer's sales.

The above appplies to the dollars each writer gets. It is measured in dollars. Dollars are the unit of measure. When I make an additional dollar, no other author has to lose anything. Maybe they all make an additional dollar.

MARKET SHARE

Market share is not measured in dollars. It is measured in percentage points. It is mesaured in a different unit.

If a firm takes a greater share of the market, measured as a percentage of the market, then it increases its market share.

Suppose in year-1 one Firm-A had 25% of the market, and all others had 75%. The total market is 100%.

Now suppose in year-2, Firm-A has 30% of the market. Now all the other firms have 70% of the market. The total market is still 100%.

In moving from year-1 to year-2, Firm-A gained market share measured in percentage points, and everyone else lost market share measured in percentage points.

EXAMPLE OF APPLICATION

Suppose Firm-B notices it's total dollars have increased. And the total spending in the industry has also increased. Well done. They congratulate each other.

But Firm-B also notices its market share has fallen from 10% to 8%. It used to have 10% of all dollars spent. Now it has 8% of all dollars spent.

So, while the total dollars spent in the market have increased, and Firm-B has also seen an increase, its competition has taken a greater share of the total market.

Suppose the same thing happens next year. Now Firm-B sees dollar revenue increase again, but it's market share falls to 6%.

This is very bad news for Firm-B. It is a path to oblivion that many before have taken. It wants to know why it is losing market share to the competition. It wants to know what it is doing wrong. It is time to change something.

This one example. We can construct many others.

MARKET SHARE IN TODAYS CONTROVERSIES

Notice how so many perople are complaining about Amazon's market shar? They complain about market share from one year to the next. They aren't quoting dollars, they are complaining that the share of the total market Anmazon has.

They say it is 65% or 30% or 50%. They measure its change from year to year.

Also notice how people revel in the increased market share independents ara gaining. Their market share has been steadily increasing. Since market share cannot exceed 100%, that means independnets are taking market share form publishers.

ZERO-SUM

Markket share is a zero-sum game because all market shares must add up to 100%. If I take an additional 10%, then I take it from someone else.

The key here is in identifying the measurement units. Market share is measured in percentage points. It is not measured in dollars. That's where the confusion arises.

IMPORTANCE RELATIVE TO OTHER INDICATORS

Market share is just one meric among many. It does not consider everything. It does not supplant anything. People use it in conjunction with other metrics to gain abetter understanding of what is happening.



Anonymous said...

Following what antares says above:

I reached a similar conclusion re Lee Childs figures. The question then is how to get a slice of this market? From an indie perspective the 4 times a year purchaser is money left on the table.

Are these any market research figures on the book buying habits of this section of the population? Do they use ereader devices at all (such as mobile phones), and where do they buy their books from?

If indies manage to break into this segment I suspect it would be the tipping point for legacy pub.

Anonymous said...

Same anon as above.

An example of what I'm thinking is this:

http://www.dummies.com/how-to/content/how-to-sell-products-or-services-using-qr-codes.html

essentially buy an ebook directly to mobile phone from an ad poster at a shopping centre, airport, tube, railway etc.

Rob Gregory Browne said...

And unless you're more interested in validation, sales are a much more accurate measure of success for authors.

To go in a slightly different direction (because all this market share/zero sum crap gives me a headache), success is also defined differently for each author.

If Ann is making $10K a month and I'm only making $5K, our success is measured on which of us can maintain the lifestyle we're accustomed to.

I may be living like a king at $5K, and she might be struggling to pay the mortgage on her twelve-bedroom mansion.

The only person we're competing with is ourselves.

Then again, I have no idea what I"m talking about. I just collect the checks Amazon and B&N send me and smile.

Anonymous said...

@Terrence OBrien, I put it to you that the only people who currently use market share as a metric in an elastic market... do not understand that market and can make no useful conclusions about that market.

Any conclusions you try to make from a market share perspective with regards to an elastic market, will either be wrong... or coincidence.

Anonymous said...

Mr. Zacharius,

I read your post here with interest. It seems like you are trying different things to keep up with the market.

I do appreciate your explanation of how different royalty terms can affect pricing. I hadn't heard that mentioned and it does make sense now why it's such an issue--on the surface it seems so obvious, just lower prices to be competitive. But if royalties are based on list vs net, that paints a different, often impossible picture.

Unfortunately, unless an author is at a very high level, like a Lee Child, or Grisham or such, or is viewed as being the 'next big thing', and receives a favorable contract with a seven figure advance….it's truly hard to fathom why someone would choose NOT to self-publish?

I'm one of those newer authors who have been following the market closely for several years and the tide has turned from crafting the perfect query letter to deciding not to even go that route, because the numbers just don't make sense.

The deal you struck with Books A Million, actually would turn me OFF from submitting because of the exclusivity factor. The only real advantage traditional publishing has to offer is WIDE print distribution. If I were ever to sign with a publisher and I'm not ruling it out, I think a hybrid strategy could be a good one to have some books out there in print that could broaden an author's market and cross-promote with the ebooks.

But, that deal with a publisher would have to mean print books in as many places as possible, bookstores, Walmart/Target/Costco, Airports, Grocery stores….etc.

Being limited to just Books A Million is a limitation, not an advantage in my eyes.

Terrence OBrien said...

I put it to you that the only people who currently use market share as a metric in an elastic market... do not understand that market and can make no useful conclusions about that market.

Any conclusions you try to make from a market share perspective with regards to an elastic market, will either be wrong... or coincidence.


Market share widely used by people with extensive knowledge of business and economics. They use it in conjunction with many other performance metrics. What I have described is normal stuff in lots of businesses. Those people make their own conclusions about the value of the tools they employ.

Those who are interested can find much more in various texts and can simply Google for "Market Share" to get started. A good place to start to get the definitions and short explanations of many business and econ terms is Investopedia on the internet.

Market Share is a tool. Business people determine what tools they will use for their own businesses.

Elasticity typically refers to changes in demand or supply as a result of changes in price. Almost all markets are elastic. Firms have market share of elastic markets.

I think people here are using elasticity to mean the total spending in a market can increase. So a market may have $100 in spending in year-1, and $125 in year-2. That change in sales may be a function of a price change that can be measured by elasticity. Or it may be a function of something else. So market share can easily be used when a market exhibits price elasticity of demand or supply.

Anonymous said...

Joe asks, quite reasonably:

"If I know I can make $100,000 on a self-published ebook in five years of sales, and I have the numbers to back up this claim, why would any informed writer--either pro or newbie--ever settle for less?"

The reason is that being informed doesn't mean you've written a good book or one that will sell.

Joe is an outlier. He has sales and momentum.

He has experimented with pen names but he also has experience and chose to write books in genres that sell.

The newbie writing their first book might not be able to replicate Joe's success. They certainly do not have his marketing expertise or sales momentum.

Most ebook authors do not make anywhere near the money that Joe makes. There are probably a variety of reasons for that.

Despite this what Joe says makes good sense. Send you books to publishers but also get them published yourself.

If they are good, they might sell.

If they sell, publishers will come to you.

And then you'll have the same pleasure Joe gets in turning them down.

Anonymous said...

Angry_Games makes an interesting comment:

"Low-priced ebooks mean customers can buy MORE books instead of less."

That might happen. Or it might mean that if cheese is cheap we'll all stock our fridges with cheese.

You can only read so many books. There are undoubtedly people who download everything that is free.

But I don't know if there are people who buy everything that is cheap.

Also Amazon is actually very interested not only in which books you bought but which books you read.

That information will impact the market at some point. It will be interesting to see how. Most likely in the first instance in online lending libraries. If your book is read, you'll get paid.


Joe Konrath said...

Market share widely used by people with extensive knowledge of business and economics.

Imagine two parallel universe, A and B.

In Universe A, I've written 53 ebook titles.

In Universe B, I've just released my latest ebook, so I have 54 titles. My fans buy my 54th title. But in both cases, my other 53 titles sell in the same amount.

I'm not cannibalizing my own sales to sell title 54 in B. I'm selling extra.

My income increases, but it isn't zero sum. It's extra income.

The market also increased in size, because the addition of one extra title made people--my fans--buy it. The market is elastic depending on what is available, discoverable, and visible.

We aren't comepeting for X number of customers. Customers who otherwise wouldn't have bought anything, would buy us if they noticed us.

Yes, you can say that all sales always equal 100%, and each writer gets a percent of that which is called market share--at any given microsecond on any given day. But those sales don't mean money that went to one title is lost to other authors--a microsecond later, that same customer could buy my title as well.

Ebooks are not zero sum.

Joe Konrath said...

I think people here are using elasticity to mean the total spending in a market can increase.

That is, indeed, what I'm saying. Each time I release a new title, total market spending increases. It doesn't not mean my new title robbed other titles of potential sales. Hence, it isn't zero sum.

Joe Konrath said...

The reason is that being informed doesn't mean you've written a good book or one that will sell.

An excellent point.

But if your book attracts an agent, or publisher interest, it is probably a good book that has sales potential.

Luck will play a part in sales, no matter how you publish. Is a $5k advance worth it to you if your publisher prices your ebook at $11.99? You may not know until you have some data.

One way to get data, without waiting for publishers to respond, is to self-publish.

Terrence OBrien said...

Yes, you can say that all sales always equal 100%, and each writer gets a percent of that which is called market share--at any given microsecond on any given day. But those sales don't mean money that went to one title is lost to other authors--a microsecond later, that same customer could buy my title as well.

Ebooks are not zero sum


In summary,
1)Dollars that accrue to one player do not have to come from another player. Not zero-sum.
2)Market share that accrues to one player must come from another. Zero-sum.
3) #2 above does not refute #1 above.
4) #1 above does not refute #2 above.

#1 and #2 above both exist at the same time.

EBooks in themselves are not a game. The game depends on what one is trying to do, and what the other players are trying to do.

Attention is not a zero-sum game. We do not have to ignore or deny the characteristics of one measurement because we also pay attention to another.

That is, indeed, what I'm saying. Each time I release a new title, total market spending increases. It doesn't not mean my new title robbed other titles of potential sales. Hence, it isn't zero sum.

I agree about the new title release and robbery. And I agree what you have described is not a zero sum game.

We can agree to that while observing competition for market share percentages is a zero-sum game.

It is possible for the same core activity to result in two diffrent games, measured in two different ways, with two different sets of characteristics.

How might that happen?

Amazon set out to gain market share measured in perecentage points. It was their goal. Each time they took more market share, somebody else lost it. Zero-sum.

That was one game they chose. It was not the only game in which they were engaged.

Amazon could have made more profit in any period by abandoning their pursuit of market share, and concentrating on maximizing revenue in the period. They didn't because they were pursuing the market share game.

Amazon chose to pursue market share measured in percentage points. They have played very well. I am in no position to say they didn't, shouldn't have, couldn't have, and didn't set out to do it. They did it.

Joe, you have touched on comnpetition among books. I will let that one go for another day, but it deserves a full airing. Given the words splilled on market share that would be a bit much now.

William Ockham said...

Let's throw a little more fire on the market share argument.

All models are wrong, some models are useful

Is the market share model useful to anyone in publishing?

Writers - No. Thinking in terms of market share is harmful. No writer has a measurable market share in "books" or "novels" or even a major genre. If you have a measurable market share in a genre, you are in a tiny, tiny genre.

Publishers - No. Sure you can measure the market share of a Big 5 publisher, but does that tell you anything useful? The problem for publishers is that the market is changing so rapidly that the current definitions of relevant markets are distorting their understanding of the underlying market dynamics. Hence, all the self-congratulatory backpatting about the slowdown in the growth of the ebook market.

Retailers - Hmm... Amazon is definitely obsessed with market share. Market share is the KPI (Key Performance Indicator) for Russ Grandinetti, I would guess. That's the reason they haven't kicked Hachette to the curb just yet. I wonder what would happen if someone set up an Amazon third-party seller account to sell Hachette's print and ebooks. Could you make money on print if you used FBA (Fullfillment By Amazon)? I suppose you would have to cut a deal with Ingram. Hmm...

Well, if Russ is interested, Joe can put him in touch with me....

Joe Konrath said...

Publishers - No. Sure you can measure the market share of a Big 5 publisher, but does that tell you anything useful?

I believe Big 5 publishers find this useful, which is one of the reasons they don't understand how big the shadow industry of self-publishing is. They keep thinking they're only sharing the pie with four other players. They think they compete with each other by luring big name authors and celebrities away from each other with large advances.

But maybe this is just sales that matter, not market share. They just want to see profits go up. But if they were paying attention to market share, and seeing how theirs is shrinking, it might be the wake up call they need.

Terrence OBrien said...

Let's throw a little more fire on the market share argument.

Gotta love a good fire.

Usefulness of any tool is found in the hands of the user. I can't tell any writer, publisher, or retailer what they will find useful. It's none of my business since I'm not running theirs.

But I can provide accurate descriptions of the tools and their characteristics, and what others have done with them.

I can even think up useful applications of tools, while refraining from steppng over the line to recommending anything to authors.

An author might consult the Howey's Authors Earning Report and find the independent market share in various genres. In conjunction with other data, he might then see more opportunity in one genre vs another.

A publisher might use market share to judge his performance vs his competitors. If his market share remains constant, as total industry sales go up and down, then he is maintaining his competitive position.

Retailers also judge their competitive position by market share. It allows a constant measure from period to period without having to adjust for total market gains and losses.

Publishers and retailers tell us everyday about Amazon's market share vs their own. The Preston 900 even pay attention and tell us in the NYT.

But what should any given author do? Do whatever you want.

I believe Big 5 publishers find this useful, which is one of the reasons they don't understand how big the shadow industry of self-publishing is.

I'd say the most significant change in publishing in the last five years is the increase in the market share of the independent authors, and the decrease in market share of the publishers.

Broken Yogi said...

But market share is a classic zero sum game. If independents gain 5% in market share, then publishers lose 5%. If one independent author gains X% market share, then it must come from other authors. That is what we have seen happening.

No author gives a damn about their market share. They only care about their actual sales numbers. Since the size of the market is never fixed, market share to any individual author means nothing. That some other author is selling tons of books, doesn't lessen the chance of selling one's own books. In fact, it actually increases it, because those successful authors are bringing more people to the marketplace, increasing the size of the market, and increasing the chances of selling their own book.

That's why restaurants, say, tend to bunch together in a neighborhood. They aren't competing with each other, they are enhancing all of their chances of getting diners into their restaurant, by creating a place for restaurant goers to flock to. Same goes for many kinds of markets. The more success there is for individuals, the greater the chance that others will be successful in that field.

So it's not only not a zero sum game, it's actually a win-win game. Good books and successful authors simply increase the appetite for books among readers. Every author benefits from that.

Broken Yogi said...


I'd say the most significant change in publishing in the last five years is the increase in the market share of the independent authors, and the decrease in market share of the publishers.


Again, I'd say this is misleading. The gain in sales by independent authors did not come at the expense of traditionally published authors. Traditional publisher profits are at record levels. Sales are not down. So what independents did was grow the market. They didn't steal sales from the traditional publishers, they simply created new sales and expanded the pie. Except perhaps in the case of traditional authors who jumped over to the independent side. But that's obviously not a loss for the authors who did that, only for the category, which is again meaningless to the other authors (though not to the publishers).

Broken Yogi said...

Let me make this a bit more personal, using Joe K. as the example.

Joe K. was a traditionally published author with some minor success, who was then basically dropped by those publishers because of his low sales figures. Then he began publishing independently, and his sales grew hugely. Even his previously published books grew hugely in sale after he got their rights back and began self-publishing them.

So, can we say that Independent Joe was stealing sales from Traditional Joe? Of course not. Traditional Joe wasn't selling, at least not using traditional sales methods. His publishers were correct to drop him given the methods they used to sell his books. So we can't say that traditional publishing lost much at all when Joe went independent.

Independent Joe didn't take any sales away from Traditional Joe, or by extension, from any other traditionally published author. He created new sales that would never have occurred for Traditional Joe. Independent Joe's success increased his market share tremendously, but not at the expense of Traditional Joe, because there wasn't much to take from him.

I use Joe's example (I hope he takes no offense) not only to be specific, but to make a truly apples-to-apples comparison. Independent publishing doesn't steal sales from anyone who actually had anything to steal from. It creates new sales where none previously existed. It doesn't diminish the sales of people who publish successfully in traditional publishing, it creates new sales for people who couldn't make traditional publishing work for them. And it increases the overall sales and author earnings, across the board, because most readers don't care who publishes a book or how, only that it be good, and that increases their appetite for more good books.

William Ockham said...

The assumption behind the notion of market share is that you have useful definition of the market. All of the examples given so far are not useful.

An author might consult the Howey's Authors Earning Report and find the independent market share in various genres. In conjunction with other data, he might then see more opportunity in one genre vs another.

As I have explained elsewhere, this would be very suboptimal. What you would need to know is what part of that market share is driven by avid readers vs casual purchasers. Without that knowledge, market share is worse than useless. The "market" definition is useful for the report itself, but don't make it take more weight than it can bear.

A publisher might use market share to judge his performance vs his competitors. If his market share remains constant, as total industry sales go up and down, then he is maintaining his competitive position

Again, this would be a serious mistake. In an industry driven by hits, that sort of analysis is very misleading. And when a large chunk of your competition is invisible to you, it's downright dangerous.

Publishers and retailers tell us everyday about Amazon's market share vs their own. The Preston 900 even pay attention and tell us in the NYT.

Now you are just arguing my side. Who would emulate them?

In short, a screwdriver is useful, but it makes a poor toothpick.

Joe Konrath said...

Joe K. was a traditionally published author with some minor success, who was then basically dropped by those publishers because of his low sales figures.

You haven't read my blog for long, have you? :)

My legacy sales were decent, and I had multiple printings and earned out advances of over $250k. I wasn't dropped by any publisher, and I was earning royalties.

I had to hire an attorney to get my rights back for the books controlled by my publishers.

Prior to that, I'd bought out two of my contracts in order to self-pub books that I no longer wanted to give them. I also self-pubbed books that no publisher wanted.

The reason I tried to got my rights back is because I was seeing how much money I was making on my indie books.

When I did get my rights back, I priced appropriately, and made more money. A minor success? Depends on your definition of success. I think my publishers made about a million dollars off of my work. Is that minor? Low sales? Again, definitions. I sold a few hundred thousand copies.

Had my publishers priced appropriately, they would have made the money I made later. No, I was never competing with myself, or anyone else, because sales aren't zero sum. So you got that part right, but know your Konrath history, man.

Joe Konrath said...

Again, this would be a serious mistake. In an industry driven by hits, that sort of analysis is very misleading. And when a large chunk of your competition is invisible to you, it's downright dangerous.

I agree. But are publishers doing it anyway?

In that Hachette investor presentation, did they discuss their market share?

Terrence OBrien said...

So it's not only not a zero sum game, it's actually a win-win game. Good books and successful authors simply increase the appetite for books among readers. Every author benefits from that.

Market share is a zero-sum game. It doesn't change with the attitudes of any authors. It doesn't change if authors know about it. It doesn't change if authors don't know about it. It doesn't change if authors like it. It doesn't change if authors don't like it. It doesn't change if authors don't give a damn. It doesn't change if authors do give a damn. It is zero-sum no matter what authors,readers,or plumbers do.

It is used in many industries, and most don't give a hoot about authors or what they think.

Other games are not zero-sum. Authors engage in them, too.

The gain in sales by independent authors did not come at the expense of traditionally published authors. Traditional publisher profits are at record levels. Sales are not down.

Gains in percentage of market share did come from publishers. That is different from absolute gain in dollar sales. Record profits don't matter. The percent of the market publishers have is significantly less than the percent they had five years ago. They lost it to independents.

At the same time, we saw an expanding market, and both independent authors and publishers are making more than they did five years ago.

Let me make this a bit more personal, using Joe K. as the example.

I won't engage in anything personal, and won't discuss Joe's situation. Issues and idea are fair game. Individuals are not.

The assumption behind the notion of market share is that you have useful definition of the market. All of the examples given so far are not useful.

I think the assumption is one has a good idea of total sales for some specific market segment, and total sales for some specific subset of players in that segment.

As I have explained elsewhere, this would be very suboptimal. What you would need to know is what part of that market share is driven by avid readers vs casual purchasers.

Of course it is suboptimal. What you cite would be good information to have because it isolates more specific segments, and would move it closer to the optimal.

Again, this would be a serious mistake. In an industry driven by hits, that sort of analysis is very misleading. And when a large chunk of your competition is invisible to you, it's downright dangerous.

Effective analysis looks at the market from lots of perspectives. Market share is one. It is used just like many other metrics, in conjunction with others and informed by all the data available.

It would probably be a mistake to use any indicator alone without the benefit of all the other indicators and data available.

Now you are just arguing my side. Who would emulate them?

In that case I don't understand your side. I observe that both publishers and the Preston 900 have been publicly citing market share figures. Anyone can observe the same thing.

In short, a screwdriver is useful, but it makes a poor toothpick.

Agree. Some tools are good for some things and not others. That's why we have lots of them, and often use them in a complimentary manner.

I agree. But are publishers doing it anyway?
In that Hachette investor presentation, did they discuss their market share?


Correct. Companies use market share all the time. It is a very common metric. It is written about it in both business and econ books. The net has a great deal of information about its calculation and use.

Terrence OBrien said...

"E-books accounted for 22% of all book spending in the second quarter of 2012, only a one percentage point gain from the first quarter of the year, but up from 14% in the comparable period in 2011, according to new figures from Bowker Market Research. In the year-to-year comparison, the hardcover and trade paperback segments both lost two percentage points each to e-books, while mass market paperbacks’ share fell from 15% in the second quarter of 2011 to 12% in this year’s second period."

Publishers Weekly
Nov5, 2012
http://www.publishersweekly.com/pw/by-topic/digital/retailing/article/54609-e-books-market-share-at-22-amazon-has-27.html

William Ockham said...

Let's define market segments based on the alphabet. Everything that starts with the letter "A" is one market segment, etc. Laptops, lasagna, and loofahs are all competing for sales in the "L" market. If the sales of licorice take off, that's bad news for Lenovo because they sell laptops. All the "L" industry analysts will pressure Lenovo to get into the booming licorice market to defend their market share. And if Lenovo started making tablets, the "T" industry pundits would laugh because how could Lenovo hope to compete against telephone and television makers.

My example isn't an argument against the concept of market share, it is an example of how the utility of the concept is tied to the definition of the market. Using the alphabet segments would be harmful to corporate decision-making. The market segments that the publishing industry uses are just as harmful as the alphabet segments. Consumers don't substitute loofahs for laptops. They don't substitute novels for how-to manuals either.

Broken Yogi said...

Joe, sorry if I got the wrong impression about your prior career in traditional publishing. From reading your references to it, I got the impression that you did decently okay, but that your publishers pretty much mismanaged your career and it wasn't doing very well until you moved over to self-publishing, where you are making tons more money than you did before. I see from the numbers you're providing that my impression was wrong, and you were doing more than just decently well. But I also take it that your numbers now are way, way better than they used to be. If you don't mind my asking, what's the total difference in income between Traditional Joe and Independent Joe? If you don't want to release those numbers I of course understand, but it would be interesting and informative to know the story in numbers.

And yes, I'm not a long-time reader of your blog, but a great admirer nonetheless. Sorry if I inadvertently seem to have put you down.

Terrence OBrien said...

My example isn't an argument against the concept of market share, it is an example of how the utility of the concept is tied to the definition of the market.

I agree utility is tied to information one has about the market.

As I have explained elsewhere, this would be very suboptimal. What you would need to know is what part of that market share is driven by avid readers vs casual purchasers. Without that knowledge, market share is worse than useless.

I disagree market share analysis of genres is worse than useless if one lacks a breakdown of avid readers vs casual readers.

Reader breakdown can certainly be useful, but its utility depends on what one is doing. Sometimes it would be necessary. Other times it would not.

Joe Konrath said...

If you don't mind my asking, what's the total difference in income between Traditional Joe and Independent Joe?

10x.

Broken Yogi said...

Wow, just wow.

I think that supports my argument ten-fold.

Joe Konrath said...

I think that supports my argument ten-fold.

I've been preaching this since 2010, Yogi.

Loyd Jenkins said...

It has seemed to me that Traditional Joe was a hard working, promoting, writer who made a living at it. Independent Joe seems to be a hard working, promoting writer who is having more fun and making 10x the money. And loves to share. Thanks for your thoughts.

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Anonymous said...

It's true that with lower priced books/ebooks, readers can purchase more books. But they can't purchase all the books they want to read.

Said another way, readers must purchase some books to the exclusion of other books.

Isn't that zero sum?

Angry_Games said...

I guess some will see it as zero sum. As a reader, it isn't that I can't buy all of the books I want to read, it's that I don't have time to read all of the books that I buy.

Reading/books are not zero sum for me. With lower priced indie books, I've purchased probably 8x or more books in the last few years since I bought a Kindle than I ever have, and it's still steady.

So, authors, I'm helping to put a lot of your kids through college (but hopefully not into your 1967 Charger 440R/T because I'm supposed to sell enough books to buy mine FIRST grrrr) because of your lower priced books.

My wife, on the other hand, mostly reads only non-fic history stuff, and she's stuck with paying dearly for any new books, as probably 99% of the books she reads are trad-pub only. She buys fewer books every year.

Terrence OBrien said...

It's true that with lower priced books/ebooks, readers can purchase more books. But they can't purchase all the books they want to read.

Said another way, readers must purchase some books to the exclusion of other books.

Isn't that zero sum?


That gets messy. We would have say a real dollar gain by one author is offset by an opportunity cost loss shared by all others.

We could simplify it to a choice between two books, where only one is chosen.

The winning author gets a real dollar in his pocket. The other gets nothing.

In zero sum, the losing author would have to give up a real dollar from his pocket. Since the losing author does not give up a real dollar, I would say it is not a zero sum game.

But it does run straight into the question of competition among books.

Anonymous said...

Okay, not zero sum then, but does speak to the issue of competition.

My wider point remains, though. Readers have a finite amount of money and must make decisions about what to buy. They can't buy every book they want. Therefore they must choose one book over another at the end of the day.

Angry_Games said...

Still not buying that it's a zero sum game.

When books are $4.99 or less, I'll buy two, sometimes more depending on the price and whether or not they are interesting.

When ebooks are more expensive than $4.99, that is what cuts into my "purchase now" decision. I'll buy maybe one book, but if there are books that I really want to read and the fall outside of my $4.99 or under budget, I'll bookmark/wishlist the book.

So, the book I didn't buy today = the book I buy tomorrow, or next week, or next month. In the end, I buy the book. So, no author is losing a sale with me (and there are plenty like me) to another author. Authors are simply losing a sale to me until a date in the future.

Terrence OBrien said...

My wider point remains, though. Readers have a finite amount of money and must make decisions about what to buy. They can't buy every book they want. Therefore they must choose one book over another at the end of the day.

Sure. For any period from one second to an entire lifetime, each consumer is limited in what he can buy. The set of books he can buy in any given period is far smaller than the set of books on offer.

Each purchase event forces one of those choices.

Still not buying that it's a zero sum game.

The zero-sum characteristic doesn't depend on what the consumer does. He doesn't matter. The game is between sellers. The buyer is not a player. He is a necessary element, but not a player.

But, I agree what Anon describes in his 448PM post is not zero sum. But that is because of the effects on the players, not because of the attitude of the buyer.

The buyer could die at any time during the period you describe, and nothing would change in terms of the zero-sum characteristic.

So, the book I didn't buy today = the book I buy tomorrow, or next week, or next month. In the end, I buy the book. So, no author is losing a sale with me (and there are plenty like me) to another author. Authors are simply losing a sale to me until a date in the future.

What you describe about future sales falls under competition. Each book competes for the consumer dollar at each and every purchase event.

A dollar in the pocket today is not the same as a possible dollar in the pocket next year. Books compete for today's dollar.

Test we all can do at home:

Option-1: One dollar right now in your pocket

Option-2: Possibility you might get one dollar in your pocket in one year.

You can have Option-1 or Option-2. You can't have both. What do you choose?

I choose Option-1.


Anonymous said...

Angry Games -

"So, the book I didn't buy today = the book I buy tomorrow, or next week, or next month."

Understood and I'm very much the same. But ultimately we're selecting one book over another even where we delay a purchase. The book we buy on day 2, week 2, or month 2 is chosen over a different book. We're part of the 99.9% of readers that can't buy every book we want to read.

The idea that ebooks aren't zero sum is misleading and provides false comfort to authors because readers can't buy everything they want and must make choices.

Terrence OBrien said...


The idea that ebooks aren't zero sum is misleading and provides false comfort to authors because readers can't buy everything they want and must make choices.

Players can lose in games that are zero-sum, and they can lose in games that are not zero-sum.

What you decsribe is not a zero-sum game, but there is definitely a winner and losers.

The winner is the book that is purchased. The losers are all the books that were not purchased. All those books tried to get the consunmer's dollar. Only one book won the dollar. The others all lost.

I agree false comfort comes from the idea that books do not compete with each other.

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