The Shatzkin Files

A benchmark event occurred today

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A shoe dropped today.

Author J. A. Konrath, who has been self-publishing on Kindle and reporting about it for quite some time, just contracted to have the latest in his series of novels featuring female cop Jack Daniels published by the new Amazon Encore imprint. Encore was originally announced as Amazon’s way to pick up and feature already self-published books. They apparently bent the guidelines a bit to include Konrath’s yet-unpublished book, Shaken. Amazon will publish the Kindle edition at $2.99 in October and release a paperback at $14.95 next February.

Although Konrath is a media- and tech-savvy author who has published with major New York houses (the Jack Daniels series was previously published by Hyperion), he is not a regular NY Times Bestseller brand. Not only is he not a multi-million dollar advance recipient, he makes it clear that the novel he just signed with Encore was rejected by the New York publishing houses. So Amazon had a low bar to jump to secure him for its Encore line.

Nonetheless, this is a significant jolt to conventional publishing economics. Sales of Konrath’s $2.99 ebook will deliver him about $2.10 a copy (Konrath says $2.04; not sure where the other six cents is going…), as much or more as he would make on a $14.95 paperback from a trade publisher, and significantly more than he’d make on a $9.99 ebook distributed under “Agency” terms and current major publisher royalty conventions. And, however one feels about the degree to which pricing is a barrier to ebook sales, one must assume that the $2.99 price will result in a lot more ebook sales than a $9.99 price would. Many times the sales!

We’ve been imagining a split market for ebooks: “branded” ones from conventional publishers being sold in the $10-$15 range and “commodity” ones from lesser-known sources (authors and publishers) at $1.99 and $2.99. Over time, we figured that improved curation of the cheaper ones, plus promotional pricing by the branded ones, would drag the overall pricing down. That’s been behind our concern that maintaining anything close to the current pricing for print will be almost impossible to do over time.

I think “over time” just became more compressed as a result of Konrath’s move.

Here are a few things to think about and watch as we go.

1. Konrath made it clear that his deal with Amazon is under a strict NDA. We’ve gotten used to reading about his financial results and, indeed, Amazon loses a major benefit of their relationship with him if they don’t allow him to talk about how much money he’s making.

2. We got a comment on another blogpost from a reader complaining about not being able to get books on Nook that were available on Kindle. Without any detail as to what books the reader was talking about, it was impossible to diagnose the reason. I could only assure the reader (who wondered if the retailer was declining to stock some titles) that Barnes & Noble certainly wanted everything possible available on Nook. Although Amazon intends to try to sell the print book through non-Amazon channels (an effort Konrath frankly admits he doesn’t place great stock in), it would be a bit of a surprise if they made the ebook available through any non-Kindle channels.

3. Giving up non-Kindle channels today for an ebook isn’t necessarily giving up a lot, particularly with Kindle clients available to be used on other devices. Publishers have been hoping that iBooks and the Agency model would result in a more diverse ebook ecosystem, reducing their dependence on Kindle to reach the ebook audience. What happens if more authors, and bigger authors, follow Konrath’s lead. Could Kindle end up being the only ebook outlet for enough important titles to seriously impede attempts to compete with it?

4. In explaining his decision to sign with Encore, Konrath credits Amazon with being able to “send an email to every person who bought” a previous book of his through their website.  This underscores the importance of email list organization at publishing houses, and the opportunity almost totally missed by publishers to entice book purchasers to register their interest in an author. (Yes, some publishers make a half-hearted effort in that direction, but where are the experiments — like Thomas Nelson’s — to give all the bookstore purchasers something of value if they’ll check in with the publisher after they’ve bought the book from a retailer?)

5. It will be fascinating to see how the rest of the retail trade — bricks-and-mortar — reacts to buying a book which delivers profit to Amazon on each and every copy sold. Sterling was a client of mine when Barnes & Noble bought them. Borders stopped stocking their books almost immediately. Only long-standing relationships with independent retailers saved their distribution through that channel, but there was definitely negative feedback from indies about supporting their perceived enemy. A retailer’s first loyalty is usually — and should be — its audience. By the time Shaken comes out in print, it is likely to have sold tens of thousands of copies as a Kindle ebook and, especially because of its unique role as a groundbreaking publishing model, is going to be known and anticipated by the audience of print book customers who haven’t made the switch to digital reading.  Will Amazon sell print to their competitors successfully? Will they offer return privileges? Will they offer competitive discounts? Will they use wholesalers? This will be fun to watch.

Konrath’s deal with Amazon was negotiated by his agent (which, according to Publishers Marketplace’s “Who Represents” database is Jane Dystel, but this was last updated in 2006.) We know that Amazon has reached out to agents lately. Many authors will be asking their agents to investigate this alternate avenue to the marketplace on their future books. Signing up new books for what publishers would consider reasonable advances just got harder. So did maintaining a 25% royalty rate for ebooks.

I met Joe Konrath once, in January 2007 at Google’s Unbound conference, which I emceed and at which he spoke. So I’ve been aware of his ongoing narrative, making pretty serious bucks selling books of his he controlled (out of print or never published) through Kindle. I have been surprised recently at who did not know about him, including a close friend who herself is a successful mystery writer and all of the agents at a pretty large NYC shop thinking hard about their digital future. His days of relative obscurity are over; Konrath has carved out a permanent place for himself in the annals of publishing history with this move.

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  • It's news alright Mike.
    Totally amazed at the note at the end! It seems odd that such people didn't know him.

    • Except for the very top authors, I think most would be disappointed at how
      little known they are…


  • chris

    Konrath is certainly no fool. So congratulations to him on this deal.

    I’d suggest that the power of Amazon's email list is a total game changer for any author – possibly even more powerful an attractant than any standard advance.

    This is a pretty big win for authors.

    I wonder how an agent’s role will change after this scenario plays out?

    If I was Amazon I’d simply greet every agent submission with a stock contract that stipulates an ebook release window with a further print book release dependent on sales.

    Amazon has Konrath’s sales stats on both his self-pubbed and Hyperion titles so they could approach similar authors direct. Imagine making decisions to publish a novel on the back of hard sales data prior to actual print … what a novelty for the publishing world!

    As for the print version: I too am very interested to see if it will be distributed sale or return. If they did it would be like buying a new Hybrid Camry and drilling holes in its fuel tank.

    As for publishers passing on books like Konrath’s? Well, that is understandable. There will not be too many publishers keen to play in the mid-list with print, especially with the recent increases in paper prices. Most of these mid-list authors will eventually self-pub so why wouldn’t AmazonEncore just cherry pick the trending books on the back of their hard sales stats instead of seeking submissions?

    Also, are we looking at zero subsidiary rights on AmazonEncore deals?

    My guess is that Joe will be giving a 15% cut to his agent (30 cents off $2.04?). Konrath is quick to praise his agent, so I’m left to surmise that the front end of the deal was significant enough to warrant representation, especially when you take into account how proactive Konrath appears to be in self-promotion and sales. I would assume the minutiae of revenue percentages don’t escape such an author. And 30cents is quite substantial on a cover price of $2.99.

    Anyway, like you said, Mike, this should be interesting to watch. Such a deal is an absolute no-brainer for a mid-list author. Best of luck to Mr Konrath. I hope he once again manages to inspire authors to embrace their new improved futures. That alone is reason enough to support the man and the deal.

    • Thanks for the comment, Chris.

      As for the subrights, why shouldn't there be some? Why would AMZN care if a
      magazine serializes or a book club (is there anywhere anymore?) distributes
      or a the French want to translate? They won't sell these rights, but I can't
      believe they're tying up these rights.

      I'm not completely sure this works for ALL midlist authors. Konrath is
      unique. He's been working his audience hard for a long time. He's developed
      more Amazon experience (which translates into those emails…) than other
      authors of equivalent appeal. I think there will be a lot of authors for
      whom an advance of $25k or $40k will be more appealing than this. And it
      still counts to see your book on the shelves at Barnes & Noble.

      Although how much *longer* that will count, and for how much, is an open


      • chris

        Sorry, Mike. I meant to add 'Foreign Rights' into the mix there.

        Konrath is unique, but his own argument is that 'price' and the feted 'bestseller list' has been the key attractant on Amazon rather than platform strength.

        I'd add 'quality of reviews' to that.

        As for the $25 t0 $40K advances: I wonder how long they will be around for?!

      • Good last question there. It may not be a lot longer. We have to take note
        of the fact that Konrath didn't seem to get an offer for the book he's doing
        with Amazon. And he has a competent, experienced agent.


    • David Sucher

      I was struck by the phrase “…Amazon's email list is a total game changer for any author.”

      Is Amazon currently allowing authors to contact (open or blind) individuals who have purchased one of their books?

      Or is that a great idea for the future?

      • I doubt very much that Amazon is relinquishing their list to anybody,
        including Konrath. Much more likely is that they have committed to Konrath
        that they will mail to their list on behalf of his book.


  • I just found out about this blog on Joe Konrath's blog. Konrath proved what he has been saying all along… that the big publishers are on the brink of a slow death entirely of their own making. They passed on newest book; Shaken. And Joe probably knew that would happen. He signed the deal with Amazon and he'll make more money with them, anyway. The big five have ignored midlist authors, their backlist, and the online marketplace. Everything that could have saved them.

    • chris

      Christy, I'm not sure publishers are necessarily ignoring mid-list authors. It would be more a case of diminishing returns on investment.

      The traditional publishing model has been broken for decades. The rapid acceptance of ebooks are merely exposing the cracks.

      Ironically, Joe's own ebook self-publishing efforts may in fact be precipitating the destruction of the traditionally published mid-list author. Cheaper or free ebook content will possibly mean less sales for print books.

      A deal like Konrath's ushers in what many authors thought would take place: savvy authors go it alone in the retail space available or they partner direct with a retailer.

    • Publishers are certainly dying a slow death (see my “The End of General
      Trade Publishing Houses”
      from BookExpo 2007. But I would label it a “death entirely of their own
      making.” They have a business model built for a different time and it is
      dependent on an infrastructure and ecosystem that has been seriously
      degrading for 15 years or more.

      The problem vis a vis Joe Konrath is pure and simple disintermediation (made
      possible by changing times.) There is no way a publisher could sell ebooks
      for $2.99 and give Konrath $2.10 (or even $2.06.) You can only do that if
      you have the customers already captive. Amazon does; they don't. Konrath has
      also built his online audience disproportionately through his own efforts.
      That's a thumb on the scale on the side of self-publishing too.

      I can see only two possible strategies for a general trade house. One is to
      win through consolidation: be the last player standing. The other is
      “verticalize”: discipline yourself into niches where you can scale marketing
      efforts and, ultimately, own audiences. The former buys you 10 years, but
      probably 20. The latter is a total reinvention of your business.

      Succeeding at either is very hard.


  • I'm curious about pricing.

    If most current e-book readers support Amazons price point of $9.99 so strongly that they protest anything higher, why do mid-list authors or authors with strong branding–choose to set prices that are so low from the “accepted” price point?

    The big six are fighting to keep e-book prices high and they take quite a bit of the flack for using that tactic. Wouldn't it be more intelligent for self-published (established) authors to set price points that meet the consumers expected norm?

    By setting their price points so low, don't they then create a new expectation for professional work far into the future–whether or not the big publishers survive?

    • I've spoken to many ebook buyers, and they perceive a lesser value to ebooks than tangible print books.

      By making ebooks a low cost, they are risk free and impulse buys. But even at this low cost, I'm making almost as much money as I earn on a $23 hardcover. In July, when the 70% royalty kicks in for self-pubbed ebooks on Kindle, I'll be earning over $400 per day on low priced ebooks. If readers come to expect that low price, I can live with it. 🙂

      (BTW @Mike–$2.04 royalty on a $2.99 title is because with the 70% model, Amazon is charging a five cent download fee. At least, they were last I heard.)

      • Cool! Thanks for replying.

        After reading Mike's post, I checked out some of the links about you plus your website and blog, and needless to say I'm impressed by what you have accomplished. It helped me understand what you were doing a little better.

        I understand where you're coming from with your pricing point with the $2.99 to 4.99 range. And also, I understand that your satisfied with the profit margin that entitles you.

        But isn't their a marginal profit that maximizes the potential profit without risking overpricing. For a well established writer, one with a loyal following, I would imagine the higher prices would be better and still capable of pulling in new readers.

        Part of this is that I thought new authors could use the lower price points to build a following. While established authors would use the higher price points to maximize their profit.

        If Stephen King started self-publishing his novels and selling them for 2.99, what would Joe Blow, newbie author, be able to get for their work (and yes, I know, that wouldn't be his problem).

        I'm just exicted by this new publishing model and glad that it gives the power to the person(s) who create the product. I'm eager to learn as much as possible!

      • Personally, I believe digital media wants to be free. It's the reason the Internet was invented–to freely exchange information.

        The way to fight piracy is with cost and convenience. Authors can still get very rich on $2.99 ebooks. Why artificially jack up the price for a higher profit?

        As for what will happen if all authors were $2.99, my prediction is: everyone would be buying more books.

        In hardcover, there is competition. A reader may only have $25 to spend, so it could be a case of buying Stephen King or me.

        At $2.99, readers will have no problem buying Stephen King as well as me. It's a buffet mentality. It it's right in front of you, it's easy to take it, even if you never actually eat it.

        My “future value perceptions” of ebooks are anywhere from free to low-cost. I've blogged extensively about value.

        I've also blogged about the magic price point to maximize revenue.

        Here are numbers from last October.

        Ebooks priced at $4 sell an average of 1100 ebooks per year.

        Ebooks priced at $8 sell an average of 342 ebooks per year.

        Ebooks priced at $2 sell an average of 4900 ebooks per year.

        It's a no-brainer to price ebooks low.

        And remember that “value” has nothing to do with the cover price. The rules of supply and demand don't apply to digital work which can be copied and distributed for free.

        “Value” is about how much profit a book can make. And a $1.99 ebook is a lot more valuable than a $9.99 ebook.

      • Thanks again to both of you for responding to my questions.

        What you say has a lot of merit. I've just recently ( since around the beginning of the year, maybe slightly longer ) been focused on learning more about the business side of things.

        I'm still working on getting my work to a professional level, but this new publishing method has got me charged up!

        I'm trying to explain to people the possibilities it offers. Some people get it, a very small few. And even though I provide links to this site and others, I keep getting–

        I don't know. A disconnect that says traditional is the only route. To each his own I guess.

      • Joe, you've got entirely the right formula: the *total* revenue, which is
        dollars times units. (In print, it is total *margin* that matters because
        you have to subtract printing cost and, in a publisher-to-supplychain
        transaction, the discount).

        Let's remember that most publishers are still pulling 80% of their sales on
        most books from print. Print won't support a lower price and, in fact, a
        $2.99 ebook doesn't provide a publisher nearly the margin that is provided
        by a $15 paperback. The calculations become skewed when the publisher and
        printer are disintermediated from the supply chain.

        I think there's a big thing missing from your calculus though, which is *
        time*. I personally am never without at least two books not started yet in
        my possession (these are ebooks; I have not read a print book in more than
        two years.) I can guarantee that I would not read one more book per year if
        books were free; I read all the books I can right now. I'm not alone. So
        there is at least one big block of readers — the *heaviest* readers — for
        whom the notion that cheaper means more unit sales is simply not true.

        I suspect most of the effect you're seeing in your pricing evidence is
        shifting (away from more expensive choices), not increasing. And in the
        ebook world, there's no point in buying something you don't read. In the
        print book world, there is.

        So we agree a bit and we don't agree a bit.


      • chris

        Mike, I think this is where the bestsellers come into play. You have stated several times before about there being too little time and too many choices for quality content ie low cost, public domain work.

        However, the bestsellers will probably breach your 'content wall'. For you these titles might be from Gladwell or Anderson, for many of us it will be – and at the risk of sounding like a poor man's Zen and the Art – a fiction title of cultural significance.

        I have a 'must read' list of free content (which we all do) but I will certainly make room at the top of that list for a new title by Le Carre. I will also pay over and above $9.99 for it in the first week of release. I'd probably expect to pay $7.99 or $5.99 after a month or so. I wouldn't expect $2.99 until the end of the equivalent TP cycle. But who knows, maybe the industry will be populated solely by $2.99 ebooks like Joe's from the get-go – after all an almost standardised retail price point exists for music and movie buying.

        Personally, I'd be interested to see if ebooks can have release windows of different pricing (modeled around HC, TP, MM).

        I have noticed Joe and other publishers experimenting with this pricing/revenue formula. And yet, I suspect there will be no definitive sweet-spot. The margins will more than likely be in a constant state of flux dependent on market response. This is a perfect world when combined with real-time stats.

        There will be a day when Dan Brown hits the market at $9.99 (no publisher, a hired lawyer for contracts and a freelance editor). That day will truly shake the industry.

      • I think it will be a long time before we have a single standard price point.
        As I said in response to Joe, I don't believe the elasticity of demand in
        response to low prices is an effect that lasts forever because the heaviest
        book purchasers already buy as much as they can read. (That is: time is my
        constraint, not price, and I don't think I'm that unusual.)

        But prices will come down over time and I agree that prices bouncing around
        based on demand is something we can expect to see in the future as
        publishers adapt to the agency model and start factoring data into their
        pricing decisions on a dynamic basis.


      • I hope so. I can really see publishers, particularly in the first say, 4 weeks of a release, pricing a book at $5.99 indicating the price will go up incrementally after that, so BUY NOW NOW NOW NOW!!!

        Or maybe not. Publishing has had a tendency to be resistant to the sales tactics the rest of the world uses.

      • Mark, I actually think that what you suggested (which is interesting) is the
        opposite of what the rest of the world uses or what I would find intuitive.

        I'd actually figure the opposite: highest price for earliest look. Your
        comment highlights the fact that such a strategy encourages *postponing* the
        purchase and yours encourages, as you say, “buy now”, but if you look at
        DVDs, for example, let alone books, the idea is usually that the price comes
        down over time; it doesn't go up. Same with cars. I can't think of anything
        where the prices rises as a manfacturer's pricing strategy.


      • I suspect the real issue is price manipulation to encourage sales, which is not something that to my mind we've seen a lot of in publishing or bookselling, although once B&N and Borders started offering bestsellers at 30-40% off it sure caused some trends.

        Although from a purely economic point of view prices tend to go down over time–and you tend to drop prices when sales slow in order to encourage sales and create a surge of interest, the reason I would think booksellers might try lower prices at first was to encourage a run on sales, at book release, which might help boost the book onto a bestseller list, which is its own marketing strategy. Also, publishers–at least traditional publishers that have to deal with returns and warehousing, etc.–have been so chronically intent on sales velocity versus sales volume; of course, that won't apply that much to e-books.

      • David Sucher

        I have precisely a different reaction about whether there is a potential for more book buying.

        For the past several years — 3 or 4 at least — I have hardly read any paper — and also very few books. (That's for a variety of reasons but one is purely personal — I started down the eyesight curve and until I discovered reading glasses I was not enjoying printed matter but a computer screen made it easy do I read lots of blogs and NYT and other on-line media.)

        But now that I have an iPad I am starting to read BOOKS again and I can tell you that I like the buffet model — I can easily buy a beer a day (i.e. pint draft microbrew for $4/day) and will, once the publishers can get two things:
        1. It's not a zero-sum game about books i.e. I can buy Konrath's book today and Grisham's tomorrow.
        2. There is a price/demand curve and for most people, the lower the price the more you buy — up to a point of course and and we are way far away from that point. I used to read a hundred books a year for years — then I stopped almost totally. But because it is so much easier to read and (potentially) so much cheaper, I will be reading and buying books again.

        I have yet to buy an in-print book on-line for more than $4.99 and doubt if I will.

      • David Sucher

        Just as an example, btw, about the nuttiness around pricing — Koestler's “Darkness at Noon” which I thought to re-read on my iPad via Amazon or Apple.

        Well the pricing stopped that one pretty quick. Both vendors want $12! For an eBook. For a book published in 1940! It's absurd. If the book had been $1.99 I wouldn't have thought a moment and maybe up to $4.99 I'd have hesitated, been annoyed and then bought it. But $12? Crazy.

        And I can buy a used P-book on Amazon for 1 cent (plus S&H of course).

      • David, this is going to shock you.

        Some people are buying Darkness at Noon as an ebook for twelve bucks! And,
        that title having a lot of its sales attributable to it being required
        reading, the price sensitivity is probably on the low side.

        I'm not saying I know they make more money selling it for $12 than they
        would for $3 or $6 or any other number. I'm just saying nobody knows.


      • chris

        I think I've said this elsewhere a few times before but … here in Australia we have a HC retail price of $49.95 (on last week's forex rates that was about $USD45). These titles usually discount to $AUD39.99. In the US you guys are forking out, what, 27 bucks? Maybe $17 on discount?

        I'll buy an ebook at $12 … hell, I'll buy it at $19.99 if I really want it ASAP.

        All relative.

      • Your point of view is very helpful, Chris. Many publishers have reported
        their biggest gains in ebook sales are offshore. Of course, there are
        various techniques to control ebook distribution in a granular way so that
        the prices can, to a degree, by regulated by market. But if we have $2 and
        $3 and $4 ebooks here, you're going to have some there, and the price
        pressure on the paper editions and brick-and-mortar economics will even be
        more extreme.


      • chris

        There will be a time lag, Mike.

        Number one being the geo restrictions currently in place. At times I have to use a proxy server to access some locked-out content from the states. I'd hate to be a foreign rights holder away from the US in this day and age … things are going to look pretty bad on their income sheets in the next few years. Probably won't help agents and authors trying to sell those rights either.

        Currently, I purchase books from the UK site,, they ship OS for free and I get it in one week. Which is one week faster than Oz-based online sellers sourcing from the US!

        Be an ebook publisher with access to a global market and count the $$$.

      • My hunch is that Kobo and Google will clean up on the ebook market in Oz.


      • chris


        Google more so. No brand recognition for Indigo.

      • What Indigo lacks now in brand recognition will be made up for with
        bookselling savvy. Or so I think. We'll see.


      • There are a lot of people in the world, David, and we're all different. And
        I don't doubt at all that there are people who will buy and read more books
        if they're cheaper. Konrath has proven unambiguously that having a
        relatively lower price dramatically increases sales. And O'Reilly has
        reported similar impacts (though they're books are different; more meant to
        be “used” than “read.”)

        But there is a top end of the market. There are a small percentage of the
        people that buy an outsized percentage of the books, or something like that
        and I think you *are* unusual having been one of those, then not, and now
        becoming one again. Many people read books to their personal time limit,
        unconstrained by cost. They can't read more books just because they're

        It is going to take a long time to know how much low-price book buying
        (cheap ebooks and used print books and library borrowing, for that matter)
        are just taking sales from more expensive books and how much it is
        increasing overall unit demand. But when I see that a book in today's market
        sells a huge multiple of copies when its price is cut, I don't assume that
        the total market would jump by that number of copies if all books had their
        prices cut.


      • There's a difference between reading more books, and buying more books.

        I can read hundreds of books a year if I want to, no problem. I read fast. I can of course get them from a library or download them for free if I desire (in a reasonable percentage of cases).

        Also, your comment on your situation is also an American one. Northern Hemisphere 'blinkeredness' leads to the extremely high per capita download rates for media of whatever kind in the Southern Hemisphere.

        Australian books probably being the most expensive in the world if you aren't from New Zealand – being able to get a Konrath book (or King at $2.99 instead of $50 or $20) would be a massive difference in the amount of books bought. Or another example – how many Night Shade books at webscriptions do I buy at 4,5,6? Answer – all of them. How many Eos books at $25 or $15? Zero. I have some Night Shade books still not read, too – there's a convenience factor. Loaded on device, can read whenever – and there's always inflation and exchange rate fun.

        There is of course the secondary effect, you choose the cheap books, read those, and are more likely to buy more from those authors – not the ones at the ridiculous prices.

        If you used Croatia perhaps as an example, or somewhere like that, sales might go from zero as most couldn't afford it, to some.

      • Absolutely true. There were two Australian booksellers in my office earlier
        this week and we were discussing exactly that. The Australian bookselling
        and publishing infrastructure is about to take a massive jolt because
        geography has insulated them from competitive and pricing realities. So far.
        But the distribution of ereading devices and, particularly, the landing of
        Kobo in the market, is going to change things very quickly. The dramatic
        reduction in the cost of reading for the average Australian is definitely
        going to happen. And the other thing that will happen will be a relative
        collapse of the Australian retail book trade. The two are connected so when
        you celebrate one, you have to acknowledge there is pain being felt
        somewhere else.

        Probably a good general principle in life.


      • Yes. Like all the other media here they deliberately dragged their heels – this lot far more so. Actually lobbying in public for higher prices recently, no less.

        Speaking of Adelaide, though, we wouldn't miss it. In the city, Angus and Robertson is a shell with minimal selection. Borders is probably the highest priced bookshop on the planet. General trade paperbacks at $37! Dymocks is better, so only one deserving of survival, anyway.

        So sure, they may feel pain, but those that fail to study history etcetera…

        Such chains of course have forced out independents, so if something kills them likewise, that is their own cycle.

        It amuses me that multinational capitalists don't wanna in this industry, but American companies happy to use their power elsewhere to dump foreign competition. e.g. No 'world electronic bases belong us us, or no US paper sales for you, garden variety author person' type stuff. Rights trading is more fun than bookselling then?

      • The Australian publisher will have direct access to the US market soon

        The booksellers I met with were successful independents. Relative to the
        rest of the English-speaking world, Australia has a lot more of them.
        There's been one dominant chain in Canada for a couple of decades. I think
        online bookselling has injured the indies far more than chains ever did.


      • Sure. In the past though with authors that they had just done Australian deals for, and no-one else had rights to – they could have been selling those digitally to the world for the last few years, no problem.

        Same applies to Canadians, (who are possibly in the North Americans read less basket, as opposed to Oceania and the UK? Speaking of dominant chains and relative sales numbers).

      • chris

        Post column getting way to small down there!! At any rate, I won't post any more after this. This will be boring many to death already.

        But back to OS sales.

        1.4 million sales for 'Twilight' in Oz. Lots of cash to be made in many countries outside the US.

        I'll bet hard dollars that lots of foreign publishers will be itching to disrupt the US market's local publishers.

        Ebooks have provided easy entry to that particular fight.

        Thanks for the discussion. Mike.

        This blog is always a great read.


      • Thanks for clearing up where the missing pennies went, Joe!


    • The anecdotal evidence that suggests consumers resist price points
      *above* $9.99
      doesn't pretend to prove that everybody doesn't prefer lower price points.

      The simple answer to your question is that authors setting prices (like
      Konrath) aren't thinking about future value perceptions: they are thinking
      about maximizing their revenue right now. If Konrath sells more than 3-1/3
      times as many at $2.99 as he would at $9.99, he personally comes out ahead.
      And I suspect the sales multiple is that high, or higher.


  • Fascinating that with all the options open to writer that appeal to mass market, the gates are opening. It really will be the audience deciding, not the publisher. Cant wait to see what unfolds.

    • Marketing still counts, not just writing. Konrath is doing plenty of that.
      Most writers don't. This magic won't work equally well for everybody can pen
      good prose.


  • marytod

    Your post about J. A. Konrath is compelling reading. It seems that Amazon has vertically integrated across the publishing chain. A company that began with a model of distributing books that others selected, edited, published and promoted is now playing in all of these components. Their cost leadership, strong consumer brand, superb customer experience, technology expertise and incredible customer data will make them a formidable competitor. Do you think Amazon will eventually offer their e-books on other technology platforms? Rita McGrath, writing about the battle for e-books in August 2009 (… ) suggests that Barnes & Noble’s decision to offer e-books on multiple devices could be a winning strategy.

    • Amazon already offers their Kindle books on multiple devices through a
      client. B&N has a long way to go to catch up; they're pursuing a similar
      strategy. As is Kobo (out of Indigo Canada but also affiliated with
      Borders.) As will Google when they go live. And as will Baker & Taylor's
      Blio and Copia, when they go live. I think the multiple-device strategy is
      now pretty much standard, except for the books bought from iBooks, the Apple
      store. Right now those work only on the iPad, not even on the iPhone
      (although they will presumably work on the iPhone shortly.)


  • marytod

    Guess I need to do lots more reading. Thanks!

  • steve

    Amazon has just announced a Kindle app for Android, which is the operating system that runs on the Nook. That means, or it should mean, that a Nook owner could download the ebooks from Amazon and read them on his Nook.

    • Seems reasonable. I don't have a Nook and haven't played with one, but if it
      allows other apps to run on it, you'd be right.


  • @Mike–Can't reply in the thread–it's too skinny. 🙂

    You said: “And in the ebook world, there's no point in buying something you don't read. In the print book world, there is.”

    I understand it is different for different people, but I disagree. I'm one of those types who has more media than I'll ever be able to absorb in a lifetime. Music and movies and videogames and books. Yet I still buy more.

    I get frequent emails from people who bought one of my ebooks ten months ago, and only just got around to reading it now. People do hoard media, and buy things they don't consume, and a low price point is a good incentive for this.

    I'd love to know what my percentage of bought vs read is. I bet it is a much wider gap than those who have bought my print books.

    I really don't think binge buying is a temporary thing. I just was on the phone today with a buddy who lamented the Kindle he just bought his wife. “It's too easy,” he said. “In ten minutes she can buy a dozen books just by pressing a button.”

    Books cost too much. A hardcover shouldn't be a luxury item. Not when you can buy the first season of LOST–over forty hours of entertainment–for less than the new James Patterson–only six hours of entertainment.

    We've been conditioned to pay a lot for books because of the flawed publishing business model. By doing away with printing, shipping, and middlemen, books “should” come down in price. The reader benefits from this.

    One of the many things John Sargent said that rankled me was that books weren't a growth market, that there were only a limited number of readers. (I wish I could find the quote)

    He's wrong. Readers who buy Kindles wind up buying, and reading, more than they had previously. That's growth. And more people will pick up ereaders as the years progress. Children are going to grow up learning to read on the things. The potential growth of ebooks is astronomical.

    And if you've got a good book at a low price, you'll get a piece of that pie.

    • Joe, there are two sides to the profit equation for each individual writer:
      supply and demand.

      Don't underestimate the advantage you've created for yourself being on the
      front end of supply. For a very large combination of reasons, the supply of
      digital books is relatively constricted at the moment. I think in the long
      run the number of writers will grow much faster than the number of aggregate
      reading hours (or even purchases.)

      *Because* you got a head start making a name for yourself while there was
      still a workable midlist print marketing capability and *because* you
      deliver a consistent reading experience and *because* you have tech skills
      and marketing savvy, you're getting a huge first mover advantage. I don't
      doubt that *many* other writers can do what you have done and, in fact, I
      was counseling a friend of mine who has two mystery characters that have
      been successful and books out of print to study what you have done. But
      $2.99 versus $8.99 isn't a universal truth. If you have a real niche market
      and your content serves some practical purpose, a higher price would make
      more money.

      You've got a permanent advantage that you're building every day: your name
      is getting brand recognition. It will be harder for a writer of equivalent
      capabilities to yours to do that over the next 3-5 years than it was for you
      to do it over the last 3-5 years; there will be a lot more competition. And
      then there will be people selling books for 99 cents or free that will make
      it harder for you at $2.99 or $3.99 just like you're going to make it
      increasingly difficult for James Patterson to stay at $14.99.

      The idea of selling more and more for less and less and everybody making
      money has a limit. It has to.


      • “The idea of selling more and more for less and less and everybody making money has a limit. It has to.”

        I dunno. In theory, you make sense. But we'll have to see what happens in practice.

        In paperback, James Patterson and I cost the same, about $7.99. But he sells more than I do, because he is available in more places, and has more name recognition.

        But ebooks change that. Distribution, and the number of copies in print, aren't relevant anymore. And I'm proof that price seems to be a more powerful motivator than name recognition, because I'm outselling a lot of name authors in ebooks who cream me in print.

        I'd posit that if all ebooks are $2.99, it wouldn't necessarily hurt my sales. It could even help them, as readers brand loyal to name authors might have more money to try new authors because they are no longer paying $14.99 for ebooks.

        I was crunching numbers as a thought experiment. If there were an installed ereader base of 40 million, and I sold 1000 ebooks per day of a title, it would take me over 100 years to saturate that market. And 1000 ebooks a day, at $2.04 profit each, is over $700,000 a year.

        There are over 70 million iPhone and iPod touches. With the relase of OS 4.0 this summer, they'll all have the iBookstore that the iPad currently has. That's a lot of potential readers.

        The current estimate for ebooks sales in the industry is 6%-8%. What happens when that gets to 25%?

        I'm currently selling 220 ebooks per day. 1000 per day seems doable. Over the past 13 months, my sales have been steadily climbing.

        Could sales drop off eventually? Sure. But I don't see it happening until ereader sales plateau, and that won't happen for a while. And when they do plateau, the sheer number of potential customers can keep me selling for decades. Even with more and cheaper competition, because I don't see low priced ebooks as in competition with each other. Right now, I can earn money in relation to 500,000 ebooks on Kindle. Perhaps when there are 5,000,000, I may lose a commanding percentage of the market. But I may may also make that up in volume.

        For example, let's say there are 3 million Kindles, and I sell 45,000 ebooks per year. That means I've sold to 1.5% of the market. But when the market gets flooded with cheap ebooks, I only sell to 1% of the market. However, if there are now 6 million Kindles, I'm selling 60,000 ebooks per year.

        But that's just me. And your argument is about everybody making money. So I tend to agree with you. I don't think everyone will make money. But it will be interesting to see the patterns of who makes money, and who doesn't, because the business modle is so vastly different than print.

      • Joe, your ruminations are fun. But reaching 1% or 1.5% of a market is damn
        good. Not a lot of authors or a lot of books achieve that.

        I just think you shouldn't give *all* the credit to your prose and your
        pricing. Some of it goes to your persistent marketing and your timing.


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  • Verena

    Hi! I'm brazilian ans ove your texts but I'm having problems to understand “Agency”… what does it mean?

    • Agency is the description of a sales relationship by which the publisher
      actually is the seller, and the online intermediary (or “store”) is the
      “agent” for the sale. This is as opposed to the other model called
      “wholesale”, by which the publisher “sells” the ebook to the retailer and
      then the retailer resells the ebook to the customer. Switching from the
      “wholesale model” to the “agency model” accomplishes two things for the
      publisher: it allows them to set the price to the consumer and it enables
      them to reduce the share of the price that goes to the intermediaries.


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  • Fierce Red Pen

    AmazonEncore is publishing other original manuscripts besides Konrath and doing it under the traditional publishing model as far as edits, book design, promotion, advertising and distribution. AE is not self-publishing. Self-publishing, by definition, involves an author paying part or all of the production costs. AE's authors, whether their books are original manuscripts or re-issued self-published books, are not investing personal funds in the production costs. Stop calling it self-publishing.

    • Distinction without a difference when the dollar amounts are so trivial.

      You're welcome to your own opinion about where to draw the line, but you're

      not entitled to mine.