The Shatzkin Files

End of a year, and perhaps the end of a stage of the ebook transition

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The year ends with a front-page New York Times story reporting the consternation in the indie author community at the current state of their commercial lives at Amazon. The proximate cause of distress is seen to be the Amazon Kindle Unlimited subscription service, through which indie authors are receiving considerably less compensation per read than they get through a sale, combined with the apparent migration of many Kindle readers to subscription, which would also explain the simultaneous sharp decline in those authors’ single-copy sales. Indie author and author service-provider Bob Mayer is quoted in the piece describing a complete turnaround in the past six months, with authors going from what they thought were secure incomes from writing to looking for day jobs.

Nate Hoffelder at Digital Reader makes the point that we’d want to know whether it is just the indie authors feeling this pain or whether publishers are seeing revenues shrink too. But that’s a very difficult comparison to make. Amazon gets the attractive books from the big non-agency publishers by just buying them for each use (paying whatever is the publisher’s wholesale price). Amazon wins that way because they don’t have to get the publisher’s permission to participate in the subscription program, but they’re paying a lot more for each subscriber read than they pay the indies. So even if the reader balance shifts from “individual purchase” to subscription read”, the publisher wouldn’t lose income.

My hunch is that the indie author community has a much more serious and intractable problem. It’s called supply and demand.

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

What is now being proven is that market is not infinitely elastic. Most of the data we see suggest that ebook sales growth has stopped. (As Mayer says in the piece, many ebook readers have an inventory of ebooks they’ve bought and not yet read.) Ever-growing supply and stable demand is a toxic formula for the prospects of each successive ebook published for that market. My own hunch is that Kindle Unlimited is simply the straw that broke the camel’s back.

And while Hoffelder’s question about the distribution of the pain is still a good one, it seems likely that the low-priced indie authors are disproportionately affected by KU. Who bought indie author ebooks in the first place? The price-sensitive reader! Who switches from buying individual ebooks to the subscription service first? The price-sensitive reader! In other words, the subscription service offering appeals most to the same audience as those who read indie-published ebooks.

And if that theory of what is happening is correct, authors may get less relief from dropping out of KU than they’re hoping for. They still have the supply and demand problem, compounded by the conversion of a chunk of their static market to the subscription model. Evidence of that is a shoe I expect we will soon hear drop.

POSTSCRIPT: Apparently the Disqus comment facility isn’t working (at least at the moment) on the site. I just got this note from Nate Hoffelder, commenting on “And if that theory of what is happening is correct, authors may get less relief from dropping out of KU than they’re hoping for.” Nate said:

As I pointed out a month ago (and have mentioned since) there are authors who never went into KU who are seeing a similar drop in revenue. So leaving KU will bring exactly zero relief.

So Nate has evidence that supports my conjecture.

Happy New Year to everybody. I hope we’ll see you at Launch Kids and Digital Book World!

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  • Elizabeth Burton

    The problem with far too many “indie authors” is that they failed to understand Amazon is not their fairy godmother. No one in their right mind who understands publishing as a business would have agreed to limit their distribution to one platform, however lucrative, and yet flocks of them did just that with the original Kindle lending program and then KU. And yes, thanks in part to the glut of $1, $2 and $3 ebooks, ebook sales have dropped across the board.

    However, this also reflects a leveling down to a more sensible level that will happen with any product once the novelty wears off. Because ebooks were “the new thing” for a lot of readers, there was an expectable surge in sales. With novelty no longer a marketing factor, sales were bound to settle.

    • Agreed that limiting to Amazon only was not a good strategy for anybody, but I don’t think it really changes the dynamic very much.

      I doubt very much that we’ve exhausted the supply of wannabe writers who will self-publish. The supply has gone up as the demand has declined or leveled off and I think that will continue. I’d expect it to be harder and harder for new indie authors to break through which will probably lead to those with the most potential and the most commercial sense to pursue deals with publishers, only doing it themselves as a conscious step to finding a professional publishing partner. And I’d also expect that most indie authors with a track record will see year-on-year declines in 2015, as many if not most have seen in 2014. This is the inexorable reality of the marketplace and it is independent of any specific distributor or any new initiative like KU.

      • carmen webster buxton

        I’m self-published, and I never stay in Kindle Select for more than the 90 day minimum. It has enough beenfits in terms of being able to give away the book for a few days, and get some reviews, but it’s certainly not worth it in the long term. So far, my most sucessful strategy has been to keep book #1 in a 2-book series free forever by making it free on iBooks & B&N via Smashwords. Amazon price matches those platforms, so the book is free almost everywhere. I sell more copies of book #2 than any other title.

        I think ebook sales as a percentage of total book sales may climb more slowly from now on, but it won’t go down. The march of technology is remorseless, and ereaders and tablets will only get better and more convenient. However, ebook self-publishing is so new that it’s still very volatile. A strategy that works in one year can be useless in the next, but the one thing that seems true is you always have to market your books.

      • Everything you say rings true, particularly the part about how tactics that work one year might not work the next. I agree that ebook share growth will continue inexorably, but slowly. And more slowly, I think, than the number of self-published titles will grow. And the market will continue to be bifurcated between those inclined to try indies and those not at all inclined. So things will continue to get more challenging, on average.

      • Mike, excellent post as always. I’d just like to add to the current discussion here one point: it seems to me that two problems are conflating here, making it difficult to distinguish one from the other. One is the relentless growth of a new technology (e-books) that is only now slowing down since it has reached a more “mature” stage of development but it certainly won’t stop growing. The other is the over-supply in titles caused by (a) the ease-of-use of this new technology (i.e. low barrier to entry) and (b) the rise in new, never-published-before authors attracted by the said technology. It’s not just established authors with a back list that are taking advantage of it, but a whole slew of writers with new, never-published-before titles. The confluence of the two is causing an unimaginable glut where the rules that governed past gluts no longer hold – particularly the idea that the “cream always rises to the top”. Or that the solution is to write another book. That’s simply no longer true and writing more books will only make the problem worse. That means that “book discovery” has become the issue #1 any serious author has to face. It also means that any aspiring writer would do well to go the traditional route and try and find a publisher because by himself he/she stands NO chance of standing out…Recently the Passive Voice reported the rant of some author whose book launched in December got not a single sale – well, that sort of thing is bound to happen more and more often in 2015…

      • Thanks, Claude. Yes, both authors (and publishers, for that matter) keeping backlist alive forever and new authors are contributing to the glut. And I couldn’t agree more that it is going to take industrial-strength SEO to give any IP a fighting chance. Now it will be interesting to see how effectively and how quickly the big publishers learn to deliver it!

      • Scott Nicholson

        You’re assuming traditional publishers will be able to regain the portion of the pie they lost to self-publishers. I don’t think this fits the “genie-out-of-the-bottle” apocalypse of ever-shrinking revenue for everyone. Publishers are going to shrink just like everyone else. The ark only has room for two of each kind.

      • I agree that there will be ever-shrinking ebook revenue for everyone (perhaps not yet, but ultimately). The question is how the “self-publish” or “be published” equation will look to an author with a choice. And my hunch is that we’ve passed the high-water mark for “self-publish” to be the right commercial decision for an author with a choice. That doesn’t mean it never will be; it means it will be less often than it was two or three years ago.

      • Steven Zacharius

        No one knows how much the dollar volume is that traditional publishers gave up to self-publishers. Accurate dollar volume is not reported, only units. Most of the sales of self-published books are fairly small numbers of units which wouldn’t have been profitable to be handled by a traditional publisher. So although publishers have given up a piece of the pie to self-publishing, the valuable piece might be smaller than we think. And many of those that are successfully self-published are also hybrid as well.

      • Elliot1234

        Agreed that limiting to Amazon only was not a good strategy for anybody, but I don’t think it really changes the dynamic very much.

        The success of a strategy depends on how well it achieves the chosen objective. Many set a goal of making as much as they could in the period when free KDP Select books led to popularity ratings that drove very substantial sales.

        Limiting to Amazon was a cost of a system that allowed the free books on which the strategy was based.. That cost wasn’t the strategy.

    • Elliot1234

      No one in their right mind who understands publishing as a business would dismiss lucre in making such decisions.

  • Bob Mayer

    I’m not a “service provider” who makes it relatively easy to publish a manuscript. That would be Smashwords. I have less authors at Cool Gus at the end of 2014 than I had at the beginning because, as I’ve said repeatedly, quality trumps quantity. We are a small publisher that focuses on a handful of authors. I would prefer not to be mis-represented.

    It’s a turnaround for some, not all. Mostly those who were on the margin. It’s another phase, one which those with solid business plans will go through and come out. Actually, the biggest changes have been in romance, which always leads the way, both good and bad.

    I don’t think KU is the problem, although it has accelerated things. I don’t think being in or out of KU makes much difference. The problem is the content flood, which I’ve been blogging about for a while and anticipated, and also traditional publishers joining the race to the bottom in pricing– Hunger Games is one of today’s Daily Deals for $1.99.

    • Sorry to have misunderstood your business. I didn’t realize you were a publisher.

      Actually, I believe that small publishers will be in a similar position to indie do-it-yourself authors. It will be increasingly difficult to succeed without scale. The glut of product will continue to grow (like the balls of plastic in the ocean, whatever it is we think we can do about it) and everybody — large and small — will be affected. As everybody *has *been affected. The ease of publishing that enables entities without big scale to make a positive contribution for an author just invites more product, whether through Smashwords or through smaller publishers.

      I have been told by more than one person that the frequently-mentioned difficulties at Ellora’s Cave are the tip of an iceberg and that we should expect more and more problems of the kind they are apparently encountering to surface. EC has been around for more than a decade; and they’re a publisher, not a service provider. Maybe they are sui generis, or maybe they’re a canary in the coal mine. I think more likely the latter.

      You’re absolutely right that both the content glut and the big publishers’ use of the lower pricing band make things more difficults for smaller publishers and fledglings. But neither trend is in any danger of diminishing.

      • Bob Mayer

        All true. And the really scary thing is, the solution most indie authors are coming up with in the face of this is to produce even MORE content, which is the snake eating its tail. Not that many have any choice.

        We’re actually starting to push something you blogged about a while back: our print sales are growing. Also, our Apple sales are increasing. I expect to see Apple make more of a presence in 2015.

      • Bob, it is a classic “tragedy of the commons”. For each individual author, publishing more is a “solution”, or at least offers some amelioration. But for the collective good, it is cumulatively toxic. What I’m waiting for that hasn’t happened yet is for the big publishers to start facilitating a burst in title count under *their *control, which is surely a strategy I’d be pursuing if I were in their shoes.

        Your initiatives sound right. Anything you can do to squeeze more revenue out of each piece of intellectual property is positive. And the more titles you have under your control, the more attention you can pay to any channel of opportunity, whether it is a format (Apple or print), an offshore territory, or a new way to sell (subscription).

        I wonder how many indie authors and indie publishers regret not having given their full support to publishers trying to establish pricing controls at higher levels, which would have left the lower price bands for indie discovery and exploitation for a longer period of time. There was a really crucial tactical error, mistaking their interests as being in common with Amazon’s and not with the publishers. If the entire indie author community had joined the majority of the published author community saying “publisher pricing control is a *good *thing”, perhaps we’d have had a different set of rulings two years ago. (And while we’re citing our own prior prescience, I wrote that blog post a LONG time ago.)

      • Scott Nicholson

        I wouldn’t think indie opinion had any influence at all. It certainly wasn’t reported in the mainstream coverage of this and was mostly voiced in an echo chamber. Besides, how many readers cared about the politics of it? They want what they want at the best price.

        I also think it’s a leap to assume indies saw success solely because of price. Surely there was some pent-up demand for books and genre niches that traditional publishers did not and probably could not provide. That those new books happened to be lower priced probably helped some, but to attribute the indie boom solely to cheaper books is to look through the glass darkly. Supply and demand may affect price, but price alone doesn’t create demand.

        That said, I agree in principle that we’re reaching the late peak or downside of the Golden Age of Ebooks. (I anticipated in 2011 that this was a five-year boom and that I had to make the bulk of my lifetime money in those years, and planned accordingly. My personal bell curve seems to be bearing that out. I hope I’m wrong, and will be happy to be proven wrong in the long run, but I planned on it, so I’m okay either way. I’m just grateful I was here when it happened.)

        I suspect almost every author in the world will be looking back and wishing they could still get a buck or two for a download, an amount many complain about now, but was inconceivable for most writers even five years ago. History has always been cruel to the average writer–the only cure is to not be average.

      • Indies didn’t see success “solely because of price”. Obviously. Lots more indies competed on price than succeeded at selling any substantial number of ebooks. But those indies that did succeed were helped enormously in 2011 and 2012 by the fact that they had a price band pretty much free of competition from brands. And shoppers for whom the “brand” that counted was “low price”.

      • Steven Zacharius

        Many of them have also written numerous titles, far more than a traditional publisher would ever be able to publish on a reasonable schedule. The sheer volume of their titles helped contribute to their income as well.

  • Max Alexander

    Mike, your post prompts a comparison to the video movie business of the early 1980s, which I witnessed firsthand at Variety. When VCRs first came out around 1982, the major studios balked at releasing movies on video, fearing (as legacy businesses always do) that it would devalue the conventional (i.e. theatrical) movie viewing experience. To fill the gap, countless indie film producers leaped into the market, cranking out thousands of cheap action “direct-to-video” movies. (The films actually made stars of people like Rutger Hauer and Jan-Michael Vincent.)

    VCR owners, desperate for content to watch on their new devices, scooped up the titles at neighborhood video rental shops. The business mushroomed, to the point where international film marketplaces like Mifed in Milan and the Cannes Film Market (the trade show under the Palais, not the glitzy competition upstairs) turned into cash-crazed bazaars as distributors jockeyed to secure rights to the films–many of which were shot in unlikely places like Israel and apartheid South Africa. Video companies like Vestron were generating revenues on the level of Hollywood studios.

    But it couldn’t last. Once the major studios jumped on the video bandwagon and customers realized they could rent “The Deerhunter” for the same price as some no-name B-movie, the business withered. Vestron and others went down in flames.

    An interesting sidelight: Cahners Publishing bought Variety in (as I recall) 1987 after salivating over phone-book-sized issues leading up to the Cannes Film Festival, packed with full-page ads for all those crappy direct-to-video movies. They saw it as a turnkey operation: Just sit back and watch the ads flow in. But they got in too late; by that time the studios were getting on board the video revolution, and the indies (and all their ads) were already fading.

    • Wow, Max. This is GREAT and totally relevant history. Thanks for providing it.

      • It is an interesting history, but it doesn’t work very well if the purpose is to dismiss the rise of indies in the publishing world. I worked for some of those companies during that time when the studios couldn’t figure out the value of the video market. One of those companies was Miramax, which made excellent films (like Sex Lives and Video Tape which was hugely successful) and was bought by Disney for a bundle. Others hung around for long after Vestron went away and were also bought by studios for millions. Vestron’s library eventually merged into Lion’s Gate, which is one of the hottest studios today. Also, Vestron didn’t just make junk. They really got rich from Dirty Dancing, which is still a classic and the musical version has made half a billion dollars (of which Lion’s Gate gets a big share). That Vestron’s management mismanaged its money is another story. It’s library was extremely valuable at the time and continues to be so. New Line, which also rose to wealth during that era thanks to Nightmare on Elm Street, was sold first to Turner for a lot of money and then merged with Warner Bros. and continues to make great films (Lord of the Rings, anyone?). It had more problems after it merged with a big studio than before.

        The problem related to Variety not being able to sell Cannes ads for crazy amounts of money is a more complicated subject as new markets stabilized and new ways of financing independent film (including studio financing) emerged.

        Rather than coming and going, those companies had a huge effect on the major studios. They changed the nature of independent film financing and independent film has not gone away. They provided the first jobs for amazing film makers like James Cameron (who started with Piranaha 2), Quentin Tarantino and Sam Raimi and many others. In fact, writers, directors and stars of that era became the new phase of big Hollywood and it marked the end of the careers of a lot of old Hollywood talent. It also changed the kind of films the big studios made. They couldn’t ignore horror and action anymore. Warner’s created Steven Seagal to compete with low budget martial arts for the video market. Schwarzenegger transitioned from that world and became one of the top studio money makers. On top of that, competing with indie producers raised salaries for a lot of talent across the board.

        Vestron might be a good model for what happened with Endora’s Cave. That is, a company made a ton of money off indie product and then couldn’t manage itself when the market turned down. But that has little to do with most indie writers. And let’s not forget that even super low budget films of that era cost several hundred thousands of dollars to produce and most cost millions. The studios could and eventually did overspend them (after buying up the talent and adopting many of the genre conventions).

        But when you’re talking about writing a book, and even publishing a book, traditional publishers don’t have a lot to offer, other than the quality of the writer. They can’t just outspend them on production, other than to pay more for the writing talent. (Perhaps that is why million dollar advances to new writers is becoming more common.) And sure, they can spend a lot more in marketing, but that cuts profits.

        If you want to use the early 80’s VCR boom as an model to see into the future of self-publishing, here is what I would say. Indie writers are here to stay. All the best new talent will start out that way, unless they get sucked up by big publishers with huge advances. The best ones that succeed independently first will be able to make huge deals with traditional publishers for their growing libraries and backlists. (If they even want to sell.) A lot of older traditional published writers will find their careers over and fade away. And traditional publishers will have to change the kind of content they create, embracing genre and new up and coming writers.

        As for the glut in content, more films are being produced today (in part because of the business models created back in the go-go 80’s) than ever before. There is no end of films new and old one can see on cable, DVD’s, downloads, Netflix, etc. Many of those films lose money, but some indie films make their filmmaker’s rich or lead to studio careers. Anyone who wants to see films for free can, either through piracy or millions available free (including feature length) on You Tube. Or an almost limitless supply for a cheap Netflix subscription. But none of that stops people from buying downloads and from shelling out big bucks to go to theaters. Ticket prices are higher than every before. And the top studio films (often bought from independents and then distributed by the big companies) make more than ever.

        So, win for big studios. Win for Indies. Win for people who love film.

        Does that mean everyone who wants to be a film director can get rich? Nope. Or than every studio film makes money? Nope. Is it tough to break into the film business? Yep.

        Is it tough for a new writer to make a living in ebooks? Yep. Are a lot of new writers going to succeed in selling ebooks and creating their own intellectual property libraries? Yep.

      • Max Alexander

        You’re absolutely right that the movie business is different in substantial ways from the book business, and I wouldn’t want to suggest there is some obvious parallel. And you brought up a number of salient points related to the 80s video boom–notably how it disrupted Hollywood (which might not have happened if the studios had understood video from the get-go) and presaged the rise of arthouse indie films–by which I think you are suggesting that indie publishing could augur a similar renaissance of great writing (and new authors).

        I sincerely hope you are right! As an author who has published all of his books with legacy houses but also re-issued some of them independently when the rights reverted to me, I work in both realms.

        However I take issue with your suggestion that legacy publishers, unlike major studios, don’t bring much to the table besides larger advances.

        First, like the studios, they bring distribution power to the table. With very few exceptions, indie authors simply are not going to get their books into bookstores, at least not on a national level, and not even in indie bookstores (irony alert). I get that there are fewer and fewer bookstores and I have personally switched entirely to e-books (to quote Penn Jillette: “God I hate paper!”), but I take my friend Mike Shatzkin’s word that bookstores still do matter for sales and marketing–and no one is a larger and earlier fan of e-books than Mike.

        Second, for better or worse legacy publishers still wield tremendous influence with book critics, as most newspapers and magazines simply will not review books that have not been “curated” by a “real” publisher. In America these include the NYT, the WSJ (which may actually publish more book reviews than the Times), the LAT, the WaPo, People magazine and O magazine. Overseas the same could be said for the UK papers and even Asian English-lingo outlets like the South China Morning Post. And book critics matter, since reading a book is a major investment of time and money.

        Third, although this may change, legacy publishing still carries a cachet with the vast majority of literary-minded midlist authors, who once dismissed self-publishing as the realm of vanity projects but increasingly associate it with “hack” authors who churn out potboilers which they self-promote relentlessly. (How much of their contempt is sour grapes I will leave for others to decide.)

        For all of these reasons I actually think the big publishers are quite a bit more like the big studios than first meets the eye. Like the studios, they are largely in the blockbuster business. Ask any agent: These days if your book isn’t “pre-sold”with a “high concept” or a star name, well good luck to you and the Red Sox as we say up here. And it doesn’t work to observe that today the best “adult” film writing is on TV because those hit TV shows are produced and distributed by the same media conglomerates. Likewise, the biggest-selling literary book titles (Donna Tartt, etc) are legacy published.

        Meanwhile, indie publishers are hurting–don’t take my word for it, ask Dave Eggers, who recently dropped the other shoe and converted McSweeney’s to nonprofit.

        So while I’d like to believe that self-publishing can really disrupt the legacy book business, I’m holding out for more evidence. In the mean time, it’s fascinating to watch this all play out. At age 57 I’m still young enough to wonder how the outcome will affect my own career, but old enough to enjoy the game as a spectator!

      • I certainly am not saying that the big publishers don’t have a huge advantage (they damn well better given their huge size). If an indie writes the greatest sci-fi book ever, he is at a huge disadvantage to the writer of a trad published good, but not great, sci-fi book. If the big publisher really wants to push it, there is almost no end to what they can do. For the indy it will be a long uphill journey and likely to end halfway up.

        But… the big publishers have to adapt. And that doesn’t mean waiting for the “glut” of books to discourage indies from writing. (That’s not going to happen.) They are going to have to adapt by upping their game in every way. Content, marketing and, yes, buying up the best indy talent.

        If we do want to focus on this parallel with the video market/indy film analogy, I would say the biggest problem for the trad publishers is they are carrying a lot of marginal talent and are not willing to focus enough on the popular genres people really want to read. And yes, I mean they spend far too much money and time trying to push literary fiction and don’t fully appreciate and promote their genre writers, primarily from snobbery. This parallels the film industry, which prior to the 80’s was overly fond of auteur prestige pictures and big character vehicles for their aging stars. They avoided martial arts, avoided horror and teen comedies, and edgy exploitation. That lead to an opportunity for the indies to fill the channel.

        That is the biggest issue facing the big five. Are they really willing to fill all the channels? Erotica, Zombie, Urban Fantasy, post-apocalyptic? It’s silly to talk about a glut of books if most of those are literary fiction that no one wants and meanwhile readers are snapping up all the Zombie books that can be produced by indies. Are the big publishers willing to put out, and promote, hundreds of 50 Shades of Grey? Or will publishing executives feel an obligation to put out one a year and ten serious works about college professors struggling with life questions? Because if they only put out one big erotica novel, they are creating a channel for fifty more by the rapid fans of the genre. Someone will fill that channel if they don’t.

        And that’s what really happened with the VCR boom. There was a pent up demand for a kind of entertainment the studios where hesitant to produce.

      • Publishers have no reluctance to sign up successful authors. That’s probably the route they’ll take to genres that are now unfamiliar.

      • I wouldn’t mean to suggest the indie surge of the past few years would have no permanent effects. I’m not sure Max meant that either. But I do think two things that have not been part of the common parlance until now:

        1. the ability of the big players to adjust to new conditions is real, but has scarcely been demonstrated because they’re slower than many individuals to “change”. But they will, and they will usurp opportunities that in the past few years would have been pursued outside their aegis.

        2. the path to indie success has gotten very much steeper in the past year or two and it will continue to get steeper because increases in supply will continue to come faster than increases in demand for indie content. Because books are possible for an individual to create and distribute on his/her own, the decline in indie production in response to this reality will not be as dramatic as the collapse of some indie film producers back in the 80s-early 90s. But we WILL be seeing indie publishing ventures failing, and we will see — probably this year if we haven’t already — a decline in the number of new players trying to play the indie publishing game.

      • Steven Zacharius

        I totally disagree with you that publishers don’t have a lot to offer. Nothing could be further from the truth. As more and more books become available online the question becomes one of discoverability. A traditional publisher is going to have a lot more clout with an online retailer because of the thousands of books they represent versus an indie author that may have written a handful of books. The online retailers make many more promotional options available to publishers than they do for indie authors. It’s all about scale.

      • I didn’t say publishers have nothing to offer. I said specifically that big publishers have a huge advantage. But that is only IF they publish the right books. Historically they have tried to marginalize genre, particularly women’s genres, and poured more effort into promoting unpopular literary fiction. The growing success of Indy publishing is because big publishers aren’t publishing enough books in the genres people want to read. If they continue down that path, they will continue to lose market share and marginalize themselves. They are also going to have to change the terms they offer to writers in order to compete with self-publishing options. That might be the hardest thing for them to swallow of all.

      • I’ll recuse myself from the discussion of what genres publishers should do to be successful. That’s a conversation above my pay grade.

        But it is pure sophistry to suggest that publishers need to change their terms to “compete” for self-published authors. There is no vast migration taking place of authors publishers want to sign to self-publishing. There are isolated examples of authors who have the choice to be published by a publisher choosing not to, but isolated examples is what they are. If you talk to editors at publishing houses, you will find there is very little concern that an author they want to sign won’t take their deal. It doesn’t happen very often, except for them to sign with another house!

      • Then why has it recently been reported that more and more first time writers are getting million dollar advances? Why is that becoming the new “normal?” Why are publishers paying record breaking advances if it isn’t to compete with self-publishing?

        I’m sure there are plenty of recent MFA Writing grads who are still begging for traditional publishing deals. But the writers of “hot” books, particularly in popular genres, are smart enough to know they can make a lot of money on their own. So yes, they are going to have to be offered better deals in order to sign with traditional publishing.

        Sophistry is a a lovely word and I’m sure it would find itself right at home in a novel about a married college professor struggling with his midlife issues. Maybe not so much in a Post-Apoc action thriller. But it is sophistry to dismiss as irrelevant the issue of popularity of genre in discussing anything related to self-publishing. The issue of self-publishing dominance of particular genres, like romance, is key to any understanding of it’s long term future.

      • The “sophistry” refers to the drawing of what masquerades as data-driven conclusions drawn from anecdata. That includes the allegation of a big increase in million dollar advances to unknown writers. Even if you could “prove” the point by counting up the number of such deals, you’d only have a numerator for the fraction which has no meaning unless you have both a numerator and a demoninator. Your conjecture isn’t unreasonable, but it is conjecture you are presenting as fact. And the anecdata I get from editors and agents contradicts the idea that there is any substantial shift of writers eschewing publishing deals for the better “margins” of self-publishing.

      • Obviously, editors and agents have motivations for downplaying the success of self-publishing. The reference to million dollar advances I made came from the recent article on Publisher’s Weekly, hardly Hugh Howey’s blog, and listed the actual deals, writers and publishers involved. It is certainly not conjecture that other up and coming writers read such stories, and read about the success people are having with self-publishing. Whether or not they are really on the margins, the expectations of new writers are going to be increased whether editors and agents like it or not. Prior to self-publishing, a system was in place that helped keep the majority of writer’s expectations down by forcing them to submit through agents, get repeatedly rejected, and the appreciate any hint of interest. That process is falling apart and is likely to have wide spread implications.

      • Steven Zacharius

        Do you have a link to that PW article by any chance?

      • Here is the exact quote:

        “Alison Callahan, an editor at Simon & Schuster, described what’s going on now as “the new normal.” She said that competition for the perceived best projects has been stiffer for the last four years, and that the biggest shift is how quickly sought-after titles will sell to editors. In the not-so-distant past, when there were multiple bids on a book, an author would often talk to competing editors—or meet them—as part of what’s known in the industry as a beauty contest. Those meetings, or exchanges, took time. “These days,” Callahan explained, “[a big book] is either preempted in 24 hours for an exorbitant sum of money, or you get a best-bid situation.””

      • Yes, this proves that the competition among publishers has become much more intense, to the benefit of authors. I don’t see anything in the quote that suggests that self-publishing has anything to do with it.

      • Well, perhaps self-publishing isn’t responsible for million dollar advances to first time authors, but it certainly hasn’t hurt them. Many have been claiming that the “glut” of books would force writers to work for free. Clearly that is not the case. Moreover, why are writers (and agents) suddenly refusing to participate in “beauty contests” and instead just asking to see the money? I would argue it’s because they know they have other options.

        I jumped into this thread because of the comment about the effect of VHS and the video market on Hollywood studios. To return to that, one other thing that happened around the time of the rise of the video market was million dollar screenplay sales. Because there were independent buyers, Hollywood in the 80’s for the first time had a rush of million dollar spec sales. What was interesting about this was that not only did studios have to spend more for top scripts, but if they didn’t spend a million dollars (or a good six figures) directors and stars would sometimes wonder if the property wasn’t valuable. Announcing a million dollar sale was a good way to attract top talent.

        The same may happened in big publishing. A million dollar advance may be worth it to attract media attention. Also, it’s a good selling point to Hollywood. Naturally, any fiction best seller hopes for a studio film deal. A publisher will get more attention for a property if they can show they really believed in the project enough to shell out big bucks up front.

        At minimum, this “new normal” shows that writers can be paid a lot in traditional publishing even as the self-publishing market grows.

      • All interesting theories. But very seldom an accurate description of how things in publishing actually work. I can’t speak about Hollywood.

      • Heywood Jablowme

        Psst…’sup jackass?

      • Steven Zacharius

        I misunderstood you. I thought you were referring to offers to indie writers. In five of these six deals discussed they were debut authors. I don’t think this is really all that unusual, we’ve seen it happen in the bast when all of a sudden a manuscript gets a big buzz and the big 5 publishers get into a bidding war for it. It also doesn’t mean they are profitable by any means. Some work and some don’t.

      • Steven Zacharius

        Where has it been reported that this is the new normal? There are very few authors that get million dollar advances. Generally they are very proven authors and not first time writers. There’s always an exception but it doesn’t happen that often.

  • Steven Zacharius

    Great insight. Can’t wait to discuss this further at DBW.

    • A lot of great questions have arisen in a Twitter stream conversation I’ve been having with Andrew Rhomberg and a little participation from Nate Hoffelder. You, Steve, are in a unique position to provide insight because Kensington has books across the subscription services. It will really be fun to juxtapose what you see with what Oyster and Scribd say is happening. S&S will add a lot of useful insight, but they’re not in Kindle Unlimited and you are. I think your session will be one of the most talked-about from the whole conference when it’s over.

  • Steven Zacharius

    I’m truly looking forward to participating on the panel about subscription services as well as hearing some of the other speakers at DBW. Should be a very interesting conference at an interesting period in ebooks publishing.

  • SpringfieldMH

    After being criticized for the one sidedness of the December 27th article referenced above (…Authors Turn Up Noses…), the NYT corrects/responds with the January 1st article (…Writers Are Mixed… ).

    And whines about the criticism, refering to “usual gratuitous insults”.

    But in the second article it continues the hyperbole and oversimplification (“heated”, “split”, “sure”) and takes pleasure in writer’s supposed naivete (assuming Amazon is their friend).

    Doesn’t correspond to the complexity and dynamics of the situation and cautious evaluative writer discussions that I’ve seen across a lot of sites, publications and forums.

    But where’s the fun or clicks in that?

    • The problem that David Streitfeld of the Times has, and that we ALL have, is that we really have no data. Undoubtedly, the shift caused some writers to lose money and allowed others to make more money. We don’t know the ratios, we don’t know the amounts, we don’t know which is which. We’ve heard enough voices with authority and chunks of information to believe it is true that overall, there is a big ratcheting downward of indie author revenue and per-title sales. The consensus on that “fact” enables us to discuss “why”. But we’re all sorta groping around looking for the keys in a very dark room so I wouldn’t be too hard on them.

      • SpringfieldMH

        But they just keep presenting as being authoritative and definitive. 🙂

      • Steven Zacharius

        Oyster, Scribd and other subscription services have to worry about their model being sustainable. Amazon of course which has far deeper pockets has to worry not only about the model being sustainable, but that it also doesn’t detract from their normal Kindle sales. They want to attract members to KU and capture those valuable names but they have to balance the two different types of sales. Interesting dilemma.

  • robert

    An excellent analisys.

    Robert Gottlieb
    Trident Media Group, LLC
    Literary Agency
    Like us on Facebook and follow us on Twitter

    • I really appreciate that assessment from a man with as keen an eye as there is on the economics.

  • robert

    Corrected Version:

    An excellent analysis

    Robert Gottlieb
    Trident Media Group, LLC
    Literary Agency
    Like us on Facebook and follow us on Twitter

  • EricWelch

    I was perusing some numbers regarding book production per million inhabitants per country and wonder if the talk of glut isn’t perhaps exaggerated. See the annual production graphs for the 15th century at and the numbers collected by the Guardian at

    • No matter what the production numbers say — titles per inhabitant or printed copies per inhabitant — there is no precedent for the *availability *we have now, where the vast majority of titles available *anywhere *are available *everywhere *and pretty conveniently too. If you just read and interpret a millimeter beyond the stats, it isn’t hard to make the case that the “glut” is much more real to every book reader today than it ever was, 20 years ago, 200 years ago, or 2000 years ago.

      • EricWelch

        That’s certainly true, but we’re dealing with perceptions as much as reality and to the 15th century mind, the numbers were probably considered a glut as well. Rereading chapter 9 of your dad’s book, I think is pertinent to how the “glut” of mass market books a few decades ago had a similar impact on the distribution of books today. My point is that the impact of the perception of a glut may not be so different today than it was centuries ago.

      • I am/was responding to the “perception” in the indie author community that over the course of the past year the slog has gotten harder. There has been a tendency to look at Amazon’s distribution and compensation behavior as a key element of that and I’m suggesting that there has been a real shift in the odds based on supply growing faster than demand. And that shift would cause that perception regardless of the details of Amazon’s tactics. If there were fewer titles, all those remaining would sell more (on average). When we cross a line that defines “glut” is probably a moving target and defined differently by different people.

      • EricWelch

        I think that’s exactly right. I have noted in reading the comments on indie sites that there seems to be an underlying assumption that Amazon exists to support authors when in reality their focus is almost entirely on what benefits consumers (of which I am one.) That tension is probably impossible to resolve but it’s a consumer’s market.

      • Although, ironically, it has been Amazon’s skill at making it easy for authors to self-publish that has contributed substantially to the sharp increase in supply!

  • InklingBooks

    I’d add to your remarks the fact that subscriptions make the most sense to the author’s best friend—those who read lots of books. The more someone reads each month, the more sense the ‘all you can eat’ world of subscribing makes.

    For some authors, the solution is to move into areas where the competition is more limited. My Inkling Books once focused on high-quality, value-added print editions of classic, public-domain books, particularly those by G. K. Chesterton. For the same price as a cheap reprint, I offered an enhanced edition with additional material and notes. Until recently those sold well and often became college texts.

    But ebooks has changed that market. Rather that compete with a less well-done print reprint at the same price, those books now compete with free ebooks. It’s hard for even an enhanced book to compete with free.

    So, I’ve changed my focus. I don’t do what anyone can do, meaning edit and republish classics. I also don’t try to write what anyone can write, say an adventure novel, although I have toyed with the idea and I did co-author one such book (Lily’s Ride, based on an 1870s bestseller). Instead, I write on topics where my experience, knowledge and perspective are unique.

    I worked for 16 months on the nursing staff of a top children’s hospital caring for children with cancer. That became My Nights with Leukemia. Quite a few books have been written on what it’s like to be a patient with cancer. This one is about what it’s like to care for small children and coming to work each night knowing that some one-third of my patients will die despite our best efforts.

    I worked (as a guy) for another 10 months on the hospital’s adolescent unit. The result is Hospital Gowns and Other Embarrassments, a guide to hospitalized girls (although valuable to anyone) who’d rather that their hospital care be less embarrassing. For hospitals, embarrassment is the ‘name that cannot be named,’ so I have the field to myself. This book seems to be the only practical guide on the topic.

    I’m currently writing another book based on that same experience, one tentatively entitled Nurse Mentors. It suggests that hospitals need a new type of nurse who operates independent of an often stifling hospital bureaucracy, seeing problems and fixing them on her own authority with having to ask permission of anyone or even informing the administration of what she is doing. As I note in the introduction, I can do that because I’m enough of an insider to know what ails nursing in hospitals but also enough of an outsider to not care if I ruffle feathers.

    You might want to do something similar. Look for areas where your knowledge or experience is special and write books based on it.

    Another suggestion. Spare no pains to get the title and subtitle just right. Look at the full titles of the books that I’ve mentioned. The title is designed to be catchy and memorable. The subtitle is designed so that, on its own, it hits every keyword someone is likely to use. Search Amazon for “hospital embarrassment” and Hospital Gowns and Other Embarrassments: A Teen Girl’s Guide to Hospitals” it the top search result. That’s no accident.

    Also, devote hours to finding just the right cover image. There’s nothing that says “quality” like a well-chosen, high-quality cover. Hospital Gowns has a teen girl in a gown. My Nights has a child who quite literally developed leukemia within a few months of when that front cover picture was taking. The back cover is that same girl after chemotherapy.

    To do that, visit the inexpensive stock photo sites and spend the time it takes to get one that’s just right. Among those sites are,, and

    In short, if you don’t want to be buried by the crowd, set yourself off from the crowd. Build on what’s unique about you.

    –Michael W. Perry, Inkling Books

  • Gino Roncaglia

    There is a further point that I think should be considered in assessing the impact of KU and, in general, of subscription models: the difference between buying a book and reading it.

    In the paper environment, most (strong) readers use to buy more books than they can read. We buy books that *we would like* to read, but… “so many books, so little time”: we simply don’t have the time to read all of the books we buy. The fact that our reading desires are bigger than our reading capability is disappointing from the point of view of the reader, but is a blessing from the point of view of authors and publishers: to get money they don’t need to have us actually *read* the book, they only need to have us *buy* it.

    In the digital (non-subscription) environment, this tendency might be *initially* even stronger: e-books are less expensive, don’t require physical space in our bookshelves, and we buy e-books (or rather, e-book licenses) through micro-expenses driven by impulse buying and often by special, discounted offers.

    As a result, we soon grow a sort of ‘ebook bubble’ on our reading devices. But all bubbles are bound to burst: we perceive we already own more e-books than we can possibly read, and – more important – we slowly understand that in the digital environment, which allows us to buy any ebook whenever we want, the sort of ‘accumulative’ behavior we were used to is simply pointless.

    But this is still nothing when compared to the disruption of the traditional ‘buy many / read few’ paradigm that is introduced by subscription services such as KU: the subscription is enough to satisfy all our ‘accumulative’ desires… but only the distributor gets money from the subscription itself: authors and small publishers (big publishers might negotiate a slightly more generous treatment) only get money when the books are actually read.

    I think this changes radically the perspective of authors and publishers (as well as the marketing required: the point is no more to get people to buy our book: with a subscription model we need to get people to actually *read* our book).

  • Subscription Services for books (SSb) [I call it so] is — in general — a Model that radically REDUCES the value of a thing like Book. Which takes much more time to consume, thereby running for a much more time of enjoyment than the Music & Film. So SSm or SSf [m=Music & f=Film] may work, but SSb just might not.

    And — in particular — such Model just doesn’t work for the kind of Books that people might want to read ‘Time & Again’ i.e. repeatedly. Such books may be called as having some kind of Eternal appeal. They force readers to come in them again & again. And if readers feel this necessity, they just want to buy it instead of bearing a running expenditure for it (whatever small be that).

    So, in the name of solving the SAMPLING problem of E-books (Non-straight text Ebooks) the SSb is the kind of model that had already inherent serious side-effects. This result should have been expected. This is nothing new to me! Amazon may not have realized this. The future for Scribd & Oyster also lies potentially in the same track. That’s most likely a bleak future indeed. Even for the Readers/Customers in the long run!

    Book is not quite like Music & Films, which you have quite earlier pointed out very wisely in your Blog-posts/Articles/etc. Even if the Book were like the Music & Films (in terms of consumption period, e.g. a 30 page Ebook takes 3 hrs to ‘finish’ with full intensity reading & a Film also takes 3 hrs in the video) the problem of running expenditure for an ‘Eternal’ appeal Title, would have been intolerable for the most consumers. [I just give an example: Eckhart Tolle’s book “The Power of Now” is considered by someone I know as the kind of book that he wants to read again & again. This book should be bought (by other people like him) & not read in a SSb model online.]

    For Publisher-endorsed Ebooks, the sampling problem is however perhaps relatively reduced. As the “Houses” have already SUPPOSEDLY filtered the good books from the Slush piles. But even there, the question of Eternal appeal books & Value degradation remains.