Thursday, November 29, 2012

Amazon The Grinch Who Stole Christmas? Amazon Doubles Down on Exclusivity

Will Amazon be the grinch who steals Christmas from thousands of indie authors this holiday season?

Last year, a mere three weeks before a record-breaking Christmas for ebook sales at the Apple iBookstore, Barnes & Noble, Kobo, Sony and other retailers, Amazon convinced thousands of indie authors to remove their books from the virtual shelves of all Amazon competitors.

The lure:  KDP Select, an opt-in program that requires authors to make their books exclusive to Amazon for a minimum of three months.  I blogged my opposition to the program here at the Smashwords blog, and in the months since also spoke out against it here, herehere and here.

The controversial program has its share of opponents and supporters.  Some authors have done well with it, and others have not.

I contended, and still contend, that exclusivity is a devil's bargain.  When authors go exclusive with any retailer, they increase their dependence upon that single retailer, limit long-term platform building at other retailers, disappoint fans who shop at other stores, and hobble the development of a thriving and competitive ebook retailing ecosystem.

KDP Select places authors in a difficult position.  They must decide if the short term benefits of KDP Select outweigh the long term harm caused to their writing career.  The potential benefits are uncertain, and the harm is impossible to measure.  How does one measure a missed opportunity?  One thing is for certain:  When I look at the Smashwords bestsellers, they're authors who maintain non-stop, uninterrupted distribution of all their books.  They're the authors who are working to build their audiences at each retailer for the long term.

This Christmas season is shaping up to be another record-breaker for Smashwords authors.  In the last 12 months, sales at the Apple iBookstore have surged as Apple continues to dominate the tablet and smartphone markets, and has built the world's largest global ebook retailing network with stores in 50 countries.  Barnes & Noble has expanded to the U.K. with the support of 2,500 brick and mortar retail storefronts promoting, displaying and selling the NOOK family of e-readers.  Kobo was acquired by Rakuten, a global ecommerce juggernaut, and has aggressively grown its global footprint and sales for the benefit of Smashwords authors.

Amazon's response to the rise of its competitors?  Today, Amazon doubled down on its exclusivity strategy. It sweetened the KDP Select lending library pot with an extra $1.5 million to be paid out over the next three months (press release here).

Undoubtedly, some indie authors will reach for the carrot and immediately pull their books from distribution, and as a result will never know what they missed out on this holiday season.  It's somewhat ironic that after decades of writers bowing subservient to traditional publishers who controlled the only path to retail distribution - and after so many traditionally published authors saw their books forced out of print when retailers dropped their books - that so many indie authors will now pull their books from distribution with their own hands.

What affect has KDP Select had on the growth of Smashwords?  Not as much as our detractors might think.  After Amazon announced KDP Select last year, some authors speculated it would put us out of business.  Quite the contrary.  We and our authors have enjoyed another record year this year, thanks to growth across the Smashwords distribution network.  We've enjoyed record profitability, and have grown our staff to 19 professionals, all singularly focused on creating success for the 50,000+ authors, publishers and literary agents we serve. We're reinvesting our profits to provide faster support, improve the speed and reliability of our distribution, and open up new distribution and sales opportunities (I'm writing this post from The Hague, the Netherlands, where I just concluded two days of exciting meetings with representatives of the International Federation of Library Associations). We'll end the year with nearly 100,000 new titles added to the Smashwords catalog.  Last Christmas was a blowout record for us, and I suspect Smashwords authors who remained fully distributed last Christmas and thereafter benefited by the reduced competition when thousands of KDP Select books disappeared from retailer shelves.  I expect this Christmas will be no different.  I expect some of our authors will pull some of all of their books, and the authors who remain fully distributed will become stronger for it.

Amazon is smart to realize that indie authors are the future of publishing.  If they can convince a large percentage of indies to surrender their independence to Amazon, Amazon will enjoy long term competitive advantage.

Indies have a choice to make.  They can support Amazon's strategy, or reject it.  I don't envy the decision many authors must now make.  It's unfortunate Amazon would play indie authors as pawns in its larger battle to harm its retail competitors. I wish the best to all self-published authors, regardless of their decision.

Image credit:  Wikipedia

Saturday, November 3, 2012

How to Sell Ebooks at the Apple iBookstore

R.L. Mathewson tops Apple iBookstore
charts for second day running
The Apple iBookstore, which last week expanded its global reach to 50 countries, has always been kind to Smashwords authors.  Numerous Smashwords authors have graced Apple's bestseller lists over the last two years, and this week is no different.

Four days ago, R.L. Mathewson uploaded Checkmate to Smashwords.  In under 24 hours, we distributed it to Apple and it went live worldwide in 50 stores.  Yesterday, this contemporary romance hit #1 in Apple's US, Australia, U.K. and Canada stores.  As I write this, it remains #1 at these same stores.

Three days ago, Kirsty Moseley uploaded Always You to Smashwords.  The next day, we distributed it to Apple and it went live worldwide in 50 stores.  Today, Always You is the #7 bestseller in Australia, #20 in the U.S. and #20 in the U.K.

Last week, the US Apple iBookstore ran a special promotion of romance titles priced $1.99 and below.  We suggested they consider Mia Dymond's Playing with Fire, and they included it.

Last week, in conjunction with Apple's iBookstore launch in New Zealand, they named Shayne Parkinson's Sentence of Marriage their "Book of the Week" for both their New Zealand and Australian stores.  Sentence of Marriage is a free series starter.  Shayne's next book in the series, Mud and Gold, priced at $3.99 (NZ dollars), is today the #8 bestseller in the New Zealand store, and #54 in Australia (after the U.S. store, Australia is the next highest earner for Smashwords authors, just edging out the U.K., which is also big for us).  I suggested they consider promoting Shayne because she's one of our bestselling authors at Barnes & Noble.  She's also one of the few authors we distribute to Amazon, where she sells well. I suspected that since she was performing well at our other retailers but hadn't yet broken out at Apple, a dose of pixie dust merchandising love could help launch her to a new audience.  That's what's happening.

The Smashwords authors above aren't the only ones doing well at Apple.  Other notable standouts now in the top 10 store-wide bestsellers include Jillian Holmes, author of Temporary Kiss (#7 in the U.K. iBookstore), Isabelle Rae, author of When Summer Ends (#8 U.K.), S.H. Kolee, author of Love Left Behind (#5 Australia, #10 Canada), and Marie Kelly, author of Billionaire's Revenge (#2 Australia, #8 Canada).

Apple is today the largest retailer for Smashwords authors.  The chart here shows the growth in monthly dollar sales for Smashwords books at Apple.  I omitted the dollar figures, but you get the idea how Apple has grown.  For all its incredible growth in ebooks, Apple is conspicuously mum when it comes to talking about their accomplishments.  Did they do a press release or a press conference on their launch of 18 new stores last week?  I don't think so.  Most authors I meet have no idea Apple is distributing to 50 countries.

I think their low key approach has led many in the industry to underestimate their progress.  My advice to authors:  don't underestimate Apple.  If you're not there, you're missing out.  Every new country they launch represents a new micro-market, an opportunity for you to become a big fish in a small but growing pond. The authors who get out there first and establish footholds today will become the bestsellers of tomorrow. 

All the authors mentioned above?  Keep an eye on them.  They're all headed toward the New York Times bestseller list in the months and years to come if they keep up their great work.

Our relationship with Apple started prior to launch of the iPad in early 2010.  I, like the rest of the world, had heard rumors that Apple was preparing to launch a bookstore, so I got on the phone and called their main switchboard.  Within about a week, I met with a senior executive at our office in Los Gatos.

Keep in mind that at the time, Smashwords was only three people.  It was myself, Bill Kendrick our CTO, and Keri McKie our CFO.  He asked me a lot of questions about our business, my background, and how we ran things.  He told us that Apple was looking to form relationships with a small number of authorized ebook aggregators, their term for distributors.  We had already signed distribution deals with Sony, Barnes & Noble and Kobo, so of course we were interested.  He laid out their integration requirements, and told us if we met the deadline and requirements, we were in, and if we didn't, maybe later.  In this industry, "maybe later" can easily mean never because things change so quickly.  We wanted to be in on the ground floor, so we dropped everything and in two weeks completely reworked how we produce .epub files, we performed dozens of other technical enhancements to our platform and processes, and we met the deadline.  We had 2,200 books on the iBookstore on day one.

Today, we supply approximately 125,000 ebook to the Apple iBookstore, and we're one of a small number of global aggregators supplying books under their aggregator program.  To remain in the program, we must undergo (and pass!) rigorous quarterly audits.

As you might imagine, I've got warm feelings for the team at Apple.  They took a gamble on us early on, and that gambled paid off for everyone, especially our authors.  They've shown our authors incredible support over the last two years. They've also been especially proactive in terms of working with us to identify opportunities for them to promote our authors to their customers.

Below I'll share some tips for succeeding at the Apple iBookstore.  90% of these tips apply to every other retailer.  These tips are based on my personal experience, opinions and observations, and are not endorsed by our friends at Apple.

  1. Read my Secrets to Ebook Publishing Success - My free ebook identifies 28 best practices of the most commercially successful Smashwords authors.  Many of the authors above are poster children for the best practices I recommend.  My Secrets book is all about what you as an author can do to publish professionally.  I underscore in the book how it's critical you publish a book that's as good or better than what the big New York publishers are releasing, and how you can employ my methods (such as pricing strategy) that will give you an advantage over them.
  2. Get there and stay there - Once your book lands at Apple, don't remove it.  In the Secrets ebook, I show charts of how prior Apple bestsellers have developed at Apple.  For many of the charts, you'll see that many bestsellers sell poorly at first, but then something sparks a breakout.  That something might be a new cover image (See our interview with R.L. Mathewson, and don't miss the chart there that shows what happened after she updated her cover image), the release of a new book, or any mix of myriad viral catalysts.

  3. Link to Apple in your promotions - I'm always surprised how often I see authors complaining that all their sales are coming from Amazon, and then I look at their website or blog and see they're only linking to a single retailer, Amazon.  Support all your retailers.  Not just Apple, but Barnes & Noble, Sony, Kobo, Diesel, every one.  Your blog, website and social media promotions should provide direct hyperlinks to your book pages at every retailer, so your fans can purchase your book at their favorite retailer.  For millions of readers, one of their favorites is the Apple iBookstore.  Use Apple's free Link Maker tool to create direct hyperlinks to your books at any of Apple's 50 stores. Use their Widget Builder tool to create and embed interactive widgets on your web site or blog.   Click here to download Apple's badges and buttons that you can place on your website or blog.    Smashwords author Russell Phillips has also developed some free link- making tools of his own on his Tools for Authors web site.
  4. Sales lead to more sales - Every time you send a buyer to Apple (or any other retailer for that matter) and they purchase your book, you gain five important benefits:  1. You get money in your pocket.  2.  You build your platform, because you get a reader, and a reader is a potential fan, and reader word-of-mouth is your single most powerful marketing catalyst.  Fans give you great reviews, and reviews lead to more sales.  Fans also await your next release, which means you have a built-in audience for your next book (definitely one of the catalysts for R.L.'s huge success with Checkmate, which is R.L.'s ninth book at Apple).  3.  Each sale gives you an incremental lift in Apple's sales ranking algorithms which by my observation is heavily weighted to unit sales.  As you rise in the sales ranking, first in your genre or category, and later in the store-wide rankings, you become more visible to more readers who are looking for a book just like yours.  4.  As you start rising in the lists, you'll grab the attention of Apple's merchandising team, which means they're more likely to give your book an extra promotional boost (more on that next).  5.  Apple's iBookstore, like most other ebook retailers, does automatic online merchandising so that when readers view a book page, they can see other books purchased by people who bought this book.  Each sale to an Apple customer gets your book cycling in their "Customers Also Bought" algorithm. 

  5. How to get the attention of merchandising managers - This is a challenge.  I could probably do an entire separate blog post on this (Next year at RT Booklovers in Kansas City, I'm actually moderating a session on the topic of retail merchandising best practices).  From my experience, Apple's merchandising team works much the same as the merchandising teams at other retailers (though I've got to say, Apple's team is impressively proactive). 

    First, it's helpful to understand their job.  The merchandisers have responsibility for identifying books that are worthy of special promotion, and most merchandisers at Smashwords retailers have a remarkably similar approach.  They're looking for books that will please their readers, and this focus usually trumps the retailer's desire to earn money.  Most merchandisers I've spoken with, if given the choice to promote a $2.99 book or a $12.99 book, will promote the $2.99 book first if they think it'll make more readers happier.  They want confidence that if they recommend a book, that book will deliver satisfaction, and extreme five-star satisfaction trumps 3-star. 

    Merchandising managers have multiple methods of showering promo love on a book.  At Apple, the promotion can come in the form of getting your book highlighted under their "New and Notables" section, as R.L. Mathewson is highlighted this week, or you might be selected for a special promotion such as the $1.99 romance promo mentioned above, or the "Book of the Week," or any myriad other promos they're doing. 

    All the retailers, Apple included, keep their promotional calendar close to the vest.  There's no "editorial calendar" that mere mortals such as myself can access. 

    It's tough to get a merchandiser's attention because they operate in a world where hundreds of thousands of authors and publishers want the attention.  There's simply too much noise.  Nothing gets a merchandising manager's attention faster than a book that is already selling, or a book getting great reviews by their customers.  In this sense, the merchandiser's attention is democratically applied.  If your fans drive you into the bestseller charts, it increases your opportunities for merchandising love.  The most reliable method of attracting the attention of a retailer's customers is to write a great book, give it a great cover image, distribute it to the store, and promote its presence at the iBookstore.

    As I mention in the Secrets to Ebook Publishing Success, different books break out at different retailers at different times, and often for reasons you can't determine.  Just as each country represents a micro-market for your books, so to does each retailer.  To the extent you cultivate a fan base at each retailer, your follow-on books will have much greater success.  This is one of the reasons I am so staunchly opposed to exclusivity programs like KDP Select.  Audience cultivation is a long term endeavor, requiring nonstop presence, patience and participation (I shared more thoughts on KDP-S in the November 2 Smashwords author/publisher alert). 

    If you've previously sold well at the iBookstore, your next release is likely to get more attention, both because you've developed a fan base among the retailer's customers, and because you've begun building brand awareness among the merchandising team. 

    It was an Apple merchandiser, for example who contacted me and asked if Kirsty Moseley had a new release planned.  Kirsty's prior title, The Boy Who Sneaks in my Bedroom Window, has sold well at Apple worldwide for months, and continues to do well.  As luck would have it, she did have a new title coming, the above-mentioned Always You.  We coordinated with Apple so they knew when it was coming, and when it arrived they were ready to give it some love.  It's now rising in the charts.

    Another way to get their attention is to get the attention of your distributor's merchandising team, which in our case is me.  If you've previously sold thousands of copies at Apple, and you've got a new title coming, let me know.  Beyond that, I'll find you.  If I see your Smashwords-distributed book is selling well at our other retailers (like the example of Shayne's books), I'm more likely to pitch your book, because your performance across the Smashwords distribution network gives me the confidence I need to pitch you.

    Another method of getting Apple's attention is through social media.  If you're on Twitter, for example, consider incorporating their Twitter address (@iBookstore) in your Apple-focused tweets.  Apple has nearly 200,000 followers on Twitter, and they will occasionally retweet the tweets of authors (see the Smashwords Book Marketing Guide for twitter tips if you're new to twitter).   To maximize your odds of a retweet, tweet something interesting or compelling or complementary about your readers at the iBookstore, and provide a direct hyperlink to the book at the iBookstore.  Apple, as a massive corporation, is really strict about naming conventions and corporate identity, so if you don't identify them or the store properly, you're unlikely to get a retweet.  For example, the store is called the iBookstore, not iBooks.  They call ebooks books, not ebooks or e-books.  They like to see books referred to as on the iBookstore, rather than in the iBookstore.  Interact with @iBookstore by tweeting at them.  Follow them and retweet them if they tweet something you think would interest your Twitter followers.  Keep in mind that behind their Twitter address is a live person, not a machine, so you want to give them reason to retweet your tweets.  Keep your retweet expectations reasonable, because retweetage is a long shot.   Click here (downloads a PDF file) if you want to torture your brain with Apple's full list of identify guidelines. 

    Finally, if you write a great book that pleases your retailer's customers, those customers will propel your book forward with their reviews and word of mouth.  Also remember that the merch teams at the retailers are populated by book lovers.  They read what they sell.  If they read your book and love it, you're more likely to get promo love.  A little birdie tells me someone at Apple read R.L. Mathewson prior to the store putting their weight behind her and naming her a breakout author back in July.  They probably read her because their customers were reading her.
  6. Support your retailers, maintain positivity - When you walk into a room, do you bring sunshine or storm clouds?  I've written about this topic elsewhere, put it in the Secrets book, and I've been talking about this in my recent workshops. For some reason, a lot of authors adopt an online persona of, "I complain, therefore I am."  Apple has never mentioned this to me, nor has any other retailer, but I can bet that everyone on the merch team has Google alerts on the "Apple iBookstore" search phrase, and if an indie author is out there trashing this or that about Apple or the iBookstore, I imagine it causes their hearts to sink.  If the day comes where they're considering giving you promo love (and 95% of the time, they'll give you the love without giving you advance notice), if they recognize your author name and brand as that [insert explicative] on [insert the name of your favorite author forum] who's always complaining about them, that's not the type of brand awareness you want. 

    New York Times bestseller Jonathan Maberry said it best, here in his interview at the Smashwords blog:
    Think about a party. If there’s someone who is bitching and moaning and someone else who’s getting folks to laugh and loosen up, which way do you drift? If a kid in a playground is constantly bitching about the quality of the toys, and another kid has turned a cardboard box into a sideshow funhouse, who’s getting more attention? Who’s going to be remembered in a positive way?

    And, even if you are a naturally cranky, snarky, sour-tempered pain in the ass, for god’s sake share that with your therapist or priest. When you go online to promote yourself and therefore your products, try not to actually scare people off your lawn.
Good luck!  I might add more tips later.