Wednesday, November 19, 2014

Ebook Publishing Gets More Difficult from Here - Here's How to Succeed

First the good news. 

For indie (self-published) authors, there’s never been a better time to publish an ebook.  Thanks to an ever-growing global market for your ebooks, your books are a couple clicks away from over one billion potential readers on smart phones, tablets and e-readers.

As a Smashwords author, you have access to tools, distribution and best practices knowledge to publish ebooks faster, smarter and less expensively than the large publishers can.  In the world of ebooks, the playing field is tilted to the indie author’s advantage.

Now the bad news. 

Everything gets more difficult from here. You face an uphill battle. With a couple exceptions – namely Scribd and Oyster – most major ebook retailers have suffered anemic or declining sales over the last 12-18 months. 

The gravy train of exponential sales growth is over.  Indies have hit a brick wall and are scrambling to make sense of it.  In recent weeks, for example, I've heard a number of indie authors report that their sales at Amazon dropped significantly since July when Amazon launched Kindle Unlimited (I might write about Kindle Unlimited in a future blog post).  Some authors are considering quitting.  It’s heartbreaking to hear this, but I’m not surprised either.  When authors hit hard times, sometimes the reasons to quit seem to outnumber the reasons to power on.  Often these voices come from friends and family who admire our authorship but question the financial sensibility of it all.

The writer's life is not an easy one, especially when you're measuring your success in dollars.  If you're relying on your earnings to put food on your family's table, a career as an indie author feels all the more precarious.

At times like this, it’s important for all writers to take a deep breath, find their grounding, remember why they became an author in the first place, and make important decisions about their future.  It’s times like this that test an author.

Don’t fail the test.

Back in December, in my annual publishing predictions for 2014, I speculated that growth in the ebook market would stall out in 2014.  I wrote that after a decade of exponential growth in ebooks with indies partying like it was 1999, growth was slowing.

I wrote that the hazard of fast-growing markets – the hazard of the rapid rise of ebooks – is that rapid growth can mask flaws in business models.  It can cause players to misinterpret the reasons for their success, and the assumptions upon which they build and execute their publishing strategy. Who are these players?  I’m talking about authors, publishers, retailers, distributors and service providers – all of us.  It’s easy to succeed when everything’s growing like gangbusters.  It’s when things slow down that your beliefs and underlying assumptions are tested.

I urged authors to embrace the coming shakeout rather than fear it.  Let it spur you on to become a better, more competitive player in the months and years ahead.  Players who survive shakeouts usually emerge stronger out the other end.

What’s causing the slowdown?

While every individual author’s results will differ from the aggregate, I think there are several drivers shaping the current environment.

1.  There’s a glut of high-quality ebooks
There’s been a lot of hand-wringing by self-publishing naysayers who criticize the indie publishing movement for causing the release of a “tsunami of drek” (actually, they use a more profane word than “drek”) that makes it difficult for readers to find the good books.  Yes, indie publishing is enabling a tsunami of poor-quality books, but critics who fixate on drek are blinded to the bigger picture. Drek quickly becomes invisible because readers ignore or reject it.  The other, more important side of this story is that self-publishing is unleashing a tsunami of high-quality works.  When you view drek in the broader context, you realize that drek is irrelevant.  In fact, drek is yin to quality’s yang.  You must have one to have the other.  Self-publishing platforms like Smashwords have transferred editorial curation from publishers to readers, and in the process has enabled publication of a greater quantity and diversity of high-quality content then ever possible before. 

The biggest threat to every indie or traditionally-published author is the glut of high-quality low-cost works.  The quality and potency of your competition has increased dramatically thanks to self-publishing, and the competition will grow stiffer from this day forward. 

Ten years ago, publishers artificially constrained book supply by publishing a limited number of new titles each year, and by agents and publishers rejecting nearly everything that came in through the slush pile. There was an artificial scarcity of books.  The supply was further constrained by the inability of physical brick and mortar bookstores to stock every title.  Even big box stores like Barnes & Noble and Borders could only stock a small fraction of the titles published by publishers each year, and as such they were forced to return slow-selling books to make room for new releases.

This rapid loss of shelf space for the poor sellers forced many high-quality books out of print before they had a chance to connect with readers.  This then limited the supply of available books, which limited the competition for the authors whose publishers managed to keep their books in print and on store shelves.  
We’ve moved from a world of artificial scarcity to organic abundance.  Readers now enjoy a virtually unlimited selection of low-cost, high quality works, and these books will become ever-more plentiful and ever-more higher-quality in the years ahead thanks to self-publishing.
2.  The rate of growth in the supply of ebooks is outstripping the growth in demand for ebooks
A few things are happening here.  Ebooks are immortal, so they never go out of print.  Like cobwebs constructed of stainless steel, they will forever occupy the virtual shelves of ebook retailers, forever discoverable.  This is both good and bad.  It’s good your book is immortal, because it means you can look forward to harvesting an annuity stream of income for many years to come, especially for great fiction because fiction is timeless.  But it means that every year there will be more and more books for readers to choose from.  Unless the number of readers and the number of books read by readers grows faster than the number of titles released and ever-present, there will be fewer eyeballs split across more books. This means the average number of book sales for each new release will decline over time unless readership dramatically increases, or unless we see an accelerating pace of transition from print reading to screen reading.
3. The rate of transition from print books to ebooks is slowing
The early adopters for ebooks have adopted.  The exponential growth in ebook sales over the last six years was driven by a number of factors, most notably a rapid transition from print reading to ebook reading, and the success of ebook retailers such as Amazon, iBooks and Barnes & Noble.  Today, ebooks probably account for between 30 to 35% of dollar sales for the US book market, with genre ebook fiction a bit higher and romance quite a bit higher.  Since ebooks are priced lower than print, the 30-35% statistic understates the amount of reading that has moved to screens.  Most likely (especially when you include free ebooks), screen reading in the ebook format today probably accounts for around half or more of all book words read.  But the rate of transition from print to ebooks is slowing.  We’ve reached a state that might best be described as a temporary equilibrium.  I think reading will continue to transition to screens, but at a much slower rate of transition than during the last six years.  The slower rate of growth will therefore limit the number of new eyeballs available for the ever-growing supply of ebooks.

How to Succeed in the Future Competitive Landscape

The easy days are behind you, but tremendous opportunities still lie ahead.

As I mentioned at the start of this post, there's never been a better time to be an indie author.  Millions of readers are hungry to discover, purchase and read their next great book.

Here’s how to succeed in the new environment.

1.  Take the long view
You’re running a marathon, not a sprint.  Most bestsellers slogged away in obscurity for years before they broke out.  Every bestselling author you admire faced moments where it seemed more sensible to quit than to power on.  They powered on.

Work today to create the future you want 10 or 20 years from now.  Six years into the ebook revolution, you’re still early in the game.
In any market, whether fast-growing or slow-growing, the early movers have the advantage.  Although it was easier two years ago to grow readership than it is today, today it’s still dramatically easier to grow your readership than it will be two years from now.

Focus now on aggressive platform building.  Build a social media platform - using tools such as Facebook, Twitter, a blog and a private mailing list - that you control. You 'll find platform-building is the most difficult when you're first starting out.  You'll also find as you grow your platform and your following, it gets easier as your readers become your evangelists.  Social media in all its forms rewards those who add value.

Authors who attract and capture the most readers today have the greatest opportunity to convert those fans to lifelong super fans.  Super fans will buy everything you write and will evangelize your work through word of mouth, reviews and social media.

2.  Good isn’t good enough
With the glut of high-quality books, good books aren’t good enough anymore.  Cheap books aren't good enough (Smashwords publishes over 40,000 free ebooks).  The books that reach the most readers are those that bring the reader to emotionally satisfying extremes. This holds true for all genre fiction and all non-fiction.  If your readers aren’t giving you reviews averaging four or five star and using words in their reviews like, “wow,” “incredible” and “amazing,” then you’re probably not taking the reader to an emotionally satisfying extreme.  Extreme joy and pleasure is a required reading experience if you want to turn readers into fans, and turn fans into super fans.  Wow books turn readers into evangelists.  Last year I wrote a post titled, Six Tips to Bring Your Book Back from the Doldrums.  It's a self-assessment checklist that prompts you to take an honest look at your reviews, your cover image, your categorization and targeting. With some simple questions and honest answers, you'll be ready to give your books a makeover.

3.  Write more, publish more and get better
The more you write and publish, the greater your chances of reaching readers.  The more you write, the more opportunity you have to perfect your craft.  What are you writing next?  Get it on preorder now.  Never stop writing.  Never stop growing.

4.  Diversify your distribution
There’s a global market for your English-language books.  Smashwords can help you distribute to iBooks, Barnes & Noble, Scribd, Oyster, Kobo and public libraries.  iBooks, for example, operates stores in 51 different countries and has become the world’s second largest seller of ebooks.  Each of these 51 countries represents its own unique micro-market.  If you’re not there with your entire list of books, then you’ll face long term disadvantage against the majority of Smashwords authors who’ve been building their fan bases for the last few years with uninterrupted global distribution. 
If you don’t have all your books available at every retailer, you’ll undermine your long term potential.
At every writers conference I attend, I’m surprised by the number of indie authors who ask, “How do I decide between Amazon and Smashwords?”  The question belies an unfortunate truth about the state of indie publishing – a scary large number of authors publishing at Amazon think Amazon requires exclusivity.  Not true!  Yes, they'll poke and prod you to go exclusive, but you can say no.  I recently wrote a short post for the IBPA (International Book Publishers Association) on this subject titled, Exclusive is Actually Optional at Amazon.  Do your indie author friends a favor and help them understand the benefits of global distribution.

5. Network with fellow indies
As I wrote in the Indie Author Manifesto, indie does not mean “alone.”  It takes a village to publish a professional-quality book.  Network with your fellow indies at writers conferences and local writers groups.  Share experiences and support one another through the good times and bad.

6. Publish multi-author box set collaborations
When authors publish and promote multi-author box sets, they can amplify their fan-building by cross-marketing to each participating author’s fan base.  Box sets work best when every author pitches in on the promotion. Check out my recent blog post on how to do multi-author box sets.  Partner with authors you love, and who you think your readers will love.  Be a great partner!

7. Leverage professional publishing tools
Over the last couple years at Smashwords, we’ve introduced a number of new tools that give our authors a competitive advantage in the marketplace, such as Smashwords Series Manager for enhanced series discovery, and preorder distribution to iBooks, Barnes and Noble and Kobo.  Yet despite the availability of these tools, they’re not universally adopted.  Even though we’ve proven and communicated that books born as preorders sell more units that other books, only a minority of Smashwords authors release their books as preorders.  Take advantage of these tools.  They give you a competitive advantage!

8. Best practices bring incremental advantage
There’s no single magic bullet that will make your writing career take off.  The secret is that you must do many things right and avoid mistakes that will undermine your career.  The many things you must do fall under the umbrella of best practices.

As I wrote in The Secrets to Ebook Publishing Success in my discussion of Viral Catalysts, it's helpful to think of your book as an amorphous blob, and attached to it are dozens of dials, levels and knobs that you can twist, turn and tweak to make your book more available, more discoverable and more desirable. What are these things you can tweak and adjust?  I'm talking about your editing, your cover, your book description, pricing, categorization, etc. Once you get the combination of settings just write, your book will start selling.
Best practices are what separate the indie author professionals from the indie author wannabees.  Be the pro!  Even if you're already a bestseller, challenge yourself to do better.  Find those things you're not doing that you should be doing better.
So here’s some good news for you.  Although the indie author community is more professional and sophisticated than it was five years ago, the fact remains that most indie authors don’t fully exploit the power of best practices.  There's plenty of low-hanging fruit on the best practices tree that they're ignoring.  This means if you fully exploit best practices, you’ll have a significant advantage over the majority of authors who do not.
Here's a quick summary of some of the most commonly underutilized best practices:  1.  Many indies release their books without professional editing and proofreading.  2.  A surprising number of authors end their book with a period and that’s it, and not with enhanced back matter and navigation that drives sales of your other books and drives the growth of your social media platforms.  3.  Although indie authors are releasing books with better quality covers than ever before, a surprising number of authors still release books with low-quality homemade covers.  4.  A lot of series writers haven’t yet experimented with free series starters, even though free series starters are proven to drive more readers into series and yield higher overall series earnings.  5.  Many series writers don't yet link their series books in Smashwords Series Manager, even though this tool increases the discoverability of series books at Smashwords and at Smashwords retailers.  6.  Even though we’ve published strong evidence three years in a row in our Smashwords Surveys (2014, 2013, 2012) that longer ebooks sell better than shorter ebooks, some authors still divide full length books into shorter books that can disappoint readers.  7.  Sloppy descriptions.  You'd be surprised at the number of book descriptions that have typographic errors, or improper casing or punctuation.  Readers pick up on this stuff.  Mistakes like this are like a slap in the face of your prospective reader.
To long time readers of the Smashwords blog, you're probably already familiar with many of the proven best practices I mentioned above.
If you want a refresher on best practices, please take some time to read my free ebook, The Secrets to Ebook Publishing Success.  Over 30 best practices are described there.  And read the Smashwords Book Marketing Guide for more than 40 free book marketing and author platform-building ideas.  And then take some time to review my prior blogs posts here, or watch my ebook publishing tutorial videos at YouTube
Indie authors pioneered many of these best practices.  I learn from you and your fellow authors, and share what I learn.

9. You’re running a business
Mark’s Unconventional (but proven effective) Rules for Business:  1.  Be a nice person. Treat partners, fellow authors and readers with kindness, respect and integrity. You'll find as you develop your career, the publishing industry will feel smaller and smaller as you get to know everyone, and as everyone gets to know you.  It takes a village to reach readers.  All these people - fellow authors, critique partners, beta readers, editors, publishers, cover designers, literary agents, publicists, retailers, and distributors - have the power to open doors for you.  2.  Be honest.  Business relationships are built on trust and honesty.  The fastest way to destroy a relationship is to be dishonest.  3.  Be Ethical. Don't cheat. Do unto others as you’d want done unto you.  4.  Be Humble. Yeah, I’ve told you have superawesome potential within you.  But know that you can always be better.  Celebrate those who help you succeed.  Always know that none of us can achieve anything without the support, encouragement and love of those around us.  It takes a village.

10. Pinch your pennies (an American saying that means, "be frugal with your money")
Practice expense control.  Your sales will always be uncertain, but your expenses can be controlled.  Jealously guard your pennies.  If you can’t afford professional editing, for example, find another way to obtain it.  A couple months ago at the Rocky Mountain Fiction Writers conference, I gave a presentation on best practices.  To underscore my suggestion that writers find another way to get professional editing if they can’t afford it, I pointed out an editor friend in the audience and suggested that if authors couldn’t afford to pay for her services consider offering her something of value in exchange.  Tongue in cheek, I said, “if you’re a professional masseuse, offer massage services.” To my surprise, I learned afterward that two professional masseuses in the audience handed the editor their business cards at the end of the presentation.  You've got skills.  Get creative.  Trade editing with fellow authors.  Trade services in exchange for professional cover design.

11. Time Management
Do you have too many hours in the day?  Of course not.  Organize your time so you’re spending more time writing and imagining, and less time with the menial grunt work.  Smashwords can help on the distribution side.  Consolidate your distribution to reap the time-saving benefits of centralized publishing control and metadata management.
12. Take risks, experiment, and fail often
Success is impossible without failure.  Failure is a gift.  The challenge is to take a lot of little risks and make every failure a teachable moment.

13. Dream big dreams
Be ambitious.  Aim high.  You’re smart and you’re capable.  You must believe this.  Because if you don’t try, you can’t achieve.   Salvador Dali said:  "Intelligence without ambition is a bird without wings."
14. Be delusional
At the Pikes Peak writers conference three years ago, I had a fun conversation with uber-agent Donald Maas. Don had just told a room full of writers that self-publishing was a fine option if they didn't want to sell any books.  Later that night, we crossed paths at dinner.  I told him I thought he was underestimating the impact self-published authors would have on the publishing industry.  He told me he thought I was delusional. When someone doubts me, I feel energized. To have vision - to see what doesn't yet exist - that's delusional.  Be delusional. What's your vision?  Know that every NY Times bestseller was absolutely nuts to write a book.  Most books fail, so common sense would advise getting a job at McDonalds instead. Three months ago, three years after my conversation with Mr. Maas, Inc. Magazine named Smashwords to its INC 500 list of America’s fastest-growing companies in recognition of indie authors at Smashwords who sold over $30 million worth of books at retail last year. Who’s delusional now?
15. Embrace your doubters
They know not of what they speak. They’re delusional too. They can't yet see what you see. They can't see what' s in your imagination.  Give ‘em a hug.
16. Celebrate your fellow authors’ success
Your fellow authors' success is your success, and yours theirs. When you achieve success, do everything you can to pause a moment and lift up your fellow authors to join you. A journey shared is more satisfying than a journey alone.
17. Past success is no guarantee of future success
I think about this a lot at Smashwords. The world is cyclical. You’ll have ups and downs. When you’re having a great run, enjoy it, soak it in, bank it, pay off debts and build your savings for a rainy day.  The rainy day will come. And then keep working. Never stop sprinting as fast as you can in the direction of your dreams.

18. Never Quit
Never give up. Quitting guarantees failure.  If you never quit, you’ll never fail.  Stamina and staying power beat the sprint.  Think of the story of the tortoise and the hare. Fight for your right to pursue the best career in the universe.   
19. Own Your Future
In the past, you were dependent upon publishers.  Now it’s all you.  Your success or failure is your own. You’re the writer and the publisher.  You decide how you publish.  You choose your partners.  If you succeed or fail, it’s on you.  Avoid finger pointing and celebrate those who help you succeed. 
20. Know that your writing is important
Books are important to the future of mankind. You are the creator of books.  That makes you special, and it also burdens you with a special responsibility. No one else can create what you have within you. Your writing represents the manifestation of your life, your dreams, your soul and your talent. You’re special. Others might think you’re suffering from delusions of grandiosity but so what?  What do they know?  If you don’t believe in yourself, who will? 
Find success and satisfaction in the journey of publishing.  Know that the measure of your importance and the measure of your contribution to book culture and humanity cannot be measured by your sales alone.  The moment you reach your first reader, you’ve done your part to change the world.  And that’s just the beginning.  

If you publish for the right reasons and you adopt best practices that make your books more available and more desirable to readers, your future is as bright as your imagination.

Thank you for everything you do.

Friday, November 14, 2014

The Amazon Hachette Dispute Comes to a Pyrrhic End

As the Epirot Illyrian general
Phyrrus demonstrated, winners
can be losers too. 
Image source: Wikipedia

Amazon and Hachette announced a settlement this week in their long festering contractual dispute.  I'm glad it's over.  As I discussed in a NINC interview last month, the dispute evoked a lot of unnecessary ugliness in certain quarters of the indie author community.

At the heart of the dispute was the Agency pricing model for ebooks, which meant it was a battle was over pricing and margin.  According to most press accounts, Hachette wanted the freedom to set consumer prices and earn 70% list for its ebooks, and Amazon wanted to pay Hachette lower margins so it could fund deeper discounting.  I covered the dispute back in May here at the Smashwords blog.

According to carefully worded statements this week by Amazon and Hachette - neither of which boasted of victory - Hachette will retain Agency pricing control yet conceded to certain unnamed Amazon demands that will incentivize lower pricing from Hachette.

It's not easy to pick winners and losers.  As with most wars, even winners can be losers.

Here's my attempt to examine the winners and losers of this episode, along with speculation on long term implications.

Hachette *mostly* won, but is now boxed into a position where faithful authors will expect higher net royalty rates for ebooks as well as other perceived reforms from publishers.  The Author's Guild has already hinted as much.  In a blog post this week commemorating the agreement, Authors Guild president Roxana Robinson took the opportunity to urge Hachette to raise ebook royalty rates for authors.

Amazon mostly lost, because it appears Agency wasn't dismantled or critically injured.  Amazon will likely seek revenge through other means (see below).

Agency mostly won. It dodged a bullet to the benefit of publishers and indie authors alike, and to the benefit of Amazon's retail competitors.

Amazon mostly lost on the PR front.  Amazon's heavy handed tactics confirmed the industry's worst fears about Amazon.  Word of Amazon's heavy-handedness leaked out into the mainstream media where it probably tarnished Amazon's otherwise pristine image in the minds of consumers who were paying attention.  Amazon dare not replay the same overt tactics again unless it wants to rip the scar off of the bloody putrid mess and invite people to connect dots back to the Amazon/Hachette dispute.

Amazon boxed in.  Just as Hachette is boxed in with expectations of payback from their defenders, so too is Amazon.  If Amazon puts the squeeze on indie authors and their 70% list, their supporters will cry foul ("Hey, I defended you like a loyal pit bull in your dispute with Hachette!")

Author affinity for publishers damaged.  Amazon partisans orchestrated a rage-fest against traditional publishers, further eroding the once divine reputation of traditional publishers. Amazon partisans used this dispute as an opportunity to paint all publishers with the broad brush that publishers don't care about authors, want to exploit authors, want to overcharge customers for ebooks to protect their print businesses, collude on pricing, and who knows what else, strangle puppy dogs?  All good conspiracies are grounded in a small amount of truth.  Yes, no doubt, publishers have much opportunity to bring reforms that benefit authors, though I thought the vitriol was excessive.  I also believe that indie authors are well-served by a thriving and profitable traditional publishing industry because it creates more publishing options for all authors.  When indies go too far to tear down publishing houses, they risk tearing down their own house as well.

Authors attacking authors.  Successful traditionally published authors who stood by publishers were attacked.  This, to me, was one of the most unfortunate outcomes.  When authors are attacking authors, you know the world has gone mad.  It was all the sadder that most of these attacks came from the indie author community.  Indies should be better than this.

Any perceived victory for publishers will likely prove Pyrrhic. The Hachette agreement, which was itself preceded by Simon & Schuster reaching new terms with Amazon, will likely be followed by other publishers striking similar deals now that the goal posts are planted in the ground.  To the extent Amazon feels it was forced to settle, this settlement will dredge up their bitter memories of the time publishers forced Amazon to move to Agency in 2010.  Amazon doesn't like it when others exert power over it.  Can you blame Amazon?  No one appreciates feeling powerless.  Amazon prefers its supplier frenemies divided, conquered and dependent. If it can't crush Agency, it will try to neuter the publishers who use it. It views publishers as fat middlemen to be disintermediated, their fat to be rendered away and conveyed to the bellies of customers. Although Amazon's ability to replay their heavy-handed Hachette playbook is limited, I expect they'll exact a different type of revenge in the form of discoverability and merchandising. Think of it as passive-aggressive. Amazon will redouble efforts to undermine the power of publishers by diverting more reader eyeballs to indie books in KDP Select and Kindle Unlimited, and to Amazon imprints that are exclusive to Amazon.  Amazon has every right to arrange their own shelves. Let's call it the cloak of invisibility that no author or publisher wants to wear.
Like with most battles, all combatants lost a little something in end.  Here's wishing the industry greater peace and prosperity in the future.