The COVID-19 pandemic will have far-reaching consequences for the business of publishing.
In this post, I’ll brush off my imaginary crystal ball – usually reserved for my annual end-of-year predictions – and speculate on the impact COVID-19 will have on the post-pandemic publishing prospects for indie authors in the months and years ahead.
As of this writing (June 17, 2020), the immediate health and economic devastation wrought by COVID-19 has been nothing short of cataclysmic.
As we'll learn, indie authors are well-positioned for the unfortunate circumstances we all face.
Let’s review where the globe is at now, and then I’ll jump into predictions and advice on how indie authors can overcome the challenges ahead.
According to data tracked by Johns Hopkins, 8.2 million confirmed cases of COVID-19 have been reported as of today. We’re approaching 500,000 global fatalities, though other reputable analysis – such as measures of average annual death rates in different countries – indicate the toll is likely much much higher than currently reported.
The US has led the way in total number of infections and deaths, followed by Brazil, Russia and the U.K. With most countries reopening for business, and mandatory lockdowns ending, infection rates are surging again in many areas. Globally, new infection case counts are rising, with Brazil, India, Mexico and several US states currently leading the way, and with the virus gaining new footholds in countries and rural communities that missed the early waves.
To prevent the spread of the virus, many countries instituted various forms of strict lockdowns. They issued stay-at-home orders to limit the movement of people, and temporarily shuttered or limited business operations. These lockdowns thrust most of the global economy into instant recession in March. There’s now growing concern for regional if not global depressions. Whereas recessions are typically characterized as short term economic slowdowns, depressions are marked by protracted economic downturns spanning three or more years, and characterized by high sustained unemployment and severe declines in GDP.
Not all countries will face the same economic dislocation. Much will be determined by the competency of a country’s government, and by the trust the people have in following their government’s recommendations. People who believe the advice of incompetent government officials or disbelieve the advice of competent officials will suffer the most. Not all governments are issuing wise advice to their citizens.
All countries are struggling to strike the appropriate balance between the health of their citizens and the health of their economies. The two are closely interrelated and interdependent.
Here in the US, the world’s largest English-language book market, the lack of a competent and coordinated nationwide response to COVID-19 shows in the numbers. Whereas many other countries have managed to crush their new infection rates dramatically, the US continues to flounder and suffer persistently high infection rates.
Given the global nature of the world economy, and the rapid cross-border human-to-human transmission enabled by air, train and automobile travel, a single hotspot in any country – no matter how remote – poses a threat to the entire global community days or weeks later.
In my 2020 publishing predictions post, I predicted a recession was increasingly likely for 2020 in light of an unprecedented continuous global economic expansion following the last global recession in 2008. As I mentioned in prior posts, recessions are beneficial to the long term health of an economy, much as a small forest fire helps clears away dead brush Yet I give myself no credit for predicting this recession. No one could have predicted the sudden and severe global recession we find ourselves in thanks to COVID-19, and no one with half a brain would ever suggest that COVID-19 is good for the long term health or economic vitality of the global economy. The hell wrought by COVID-19 is likely to leave a sting for years to come.
COVID-19 is a black swan event. Let’s hope we or future generations are better prepared the next time a global plague makes its entrance.
Economies of the largest English-Language Book Markets
An individual consumer’s economic realities impact how, where and on what they spend their money.
Let's look at unemployment levels in some of the largest English-language book markets, ranked roughly by the size of the market. Note that all of these numbers will be out of date within days of me publishing this post, but they serve as an approximate snapshot of where we stand today.
US - Unemployment in the US, the world’s largest single market for English-language indie authors, is approximately 13%. These levels have not been seen since the Great Depression in the 1920s.UK - Unemployment in the UK, the second largest market for indie authors, has increased dramatically since the pre-pandemic lows of 3.9%, though the true rate is somewhat obscured by a government-subsided furlough program (which I won’t claim to understand) scheduled to end in October.Canada - In Canada, unemployment is approximately 13% .Australia - In Australia, where the government handled COVID-19 more competently than most, unemployment is expected to reach 10% later this month.New Zealand - In New Zealand, where the government has been widely praised for their competent handling of the pandemic, the government expects unemployment to peak at just under 10%.
The Hit on Consumers
If a reader loses their job, they'll need to prioritize purchasing food and paying their rent or mortgage before they buy a book.
If your friend or neighbor loses their job and is struggling to pay their rent or mortgage, you too may wonder if it’s time to tighten your financial belt even if your job is secure. Frugality is contagious.
Books are purchased with disposable income. In economics, disposable income is your spendable money after you’ve paid necessary taxes. With high unemployment levels, and reduced employment for many of those who kept their jobs, and increased economic uncertainty, consumers don’t have as much disposable income to spend on discretionary purchases such as books.
In these first few months of the pandemic, many governments extended social safety nets. Here in the US, for example, our government did this with unemployment insurance (not enough to live on), relief checks (free money mailed to taxpayers), the Paycheck Protection Program (forgivable loans to small businesses that maintain employment) and other forms of entitlements to people and corporations. Other countries instituted various other programs. Some of these programs will be short-lived, which means once the money runs out, additional economic pain may ensue unless economies bounce back quickly.
New unemployment data released in the US on June 5 surprised many analysts when it showed a drop in unemployment thanks to partial reopenings. Is the worst behind us, or is this a dead cat bounce as the economy absorbs the initial government stimulus? It’s too early to tell.
Now that economies are reopening, it remains to be seen if consumers will show up as they did before. So much of the economy is dependent upon close, human-to-human interaction.
If economies don’t bounce back quickly, consumers will face additional economic hardships that will have ripple effects throughout the global economy. For example, if homeowners are unable to pay their monthly mortgages, they’ll default on their loans with all the ensuing unpleasant economic ripple effects to their local economy and global banking systems. Many small businesses that were forced to close will not reopen, and those that do reopen may fail to achieve sustainable business levels if customers are unable or unwilling to return in sufficient numbers. Restaurant operators, for example, which employ millions of lower-income workers, will find it difficult to stay in business here in the US if they’re required to limit the number of patrons they can serve at any one time. And what if patrons don't immediately return? The restaurant business – similar to the publishing business – was already notoriously difficult to run sustained profits in, and that was before the pandemic.
How Quickly will Things Recover?
Most people want to see things to return to “normal” as soon as possible.
It’s too early to tell if this will be merely a severe recession with a quick snap back to normalcy, or a prolonged recession or depression. Global stock markets, at for moment at least (this could all change tomorrow), are anticipating a quick recovery.
A full return to normal isn't possible until after there’s a safe and reliable vaccine, or an efficacious treatment for the disease that can lower the mortality rate to that of the common flu, or, improbably, if suddenly all consumers wake up tomorrow and decide they're rather go on living their normal lives than maintaining lockdowns.
Until such a vaccine or treatment is available, a significant percentage of the population will remain fearful of flying on airplanes, or congregating with fellow humans in shopping malls, retail stores, live events (writers conferences and book signings) and other places where a large numbers of people come in close contact with one another to share the same air.
Here in the US, our country faces other unique challenges, such as a well-entrenched “anti-vaxxer” movement of individuals across the political spectrum who refuse to accept vaccines for themselves and their families. According to a recent poll conducted by the Washington Post, nearly 30% of Americans say they will “probably not” or “definitely not” take a COVID-19 vaccine if it was made available to them for free. If these numbers hold true, it means COVID-19 will continue to spread on ripe hosts for many years to come.
There are over 100 vaccine candidates under development. Under the most optimistic scenario, limited quantities of vaccines might be available as early as late Fall 2020, or early 2021, though realistically it probably won’t be until later in 2021 that a safe and effective vaccine is globally available to all who want it.
So against the above backdrop, what impacts can indie authors expect in the months and years ahead?
On with the predictions...
Post-Pandemic Publishing Predictions for Indie Authors
Economies are unlikely to bounce back as quickly as hoped – Despite the large amount of fiscal stimulus pumped directly into consumer pocketbooks by government stimulus programs, the global economy is unlikely to return to a pre-pandemic normal until vaccines or effective treatments are widely available. And even once vaccines or treatments are available, it will take time to rebuild broken economies. State, local and federal governments will have borne enormous damage to their balance sheets thanks to the pandemic, which could mean lower expenditures or higher taxes down the road, both of which could hamper economic recoveries.
People will stay home more – COVID-19 has led many people to develop a general mistrust of fellow humans. We must trust that our fellow humans aren’t going to murder us if we step outside. Yet now that there’s this silent and deadly virus, and many of those infected might think the slight sniffle they’re battling is just allergies or the common cold (which never stopped them from going out in public before), or worse, they might be asymptomatic and not realize they’re infected and infectious, or even worse they might believe COVID-19 is a hoax perpetuated by Bill Gates or a tyrannical government (yes, here in the US, such conspiracy theories are quite common; they’ve become stranger than fiction). This means that every other human you walk near, converse with, or share air with is potentially carrying a deadly weapon that can kill you or your family. And if they’re not wearing a mask, you might feel even more ill at ease. In the absence of a vaccine, other people will seem scarier than usual, and this will have significant implications for how we live our lives, and how and where we choose to spend our time and money.
The US economy will likely have a longer, slower recovery than the rest of the world - The world’s largest market for English language books will probably fare worse than other economies. This means a slower recovery, and slower resumption to prior consumer spending levels. But a slow and painful recovery ahead in the US will actually be positive for indie ebook sales (read on for reasons why).
Consumers in hard-hit economies will change spending habits – Typically as a result of severe recessions, consumers are forced to change their spending habits. They become more frugal, tighten their financial belts regarding non-essential discretionary spending, and try to pay down debts while rebuilding their savings. In this environment, indie ebook purchases, ebook subscriptions and library check-outs will begin to look more appealing than print purchases because of the significant cost differential between affordable indie ebooks and higher-priced print books, and higher priced ebooks from traditional publishers. But the positive impact of frugality won't be felt by ebooks alone. Even print books will become more appealing to some consumers given the many hours of home-based entertainment they provide at great value.
More books will be written - With forced unemployment comes more time for authors to write books. There will also be more workers deciding to retire earlier than planned, which also leads to more time to write more books. This means the publishing market will see an uptick in self-published titles over the next couple years.
Physical books at bookstores will seem “scary” to touch – One of the joys of physical bookstore browsing is the ability to pick up any book, flip it to the back cover, or rifle through sample pages. Yet now in the age of COVID, physical objects touched by others are viewed as potentially dangerous. Bookstores will attempt to address this concern by asking customers to place touched books onto carts that are then quarantined before making their way back on the shelves, yet even this step won’t completely alleviate consumer fear. If a sick person sneezes in front of a shelf, dozens of books would be instantly contaminated. Or what if the virus-denying idiot before you was too lazy or feverish to remember to place the book they just touched onto the cart?
Print sales through physical stores will decline – Until there’s a vaccine or a treatment, many consumers will be reluctant to return to physical bookstores. This means more of these print sales will move online. But without the bookstore magic of serendipitous physical book discovery – a key joy in browsing a physical bookstore – I’d expect overall print sales to decline as well.
More print sales will go online, and the benefits will not be equally distributed - The move to online print sales will benefit traditionally published authors more than indie authors. Traditionally published authors typically have stronger brand awareness than indies, and since consumers aren't browsing at a bookstore more of their print purchases will be without having browsed the book in person. Also, indie print books are often more expensive than traditionally published print books, owing to the fact that traditional publishers are doing big print runs and most indies are doing print-on-demand which carries higher per-unit production costs.
The move to online print sales will benefit large retailers while harming smaller indie bookshops – Although some indie bookshops operate online stores, those stores are typically not the consumer’s first choice – Amazon is. Since most indie authors don’t benefit from physical bookstore distribution, the hit to bookshops will impact traditionally published authors more than indie authors.
Many indie bookshops will not reopen – It’ll be really tough for indie bookshops – already operating on razor-thin margins and struggling to survive – to continue to operate their businesses once economies reopen. For the reasons mentioned above, they’re unlikely to see business-sustaining traffic return until after a vaccine is widely available. This means many indie bookshops are likely to experience a year or more of below-average sales before things start returning to normal, and that’s assuming the world returns to the previous historically-low pre-pandemic unemployment rates. Just as with restaurants, it’ll be difficult for these stores to remain in business unless their local customers and communities truly rally to keep them afloat. Already, several bookstores across the US have launched GoFundMe campaigns to keep their stores in business. Not all of them will make it. If consumers truly cared about keeping their local bookstores in business, they wouldn’t be purchasing so many books from Amazon.
Overall ebook sales will increase – With millions of newly budget-conscious readers stuck at home either by choice or by government-mandated stay-at-home orders, or by the reality of unemployment, and with lingering reluctance to visit physical bookstores to touch books pawed by other customers, many readers will gravitate toward digital reading. We’ve already seen this play out at Smashwords over the last couple months of the pandemic. The pandemic has caused a surge in sales at the Smashwords Store and some of our retailers, but it remains to be seen how long the surge will last. As stay-at-home orders lift, and as people’s jobs come back and family finances are rebuilt, I’d expect sales levels to revert back to the prior trend, which was not terribly strong. Prior to the pandemic, most ebook retailers were experiencing their fifth or sixth year of weak or declining ebook sales levels (for reasons why, see my last two year’s of publishing prediction posts, each of which open with a “State of the Indie Nation” update where I examine sales trends). Although the initial ebook bump will dissipate, I do expect ebooks to be incrementally more appealing to consumers for the next several years than they would have been were it not for this horrible pandemic.
Ebook Subscription services will gain in popularity – Newly budget-conscious avid readers will gravitate more quickly now to subscription services such as Scribd and Amazon’s Kindle Unlimited. The impact on indie authors will be mixed. Whereas Scribd compensates authors based on their list price, thereby preserving value for the author and giving the author a measure of pricing control, Kindle Unlimited devalues books by paying a fraction of a penny per page read. Kobo is also jumping further into the subscription ebook fray with their Kobo Plus service, which, similar to Kindle Unlimited, will devalue books and ultimately lower author earnings (this is why Smashwords is not supplying Kobo’s Kobo Plus subscription service). So while authors can expect to see subscription earnings account for a greater proportion of their income, they can also expect to see their incomes drop on a relative basis as their single-copy sales take a hit (the obvious partial exception to this rule, as noted above, is Scribd).
Writers conferences move online in 2020 – For obvious reasons, most writers conferences for 2020 have been, or will be, cancelled, with some of them moving online. Here at Smashwords, we don’t plan to attend any conferences until a vaccine or treatment is widely available. It’s simply not safe to fly in airplanes or gather in congregate. Social distancing at writers conferences is impossible. I’m saddened by this because I do miss the face to face conversations with authors and fellow industry friends.
Indie Publishing Strategies for a Post-COVID world
Aside from the health and economic devastation of COVID-19, indie ebook authors will likely see increased readership and earnings for the next couple years, reversing a trend of the last few years where most indies experienced declining ebook sales.
Since most indies earn the bulk of their income from digital sales (ebook, audiobook) as opposed to print sales, the intermediate-term outlook is brighter for indies than it is for print-dependent authors.
The latent fear of social gatherings, and the likely multi-year economic recession, will make ebooks and audiobooks appear incrementally more desirable than print books compared to attitudes just a few months ago.
Yet it remains to be seen how long the COVID bump will last. There are other larger, more entrenched macro trends that paint a challenging picture for all authors, and I’ve addressed these issues in great detail in my end-of-year prediction posts (Here are links to the last three years: 2020, 2019, 2018), chief among them the glut of high-quality, low-cost-ebooks that never go out of print; strong devaluation pressures coming from Amazon and its Kindle Unlimited subscription service; and the knee-capping of the major Amazon ebook retailing competitors - Apple, Barnes & Noble and Kobo - due to Amazon’s success of denying these retailers critical inventory of millions of indie books that have been locked up in KDP Select exclusivity since the launch of the service in late 2011.
When the pandemic ends and economies recover, I’d expect the environment for ebook sales to revert back to their pre-pandemic normal, barring any governmental interventions here in the US or in Europe seeking to reign in Amazon’s anti-competitive behavior. Such potential intervention has been simmering on backburners for a few years now. On June 11, the New York Times reported that the European Union is preparing an anti-trust case against Amazon, alleging that Amazon gives its own products preferential treatment in their store.
Certainly, if the EU were to take action that caused Amazon to cease KDP Select exclusivity, it would dramatically boost the prospects of all indie authors as well as Amazon’s bookselling competitors, and we’d likely see a long term indie author earnings boom as Amazon’s competitors could finally compete more effectively on a level playing field. I’m not holding my breath. As the New York Time’s article points out, the EU’s actions to date have been largely slaps on the wrists and therefore ineffectual at curbing the bad habits of monopolistic megaplatforms.
Indie Author Action Plan
The road forward remains the same as it has always been. Focus on building a long term career. Focus on essential evergreen best practices, and steer clear of ephemeral flash-in-the-pan tricks and “systems” that make promises that can’t be kept. This means:
1. Commit to digital - If your entire book list isn't yet on ebooks, do that now. A global ebook distributor such as Smashwords can help make your books more accessible and more available to a global audience of millions of readers. With ebooks, indie authors have significant advantages over print authors, and thanks to COVID-19, those advantages just became greater.
2. Distribution - Maintain diversified distribution so your next meal isn’t dependent on the algorithmic whims of a single retailer.3. Marketing Platform - Build a marketing platform you control, which means migrating your readership to your private author newsletter so that your relationship with YOUR readers is not mediated by third party retailers and social media platforms whose business objectives are rarely aligned with your own (Smashwords Presales can help you build your mailing list!).4. Craft - Focus more on the craft of great writing rather than the business of publishing. Far too many authors spend more waking hours trying to learn how to game retailer algorithms and ad platforms rather than honing their craft to write better books. If your book takes readers to unimaginable heights of ecstatic joy, your book will sell on the wings of reader word-of-mouth, algorithms be damned.5. Advertising - Advertise with caution. Recognize that paying retailers for advertising – especially when tacitly required by a certain retailer to maintain normal visibility – is a tax on your income. Think of it as a backhanded way for them to pay lower royalties. It can also cause you to trample on your fellow indies, as I wrote for Publishers Weekly in my article titled, Avoiding Platform Theft.6. Author-friendly retailers - Direct your readers to author-friendly retailers. If a retailer is going out its way to erect tolls, taxes and restrictions that limit your ability to market your book on a level playing field, or that continually institute new policies and programs that serve the purpose of lowering your effective royalty rate, they’re not an author-friendly retailer. An author-friendly retailer pays 70% list (60% after your distributor takes a commission) gives indie authors the freedom to set their own prices, publish independently, and distribute where they want.7. Financial management - Here in the US, we have a saying called "pinch your pennies." It means, "be frugal." As an indie author, you're running a publishing business. While you can't control your sales or the timing of an economic recovery, you can control your publishing expenses. Given the economic uncertainty, it's more important than ever that you be frugal with your publishing expenses. Now is not the time to invest large sums of money in speculative marketing campaigns. And as I caution in the Smart Author Podcast, never finance your publishing with debt, and never invest money in publishing that otherwise needs to go to putting food on the table or paying rent. Do as much as you can on your own, barter for services where possible, and don't invest money you don't have.
Be safe everyone!
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