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.
Health Impacts
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.
Economic Impacts
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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10 comments:
Mark,
How about some type of Year-in-Review type post aimed at authors of erotica? It doesn't have to be in as much detail as your typical review but to give us a milepost to help determine how we are doing. It would be helpful to know things like volume, genre, and type of stories that sell.
Your take on this is thought-provoking and helpful. I am an indie writer/publisher and I have my books on ebook and pod with Amazon. I appreciated your balanced perspective about Covid and the ripples we may see depending on how things play out. I also agree that in countries where we don't trust our leaders, there is increased fallout. I'm saddened for indie bookstores. I feel grateful that there is a path of "what to do to weather this storm." You didn't just leave us high and dry. You made clear cut suggestions. This was so thoughtful, thorough and pragmatic. My favorite quote was this: 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. ... Hallelujah to that!
@Larry, thanks for that suggestion. Will definitely consider that down the line, maybe along the lines of a mini-Smashwords Survey. As luck would have it, just last week we aggregated a fresh batch of data to analyze from the last 12 months. I was mainly looking at preorder data, which might be the subject of one of my next posts. FWIW, preorder usage among erotica authors has always been really low, and also the least effective so I'll probably touch on that in the preorder report.
@Patty, thanks for the feedback, and thanks for stopping by!
Isn't it a little early to talk about post-pandemic publishing? We are, according to Dr. Fauci, still in the first wave of COVID-19. As states reopen, new cases of the virus are spiking but it's occurring during the first wave because we are still in it. Even those who've had COVID-19 and who have been in ICUs and on ventilators are experiencing issues anywhere from necrosis of the lungs to psychiatric problems. A vaccine probably won't be available until 2022. Who can predict what will happen in two years? Certainly not me and maybe not even you. I respect you, Mark. You are highly intelligent and astute and I say this because I've sat on a panel with you at the San Francisco Writers Conference. But let's get past the first wave and the second wave before we fool ourselves into dreaming about a post-pandemic era.
Thanks, Mark. As a UK author, I have need of sane and balanced reviews of what's going on.
And while I appreciate Frances's situation, it's never too early to think about 'what next' if your craft/business depends on planning. It's what helps get us thorough to the other side. We're in a global market, and some parts of the world have handled the pandemic much better than others. Some are only just starting, but those are mostly those where indie-author sales are not an issue. Like grieving, people will be at different emotional and mental stages, which may not be aligned to their governments' mental states.
Thanks, Mark, for using your invisible crystal ball to glimpse at possible futures. Some of your other predictions have come true in the past. One thing we can all agree on is the planet will never go back to the way it was and that includes the world of publishing. Thank God, for eBooks to help us learn and/or to escape into a fantasy world. Keep on writing…
Excellent analysis, not only about independent publishing, but about other major pandemic issues. Clear, well-written... Thanks!
Great post, as usual. :) ... I would add that even though, overall, readers have less disposable income, they're spending money on ebooks, specifically, because of the pandemic. If we, as authors, can get our books to those readers, there's an opportunity to build an entirely new readership, because as others have stated, this virus isn't going anywhere soon ... and latest research is starting to reveal all sorts of nasty aspects to it that we've yet to experience on a large scale, yet. :(
Hi @Francis! Now's the perfect time for indies to take stock of their publishing strategy, and to make preparations in anticipation of how this pandemic will alter the course of publishing. With the first few months behind us, we've already got strong indications of short and medium-term impacts and trends. With the framework I presented, indies can now reassess their individual publishing strategy based on what they write. And this reassessment will be informed by their own assumptions about vaccine availability; the timing of returning to normalcy; how they think the pandemic might unfold from here; economic prospects and likely consumer behaviors in different markets; and much more. Thanks for stopping by!
@Jemima, Pamela, Unknown, and widdershins - thanks for your comments. Widdershins, interesting point about the opportunity to build new readership. Yes, I imagine that's quite likely at some level. It's likely that there will be some readers who will make the transition to ebooks for the first time, and as such, they're likely to discover a new world of great authors they never would have otherwise been exposed to. I think about the impact that 50 Shades had on the romance market. 50 Shades introduced millions of new readers to the joys of romance (erotic, BDSM and even contemporary), and helped contribute to a multi-year boom in romance sales as readers moved on to discover other books by other authors in the category. Maybe ebooks in general will see some incremental boost for this reason, in addition to the other positive drivers I noted.
That's absolutely fascinating and very insightful, Mark. I'm in NZ (yes, the well-managed and very blessed!), where I first saw you making your predictions for ebook readership about a decade ago. You were spot on then, and I fully expect you're spot on now.
Interesting about subscription services. For those of us with big backlists etc, would Smashwords consider a subscription service on its own platform?
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