Thursday, December 31, 2020

2021 Publishing Predictions – Pandemic Reshapes Publishing, Accelerates Consolidation

Welcome to my annual publishing predictions post, where I recap the state of the indie nation and share publishing predictions for the year ahead.

Also check out my annual Smashwords Year in Review and Preview of 2021.

The purpose of these predictions is to focus our attention on the future.

Some of my predictions will inspire you, and others might surprise or anger you.  That’s the point.  By imagining potential futures, you can work to shape the future you desire.

Although it’s easy for an individual author to feel powerless against the broader forces of this industry, the opposite is true.  Authors hold great power.  The collective actions of authors determine the direction of this industry and the exciting opportunities you’ll find within it. 

Your future success can be distilled down to four high level factors:  

  1. The foundations you laid for yourself in the past (skills, training, experience, past actions).  
  2. The actions you take today.  
  3. The future actions taken by others in the publishing industry.  
  4. Black Swan events that come out of nowhere to cause abrupt and massive shifts in direction.
My friend Jennifer Leggio sports prophetic dumpster fire halloween costume in 2019
My friend Jennifer Leggio sports a
prophetic dumpster fire costume in 2019.

You control the first two factors.  For the third factor, through your mentorship and conversations with fellow authors, publishers, retailers and service providers, you influence the direction of the industry.  You have minimal influence over the fourth category of Black Swan events, though with proper planning and diversification you can make your publishing business more resilient to unexpected shocks.

When I look back at the raging dumpster fire that was 2020, I find it impossible to separate a discussion of publishing futures from a discussion of the unfolding Black Swan event that is COVID-19. 

If COVID-19 teaches us anything, it’s that our fates are intertwined.  Whether we’re talking viruses or indie authorship, we are all neighbors.  We share the same air.  Take care of your indie author neighbors and all who support them. 

The State of the Indie Nation

COVID-19 was a Black Swan event that continues to have enormous impact on authors, readers and retailers.  It created new winners and losers, and it accelerated the progression of several entrenched trends in publishing, while pausing or redirecting other trends. 

For most indie authors, 2020 was an up year for ebook sales after several years of decline.  I find it difficult to celebrate this achievement when we consider the cost.

2020 started weak for indie authors, with most ebook retailers experiencing year over year sales declines for the first two months of the year.  This marked a continuation of a multi-year trend of lackluster ebook sales exacerbated by rampant devaluation pressures in a slow-growth industry.  I'll explore some of these pressures later in the post.

COVID-19 reversed that lackluster sales trend in March. 

As I discussed back in June for my special edition mid-year predictions post, Post-pandemic publishing for indie authors, indie ebook authors found themselves well-positioned to meet surging ebook demand from readers who were home-bound by choice, unemployment or government mandate.  Sales moderated somewhat as the year progressed and people returned to work. 

Democratization vs. Authoritarianism

In a democracy, power lies with the people.  With authoritarianism, power is consolidated under the control of a single supreme leader.  Authoritarians come to power when the people surrender their power.

I founded Smashwords 13 years ago to enable freedom of expression and author self-determination.  I wanted to democratize publishing by breaking down the barriers to publication and retail distribution.  I wanted to empower any writer anywhere to self-publish at no cost and control their own rights, production, pricing and promotion.  And I wanted to give the readers – not gatekeeping publishers – the freedom to choose what was worth reading. 

The old world of publishing was somewhat authoritarian by nature.  A small group of powerful publishers dictated which writers would become published authors, which books were distributed to retailers, and how much authors would earn for their labor.

Authoritarianism is the opposite of democratization.  

In recent years, we’ve witnessed a troubling rise in authoritarian tendencies here in the US.  The US isn’t the only country facing this challenge.

When people are hurting and losing hope, they become susceptible to nihilistic thinking.  This makes people ripe for exploitation by the siren call of authoritarian leaders. Authoritarians promise overly simplistic solutions to complex problems.  Never mind that more often than not, their tainted remedies exacerbate the very reality their supporters seek to escape. 

There’s always been a dramatic income inequality gap in publishing, even though few think of it in these explicit terms.  It’s time we acknowledge this as an industry.  A few authors do really well, and the vast majority live hand to mouth as they struggle to find their next reader. 

No, I’m not advocating socialism for my fellow Americans haunted by the ghosts of Fidel Castro or Hugo Chavez.  There’s nothing wrong with some books selling better than others.  Excellence should be rewarded. 

As I share in this post and many that preceded it, I’m concerned about greater forces at play working to steal power from indie authors.  These forces have been persistent, increasing, and well-documented for many years.

As I discussed in my podcast episode, The Indie Author Manifesto, ever since Gutenberg’s invention of the printing press, there have been forces that seek to control the power of the printed word. 

Although indie authors benefited this year from COVID-19 in the form of stronger ebook sales, the pandemic also altered the power structure of the publishing industry in ways that will amplify future inequalities and jeopardize author independence. 

Physical bookstores were big losers in the pandemic, while enormous power consolidated around a small number of major online platforms such as Facebook, Amazon and Google.  These dominant platforms wield their supreme power to stand between you and your audience. 

We've traded one group of authoritarian overlords for another.  These platforms are the new gatekeepers for indie authors.  

But rather than gatekeeping an author’s books based on editorial quality, author reputation, sales potential, or relevance to the reader, they gatekeep based on the author’s willingness and ability to pay for access to those readers.  The payment comes in the form of paid advertising, and in the particular case of Amazon, pressure to accept additional concessions such as reduced royalties, control, and distribution.

I’m concerned that far too many authors have been hurting for far too long, and this hurt is forcing short term thinking that undermines the long term opportunity for all authors.  

Here in the US, it’s becoming all too common to turn on the television and witness the modern day equivalent of Depression-era bread lines, with thousands of people lined up in their cars, waiting for food assistance.  My mom, who volunteers at a homeless shelter to distribute food here in the San Francisco Bay Area, tells me donations are way down while the need for assistance has skyrocketed.

Although COVID-19 is the immediate trigger for the sudden unemployment and destitution of millions of families, income inequality is more to blame.  Too many people here are living too close to the financial edge.  This holds true for authors as well.

When someone’s living hand to mouth, uncertain if they'll make their next meal or mortgage payment, they don’t have the luxury to think long term.  This further perpetuates the cycle of short term decision-making which leads to greater exploitation and lost independence.  Your decisions are your votes for the future.

So ask yourself:  Are you okay that a multi-billion dollar publishing industry continues to profit on the backs of starving artists?  

Are you okay that Jeff Bezos, the head of Amazon – the company whose business model is predicated upon nickel and diming its suppliers, devaluing your books and forcing you to trample your fellow authors when you advertise – saw his net worth rise by nearly $100 billion during the pandemic?

If you’re okay with that, carry on with business as usual.  If not okay, act accordingly if you are able.

Now on with the predictions.

Mark Coker’s Publishing Predictions for 2021

  1. Nesting will favor digital reading - With eight billion people around the world in need of COVID-19 vaccinations and not enough vaccine supply to go around, many consumers of books will spend more time at home than they did pre-pandemic.  The indie author community, which earns the bulk of its income via ebooks, will be a beneficiary. 
  2. Trump effect will lead to more book reading - Regardless of how you feel about Donald Trump, most people would agree that he held a sizable portion of our daily media consumption attention.  With each day, his presidency served a tantalizing new episode of must-see reality TV. The episodes got more and more riveting as he broke every imaginable norm and then some.  Last month voters cancelled his show due to poor ratings and replaced it with what promises to be a less dramatic presidential show.  This means we can now spend less time shouting into our echo chambers on social media about why he’s the worst or greatest president of all time.  What are we going to do with our extra hours of free time each week?  A portion of that time will shift to reading.  Yay for books!
  3. Consolidation in traditional publishing drives more authors to self-publishing AND vanity presses - The big four publishers are about to become the big three with Penguin Random House’s pending acquisition of Simon & Schuster.  In slow growth or overcrowded markets, consolidation yields greater efficiencies, profits and competitive advantages for the surviving entities.  The combination will give Penguin Random House about 30% of the US book market.  With fewer publishers bidding for the best books, it means fewer opportunities and lower advances for authors interested in a traditional publishing deal.  This will drive more authors to self-publishing.  For authors that don’t have the desire or the ability to put in the hard work to become a professional self-publisher, many will turn to vanity presses and subsidized presses.  These companies earn their income not by selling books to customers, but by selling services to authors.
  4. Consolidation coming to indie publishing as well - The self-publishing market is overcrowded with too many companies fighting for too few dollars.  You want to get your book to Apple Books?  Apple lists Smashwords and 20 approved aggregators and conversion houses to help you, or you can upload direct. And there are thousands of other service providers who can help you do the same.  This is unsustainable.  For the same reasons the big New York publishers are consolidating, consolidation is inevitable for self-publishing as well.  Does the world really need hundreds of ebook distributors?  The answer is no.  In fact, the plethora of all of these companies doing the same thing is confusing and counterproductive for most authors.
  5. Book discovery continues to shift from organic to inorganic - There was a time when most online book discovery was organic.  If a quality read attracted enough readers, their purchases and reviews would cause the online store’s algorithms to elevate the book’s visibility to other readers.  Today the ebook market is dominated by a single toll-taking retailer that grants preferential discoverability to authors and publishers that pay tributes in the form of paid advertising and exclusivity.  Other retailers will face pressure to do the same.  I’ve lost track of the number of times authors have asked Smashwords to create a paid advertising “opportunity” in the Smashwords Store.  Sure, we could make a lot of money doing that, but I’d have difficulty sleeping at night.  Nor would I want to disadvantage our authors who can't afford to advertise. I’d be the guy to say, “Oh, your ad spend didn’t earn back?  Here’s a refund.”
  6. Subscription consumption grows, single copy sales fall - The two dominant ebook consumption models are single-copy sales and subscription.  The three major ebook subscription services for indie authors are Kindle Unlimited, our partner Scribd, and the newer entry, Kobo Plus.  Apple doesn’t have such an offering yet, nor do I know if they plan for one, though I expect they’ll feel pressure to introduce a similar service one of these years.  Apple has a lot of experience in subscription businesses.  Over the long term, subscription will probably win, driven by the extreme value to consumers, the greater profitability to the retailer, and the proven willingness of many indie authors to accept ever-lower royalties in exchange for greater book visibility.
  7. Subscription services to drive devaluation - For indie authors, two of the three major subscription services (KU, KP) pay via a pool model in which the provider pays less than a 70% royalty from the pool to authors and publishers.  This means devaluation – readers can enjoy your book risk-free for less cost than a single copy purchase, and you earn a lower effective royalty rate for the read.  This contributes to a double devaluation of your books.  Readers become accustomed to consuming books for what feels like free, and the author is paid less per read.  Not all authors can make up the difference with higher unit consumption because there are only so many readers to go around.  And since when is a $4.99 ebook from a professional indie author too expensive?
  8. Royalty compression accelerates - Say goodbye to 70% ebook royalties.  Yes, every major retailer will continue to offer 70% list (60-80% if you work through Smashwords), yet effective royalty rates will drop.  The drop will come in the form of hidden tolls, taxes and so-called “opportunities,” such as the opportunity to raise the visibility of your book by paying the retailer for visibility; or by discounting the book to appear in a feature or special catalog; or discounting the book so that it can appear in a subscription service that can only list lower priced books that don’t break their business model.  The net effect on your income is that you’ll be paid less for each sale.  Many forms of royalty compression have existed since the start of the indie ebook revolution in the form of delivery fees, generous no-questions-asked product returns on the backs of authors (#Audiblegate anyone?), or royalty rules that drop royalties in half if you price under $2.99 or over $9.99.  Every major retailer will face pressure by their customers to enact more royalty compression so customers can read more books for fewer dollars.  If stores resist this move, they’ll lose more customers to Amazon.  Of course, if authors refused to sell their books anywhere their effective royalty rate dropped below the highest single copy rate of 60-80%, then retailers would be forced to maintain the high royalties.  But the cat is already out of the bag.  Too many indie authors followed the siren call of KDP-Select, and too many authors have shown themselves too willing to accept more compression if it helps them skip to the front of the line in the short term.  Once you surrender your power, it’s difficult to take it back.
  9. Advertising ROI drops further - Advertising is already ineffective for many authors, yet authors still throw good money after bad hoping to be among the lucky few who can crack the formula.  Because ads on Facebook, Amazon and Google utilize an auction model where the highest paid spot earns the best visibility, economic theory would dictate that authors will continue to bid on such ads until the effective ROI of the ad reaches zero, the point at which book sales can’t cover the ad expense.  But economic theory doesn’t know indie authors.  This mad scramble to the bottom of ad ROI is exacerbated by authors’ willingness to over-invest on loss leaders (such as series starters or a debut book) in the hope that they can make up the difference later with follow-on sales. 
  10. The mad dash to the bottom of advertising ROI undermines non-advertisers - Not all indie authors spend money on advertising, yet those who don’t advertise will continue to see their visibility marginalized by those willing to pay for visibility.   As I discussed last year, at Amazon their ad program is constructed to help advertisers leech off the brands of other authors.  You can test this for yourself.  Type your pen name into the search bar at Amazon and marvel at all the paid ad spots for other authors that appear at the top of your search results and mixed within.
  11. Self-publishing to receive increased scrutiny - As society comes to grips with the collision between free speech and its ugly cousins misinformation, disinformation and fake news (I’m talking truly fake, not quality journalism erroneously labeled as fake), public pressure will build to demand more curation and accountability for the platforms that enable its publication.  Facebook and YouTube, which are two of the largest self-publishing platforms are facing such scrutiny (when you post a video to YouTube or comment on Facebook, you’re self-publishing!).   If a self-publishing platform like Smashwords – or a retailer like Amazon – allows the publication and distribution of a harmful conspiracy theory or bad medical advice, should the platform or retailer be held liable when a reader believes it as true and drinks the proverbial bleach?  It’s a challenging question we’ve had to grapple with.  Our ethos at Smashwords is free expression, but per policy we will ban authors for publishing information we deem harmful to the public.  But who are we to decide, and where should the lines be drawn?  We don’t employ medical doctors or trained epidemiologists.  I didn’t start this business to squelch voices, but I didn’t start it to help authors publish bomb-making manuals either (which we’ve never allowed).  If you want to place a long shot bet on the next Black Swan event affecting indie authors, it could very well be that a retailer is found financially liable for what it allowed in its store from a self-published author, and as a result of the costly ordeal, decides it’s not worth the risk to allow such unfettered, freewheeling access to their sales platform.
  12. Mailing list development again a top priority for indies - The most important platform-building tool is your private author newsletter.  When readers subscribe to your newsletter, you own that relationship.  You can contact the reader directly on your terms without having to rely on a toll-taking intermediary that may inhibit or even prevent your ability to notify your current and prospective fans about your new release. When we surveyed authors this year who took advantage of our new patent-pending Smashwords Presales feature, one of the top reasons cited for using the feature was mail list development (the most common reason cited was sales channel diversification).  Many of these authors are offering their subscribers the opportunity to purchase their new upcoming releases early, before the general public.  It gives your most loyal readers a strong incentive to sign up and stay subscribed.
  13. Books become more important in 2021 - In 2020, millions of readers rediscovered the joys of reading.  This trend will continue through 2021 and beyond.  The pandemic is not over.  It's difficult to emotionally process trauma when we're living it.  Even after every last soul is vaccinated and this plague is eradicated from the earth, it will take years to heal from this collective trauma.  Books have always provided readers great comfort, pleasure, escapism and understanding.  I can't think of any time in the 55 years of my lifetime when books have been more essential to the healing, recovery and progress of humanity.  As an indie author, you are the creator of this magic we call books.  Your work is important now, and will become more important in the years ahead.  It doesn't matter if you write fiction or non-fiction, romance or self-help, you will help heal the world.

That’s it for my 2021 predictions.  Feel free to contribute your own predictions in the comments below. 

I wish you, your family and our indie community the best of health, happiness and prosperity in the year ahead.  

Here are links to my prediction from prior years:

Summary of Prior Publishing Prediction Posts by Mark Coker

2020 Publishing Predictions (Published December 31, 2019)
2019 Publishing Predictions
(Published December 31, 2018)
2018 Publishing Predictions (Published December 31, 2017)
2017 Publishing Predictions (Published December 31, 2016)
2016 Publishing Predictions (Published December 31, 2015)
2015 Publishing Predictions (Published December 31, 2014)
2014 Publishing Predictions (Published December 30, 2013)
and Huffington Post (Published January 7, 2014)
2013 Publishing Predictions (Published Dec 21, 2012)
2011 Predictions at GalleyCat (Published Dec 28, 2010)
10-Year Predictions at GalleyCat (Published Jan 4, 2010)

Smashwords 2020 Year in Review and 2021 Preview

Welcome to my 2020 Smashwords year in review and 2021 preview.  Can you believe we’ve been in business for 13 years?  We couldn’t have done this without your partnership and support.  Thank you!

Don't miss my annual companion post, 2021 Publishing Predictions – Pandemic Reshapes Publishing, Accelerates Consolidation

I feel a little uncomfortable talking about our accomplishments at a time when a pandemic is raging and so many are hurting.  So, I’ll keep things briefer than normal.

As I mentioned in my predictions post today, 2020 was a good year to be an indie ebook author.  Most Smashwords authors experienced a strong uptick in sales starting in March of 2020 due to millions of people spending more time at home because of government-mandated lockdowns, unemployment and personal choice.  

The growth moderated somewhat as people returned to work, but for most authors it will still be an up year despite a weak start in January and February.

What have we been up to at Smashwords in 2020?  Here are some highlights, as well as some broad stroke hints of where we’re focused for 2021.

Smashwords 2020 Milestones:

Books published – We now publish 556,800 books; up 5.7% from 526,800 books at the end of last year.

Words published – We now publish 19.7 billion words; up exactly one billion words, or 5.3% from 18.7 billion a year ago.

Authors served – We’re now serving 154,100 authors and publishers; up 5.3% from 146,400 a year ago.

Smashwords Highlights for 2020

Smashwords Presales - Our patent-pending Smashwords Presales feature, which we launched in December 2019, is getting good traction from early adopters.  I’m pleased by how sales are trending and I’m looking forward to introducing more authors and publishers to this exciting tool in 2021.

A key motivation behind Smashwords Presales is to help indie authors gain greater control over their publishing future.  Early adopters are discovering the power of ebook presales to thrill their readers, diversify their sales channels, build greater reader loyalty, and grow their private mailing lists.  Unlike preorders, which require readers to wait until a book’s public release date before they can enjoy the book, presales give your most loyal readers exclusive early access to your new releases in the form of public and private presales.  Readers love early access!  

As I discussed last year, Smashwords filed a patent with the US Patent & Trademark Office in 2019 describing our presales invention. The full scope of the invention is yet to be revealed in the current iteration of our Smashwords Presales offering.  We continue to work through the approval process with our patent examiner.  It’s been a fun and exciting process, though it’s too soon to know if the patent will be granted.  Patent or not, we’ll continue to build out this innovative technology for the benefit of indie authors.  In 2020 we also filed what’s known as a PCT, the first step in securing international protection for the invention.

Smashwords Store achieves fourth consecutive year of sales growth - Although our primary business is ebook distribution to major retailers and library platforms, we also operate our own ebook store.  Our store pays up to 80% list on ebooks, among the highest of any retailer.  With the exception of this pandemic year, most major ebook retailers have seen flat to declining ebook sales the last few years, but our little store has managed to buck the trend, turning in its fourth consecutive year of sales growth.  Some of our authors now sell more in the Smashwords Store than they sell at Barnes & Noble or Kobo.  Your mileage may vary month to month, but a key factor in your performance is to make sure your readers know that your book is available at Smashwords in addition to our other great retail partners.  Many Smashwords authors utilize our store as their personal sales platform.  They leverage our exclusive sales, marketing, and platform-building tools such as Smashwords Coupons, the new Smashwords Presales feature, Smashwords Interviews, and our popular Smashwords Alerts feature that notifies fans of new releases.  Thank you Smashwords authors and customers!

New curated merchandising at Smashwords Store - Everyone’s familiar with our annual sales such as Read an Ebook Week, the Smashwords Summer/Winter Sale and the Smashwords End of Year Sale (now running until January 1st).  These promotions are open to all Smashwords authors and publishers.  For a long time, we’ve wanted to add additional themed merchandising features to showcase and promote a broader diversity of authors, book categories and themes at the top of our store.  We have an ambitious promotions calendar planned for 2021.  Almost every week in 2021 you’ll see new curated features.  There’s a good chance we’ll publish an editorial calendar down the line so that authors can nominate books for consideration.  We’ll also look to showcase highly anticipated exclusive presale releases.  Our selection criteria focuses on an author’s track record of pleasing readers, as measured by their sales and downloads across the Smashwords distribution network.  By showcasing more categories and themes, we’ll create new opportunities for more authors and a lot of excitement for readers.

Smashwords introduces two factor authentication - To help authors and publishers protect access to their Smashwords accounts and payment settings, Smashwords introduced a two factor authentication (aka 2FA) solution.  2FA increases the security of your Smashwords account by preventing other persons from accessing your account, even if they've stolen your password.  You'll find the feature under the new "Account Security" section on your Account page.  Here's a direct link you can use to activate 2FA in your account - 2FA setup for Smashwords authors.

Author Education Day - With writers conferences cancelled around the globe, Smashwords produced our first ever online education conference called Smashwords Author Day.  Hundreds of authors attended, the feedback was excellent, and we’re encouraged to do another one in 2021.  Click here to view the full recorded sessions presented by Smashwords Marketing Director, Jim Azevedo.

Smashwords launches special Authors Give Back sale - For the period of March 20th through May 31st, we launched the one-time Authors Give Back sale, designed to help readers affected by pandemic lockdowns and subsequent job losses to access discounted ebooks.  The sale was well-received by customers and authors alike.

Smashwords goes virtual - For the first 12 years of our business, Smashwords maintained a physical office in Los Gatos, California.  Over the years most of our employees, including yours truly, transitioned to working from home offices.  When we decided to eliminate our underutilized office in February, we had no idea how propitious our timing would be.  The physical lockdowns that were disruptive to other office-bound businesses didn’t affect our operations.  It’s encouraging to see many large corporations, initially forced to allow employees to work from home during the pandemic, now plan to make greater use of teleworking in the future.  It offers team members more hours in the day for work-life balance.

Plans for 2021

One of the worst planning investments anyone could have made in 2020 was the purchase of a 2020 day planner or calendar.  COVID-19 and its spawn will continue to disrupt the global order in 2021, but we’re prepared to carry on with the business of helping authors publish, distribute and market ebooks.

Among new features, keep an eye out for a new book uploading experience in 2021.  We had hoped to complete this project in 2020 but alas did not.

We’ll continue to evolve our tools, processes and technology to make your publishing and distribution faster, easier and more rewarding. 

Thank you, Smashwords authors, publishers, customers, retailers, and libraries for your continued trust, support and partnership.  It’s our sincere honor to work with you.

We hope you and your family enjoy a safe and prosperous New Year!

Thursday, July 23, 2020

Smashwords Author Day, Spring 2020 Now Online

The pandemic may have shuttered in-person writers conferences in 2020, but it didn't negate the need for ongoing author education.

Back in April, Smashwords marketing director Jim Azevedo presented a live, power-packed webinar featuring four workshop presentations covering the most important indie publishing topics for indie ebook publishing. 

Jim shared actionable advice on how authors can make their books more visible, desirable and enjoyable readers.  Learn state-of-the-art strategies for building a marketing platform you control.

These presentations are now available for viewing at the Author Day event page and on the Smashwords YouTube channel.

Or, watch any of the individual segments below:

0.  Introduction and start

Watch the full 5+ hours here:

1.  Ten Trends Driving the Future of Publishing (beginner to expert)


2.  Introduction to eBook Publishing (beginner to intermediate)


3.  The Sixteen Secrets of Ebook Publishing Success (beginner to expert)


4.  Book Launch Strategy:  Preorders and Presales (beginner to expert)


Please share with a friend!

We're considering doing another live Author Day in the September-October timeframe, so stay tuned for that.

Wednesday, June 17, 2020

Post-Pandemic Publishing for Indie Authors

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!


Considering publishing with Smashwords?  Learn about our free and amazing services here.

Friday, March 20, 2020

Smashwords Launches Initiatives to Help Readers and Authors Cope with Covid-19 Pandemic

Books matter now more than ever.

The world has been thrust into a state of crisis not seen since World War II.

Humanity will overcome this challenge, led by the imagination, innovation, creativity and intellect of thinking people.  These are the same thinking people who turn to fiction and non-fiction for entertainment and inspiration.

Books will help humanity navigate this crisis and emerge stronger than ever.

For the concerned parent who must hold it together for their children in the face of news that gets darker by the day, a book offers a welcome respite, a magical elixir delivering happiness, safe harbor and emotional recharge on demand.  For their children, books offer healthy distraction and diversion at a time when social distancing is necessary to save lives.

Insert your situation, or the situation of your friends, family and community, and you begin to realize how books have an important role to play in helping people cope with this global calamity that is Covid-19.

Authors are the magicians who create books, and it just so happens that Smashwords is honored to work with over 140,000 authors spread across the globe. It shouldn't come as a surprise that many authors are now asking how they can use their books to help others.

Authors Helping Readers

Several of our authors contacted me in recent days, asking if I'd consider running a special sale where they could make their books more accessible and affordable to readers suffering in self-imposed or government-mandated isolation.  These authors wanted to help fellow readers gain strength, comfort or entertainment from the power of their books.

In this context, any book that brings the reader precious moments of joy - whether a romance, a thriller or a non-fiction treatise about boosting your immune system - is critically important to the global recovery effort.

With this heartfelt intention in mind, today we launched our Authors Give Back sale, running now through April 20.  For the next 30 days, thousands of Smashwords authors are going the extra mile to share their books with the readers who need them.

If you're an author or publisher, you can enroll your books now at this enrollment link which you'll also find on the Smashwords home page and in your Dashboard. 

If you're a reader, you can access 30,000 deep-discounted books and over 80,000 free books  with the compliments of indie authors and publishers around the globe.  These authors are your friends and neighbors.

You'll find the sale at the top of the Smashwords home pageHere's a direct link that will take you into the sale catalog.

Please tell a friend!

Smashwords Helping Authors

The desire of our authors to support readers got me thinking about how Smashwords can support our authors during this crisis.

Writers conferences, like most large public gatherings, are getting cancelled left and right.  These conferences provide important educational venues for writers to gain the knowledge and connections they need to build their writing careers.

The need for continuing education doesn't disappear simply because most of us find ourselves trapped at home.  With this in mind, Smashwords this week announced our first-ever Author Education Day, a one-day online educational event where we'll teach veteran authors how to take their ebook publishing to the next level, and we'll teach aspiring authors how to publish ebooks with ease, professionalism and success.

The Smashwords Author Education Day event will be held next month on April 18, and is open to all writers and publishers.  Even if you don't (yet) publish with Smashwords, we invite you to attend at no cost.

Jim Azevedo, our marketing director, will present four live workshops, each followed by an interactive Q&A.

The sessions will be presented in sequential order, with each session building on the knowledge covered in the prior session.  Whether you're a first-time author or an experienced veteran, you'll leave this one day e-publishing intensive inspired with fresh ideas that will help you take your publishing to the next level.

These are the same (but updated) Smashwords workshops we've presented in person at writers conferences around the globe.  You'll learn evergreen best practices to improve the discoverability and desirability of your books, and you'll learn strategies for building a sustainable long term career as a writer and publisher.

The sessions include:

1.  Ten trends driving the future of publishing (novice to expert)
2.  An introduction to ebook publishing (novice to intermediate)
3.  16 secrets to ebook publishing success (novice to expert)
4.  Book launch strategy:  Preorders and presales (novice to expert)

Advance registration is required for this free event.  To view the full event description and to register, visit our Smashwords Author Education Day event page.

Hang in there my friends and fellow book lovers.  The sun will rise again.