I’ve already visited this subject twice on Brad’s Reader. The first was back in 2007 in my post Advertising in Books: Will it Work? and again in 2009 Ads in ebooks – Coming to an eReader near you. Notice that my thinking on this does shift from post to post.

According to this Mediabistro post, the Wall Street Journal is already speculating that ads just might help publishers get some of their mojo back when publishing ebooks:

The Wall Street Journal reports: “In short, physical books can’t compete with other print media for advertisers. Digital books can. With an integrated system, an advertiser or publisher can place ads across multiple titles to generate a sufficient volume. Timeliness is also possible, since digital readers require users to log in to a central system periodically.”

The article continues:

The Wall Street Journal reports on what these ads might look like: “For consumers, the free samples of digital books now available would surely include ads. Because not every consumer who reads a sample chapter will buy the book, it’s reasonable for the publisher to extract some additional value. Seeing ads in the sample may also convince a reader to pay for a premium, non-ad version of the full-length book. The old market segmentation of paperbacks and hardcovers will be replaced by ad-supported or ad-free books.”

I will say that if publishers do start inserting ads into ebooks, the ebook prices better remain lower than $10. Otherwise, they’ll just be shooting themselves in the foot, again.

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One of my favorite parts of what Electric Literature does is taking a single sentence from a short story they publish, and then animating it. The result is an illuminating visual interpretation of that one sentence. In a way, the short cartoons (often less than a minute long) represent how one’s imagination would perceive a particular literary “bit.”

The following is one of my favorite pieces from Electric Literature. It’s simplicity shines a bright light on the sentence, making it more powerful and thought-provoking than it otherwise would be. The sentence comes from the short story Little Things by Matt Sumell.

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That’s a very large chunk. When I see numbers that big I become skeptical. Don’t get me wrong, I don’t doubt that Apple is now cutting a large slice of the ebook market pie. Just how much, though, is up for debate.

According to a post by AppleInsider Apple grabs 22% share of the ebook market, Jobs gives some more details:

In the first 65 days, Jobs said users have downloaded more than 5 million books — amounting to 2.5 eBooks for every iPad sold and giving Apple a near-instant 22% slice of the eBook market. Five of the six largest publishers in the world are on board with iBooks, releasing content for the Apple-supported format.

The sixth large publisher to hold out is Random House. Why they are missing the opportunity to have their catalog of books available to iPad users is beyond me.

While Apple claims to have gained 22% of the ebook market, it’ll be interesting to see how long-term trends play out.

iBooks competing with Kindle, B&N and Stanza apps

There is one factor that makes analyzing Apple’s appearance on the ebook stage much more complicated. iPad users aren’t obligated to buy ebooks only from Apple. They can download free ebook reading apps from Amazon and Barnes & Noble, not to mention the very popular Stanza app (which is owned by Amazon). Users can buy ebooks from those respective retailers to download to their iPads.

If Apple was determined to take as much of the ebook market as possible, then they’d block out all other ebook apps on the iPad. But they haven’t. This tells me Apple isn’t so much worried about where users are buying their ebooks from, as long as they’re reading them on an Apple device.

Amazon and Barnes & Noble, Beware!

Because Amazon and Barnes & Noble sell both the ebook device and the ebooks, they probably have the most to lose from Apple. It has been widely reported that Amazon loses money on ebooks sales while making a profit from selling their Kindle. I’m assuming the same holds true for B&N.

The problem, as I see it, is that iPad users have so many more choices with regard to where they purchase their ebooks, they can afford to be selective. Users can buy ebooks from any number of ebook retailers based on price, availability and even how ebooks are rendered. It’s even being reported that Apple will start supporting PDFs, something stand-alone ebook readers still struggle with.

My guess is that to survive, Amazon and B&N will need to drastically lower the prices of their ebook devices to stay viable in the long term. As of this writing, both the Kindle 2 and Nook cost $259, a price that works okay now but won’t work in another year or two – especially as Apple drops the price on the iPad when a new generation comes out (like they do with the iPhone).

The good news in all this is that the price of ebook readers will only decrease as the technology improves and more players come onto the market. Great news for ebook fans!

I always still laugh, however, when I see Apple touting iBooks because it was only a few short years ago when Steve Jobs said Apple will never get into the ebook business because no one reads anymore.

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There used to be a time when writers could make a living writing short stories that they sold to magazines (who paid a healthy sum for quality work). F. Scott Fitzgerald financed his novels by writing short fiction, as have other writers.

Today, I think it’d be nearly impossible for a writer to make a living solely on short fiction. But with ebooks now in the mainstream, it’s a lot easier for writers to publish their short stories and for readers to consume them. And publishers are taking notice.

In this recent Wall Street Journal article, publishers Harlequin and Ballantine Books are making plans to use short fiction as a way of getting readers enticed to buy and read longer novels. Or, as the article says, the shorter works will be used as “bridges.”

Thriller writer Steve Berry will have a short story released that will tie in with an upcoming novel:

Separately, Ballantine Books, an imprint of Bertelsmann AG’s Random House Inc. publishing arm, plans to publish in September a digital short story, priced at $1.99, from thriller writer Steve Berry.

The article continues:

The 6,000-word piece, “The Balkan Escape,” is too short to have been published as a paperback original. In effect, it is a literary appetizer, inexpensive enough to attract potential readers who might otherwise not be willing to buy a new novel from an author whose works they haven’t yet read, said Mr. Berry.

I love that term “literary appetizer.” Even standalone short stories that aren’t tied into a novel can also be a literary appetizer for the simple fact that they are a great way to familiarize a reader with a particular author’s work without investing the time and money in reading a full-length novel. Mr. Berry does note that his short story can be read independently of his novels.

Because ebooks cost less to publish than print, and authors can easily self-publish their own ebooks, I have a feeling we’ll be seeing a lot more of this in the near future. Short fiction is the perfect bite-sized literary “snack.” Instead of spending a lot of time reading a novel, one can read an entire short story in the waiting room at the doctor’s office, for example.

Matt Schwartz, president of digital marketing and strategy at Random House, seems to agree:

Although many publishers remain concerned that low e-book prices could one day lead to lower prices for physical books, Mr. Schwartz said that the digital work’s $1.99 price is justified because the work is a short story. “It’s the equivalent of buying a couple of songs online,” he said. “You can read it in 30 minutes.”

He’s right. I’ve bought several short stories from Smashwords (aff link) by indie authors and have enjoyed reading them on my iPhone.

Large publishers should not be afraid of short fiction. It’s a relatively small investment and they can use these stories as a marketing tool for the authors. On the flip side, indie authors can use short fiction to garner more exposure for themselves.

Short fiction has been, and continues to be, one of my favorite literary forms. I’m very optimistic we’ll see a short story renaissance hit the literary community.

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The online retailer began its first imprint, AmazonEncore, as a way to give exposure to great writers who are more-than-worthy of being published. AmazonCrossing has the same goal, only at the international level. Jeff Belle, VP of Books, says in an Amazon press release:

“The goal of our publishing programs is to introduce readers to terrific authors they might not otherwise have the chance to know,” said Jeff Belle, Vice President of Books. “Our international customers have made us aware of exciting established and emerging voices from other cultures and countries that have not been translated for English-language readers. These great voices and great books deserve a wider audience, and that’s why we created AmazonCrossing.”

I’m thrilled to see a major US company like Amazon working to expose readers to a wider variety of books from different cultures. One translated book that easily comes to mind is The Alchemist (aff link) by Paulo Coelho. The novel, originally written in Portuguese, has been translated into 56 languages. It has won a Guinness World Record for having been translated into the most languages by a living author (source).

One of the many parts of literature I love is how easily it crosses cultural lines. Literature is universal. One reason for this is that the human condition is the same wherever you go in the world. At the same time, cultures have their own flavors that provide a diverse learning experience for those who are enlightened enough to look beyond their own backyard.

I’ll be looking forward to seeing the titles AmazonCrossing publishes. Do you have a favorite novel that has been translated into English? Leave a comment below with your answer.

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But one author has taken self-publishing to a whole new level. Christopher Herz decided to use the POD model with his book The Last Block in Harlem (aff link) and then take it to the streets, literally. He’d hand sell one copy at a time to strangers on the street. You might recall that I wrote about him in my previous post Author sells self-published book one copy at a time. His efforts were even picked up by Publishers Weekly. Well, all of his hard work has finally paid off.

On his website, Christopher writes about being picked up by AmazonEncore:

My first book, The Last Block in Harlem, was recently picked up by Amazon Encore, a new publishing venture from Amazon.  I originally published the book myself. I took it to the streets of New York City, literally putting ten books in my bag each day,  walking up to people and asking if I could present my novel to them. It was one of the great experiences of my life.

Amazon’s website describes AmazonEncore (aff link) publishing program as a way to get great writers who are struggling to get their books into the hands of readers a larger audience.

AmazonEncore is a new program whereby Amazon will use information such as customer reviews on Amazon.com to identify exceptional, overlooked books and authors with more potential than their sales may indicate. Amazon will then partner with the authors to re-introduce their books to readers through marketing support and distribution into multiple channels and formats, such as the Amazon.com Books Store, Amazon Kindle Store, Audible.com, and national and independent bookstores via third-party wholesalers.

There are a few points I want to make.

Good Writing Still Matters

Christopher Herz is obviously a great writer who has written a great book. You can write and self-publish hundreds of books, but if your writing isn’t polished and the book doesn’t have a professional look, then you won’t have the same success Christopher has had.

This also means that you shouldn’t rush to get your book published. It’s very easy to get excited about having your book in print. However, take your time and do it right. The extra time you spend can pay big dividends.

Hard Work Pays Off

Self-publishing is not a get-rich-quick scheme. It takes dedication and hard work. Once the book is printed and you still have to sell it. This is where Christopher stood out by hand selling his book to people on the street. Not an easy task and one that few authors would try. Take the marketing and selling of your book into your own hands.

Hopefully other authors can learn from Chris about successfully self-publishing a book.

Congratulations Chris! Keep up the good work.

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Surprise! Higher ebook prices benefit only the publishers.

Author Michael Stackpole wrote a very eye-opening article for the Huffington Post entitled Who Benefits from High Ebook Prices? As a traditionally published author, he knows the ins and outs of the publishing world and how royalty payments are calculated and paid out.

He breaks down the argument that higher ebook prices only benefit publishers by comparing the old Amazon ebook model of charging $9.99, compared to the newer agency model where ebook prices are expected to jump as high as $14.99.

Under the old Amazon model, the publisher would get half the price of a book–$12 for a $24 hardback. Amazon would list the ebook for $9.99, eating $2 a copy to subsidize folks buying the Kindle. Out of that $12, authors would get $3-$6 dollars depending on their ebook royalty rate.

Now, compare that to the agency model:

Now Amazon is shifting to an “agency model,” (like Apple’s model for the Appstore), where the publisher will get 70% of the retail price. By way of example, let’s assume a price of $14.99 for a new release. The publisher takes home $10.50, and the author gets between $2.63 and $5.25. Authors end up losing money, and still have to deal with the archaic royalty reporting system where publishers will take 6 to 9 months to send that money to the authors.

Stackpole also notes that Amazon pays publishers within 30-60 days, yet forcing authors to wait almost a year for their royalty check. Authors are not benefiting from higher ebook prices both in terms of lower royalties and decreased ebook sales as a result of charging the consumer more.

Turning to self-publishing and cutting out the middleman

Michael Stackpole also notes, the agency model, and the decreased royalties it gives the authors is another reason why authors should self-publish their back list as ebooks and then sell them on a platform like Amazon or Smashwords.

One of my publishers recently offered me the 25% deal on one of my older novels. I turned them down because when I publish the novel myself, either at my website or via Amazon, I make that same 70% the publishers ; and I’ll get it in at the most 60 days.

With publishers taking advantage of higher ebook prices and authors, why should most authors even consider publishing their ebooks with a traditional publisher? Certainly not production and distribution. Authors can do that on a variety of self-publishing website. Marketing? Maybe. But with social media popping up everywhere, an internet-savvy author can do his/her own marketing.

Higher ebook prices breeds piracy

Publishers charging more for Ebooks is an obvious problem, and a symptom of that problem is (you guessed it) piracy! Here’s a very simply formula to think about: Publishers charge more for an ebook, price increases, piracy increases, publisher’s profit decreases. Publishers end up screwing themselves over, not to mention the author who loses out on those royalty payments.

Again, piracy is not the problem, it is a symptom of a larger problem – publishers ignoring how much a given market is willing to pay for an ebook. The general consensus is that ebooks should be no more than $9.99. So by demanding higher prices, publishers are only encouraging consumers to get their ebooks elsewhere.

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The post was prompted by an article I read by Angela Hoy from http://www.writersweekly.com entitled Think Twice Before Giving Away Your Entire Book Online for Free. While I have a lot of respect for Angela and read her weekly newsletter every week, I have to disagree on this point.

Just after my last post on this topic, I stumbled upon another post named Sales Impact of Free eBooks Dissertation Published. The dissertation was researched and written by a doctoral student studying the effects of “free” on ebook sales. You can read exactly how his study was set up, so I’ll get to the meat of what this student discovered:

During the ten weeks of the study the books were downloaded 102,556 times. Collectively, the books sold 68 more copies in the ten weeks they were online for free versus the ten previous weeks. This was an increase in sales of 26%. Over the same period of time in 2008, sales of these same books decreased by 38%.

The post continues:

There was a moderately strong correlation (r=.65) between downloads and Internet print sales (the more books that were downloaded, the more books were purchased online). Thus if more books had been available and downloaded the number of additional books sold would likely have increased.

The post does talk about the limitations of this study. These limitations include the relatively small number of books studied and the short, 10 week, duration of the study. Despite the study appears to prove what I (and many others) have been advocating, I think it’s important to disclose possible problems with the study.

Writers need to market themselves, just like any other business

In the end, writers need to think of themselves as a business. All businesses need to advertise and market their products. When an author gives away ebooks for free to sell future ebooks, it’s really just the author marketing him/herself. Most businesses out there use the same principle of giving stuff away for free because it increases sales of other products. Writers should be no different.

The main point of those who disagree with authors giving books away for free seems to be that authors should be fairly compensated for their work (an idea I totally agree with). However, giving back titles away is in investment in the marketing of future titles and other works. It’s a sales strategy that, if implemented correctly, will pay big dividends.

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The main argument in favor of giving your works away for free goes something like this: You provide an ebook or two for free, and it will give readers a sampling of your work, enticing them to buy future ebooks that they would, of course, pay for. This has worked for many authors who claim that giving their stuff away does increase their sales of other books.

On the flip side, the argument against giving your work away for free is that readers will expect it for free and will expect the same thing with all of your books, thus no one will want to pay. Why pay when you can get it for free, right? The other issue that comes into play here is that authors should be fairly compensated for their work.

I recently read good article about this subject by Angela Hoy who runs writersweekly.com. I have been reading her site and subscribing to her newsletter since at least 2002-2003, so I highly respect her opinions and what she says. In her recent article Think Twice Before Giving Away Your Entire Book Online for Free she argues against what I often promote here at Brad’s Reader, and many other writers/bloggers promote as well – giving stuff away for free as a promotional tool.

A big part of Angela’s argument is this:

Giving someone an entire ebook for free, especially for unknown authors, gives the potential buyer zero incentive to buy your book. Why pay for something (by an unknown author) that’s completely free, especially in this economy? Some authors think doing this will generate lots of press (it won’t – too many authors have done it before so only well-known authors get big press for this now). Others think giving away their book will increase their readership and help sales of future books.

Based on my own personal experience, when I download a free ebook (either onto my iPhone or Sony Pocket Edition), I want to like the author’s work enough to buy their future novels. I’ve bought many ebooks from authors who offered their back list titles for free, and I know a lot of others who have done the same.

Obscurity or Making Money as a Writer?

Cory Doctorow, a science fiction author, blogger and a tech guru is one who knows something about giving his work away for free. Whenever he has a traditionally published novel released, he also releases it as a free ebook and audio version – making the title available in as many formats as possible. He says this increases his sales. He also makes an interesting comment about obscurity.

“I really feel like my problem isn’t piracy,” Mr. Doctorow said. “It’s obscurity.”

While piracy is another subject for another day, the issue of obscurity rings true in the whole should-I-give-stuff-away-for-free debate. Unknown authors have a big problem: No one knows who they are. By itself,  this makes it very unlikely anyone will read his/her work whether it’s free or not.

So what’s the unknown author to do? My first response is to get out there and start publishing your work on sites like Smashwords. But more than that, you need to somehow establish yourself. This involves more than just giving a few titles away. This also means:

• Setting up your own blog to build a healthy base
• Being active on Twitter
• Starting a Facebook fan page
• Connecting with other like-minded authors
• Continuing to write, write and write some more!

The whole purpose of all this is to avoid the obscurity trap. If you establish yourself online and have a following (even if it’s only 20 loyal readers on your blog), you are much more likely to have success giving a few titles away for free, and when the time comes, charge a reasonable price for your work. Your base of readers and followers, those who value what you have to say, will have no problem paying for that new novel you just published.

One blogger I follow is Joanaa Penn who started Author 2.0, a package of information that shows authors how to leverage technology and the principle of free to establish a following. She gives away a lot of free information to build her brand and help sell books.

What do I give away for free?

The short answer is anything you want. However, I have always felt that short fiction is the perfect “teaser” to get readers to buy your novels. If you have a few novels under your belt and are releasing new ones on at regular intervals, giving away your old back titles for free will give readers a taste of your work and will entice them to buy your newest release.

Another strategy is to give your readers something when they take a specific action. For example, you send out a monthly newsletter to your blog followers (you do have a blog, right?). Offer a free title or two (whether it’s a short story or novel) when they sign up. Make it exclusive to subscribers only. This will not only bring you more followers, but will help disseminate your work to more people.

In the end, the name of the game for all writers is marketing. Using a healthy mix of free and paid content can help you climb out of the obscurity trap so you can start commanding higher (but still reasonable) prices to those novels you work so hard to write.

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I’ve been advocating for this type of bundling for a while now. The obvious advantage is that you can read the print version in the comfort of your own home, and then take the ebook version with you while you’re on the go. This would work especially well with dinosaur-sized books like Stephen King’s Under the Dome (which I’m currently reading as an ebook). If I had bought King’s latest magnum opus as a hardcover, you certainly wouldn’t see me lugging it around so I could read a few pages in the doctor’s office waiting room.

However, there is one caveat to B&N’s plans to bundle print and ebooks together, as the Teleread post explains:

But from the article, it does not sound as if B&N is truly planning what people usually think of as “bundling”—you will have to pay some extra money for the e-book version. Given that the e-book version has no marginal cost to produce, I expect e-book fans will still express disappointment that this offer does not go far enough.

So it’s not a true “bundle” where you get both for one price. However, I think B&N and publishers are taking a step in the right direction. People want choice. They want to read books when they want, where they want and in the format they want. This faux bundling starts to make that possible.

While not the ideal situation, having to pay a reduced price for the ebook version of your newly purchased print edition will not be the end of the world. However, the key word here is “reduced.” If B&N and publishers think consumers will pay much more than $5 for the ebook, then they’re going to have a lot of angry consumers to deal with.

Print-On-Demand at B&N Stores?

Another interesting item brought up in the PW article is that B&N is playing with the idea of maybe bringing POD technology directly to stores (think: Espresso Book Machine):

He said at some point it could be possible to put a pod machine directly into a store, providing the store “was big enough.” He would also not rule out the possibility that B&N could make a “small acquisition” in the technology field if it fit with its digital plans.

Very interesting indeed. I have read a lot about this type of portable POD technology, but would love to see one of these machines in action for myself.

Reading about B&N’s future plans for ebooks got me thinking that they are now taking the lead in innovation. Amazon has been the leader in ebooks for a few years now, but they really haven’t done anything that innovative in a while – other than releasing updated versions of the Kindle every few years or so.

What do you think about B&N’s plans to bundle ebooks and print books? Would you go for it? Or is this just a cheap marketing gimmick to get people to buy their Nook? Leave a comment below and share your answer.

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