by Deb Vanasse, Reporter, IBPA Independent magazine —
Watch Joshua Robertson’s video recap of this article!
Which developments over the past year—e-books, audiobooks, artificial intelligence, Amazon—portend opportunity, and which pose obstacles to be navigated?
With the turning of the calendar to a new year, publishers take stock of industry trends. E-books versus print. Amazon versus everyone else. The eternal challenge of how best to reach readers.
The point isn’t to predict the future, but rather to assess which developments portend opportunity and which pose obstacles to be navigated. Empowered with this knowledge, publishing professionals in turn help create new trends. As Smashwords CEO Mark Coker points out, “Authors and publishers can control their own future, and the future of the industry, based on the decisions they make today.”
Format: A Mixed Bag
There’s no doubt digital is here to stay. But what about reports that e-book sales have flattened, and that print is making a comeback? Are there more opportunities in audio than in e-books?
Titles released by independent publishers continue to shine in e-book format. Notes Coker, “By combining high quality with low prices, indie e-books are hitting, every single week, the bestseller lists at any major retailer.”
Posting in her blog, publishing industry expert Jane Friedman concurs, pointing to Nielsen data showing that self-publishers and “very small publishers,” have the largest e-book market share. Fiction is an especially lucrative market, she notes, with an estimated 70 percent of all fiction sales occurring in e-books.
Concerning reports that e-book sales in general are declining, Friedman points out that Big Five publishers have set high prices for e-books, while Amazon has simultaneously lowered print prices. These factors skew sales toward print, she suggests. She also notes that new print titles aren’t getting as much traction as backlist, which dominated 2017 bestseller lists.
Rapid growth in the audio segment points to another healthy revenue stream. Per an Association of American Publishers report, downloadable audio sales were up 28.8 percent in the first quarter of 2017 compared to the first quarter of 2016. But, as Friedman points out, audio still makes up only a small portion of the overall book market.
Authors with big online followings bring their own built-in platforms for connecting with readers. Artificial intelligence generates consumer data. Amazon compresses the supply chain. In each of these developments, publishers may find opportunity. But inherent in each are potential risks.
Rudy Shur, Square One Publishing
“One of the more interesting trends is the ability for indie publishers to find authors who have large followings,” says Rudy Shur, founder of Square One Publishing, named by Publishers Weekly as one of the nation’s top 10 fastest growing indie publishers. “A writer’s potential audience can be seen through the number of their social media followers, by the number of people they attract at their lectures, the popularity of their blogs, and their ability to been seen or heard on radio and TV.”
Yet Shur cautions publishers against relying too heavily on an author’s platform to the exclusion of other promotional tactics. “While it’s great to have an author who has a large following, the indie publisher should use the author’s audience to springboard that book’s sales to even greater heights,” he says.
For publishers seeking to interact in precise and meaningful ways with consumers, artificial intelligence (AI) services such as Google Cloud API can provide a wealth of data, notes Kinga Jentetics, CEO of Publish Drive. “Figuring out and simultaneously acting on what drives reading and customer behavior can be a game-changer for the industry,” she says.
But Jentetics suggests publishers take a measured approach to these technologies. “AI can overestimate or underestimate any outcome, and this can take your business decisions in an unwanted direction,” she warns.
Then there’s Amazon, described by Coker as “not the kindest, gentlest players.” For one thing, Amazon works to the advantage of its own publishing imprints, which have produced over 2,000 titles. No surprise—these Amazon imprints tend to dominate Kindle bestseller lists, Friedman notes.
Amazon has had a crushing effect on distribution, says Shur. “Over the last decade, Amazon has essentially crushed dozens of specialized, regional, and local wholesalers,” he explains. “These companies were happy to work with indie publishers to get their books out into the various retail businesses they served. Today, the system of distributing titles has been consolidated into just a few wholesalers that now represent thousands of different publishing houses.”
In light of this, Shur warns independent publishers against banking on the efforts of any wholesaler to get their books to consumers. “Wholesalers should be seen as fulfillment houses, not customers for a final sale,” he says.
Likewise, Coker urges publishers to cultivate diversified retail distribution. “Avoid over-reliance on any single sales channel,” he says. “Avoid exclusivity, even for short periods of time. A simple change in a retailer’s algorithms or policies can cause discoverability to dry up overnight.”
Amazon’s KDP Select option poses a “massive risk,” Coker says. “With over 1 million exclusive books enrolled—all almost entirely provided by indie authors and small indie presses—it’s slowly sapping the strength and customer bases of the other e-book retailers,” he explains.
Coker also warns of devaluation resulting from Amazon’s Kindle Unlimited (KU), a reader option that relies on books enrolled in KDP Select. “KU is devaluing books by training readers to expect books for what feels like free while at the same time undercutting the single-copy sales upon which most publishers depend,” he says. “And by paying only a half cent per page read, Amazon’s also stripping publishers of their ability to set a fair price for their books.”
To temper the Amazon effect, Coker urges publishers to seize the clout inherent to their position—after all, they’re the ones who generate the product. “There’s a lot of hand wringing out there about stagnation in publishing and how Amazon is a big meanie in terms of how they treat authors and publishers,” he says. “[But] Amazon became the power it did because authors and publishers surrendered that power to them. Authors and publishers also have the power to take that power back.”
As Jentetics points out, publishers can help level the playing field by connecting with emerging overseas markets that Amazon has yet to dominate. Pricing is key to success in places like India and Eastern Europe, she says. “The best way to avoid pricing mistakes is to research the best practices in the same categories in each of the different markets,” she explains.
To take advantage of developing opportunities and avoid obstacles, publishers need to stay abreast of industry developments. In addition to listening to his own Smart Author Podcast, Coker recommends professionals stay up-to-date with Publishers Weekly, Publishers Lunch, and IBPA Independent.
Sourced information about trends is helpful, but, as Jentetics notes, experience may be the best teacher. “You can always read articles
Kinga Jentetics, Publish Drive
and expert opinions from business and technology perspectives, but it is only the hands-on information and experience that will help you to dive into a subject,” she says. “That’s what my entrepreneurial spirit taught me.”
Jentetics also urges publishers to find a balance between holding back and expecting too much from new technologies. “They will not change your world overnight.” On the other hand, she notes, “If you are missing out on the opportunities, you might lag behind in the future.”
Coker warns against focusing on any single trend at the expense of the bigger picture. “Be careful not to pay too much attention to every bump and burp in the industry,” he says. “If you maintain open lines of communication with your customers and partners, and focus on building successful long-term relationships with them, you’ll gain the best insights into what really matters.”
In a changing marketplace, it’s worth noting that obstacles and opportunities may not be entirely distinct. “In my experience, all challenges eventually became opportunities,” Jentetics says.
With characteristic resilience and adaptability, independent publishers respond to industry changes with a nimbleness that eludes the Big Five. By taking stock of what’s new and assessing the possibilities, they establish practices that engender success.
Co-founder of 49 Writers and founder of the author co-op Running Fox Books, Deb Vanasse is the author of 17 books. Among her most recent are the novel Cold Spell and a biography, Wealth Woman: Kate Carmack and the Klondike Race for Gold. She also works as a freelance editor.