It was inevitable, but the speed of the transition is impressive:

In July 2010, Amazon announced that sales of electronic books for its Kindle e-book reader surpassed sales of hardcover books on the site. Six months later, sales of Kindle books surpassed that of paperbacks. Now, customers are downloading Kindle books more than hardcovers and paperbacks combined.

Having built their businesses on the production and distribution of physical books, traditional (legacy) publishers are in big trouble. The cash crop of seasonal, celebrity and cyclical titles that annually supported publishing’s administrative and production overhead is rapidly disappearing. The same information is either readily available for free on the internet, or more quickly and easily produced as an e-book or subscription service. Customers can still get what they want, but publisher are no longer critical to that process.

Attempts by publishers to control (if not fix) the price of e-books have also failed. Even with a lower cost of production, e-books must still provide revenue that offsets the loss of print sales or publishers will necessarily have to reduce those costs — including employment costs devoted to print. Whether Amazon’s numbers are consistent with other retail channels, the trend seems clear: the profitability of e-books will determine the viability of any publisher going forward. (There are probably very real implications for the paper industry as well. Adjust your portfolio accordingly.)

The good news is that content and books as valued objects are not under siege. If anything, many of the books previously sold in physical form and now sold in digital form had little or no value as objects — and probably little or no value after a year on the shelves. Clearing big-box stores of titles that existed only by virtue of a constricted distribution channel obviously means adjustment, but I see no downside for the reader. Physical books will still be available, and probably in better-quality editions. It may also be that independent bookstores will thrive because of their smaller footprint and more intimate knowledge of local reading habits.

Update: The New York Times has more here.

Kindle users have been kind’a-sort’a able to loan e-books to each other for a while. Today Amazon announced that the Kindle is making a bigger leap in the near future:

Amazon said the library books will be available on the Kindle “later this year,” but the company did not specify a launch date. The free e-books will be available though Kindle apps on smartphones and on the Kindle e-reader device, which can download books over Wi-Fi or 3G internet connections.

The service will work only in the United States.

I’m not sure why the reporter used the word ‘free’ to describe the financial impact of taking out a library book, unless it was to clarify the terms of such a transaction for those who have never had a library card. In any case, the basics of the deal strike me as almost banal in the way they replicate the loaning of physical books. (Libraries will purchase and loan limited copies. Copies loaned out will not be available until returned.)

The one glitch I can imagine is allowing loans via the internet. Libraries have always required that patrons present themselves physically, with allowances made in some municipalities for the physically disabled. Allowing people to download content from anywhere is obviously problematic, but can be mitigated to a great degree by only allowing people who qualify for local membership (meaning they reside in the library’s district) to access content from that library’s site.

How long will it take for somebody to download and pirate/market content from a library system? Well, I have to believe that’s already been done, and will be done again. (If I understand the piracy argument correctly, everything’s already on the web anyway, so why would pirates bother — unless they like the clean, device-ready formatting.)

Interesting times.

– Mark Barrett

At first blush, print-on-demand (POD) seems to be the middle-ground in the publishing revolution. It yields a physical book, much like traditional publishing, but is the result of a quasi-do-it-yourself process. To the extent that holding a book, or being able to physically transfer contents in book form, is important to an author, there are a wealth of companies providing POD services. (The big three are probably Lulu, CreateSpace, and Lightning Source, with Blurb anchoring the image-heavy end of the self-pub spectrum.)

Thinking that it would be nice to make a POD version of The Year of the Elm (TYOTE) available for anyone who wanted it, I spent a fair amount of time last night digging deeper into the POD process. What I’ve come away with today is both a renewed appreciation for the craft and complexity of publishing, and a growing conviction that I don’t want to go down the POD road, at least for now.   Read more

Dan Wagstaff had an excellent post up over the weekend at CasualOptimist. Here’s the crux:

My point is not that we should not stop experimenting with new author contracts, transparency, formats, trade terms, or marketing — we need to try new things and be allowed to fail. But this should not come at the expense of consistently good, interesting (and inexpensive) books.

I encourage you to read the post. It’s a summary of things that have been and are being tried to in order to gain a toehold in the new publishing reality, but — as Dan points out — it’s also a reminder that the basic problem is not one of process but product. What is it that is the publishing industry should be selling?

In the comments to the post, I wrote this:

…if the industry needs to contract on the basis of content alone (ignoring other obvious reasons driving a coming contraction) — it seems to me that the internet is a useful mechanism by which that contraction can be managed, as opposed to happening at a more precipitous rate.

I think it’s clear that corporate publishing cannot continue in its present form. It’s top-heavy and badly listing, and sooner or later economic pressures are going to take their toll. Thinking about this over the weekend, it seems to me that even as the internet is the instigator of many of publishing’s woes, it’s also a relief valve of sorts in that it allows publishers to connect readers with content, while at the same time being more (appropriately) selective about which content is turned into physical books. (Note how completely this distinction seems to be lost in the current publishing dialogue at the corporate level, while it is at the heart of discussions at the authorial level.)   Read more

For my own reference, as well as that of readers who are in the same boat, I pulled together the following links to help make sense of the alphabet soup inherent in self-publishing solutions. My objective is simply to provide a single post that will replace the repeated searches I’ve been running whenever I can’t remember how XML is different from HTML is different from XHTML.

• Brian O’Leary, in a post titled Alphabet Soup, tackles the issue head on. If you get confused by XML, HTML and XHTML, this is the post for you.
• In a post titled Web Standards for E-books, Joe Clark dives deeper. There’s a lot here and I’m not sure I understand or agree with all of it, but it definitely wrestles with the issues I’m wrestling with.
• Gizmodo leads with a tabloid headline: Giz Explains: How You’re Gonna Get Screwed By Ebook Formats. Despite the hype the article is still worth a read, in large part because it projects all these tech issues onto the current marketplace. Again, I’m not sure I agree with the conclusions, but the article frames the right debates.
• Jedisaber has an .epub eBooks Tutorial that I found extremely helpful. It includes a list of tools, with commentary about same, as well as many other useful bits of information. If you’re thinking of creating an ePub file, this is the place to start.

As suggested in a recent post, it’s always a good idea to look for work flow examples that you can copy or emulate. You may not agree with all of the other person’s choices, or need to follow their examples word for word, but anything is better than reinventing the wheel.

Where the rubber meets the road for me in all this jargon is getting my content distributed. I am concerned about embarking down a technological path that either dies out or takes my content hostage. I don’t want to have to keep changing native file formats, or create new documents for new services or sites that use proprietary tools as a means of also holding customers hostage. I’m interested in flexibility and utility and portability, and I’m constantly judging tech solutions by those criteria.

Update: Keith Fahlgren has a post about ePub and CSS that’s worth reading, if only to give you an idea of what’s coming in terms of compatibility issues. In the comments to the thread, Liz Castro says, “It’s browser wars all over again,” and I fear she may be right. My one hope is that the maturity and deep pockets of many of the market players will keep the insanity to a minimum.

– Mark Barrett

I am publishing a collection of short stories as an e-book. Concluding a series of posts on that subject, I’m setting a price for that content today, subject to further modifications, complications, frustrations and disturbances in the time-space pricing continuum, as prophesied below.

$4.99. That will be the price of my short story collection on Smashwords*, where I’ll be making the work available as an e-book. To the extent that I have now answered this vexing question, I am relieved. To the extent that I have unwittingly uncovered a new and nightmarish parallel problem, I wish I had been born with no curiosity and wealthy parents.

Why $4.99? Well, I can’t point to any single determining factor. Rather, I took everything I learned over the past few weeks (and months) and tried to find a price that met the evolving criteria without contravening my basic assumptions, which included:

• No free/freemium pricing.
• No price above $10, because that’s getting into (discount) print-book territory.
• All things being equal (meaning equally profitable), a lower price is better because it produces more readers.
• Psychological price points matter. $4.99 is much better than $5.01.

Particularly helpful was data from Smashwords CEO Mark Coker, which pegged pricing sweet spots at the $5 and $9 price points. Following the maxim that a lower price is better when profit is the same, I chose the $5 price point over the $9 price point because I thought it would spur demand, and because I thought $9 for an e-book was simply too close to the low end of current print-book and print-on-demand (POD) pricing.   Read more

I am publishing a collection of short stories as an e-book. Continuing a series of posts on that subject, I’m trying to work through the relevant pricing issues and set a price for that content.

Months ago, when I began idly wondering what my short story collection should sell for, I repeatedly found myself thinking in relative terms. In hindsight that approach seems to make sense given the rampant uncertainty in the e-book market , but it was more coincidence than prescience. I didn’t know how much I didn’t know, and I certainly didn’t know how much the industry didn’t know.

The comparison that popped up the most was what I took to calling hamburger pricing. Invariably this analogy would present itself while I was driving, because it’s impossible to travel anywhere in the United States for more than fourteen minutes without passing a hamburger stand. (I made that statistic up, but please feel free to quote me. The world can always use more urban myths.)

What I kept thinking at the time was that whatever my short story collection was worth, it had to at least be worth the average cost of an average hamburger at an average drive-up window. Without doing any research I pegged that number around $4, and in a lot of ways I felt like the idea made sense.

Which of course it doesn’t.   Read more

I am publishing a collection of short stories as an e-book. Continuing a series from last week, I’m trying to work through the relevant pricing issues and set a price for that content.

Coming up on the end of a second week of thinking about how to price an e-book, I feel as if I finally understand the problem. I don’t have a final number yet for my short story collection, but I genuinely feel as if I have the tools to make that decision. (I know this kind of analytical obsessing isn’t as fun to read as gossip or flippant analysis, but if you’ve been reading along I hope you’ve gained some insight into these issues as well.)

Today and tomorrow I’m going to run down two perspectives I haven’t yet talked about. After that I’ll wrestle with the fact that setting a price in one place has an inevitable domino-effect along the pricing pipeline, and why I think that’s an indicator of problems to come. After that, I’ll pick my number and get back to the (relative) sanity of regular posting.

Fairness
Despite everything I’ve learned about the haphazard nature of pricing in general, and of e-book pricing in particular, I still retain a belief that there is some sort of fair value that can be applied to digital content. I know rationally that the marketplace will eventually come to define fairness as any stabilized price, but absent that stability I still find myself asking: what’s fair?

In the hard-bitten world of business this is obviously a naive view. What’s fair to most people is whatever they can get away with. If selling people into a mortgage or cell phone plan means using legalese to obscure relevant costs and fees, you do not hesitate to screw your customer. (To paraphrase Raymond Chandler, nobody ever made a hundred million dollars being a nice person — and that includes the messianic Mr. Jobs.)

Complicating things further, fairness is always a relative concept. Trying to be fair means trying to balance all factors involved, yet there’s no way to control for or even anticipate all of the variables. If I say a price is fair, who am I being fair to? A kid in Haiti who just lost his whole family? The rich, degenerate housewives on Bravo that are laughing all the way to your bank? Being fair in an absolute sense in any transaction seems a theoretical impossibility. In practice we rely on orderly (and regulated) markets to quantify fairness as a floating point between supply and demand, and that’s probably the best we can hope to do.   Read more

I am publishing a collection of short stories as an e-book. Continuing a series from last week, I’m trying to work through the relevant pricing issues and set a price for that content.

We all have expectations. Sometimes, particularly when we’re young or old, our expectations can be out of step with reality. When we’re young we don’t have the cognitive ability to understand the world as it is, so we fantasize. When we’re old we may have trouble keeping up with the pace of change, and the world may move on without us.

Perhaps no other aspect of daily life in America defines our expectations more than the price of goods. We are a consumer society, and as such we gauge our worth and meaning by what we have and what we can afford. Goods that are priced out of reach make us feel poor. Goods that are within reach make us feel wealthy — or at least as if we have options.

Everyone has heard a child request a new car or new house in the same way that they ask for a piece of candy or scoop of ice cream. To a child price is no object because money has no meaning. And who hasn’t heard an elderly person comment that a candy bar used to be nickel or a gallon of milk a dime? To an elderly person prices may mark the zenith of their life experience, while also serving as a reminder of the threat posed by inflation and rising prices.

People in the prime of their working lives generally have more realistic expectations about prices, but they can still experience dissonance when the cost of goods change. Gas at $4.00 a gallon is an outrage. Gas falling back to $2.50 is a windfall. But note: these emotions and responses are usually relative, not based on an actual understanding of the costs of production. Because we live lives abstracted from our own survival needs, and because our economic lives are abstracted through bank accounts, direct-deposit paychecks and credit cards, there is often no contextual reality to the prices we pay. We pay what we pay because that’s what an item costs, not because we know that’s what an item is worth.   Read more

I am publishing a collection of short stories as an e-book. Continuing a series from last week, I’m trying to work through the relevant pricing issues and set a price for that content.

Think about any subject long enough and you’re bound to end up in the weeds…

The title of this post refers to a deservedly famous Taxi episode in which Jim burns Louie’s apartment to a cinder, presenting Louie with the opportunity to quantify the practical limits of greed. (See the 7:15 mark here. The bit continues in the next clip.)

The problem with this approach in my case is that the DePalma price for an e-book is probably one dollar over the high end of the acceptable range — meaning something like eleven or twelve dollars. And I would only be able to get that price if the customer borrowed my car and wrapped it around a tree prior to making a purchase.

As much as I would like to embrace my inner greed, I just don’t see a useful lever. To my chagrin, market forces seem determined to have their way with me.

– Mark Barrett