Wednesday, February 26, 2014

Authorearnings: The Fallout Continues

Hugh Howey's new site is still making waves. The latest report veers away from Amazon to look at it's top retail competitor in the book market, Barnes & Noble. The  report begins with a simple explanation of methodology as well as intent:

"Last year, Barnes & Noble reported that 25% of the Nook market was made up of self-published works [link]. We were curious to see if this meant 25% of the bestselling titles were self-published, 25% of the sales came from self-published e-books, or if self-published e-book sales accounted for 25% of the gross dollar market. As always, our primary concern here is where authors are doing better, sale for sale. It doesn’t help authors to say that 70% of the book market is in print if only a small fraction of that money ends up in authors’ pockets [link]. What we want to see is the combined effect of royalty rate, sales volume, and sale price. These three factors combine to give us a true picture of comparative earnings, as shown in our pie charts. Let’s see what our spider gathered as it snared 5,400 of Barnes & Noble’s top genre e-books in its digital web:"

 The report goes on to show that over 50% of e-books published on the Nook (genre fiction) are Indie, and that 1/3 of B&N's bestsellers are -yep- published by Independent Authors! Here's that chart:

The number of daily unit sales are consistent with this, but the amount of daily revenue to Indie authors diverges here from previous results. In other words, while Indies have the strongest presence at B&N, they don't take home the largest piece of the pie. Hugh breaks this down by comparing Indies (1/3 of the market) with legacy publishers and their various market shares in order to show that, individually, each publisher's revenue looks miniscule compared to the army of Indie authors. This is reasonable, but what I take from this relates to something I observed on my own, long ago: Barnes and Noble kills Indie books.

That's sort of a generalization, and perhaps sounds unfair, but this is what I mean by this statement: B&N does a terrible job of making Indie books available to buyers. They put Indies in a back-of-the-store type of category, with almost no visibility whatsoever. When my books were there, I could only find half of them by searching for the title and/or author name. The rest I couldn't find at all, or only could occasionally. In other words, B&N went out of their way to make Indies use the back entrance, whereas treated Indies the same as any other publisher. Naturally, Indies got their foothold at Amazon and it has remained that way ever since. Some Indies do well at B&N, but most do not.

In my case, this is the reason I ultimately went exclusive with Amazon. They offered me free advertising opportunities in exchange for exclusivity, which not only kept the playing field level, but helped me show my books to thousands of potential new fans. Meanwhile, B&N wanted to treat me like "the help" and pretend I wasn't there, except when it came to taking their cut of my sales.

Consistent with previous reports, Indie books cost less at B&N but rake in higher review scores than traditionally published books. Perhaps not with the Literati, but with people who actually buy books. Go figure. Despite being treated as an embarrassment rather than a valued customer or partner, Indies do comparatively well at B&N. Add to that, this little snippet from an article I found courtesy of The Passive Voice:

"In 2011 the company lost 209 million, in 2012 they lost 261 million and in 2013 they increased the losses to 475 million. If we look at the quarter ending on July 27, 2013 they reported loses of 55 million and October 26, 2013 NOOK lost 45 million. If you add all of these figures together it comes to over 1 billion dollars."

Emphasis mine. B&N lost one billion dollars from 2011 to 2013. This isn't necessarily directly related to my experiences with them or their treatment of Indies in general, but it speaks volumes as to B&N's difficulty in choosing a direction for their company. Or an executive to execute that vision. Which I find unfathomable, considering they've got a perfect template to follow in Amazon. Even lacking a consistent vision of their own, B&N could do just fine if they would accept that we've had a disruptive revolution in the industry. They could embrace these new technologies (including POD and espresso printing machines). So could big publishers. Yet, rather than develop a new visionary direction based on modern technological realities, these corporations cling to old ideas and try to stifle innovation. They spend (and lose) billions in the effort to prop up an industry that 's fast becoming irrelevant. Their distribution model won't mean anything once all paperbacks are POD and 90% of books are published electronically. That day might be ten years off, or even twenty, but its coming, and it will be here faster than anyone thinks. Don't think so?

How long did it take for cassette tapes to become irrelevant when compact discs became available? And what happened to CDs when the internet and .mp3s came along? Sure, CDs still exist but only so we can have a hardcopy to rip onto our computer. Netflix anyone? Sigh...

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