The Business Rusch: The Holiday Surprise

The Business Rusch: The Holiday Surprise

Kristine Kathryn Rusch

 I’m starting this column on Boxing Day because I’m absolutely and utterly buried. December had a lot of real life bumps, including illness, spousal illness, more estate stuff, and some other business things that got in the way of writing. And you should realize: Usually nothing gets in the way of my writing, so these things were severe.

Anyway, I know you folks don’t normally care about my writing method on these columns, but today it’s relevant. Because as I went through my morning routine, I learned a few things.

First Amazon UK announced that the Kindle was their top-selling item this Christmas season. Not only that, it was the top gift-wrapped item this season—a detail I love. (How many brick-and-mortar retailers can tell you that statistic?)  More than 2.1 million Kindles sold from the end of November through Christmas in the United Kingdom alone.

This is fantastic news for writers with a digital presence, whether through their traditional publisher or through their own indie publishing program. The UK has been relatively slow to adapt to e-readers, partly because of pricing barriers.

In fact, all of the European Union has pricing issues, which I’m not going to go into here. But suffice to say what it has done is slow the e-book sales in Europe, so that only the hardcore reader and/or computer user adapted to the new format.

Those pricing issues are fading, especially in England. So that, plus the low-end Kindle being offered at 89 pounds (about $138) will lead to a significant rise in e-book sales.

I already noticed it in my UK sales this morning. My US Kindle sales aren’t that different than usual, but there was a flurry of buying on the UK site on Christmas night and into the day after.

Still, I don’t expect much difference for my books in the next month or two, and neither should any other writer with books at the usual price.  Right now, every traditional publisher on the planet is offering a deal to catch the new readers.  Last fall, I talked to WMG about reducing the price for the first novel in my Retrieval Artist series during this period, but we decided against it. Not because we expected a flood of other inexpensive books, but because we decided to focus our promotional efforts in the summer, when the next Retrieval Artist came out.

But it looks like WMG might have been the only publisher on the planet to decide not to discount books. For example, Sourcebooks has put 65 titles on sale, all the first in a series (including my Wickedly Charming).  But they’re not alone. Publisher’s Marketplace this morning noted that several other publishers have done the same.

With that in mind, I picked up my handy dandy Kindle to see what was going on with the Kindle free bestseller list. I figured there’d be some great titles in the top free, titles by authors whose work I either like or want to try.

Imagine my surprise: The top free Kindle book on the morning after Christmas is The Adventures of  Sherlock Holmes, by Sir Arthur Conan Doyle. Okay. Not a surprise considering the release of the new movie. Until I went down to the next title, and the next and the next.

Jane Austen, Charles Dickens, Lewis Carroll, L. Frank Baum, Charlotte Bronte, Mark Twain.  Classics that have been on the Kindle free list from the very beginning, usually around number 90 or so, and sometimes dropping off the list entirely. (The Dickens is A Christmas Carol, which is only on the list seasonally for some reason.)

The first non-classic (or non-game or non-app) that I found was by Vince Flynn at number 30 or so. And then I had to scroll through several more classic titles to find a new novella by Eloisa James, somewhere around 50. After that, there were some indie writers, and a few more contemporary writers, as well as one Middle Grade pile of excerpts from traditional publishers, which won’t be on the list in a month or two, as the new Kindle readers realize they can just download a free sample of each item rather than download a group of excerpts.

I laughed so hard, I almost hurt myself. No one saw this coming. And we should have.

Free—that glorious free promotion that so many folks are trying for—has done what all the gloom-and-doomers are worried about. It has forced the rest of us to compete with the tried and true. Not only are the classics tried and true, but in the case of the list above—Sherlock Holmes, Jane Austen, Charles Dickens—they’re beloved.

Of course they’re at the top of the list.

So all of those promotions, all of those attempts at the halo effect, all of that work to get new readers into the correct fold, got derailed by authors long dead.

This derailment won’t continue. The new readers will learn how their Kindles work. They will realize that they won’t have to buy everything they want immediately in case it goes away, like they did in a brick-and-mortar store. The new readers will learn about sampling, and they’ll learn that they can set up a wish list to keep track of titles that will remain available. And eventually, they’ll become as jaded as the rest of us.

But all this planning, all these hopes, all of these attempts to manipulate the new post-Christmas sales season will go awry.

Why?

Because everyone is doing it.

I’ve already seen some backlash. Indie authors on Christmas night wondering why they didn’t have a magical miraculous huge uptick in sales. Indie authors expected it immediately.

Traditional publishers did too. They’re going to want to know the effect of their promotions—how many new readers did the promotions bring in? And they probably won’t bring in nearly  as expected.  Because—think about it—if everything is on sale, then the sales price doesn’t look that enticing.

The sale isn’t special.

If everything is on sale, the reader has wandered into a virtual discount store—only this discount store isn’t full of remaindered items that couldn’t sell. This discount store is filled with stuff that everyone wants.

There’s too much, and the reader won’t even get a chance to see it all. In fact, the reader will probably quit looking at some point because she’s so overwhelmed.

So guess what’s going to happen? We’ll all see analysis in the next few months on how e-book sales weren’t as big as expected.  In-house at traditional publishers, there will be an examination of the promotions, and that examination will determine that most promotions don’t work.

Of course, the sales will have improved, but everyone will be complaining because their expectations were unrealistic. Rather than seeing the improvement as a good thing, they’ll look on it with disappointment, wondering what went wrong.

Then e-book sales will plateau as the new readers actually read what’s  on their devices, instead of shop on those devices. This is what happened last year. There was a huge rush of sales in the weeks after Christmas, and then the sales dropped off.

The sales are going to drop off this year as well. This year more than last, a lot of the e-readers went to people who got them for reasons other than the love of books.  Many of these new e-reader owners aren’t device folks in the first place. Either they wanted the newest gadget because it was The Hot Thing, and they’ll play with it for a while until another new gadget attracts their attention, or they’re like a woman who wrote to me on Christmas Night: she’s a heavy reader who didn’t want an e-reading device, but she got one as a present. So she’s giving it the old college try.

Sometimes the old college try leads to a love of the device, but often it leads to something I saw last year with another friend of mine. He had an early Kindle, tucked behind a lamp in his immaculate house. The Kindle was covered with dust, turned on its side, and had a message reminding my friend to charge the battery, which he hadn’t done in…oh…months, maybe.

That flurry of sales holds a lot of promise, but the promise will drop off. The drop will be at a new plateau, however. More e-books than ever will sell. More people will be reading on devices.

You can’t absorb millions of new devices into a system and not have an uptick in book sales. Mark Coker discusses this in his Smashwords blog: “If the patterns we observed last year hold true again, we’ll see a massive stepping up of the sales rates across all retailers in the first few days after Christmas, followed by a week or so of moderation, and then a new normal going forward that is significantly higher than the sales rate for the weeks and  months immediately preceding Christmas.”

But in this gotta-have-it now environment that traditional publishing (and some indies) have gotten themselves into, the drop off  (or moderation, as Coker calls it) will look catastrophic. That catastrophe, on top of yet a larger first quarter drop off in paper book sales, will have every traditional publisher reassessing everything they do.

Because their business model won’t let them wait until the second quarter. Their business model demands a huge improvement in each quarter—and since they predicted a brilliant first quarter, and they’ll probably only get a good one, they’ll see that as a failure.

And what will happen in the second quarter? We’ll see what the actual post-Christmas growth really is. We’ll know what the new plateau is. We’ll know if we’re getting ten times more readers or twenty times or three hundred times. We’ll see how the growth is actually working.

But we won’t know until July at the earliest.

Now, let me throw a few other things into the mix.  My sales on Barnes & Noble went up dramatically over the Christmas holiday. They grew four times larger in two days. I’m not alone. As I get ready to post this, I see that Smashwords saw a huge increase in the sales of titles they distribute to Barnes & Noble. Sales over the two days of the holiday were up 225%.

Smashwords doesn’t distribute to Amazon, so they have no point comparison (although they promise Apple information soon), but I must say this rise in B&N digital sales does not surprise me one little bit. Nook readers have a tougher time finding discounted books. Is that a good thing? For me, the writer, it is. I’d rather have someone pay for my content. I think I’d be annoyed as a reader because I use free books (and music) to sample authors’ entire works, works I wouldn’t read otherwise.

But let’s continue to look at this Christmas season and the upcoming reaction to it. Because something else fun happened this past month.

A directive came down from Barnes & Noble corporate in the middle of December, telling all the brick-and-mortar stores that they had to prepare for an influx of books. I don’t have a link to this: several people who work at B&N in management let me know when the directive came down, partly because it had an unintentionally funny line: Apparently, B&N corporate said to its staff, “We underestimated the interest in books,” and that was why B&N was scrambling to fill its brick-and-mortar stores with paper books.

Um, der.

This was after The New Yorker put B&N on the cover in a rather nasty way—quite shocking when you consider that B&N advertises every week in The New  Yorker, and one of the cardinal rules of magazine publishing is not to piss off your advertisers in a recession. Here’s the cover:

I think B&N got the message. I hope they filled the stores with books. I didn’t get a chance to check because I got sick at that point, then Dean got sick, and then there was no leaving the house before the holidays.

Usually, however, these corporate directives do lead to action. So if B&N did increase the amount of books it stocked in the last few weeks before Christmas, then fourth quarter numbers will show that paper books sales went up more than expected.  B&N is now the largest bookstore chain in America, and as such will have a large impact on book sales whenever it remembers that it’s an actual bookstore, and not a place to sell toys or games.

People will have purchased a lot of those books at B&N as gifts. No matter how the various e-reading sites try to develop a good way to help consumers give electronic books as a present, nothing is more satisfying than wrapping a book and placing it under the tree. A lot of the B&N customers who bought books for presents only go into B&N at Christmas time, so they probably didn’t even know that for a while B&N didn’t carry many books at all. These customers bought their holiday books, ticked an item off their Christmas list, and moved on to other stores without a backwards glance.

And those folks won’t return until Christmas 2012.

Those of us who used to shop B&N regularly already have alternate methods of buying paper books. I bought my December books through my local independent bookstore and through Amazon—early, because I knew the chances of finding what I wanted in an actual store were pretty slim. I’m not changing my habits again because B&N changed its mind so quickly.

If B&N’s corporate masters are that clueless, then they will expect that uptick in paper book sales to increase in the first quarter. And like all first quarters in the paper book part of the industry, paper book sales will decrease. They might even drop off precipitously, considering that the only people who went into bookstores in January, February, and March were book lovers, all of whom have, like me, developed new ways to find their paper books.

If B&N has a dramatic downturn in paper books, then the entire paper book industry will have a decrease. It won’t be as bad as the first quarter of 2011, when traditional publishers finally realized that Borders really and truly was going to go bankrupt and no one could stop it.  But it won’t be pretty.

Combine that with the first-quarter plateau in e-book sales, and what will you get? Incredible doom and gloom from all of the traditional industry pundits long about the first week of April. The sky will be falling yet again, even though more books will have been published than ever, more books (of all types) will have been purchased than ever, and the industry—the overall industry (not just traditional publishing)—will be healthier than it has been in decades.

What does this mean for writers? If they’re in traditional publishing, writers should expect more of the same—more decreased advances, more demands to give up more rights, a firm insistence on that 25% of net for e-books from their traditional publisher. The traditional publishers should be even more panicked in April than they are right now, because most traditional publishers will look on the sales this Christmas as disappointing.

Writers who indie publish will realize, long about April, that their sales in the first quarter were pretty darn good. Maybe not the blow-out that some expected—I’m still rather astonished that indie writers whom I know expected that from Christmas forward, they’d sell dozens, maybe hundreds, of copies of something only selling one or two things before.

Writers with a lot of indie titles (25 or more) will see their monthly checks from the various e-tailers like Amazon grow in the first quarter. Maybe not significantly—no home runs—but enough to be noticeable. Why do I say that writers with a lot of titles will notice and others won’t?

Choice. Click here to look at this nifty diagram from writer Emily Casey. She has a great blog post about taste.  No matter how “scientific” we all believe book buying is, it’s really just a matter of taste. An editor buys the books she likes that fall into a taste range that agrees with the taste of the head of the sales force. There are always books that the editor can’t get through the publisher or the sales force. (For a vivid example of this, see Joe Konrath’s rejection blog this week.)

The narrowing of taste—appealing to the editor, the sales force, the bookstore—means that only certain types of books get published. And as Emily Casey points out, those folks know only what they, their friends, and others like them will enjoy. Those buyers don’t take into account the reader in Cincinnati who wants a romance set in 1850 Ohio or the reader in Japan who wants a modern version of Sei Shonagon’s Pillow Book.

Those readers might not buy in bulk—they might not buy thousands of copies in the  month of a book’s release—but they’ll buy. And then they’ll convince their friends to buy and so on.

And suddenly, books that had no hope in New York publishing will sell thousands of copies. And since the writer is not making pennies on each copy but dollars, the writer will earn a living wage (or better).

So…the holiday surprise is that yes, Virginia, Santa brought everyone a few classics in their Christmas stockings this year.  And readers have gotten overwhelmed by too many discounted items.

But those of us in this business for the long haul, those of us who aren’t looking for dramatic quarter-to-quarter upticks in our profit margins, those of us who are willing to watch a slow but steady growth instead, will be pleasantly surprised by the first and second quarters of 2012.

Patience, my friends. Traditional publishing and the pundits are floundering because they don’t know what’s the best thing to do any longer.

But publishing itself, that grand old business that we writers form the foundation for, is doing better than ever. Our business is healthier than it’s been in decades—and it’s working its way toward robust.

And that’s no surprise to those of us watching all aspects of the industry. But it is a nice thing to remember in this strange transitional holiday season.

So…the last Business Rusch post of 2011 is now done. Thank you all for following me this year. I appreciate the support in the comments, links, and e-mails. I also appreciate the donations, which fund this column and make it possible. I do have a donate button below. If you like what you’re reading, please leave a tip on the way out.

But before you do, let me wish you all the best for yourselves and your writing in the new year.  Thanks again.

 Click here to go to PayPal.

“The Business Rusch: The Holiday Surprise” copyright 2011 by Kristine Kathryn Rusch.

 

 

 

 

 

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48 Comments

  1. Great analysis, Kris. Lots to think about.

    I was one of the lucky indie authors to have a home run this Christmas.

    Devil’s Lair was selling about one copy a day. I did a two-day free giveaway on Amazon (before the crest of the free classics wave), and on Christmas Day sold 240 copies in the US at $7.99 for a one-day take of over $1,300.

    I know I got incredibly lucky. Now I’m focused on getting more titles out for 2012. I’ve learned a lot this year, and look forward to learning (and earning) more in the months ahead.

    Thanks again for sharing your wisdom.

    And Happy New Years!

    David

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    • Wow, David W. What a great day! Excellent. Nice halo effect. Congrats!

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  2. Thanks for the rather intriguing post, Kris. Christmas has been about what I expected. I started 6 months ago and I went through the aches and pains of those rather slow periods, so the reasonably ok sales hasn’t thrown me. (Of course, I expected more, listening to others harp on about last year, but this is 2011, not 2010, it’s a different ball game now.)

    By the way, the B&N thing is pretty interesting. My friend lives in Japan. He gave me a call over Christmas and we chatted about Kindle and what I’m doing (I force the poor guy to read all my books -he he.) The interesting thing is that Japan is the complete opposite. Used book stores and department store bookshops are MASSIVE there. He has a Kindle and he said people actually stare at it (not him, but the machine) when he’s in a cafe or the train. He’s never seen anyone with one or even reading a book on their phone. It’s like my country was and still is really. Paper is king. The US is ahead of the game it seems.

    However, I wonder about the UK. What about book stores there? My country has libraries and bookstores, but people are slowly getting more smartphones and iPads are common for reading. The cost is high compared to expendable income, but Apple is doing a good job of getting books into people’s hands (without charging a $2 bribe for service!)

    Also, for me, UK sales have been normal. I sell about 30-40% of my work to the UK. I’ve seen the normal increase that I get monthly, but slow and steady seems to be the reality. Probably the only thing I can say is that my erotica sales in the UK are fractionally higher (in the US they are 10-20% of my sales – Erotica makes up about 5% of my total stock list under this and my other pen names).

    Finally, as for your predictions, I’m in agreement, but I will wait and see. Things change a lot and often in my experience. What is true now might not be half way through next year. Still, I’d like to see a bit of a bounce on top of my steady increase (higher pricing has given me $40 extra a month instead of $20, but $60 extra a month would be incredible! Then one slam dunk… Ah, the wonders of greed.)

    Hope you have a good 2012!

    Kenneth Guthrie.

    Reply
    • Kenneth, good points about Japan. Right now, Amazon/Kindle is in a major battle with the Japanese. The Kindle is being delayed (again) because they can’t get the pricing structure they want. The publishers are afraid that the Kindle will destroy the book business in Japan and aren’t cooperating with Amazon. It’ll be interesting to see how it all shakes out. As for the UK, someone who lives there might need to speak on your question.

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  3. This came at a really good time for me, so thank you, Kris. I actually have seen a pretty decent uptick in sales…that started in November for some reason…so I have no complaints. But I am still trying to assess the point at which I’ll feel (relatively) secure that I can support myself in the states on this work full time, so I have to watch my reactions and overinflated expectations, too. I’m fairly conservative financially, so the uncertainty is hard at times…the voice of sanity and non-overreaction is really welcome.

    And I had to laugh at your description of how the publishing companies will react to the fact that they won’t do as well as their astronomical projections (and golden promises to higher-ups) had indicated. I think you’re dead on in anticipating the panic and mayhem this is likely to cause in those companies. And poor Barnes and Noble. They just seem to be shooting themselves in the foot.

    Happy New Year!

    Reply
    • Thanks, Julie (JC). Btw, the disappointment is already starting. This morning’s news is that Amazon didn’t grow as much as predicted, so there is disappointment showing up in the stock price. I’m working from memory here, but the growth was “only” 38% instead of something higher. Ahhhh, pout. So silly.

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  4. I’ll take slow, steady growth over brief explosions tapering to tiny trickles any day!

    But anyway, happy new year, and thanks so much for your incisive columns. I was only able to donate once–2011 was a sad year for revenue–but I appreciate your hard work on our behalf. I point all the people who tell me they’re re-thinking what to do with their nascent authorial careers over here and gotten a lot of “thank you, that was amazing” comments in return. :)

    Reply
    • MCA, the links to my blog are as important as donations. Thanks! The more the merrier. And I appreciate the good words.

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  5. I got myself a nook touch the day after Christmas, and when you mentioned that the top downloads were classics, I looked at my nook. I’d downloaded a few classics on my to–re-read or to-read list. More modern freebies, though.

    But I’ve also known about and used Project Gutenberg (where you can get free e-books of classics) for nearly a decade. I discovered this week that most folks still haven’t heard of it. So that probably contributes to the many downloads of classics.

    Instead of lowering my prices for Christmas, I actually raised prices on one book. It hasn’t seemed to hurt sales.

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    • Carradee, we raised some prices too. It helped sales. :-) Who knew? Fascinating to know that the Nook has the same classics thing going on. You made me smile with that piece of news.

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  6. Thanks so much for this post.

    I am one of those indie authors who had high expectations for this Christmas because my sales right after Christmas last year were so fantastic. While the uptick has been moderate, it has not been what I expected. But I do know better, expectations in this business, particularly given the amazing transitions, are not particularly useful.

    I also had noticed the number of classic books that were at the top of the category of historical mystery where I had been ranking in the top 5, but was now in the teens and twenties. I had decided this was because my category on Kindle had gone from 80 books to 1500 the week before Christmas (evidently Amazon had finally gotten rid of a computer glitch that had kept books out of this category unless input manually). But now I know that this is part of a larger trend, and your analysis makes perfect sense.

    Of course the fact that the Sherlock Holmes canon, and Dorothy Sayers, are inaccurately listed in historical mystery category (I can just hear what ever publishing house techie made that decision say, “well they are mysteries and they are set in the past”) is frustrating for those of us who have legitimate historical mysteries, but it is sort of flattering to know I am competing, and not doing too badly all things considered, with one of my idols like Sayers!

    Anyway, this post was such a good reminder to us all to be patient and celebrate the fact that as indies we don’t have to panic, our books aren’t “going to go away,” and the readers will find our books, if they are any good, eventually.

    Thanks,

    M. Louisa

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    • M. Louisa, thanks for the information on the historical mystery list. I hadn’t known any of that was going on. So much appreciated.

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  7. I wish my current financial situation allowed me to drop a little something in your tip jar.

    It doesn’t so I’ll have to settle for thanking you for your insight and inspiration over the past several months.

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    • I appreciate the thanks as well, Gregory. So thank you.

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  8. “if everything is on sale, then the sales price doesn’t look that enticing.”

    Exactly. I’ve been trying for years to get a similar concept into the heads of people I work with in the day job: If everything’s a priority, nothing’s a priority. Somehow, even with very smart people, the logic of that statement just doesn’t get through.

    I haven’t been in our local B&N since November, but my daughter was there last night. She said they’ve moved everything around again, so I guess they did try to make space for more books. She was disappointed in the manga section, which like anime has been dwindling everywhere. While she has online sources to purchase the books, she’d rather buy manga at a bookstore, especially a series she might like to try (she’s resistent to e-pubbed manga), but that’s becoming increasingly more difficult.

    While free is good and does lead me to try authors I haven’t heard of before, reasonably-priced ebooks would be better for everyone in the long run. Favorite authors of mine have new books out that I haven’t purchased yet because the ebook price is too high.

    Reply
    • Annie, thanks for the B&N report. I hope to hit one in the next few weeks. I’m holding off on some e-books for that reason as well. What I really find amusing about myself is this: If the e-book price is high, and I have to have the book right now, I order the paper copy–through Amazon, at great discount. I guess I’m still a paper girl at heart. Or maybe I’m reverting. I used to do the same thing with hardcover and mass market. If I could wait a year, I would. Otherwise, I’d buy the hardcover–unless I knew I could finish it in one sitting. Then I felt the price wasn’t worth it. I suspect other readers have their own price rules as well.

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  9. Hi, Kris, and let me wish you a happier, healthier New Year right off the bat!

    We had one experience with the Kindle I’d like to share. My mother-in-law is an avid reader, so her kids got together to buy her a Kindle for Christmas. However, rather than leave it to her to figure out how to use the computer, the Kindle, and wi-fi all at once, they elected to “pre-load” the Kindle with some books on her wish list. We did so, which means that those books will show up as PRE-Christmas sales, not post-Christmas like many people are expecting. We loaded her up with a dozen or so novels (plus all of my work, heh), so my MIL won’t be buying any more Kindle books until well into late March or early April. So anyone looking for a post-Christmas surge in e-book sales should take into account not only (as you said) the lull in sales as readers read their new books, but the possible pre-Christmas surge as books were loaded onto gift versions of the reader.

    As always, a good blog post filled with interesting and useful information. Thanks for a year of fine commentary, Kris. I hope you and Dean feel better soon.

    Sarah

    Reply
    • Sarah, your pre-loaded Kindle story makes a lot of sense and adds to the feeling that I had that some sales were increasing during the holidays, but I didn’t know why. Fascinating. Good post.

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  10. Thanks for the large view, Kris.
    Somebody has to write this.
    Glad it was you.

    Happy New Year to you and Dean.
    May viruses be banned from your estate until the 12th of Never.

    Chuck

    Reply
    • Thanks, Chuck. From your mouth to God’s ear on the viruses. Happy New Year to you as well.

      Reply
  11. Great post, Kris. I’m just getting started in the indie publishing world, but I hope next Christmas will be fruitful. Thanks for linking to my post. I appreciate the kind words. :)

    Reply
    • You’re welcome, Emily. Great chart!

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  12. I wanted to thank you (and Dean) for talking about this subject. Very glad to have your opinions. To paraphrase McCoy during Star Trek V, “Your guesses about publishing are better than most people’s facts.”

    I think all the new e-readers this Christmas is like sitting down in a tub–the water’s going to slosh around a bit before it finds its new (higher) level. One thing I WOULD say, is that there are a lot of new ebook readers out their trolling for fiction, so it seems to me this is a good time for writers to get stuff up in the hopes that readers will find them. You might not see higher sales right away–but there’s the potential to plant the seeds for better sales down the road.

    Anyway, thanks again for the great post!

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    • Steve! A bathtub metaphor. One would think you’ve seen Dean teach. :-) I think you’re right, though, about all of it. Thanks for the post.

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  13. There are also the people like me who had a reading device (an iPad in my case), but spent their Christmas money on a kindle. I won’t be contributing to a surge in new book sales.

    However, I saw my best monthly UK sales for my book this month. Of course, 3 sales is statistically insignificant. I need more books out.

    Thanks for the blogs. They’re the first thing I read Thursday mornings, unless I see them Wednesday night.

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  14. Writers who indie publish will realize, long about April, that their sales in the first quarter were pretty darn good. Maybe not the blow-out that some expected

    I’d settle for plain old good. :-) As you and Dean continue to point out, the more books you have out there, the better chance people will find you. That’s what I have to keep focused on. And because I want to be more focused on writing, I haven’t been going on Kindleboards all that much, just reading you, Dean, and Konrath’s blogs.

    LOVE that New Yorker cover! :-)

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    • I think we’re all happy with good, Nancy. At least those of us with realistic expectations. :-) Thanks for the comment.

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  15. “So guess what’s going to happen? We’ll all see analysis in the next few months on how e-book sales weren’t as big as expected. In-house at traditional publishers, there will be an examination of the promotions, and that examination will determine that most promotions don’t work.”

    Yes, the two business philosophies I’ve seen repeatedly exercised in by publishers throughout my writing career are:

    1. “If it hasn’t been done before, then… my GOD, man, let’s NOT try it HERE!”

    2. “If we tried something and it didn’t work, then the obvious conclusion is that it CAN’T POSSIBLY work–certainly NOT that we made a poor effort and should try it again with a more intelligent strategy and much more competent tactics next time around.”

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    • Wow, Laura. Most traditional publishers in two quotes.. :-) Exactly.

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  16. Kenneth – bookshops here in the UK are having a hell of a time. Most independent bookshops have closed down (my local two have). Borders, the chain bookshop, closed down two years(?) ago and the other one, Waterstones, is not said to be having a good time. This is mostly down to people buying books over the internet (with supermarket book sales having a smaller impact). I don’t think ebooks are helping, but they’re not the shops’ biggest problem.

    As for ereaders/ebook sales in the UK, I agree with Kris that pricing has been an issue. The Kindle is now down to £89, which is still more than the $99 they’re selling for in the US (that’s about £64). On the other hand, the British love their smart phones and their ipads / tablets. So I suspect a measure of reading is being done on those.

    The biggest enemy of the ebook is VAT (sales tax). Historically, there has been no VAT on books because it was considered shouldn’t be a tax on knowledge. However, digital products like ebooks aren’t put in the same category and have VAT at 20% added to their price. So a nicely priced $4.99 ebook is selling in the UK for the equivilent of $5.99 – ouch!

    Reply
    • Thanks for answering Kenneth, Jane. It’s always good to hear from someone in the country in question. I noticed a lack of good bookshops when I was in the UK in 2007, and thought it odd, because I remembered discovering great books the last time I was there. (Decades earlier.) Sorry to hear the trend is continuing. I did hear that there’s been some successful negotiation on that VAT tax, but it won’t hit until later in 2012 (I think. I really should locate the article…)

      Reply
  17. “I’m working from memory here, but the growth was “only” 38% instead of something higher. Ahhhh, pout. So silly.”

    Silly from the everyday perspective, yes. But as we all know, stock price is based on the forward projection of future cash flows and dividends. The various analysts on wall street base those predictions on their own research and on what the company in question (Amazon in this case) projects in their quarterly reports and other press releases. So if Amazon predicted, say, a 50% increase and the stock price changed to reflect that prediction 6 months ago (which it probably did), when growth only actually came in at 38%, the assumptions built into the stock price were thrown asunder. Thus the stock isn’t worth as much as predicted, and the stock price goes down. If a company’s job is to increase shareholder value (and it is), this is a bad thing. Which is why it’s so important to strive to be accurate (and conservative) with one’s projections. Not meeting the market’s growth predictions can be deadly.

    Shame on them for over-promising, I guess.

    Wow I feel like I’m giving a lecture about things you probably already know. Sorry.

    Great post as always, Kris. Thanks!

    Reply
    • Well, yes, Michael. :-) Good to remind everyone, though, and inform those who don’t know.

      But that goofy statistic also proves my point. Expectations for this Christmas sales were gargantuan. The fact that they’re going to be merely gigantic is going to be a disappointment to the stockholders, the publishers, and those who made the predictions. The rest of us will simply smile and look at our increased sales figures and hope that our readers come back when we have a new book out. :-)

      Reply
  18. Over on the Kindleboards, where as you can imagine the writers watch Amazon’s moves very carefully, there are a lot of consistent reports of improved sales numbers, without an accompanying change in Amazon ranking. When the ranking is stable at increased sales, that tells you that sales are up across the boards (since rankings are based on relative sales, yours vs. everyone else in your category). So more evidence towards that belief that coming out of Christmas, the most important point is not a surge of Christmas sales, but the higher ongoing sales level for ebooks overall.

    Reply
    • Excellent point, jnfr. Good to hear it’s across the board (and Boards). Thanks.

      Reply
  19. I found your blog about a year and a half ago, from a link on a favorite author’s website. I’m not a writer, but have found your blog fascinating ever since. It’s nice to see a discussion about what’s going on in the industry from someone who understands it; as I had noticed changes in my local B&N, and was starting to worry that publishing was going away, and I wouldn’t be able to find my books anymore. As a point of interest, I’ve discovered that I don’t read paper anymore at all. After I got my reader 3 years ago, I used to try new authors in paper (so I could resell them if I didn’t like them:-)). I noticed a couple of months ago, that they are still in a pile next to my bed (they’d been kicked underneath). When I finish a book, I don’t even think of those, I go search online for another. I assume I’m not alone, so not good news for B&N, but great for those of you with an e-presence. Anyway, just wanted to say thank you for all your work on this blog, and great success for 2012!

    Reply
    • Thanks, Wendy. I appreciate the good words–and the observation!

      Reply
  20. I did experience a modest upturn in sales in December. It’s not nearly as much as many others are seeing, but I’m very happy right now.

    Anyway, I just wanted to thank you for this great series. Without your and Dean’s blogs, I wouldn’t have started indie publishing and I wouldn’t have 12 stories out there selling.

    Reply
  21. Ooh – if you find that article about VAT, please post!

    Reply
    • Will do, Jane. :-)

      Reply
  22. Full disclosure, I’m in UK and I bought a Kindle Keyboard G3 a year ago. I have been buying and reading eBooks since October 1999.
    I bought it as a reader and also for the value of the extras like reading your column or calling Google Maps away from hot spots with no smart phone and no data contract needed.

    2 Million Kindles
    I too noticed the classics returning to the top 100 free

    I explain this more as a “I always meant to” like Catch 22 being (paid) #707, _1984_ being #752

    There is a change in the EU which will have some effect on Amazon sales from 1st Jan. The VAT (sales tax) Luxembourg charges on eBooks was changed from 15% to 3% so many Amazon eBook prices fell by 10% since they are all sold “by: Amazon Media EU S.à r.l.” in Luxembourg.

    Other UK eBook stores are paying VAT at the full UK 20% (0% on printed books).

    As to “buy immendiately in case it goes away” this is true for freebies and special offers, including yours.

    This of course provides evidence for some of the sales theory that you have noted here. Amazon.co.uk have been running “Kindle Daily Deal … one book every day at a specially discounted price” since November a little earlier in the US. Each book spends a day near the top of the “paid” list BUT stays in the list for some time thereafter, selling at the full price. Starting at #10,000 and being at #20 a month later is common. It may be at #7,00 3 months later of course.

    Sashwords has in fact put some of its top sellers in the Kindle store, a search shows 130, so Mark Coker /has/ some data.

    Mike D
    Little Egret in Walton-on-Thames

    Reply
    • Thanks, Mike, for the UK report. That’s quite helpful. And as for the “I always meant to” syndrome, yeah. I just downloaded the free ebook of Wilkie Collins’ Woman in White. I own it, but in a messy paperback with tiny type. I’m hoping I’ll finally read the ebook version. :-)

      Reply
  23. I appreciate the fact that you stress the long haul. Too many of us (and this could have a lot to do with cultural attitudes influenced by runaway capitalism in the financial sector) expect to see unrealistic expectations of constant growth every quarter and when things fall just short of those expectations we think we have failed or that the industry is failing, when what needs to happen is a reassessment of our expectations.

    Reply
    • Exactly, Victoria. Thanks.

      Reply
  24. Thanks for the analysis; it helped me to put things in perspective.
    I mean, here I thought I was making such a brilliant move–releasing not one but two free ebooks on Thanksgiving night with stories from my anthology and EXCERPTS from other stories, in hopes of enticing people into buying the collection. I even added chatty little afterwords to the books, attempting to attract a little love.
    But, wow, it’s pretty freakin’ hard to compete with Mark Twain and Jane Austen.
    Oh, well! Thanks for the reality check…

    Reply
    • At least they’re not writing anything new, Michael…:-) Good luck with all of it.

      Reply
  25. A belated Merry Christmas and Happy New Year.

    With the amount of confusion in New York I wouldn’t be surprised to hear some executive claim that everyone is dropping eBooks and moving back to hardcovers because of price and convenience. And then have their company invest heavily in new presses and distribution systems.

    As to competing with Mark Twain, do I really have to?

    Wayne

    Reply
    • Thanks, Wayne. Yeah, we’re all competing with Twain, the curmudgeon. But at least he’s not writing any new books. :-) Btw, you see some of that moving back to books comment in B&N’s latest press release. It was funny. We’ll see what publishers do. They make a lot more money on e-books, so they might not jump to new equipment as fast as you think. But they might. I have no clue how they make all their choices. (Thank heavens.)

      Reply

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