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