Business Musings: The Data Divide
I wish I could have been a fly on the wall at the Digital Book World Conference last week as Data Guy made his presentation. He brings data to a world still stuck in the 19th century. As I read reports of the reaction to his presentation, I saw continual insistence that publishing is about “gut instinct” and the ways that data undermines the art of publishing.
Which misses the point.
I too believe that parts of publishing are about gut instinct. Curating—editing—that’s all gut instinct, because it’s about taste.
Yeah, I said taste. I’m sorry, all. Editing is not about buying “good fiction.” It’s about the editor’s likes and dislikes. That’s it. Some editors are really good at capturing the cultural zeitgeist. Others really speak to their niche audience. Readers, whether they know it or not, usually buy books edited by the same editor.
Or readers did, back when books only went through major publishing houses.
Now, readers act as their own editors 100% of the time. Sure, readers use curation services, from similar readers at Goodreads, to recommendations from favorite reviewers, to buying magazines edited by the same person.
But, with the increased availability of indie published titles, readers now have the freedom to follow their own gut.
Does that mean that traditional publishing is passé?
No, but our understanding of it is. Traditional publishing, as the be-all and end-all of everything “good” in literature, no longer exists (if it ever did—that’s an argument for another blog post).
Traditional publishing is now another venue for fiction. For readers, a traditionally published book does a few things: it promises a certain standard of copy editing and line editing; it will occasionally gift us with a mass market edition; and it sometimes produces lovely books.
For writers, a traditionally published book does a few other things: it goes through an existing trade channel—the one the traditional publisher has set up over time; it puts a book in front of a specific and known audience; and it satisfies that need that some writers have for outside validation. For a handful of writers, it also brings in some necessary advance money, to make the writer feel good about finishing the book.
Those are the only upsides to traditional publishing in the modern era. There are hundreds of downsides for writers, maybe thousands of them, considering the contracts issues, the rights issues, and, oddly enough, the availability issues.
I’ll get to the availability issues later in this blog, but first let me go back to Digital Book World.
In the white paper that Digital Book World released before the conference began, Porter Anderson wrote an introduction that seemed to presage a different talk from Data Guy. Anderson used Data Guy’s October report to show that indie’s share of the ebook market fell between May and October of 2016. The implication was that Print Is Back! (Joy of joys! Celebration all around).
But, Data Guy’s presentation nuked that expectation. (You can see the full presentation for yourself on Author Earnings’ website.) Print did come back in 2015-2016, he said, because Amazon dicked with the hardcover prices when it could no longer discount ebook prices.
I had noted Amazon’s pricing structure and its repercussions repeatedly in my blogs during that period of time, but all I had was anecdotal data. Data Guy’s spiders mined the data and that actually showed that the 3.3% rise in print sales in the U.S. was due entirely to Amazon’s shenanigans with hardcover prices.
Slide #11 of his presentation was particularly devastating in this regard: Print book sales went down at WalMart (and their ilk), Barnes & Noble, and chain stores, airports, etc. Significantly down. Print book sales were slightly up for independent booksellers (yay!) and significantly up at Amazon—a full 15% over the previous year.
However, the moment Amazon brought its print prices in line with the 2014 discounting levels (in other words, few discounts), print sales went down and then leveled off.
Price matters. Format matters. And price comparisons matter. Of course, people will buy their preferred format, but at a preferred price, which Amazon allows. Take me, for example. When I’m buying books for research, I buy paper, so I can scribble all over them, put sticky notes in them, and generally abuse them. Because I’m going to abuse those books terribly, I don’t mind if I buy a used hardcover or a battered paperback. But I do want paper.
The rest of the time, I prefer mass market, but I’ll read trade or hardcover or ebook, depending on price and my level of urgency to read that particular book.
Every other reader out there is different from me in those preferences. Every one, and Amazon (and other stores similar to it [nothing is like it] provides me with choice, so that I can get what I want, when I want it, in the format I want it in, and at the price I’m willing to pay for it).
The fact that the great news of Print Is Back! went from something to celebrate to something to fear in the space of an hour-long presentation had to be difficult for the traditional publishers, whether they admit it or not. The attendees of that talk must have staggered out of the room, feeling stunned.
Real data for publishing businesses isn’t necessarily about what books to buy at the editing phase, but it is about how to market those books, why some books sell well and others don’t, and what’s going on within the industry.
That’s why Author Earnings is so valuable.
I know those of you outside the United States get quite frustrated when I write posts like this one, because you believe this has nothing to do with you.
But it does have something to do with you for this reason: Since the dawn of the indie revolution in publishing (2008-2010), the United States has been two years ahead of the rest of the world in trends. That’s not entirely uniform, due to country-specific regulations (I’m looking at you, France. And you, Germany), but it’s a good rule of thumb.
So what you’re seeing here in the U.S. will become a trend in your country, if it hasn’t already.
I have many takeaways from Data Guy’s presentation. I know that if I were the CEO of one of the Big Five (Three?) publishing companies, I’d be eyeing my golden parachute right about now. Let someone else deal with all these changes. Let someone else try to turn a ship built in the 19th century and remake it into a sleek digital business that can surf the web as easily as it once surfed the waves.
But I’m not the CEO of an old company. I run a newer company. (Several newer companies.) Most of you who read this blog only run one company—and that’s your writing business.
You can find a lot of clarity for that writing business in Data Guy’s Digital Book World presentation.
There are a lot of writers out there who are trying to figure out what’s best for their writing business—going fully traditional, going hybrid, or going 100% indie. In my contracts series last year, I argued that no one should go fully traditional with their novels any more, because of the contract terms.
Traditional publishing contract terms have become more egregious, not less, even as the publishing world made it easier for writers to go it solo. If you don’t understand what I’m talking about, you can read the entire book online in unedited blog posts or you can get a copy of the book itself.
A lot of very smart writers, however, have tried to thread the needle between traditional publishing and indie publishing. Those writers have decided to be hybrid—putting some books into the traditional mix, and “losing” that book, for the promotion and distribution opportunities that traditional publishing supposedly offered.
By “losing,” I mean the writer essentially loses earnings potential and control of the book itself, not to mention the bulk of the copyright, in exchange for the “benefits” of traditional publishing.
I’ve been skeptical of that hybrid argument for a long time. The argument is too binary. Traditional publishing, the argument goes, has a lock on book distribution and book advertising; indie (self) publishing relies on ebook distribution only and ineffective online promotion, done by the author.
I’ve also written about the ways that an indie author can do the same kinds of promotion that a traditional book company can do, in a series of posts on discoverability and a book of the same name so I won’t go into those arguments here.
Instead, I want to use Data Guy’s numbers to examine that whole distribution strategy that some hybrid authors believed would make a traditional book sale worthwhile.
I’ve been on the cutting edge of digital publishing for almost a decade now; I learned early that traditional publishing didn’t have the desire to make its English language books available worldwide. By going indie, I ended up with book sales around the globe—for my English language titles. That was always one of my arguments for going indie.
But so many writers wanted to be in bookstores, so those writers either did print-only deals with traditional publishers (and, I’m sorry to say, writers, those contracts screw you as bad as regular traditional contracts) or those writers sold entire novels or series to traditional publishers as loss leaders to promote other writings.
Maybe those decisions were good ones five years ago. We can argue about that.
But given Data Guy’s numbers presented in January of 2017, I think that there is no reason to go hybrid with your novels from this moment forward. You have as much or more advantage as an indie than you do with a traditional publisher.
Let me show you how Data Guy’s information proves that point.
For years now, industry pundits, blogs, and insiders felt that there was a major difference between ebooks and print books. You see it in those print-only deals that indie writers make with publishers. There is this perception that print is for brick-and-mortar stores; ebooks are online.
That might have been true for a few years, but it is no longer. As I noted in my blog “2016 Disappointments,” one of the biggest takeaways from last year was that study after study shows that shoppers now make half of their purchases online. That means that most people have shopped online at least once in the past year.
Data Guy breaks this down for books. His data spiders, crawling through the web, discovered that 69% of all U.S. book purchases are made online. Not just ebook purchases. All purchases, including print. The fact that Amazon alone changed the print-ebook sales ratio just through discounting, making print grow for much of 2016 proves that point all by itself.
Data Guy breaks everything down by category. I’m going to focus on adult fiction and its subgenres, because this is mostly a blog for the fiction writer.
According to Data Guy, three-quarters of all U.S. adult fiction is bought online. Again, that’s print, audio, and ebook.
So that desire you writers have to get into a brick-and-mortar bookstore through traditional publishers? It doesn’t happen much any more. If you don’t believe me, search for a brick-and-mortar bookstore within 20 miles of your house. If you live in a small town, you might not find a brick-and-mortar bookstore at all. If you live in a city, you might find one of those stores. Now, break that down: does the store carry new? New and used? Or just used?
My little town has several great bookstores, most of them used. A couple carry new and used, but none—not a single one—is 100% new.
We used to be able to buy new books at the grocery store or stores like BiMart or WalMart or Rite Aid, but these days, their book racks have gone down from an entire aisle to one measly little shelf.
The same with airport bookstores. Shelf space has decreased dramatically. And while indie bookstores have grown in the last few years, chain bookstores have vanished. The small city an hour from us that used to have Borders and Barnes & Noble no longer has either. To get to a bookstore that’s 100% new books, I have to drive 2.5 hours.
And my situation isn’t unusual. Most of America deals with that now. I personally think this stupid decrease in available print books is the fault of traditional publishers. They decided to get rid of mass market editions because they figured the ebook would be the cheap edition, forgetting (apparently) that much of the rack space outside of bookstores (truck stops, grocery stores, discount stores) was mass market only. Those sales are down because availability is down.
Anyway, let’s get back to you writers. You’re still thinking about going to traditional with a few books. You think it worthwhile to risk “losing” that book for years to promote your other books.
I used to tell writers that they needed to make that choice based on the genre they write. For example, if they were writing romance, I’d advise going indie. Because most of romance, I knew, had migrated to ebooks.
But I would tell writers that if they were writing thrillers, they should decide if indie was better for their needs or if traditional suited them.
Well, Data Guy’s spiders nuked that argument as well.
Yes, writers of romance should go indie. According to Data Guy, 55% of the romance market is indie. 96% of the romance market is ebooks, so online makes sense. As Data Guy said in the report, “Romance is Huge (and totally indie dominated).”
There’s no need to go to traditional if you’re a romance writer.
But what about that thriller example? According to Data Guy, the thriller/suspense genre is 60% traditional with 37% coming out of the Big Five. But if you look at that slide, which is #61 for those of you who are playing at home, you’ll see a little note on the bottom right from Data Guy. He wonders if that 37% is “due to a handful of decades-old mega-author brands…”
Even if it isn’t due to mega-authors, there are some other numbers here that thriller writers should pay attention to. The thriller readers buy 87% of their books as ebooks, a number that will only grow. And the fascinating part of that is that thriller readers are buying high-priced ebooks by their favorite “decades-old mega-author brands.” So the thriller reader is willing to spend more to get a favorite, even in ebook format.
Every single genre has at least a 70% ebook sales rate. That means of all books sold, at least 70% of them in adult fiction are ebooks. Which is online. Which means that selling your book to a traditional publisher, who often does less with their ebook editions than indie writers do, will actually hurt your readership, not help it.
If you’re writing something that traditional publishers do not value, something that the current curators see as “unsalable,” then you should definitely go indie.
Data Guy digs into the numbers and finds, for example, that the bulk of general fiction sales happens in the African-American category. That’s because traditional publishers believed (and many of them still believe) that African-Americans don’t buy books.
This is a prejudice that’s almost impossible to fight, believe me. I’ve tried. I even pointed out to a few publishers that the most educated sector of the American public is African-American women—and no one believed me, even when I demonstrated this with actual numbers. (Which I’m not looking up again late on a Sunday night.) To understand the kind of myopathy that the entertainment industry (including the book industry) has shown to African Americans, look at the stunned surprise the movie industry (and pundits) have displayed just this month as the movie Hidden Figures ruled at the box office.
Because African-American writers in the United States have trouble selling books whose main subject is something other than race relations, those writers were rejected much more than white writers were. That’s why Data Guy found that African-American fiction as a subgenre is 71% indie (greater than romance!) and 96% ebooks (the same as romance).
Data Guy is so polite. He looked at those numbers and said, “Huge opportunities exist for indies in genres underserved by traditional publishers.” He used the phrase “underserved” because he was talking to the traditional publishing folks, and trying to be nice, rather than excoriating them for ignoring all the diversity in the United States.
Fiction with nonwhite characters, identified as such, has a larger market than traditional publishing believes it does. So if you’re writing a book about, say, a Latino neighborhood in Los Angeles and that story isn’t about gangs, but a teenage love story centered around a Quinceañera, then go indie. It’s just smarter.
In fact, Data Guy’s numbers show that, as of 2017, being hybrid with novels is no longer a good idea for career writers. You’re better off doing the publishing yourself. You’ll have the same distribution opportunities as traditionally published writers, and you’ll have more control about where your books end up.
You also control price (which, as Data Guy’s slides show, is important), and you can change out your covers when they become dated or decide to go wide one year and focus only on Amazon the next. Your decision, not some bean counter you’ve never met in a publishing house.
Now, I understand that many of you want the validation or the prestige of being published traditionally. Many of you don’t want a writing career, you want to be a published writer, and keep your day job. You will make different choices from the writers who want to make a living at their writing for the rest of their lives.
Those of us who are career novelists need to control our novels. You can’t control your work if you’re traditionally published. And there seems to be no real benefit in traditional publishing as it’s practiced in 2017. Maybe traditional publishers will figure out what makes them special by 2020. I doubt it, but I’ve been wrong before.
Spend some time on Data Guy’s presentation, and think about his conclusion. In particular, take a close look at the major point he was making to these traditional publishers.
That point is this: the digital divide isn’t between print books and ebooks. The digital divide is between brick-and-mortar stores versus online stores.
Consumers have migrated online for all of their shopping needs, including books. On virtual shelves your indie published book—beautifully produced of course—is equal to if not greater than a traditionally published book.
Recognize this as a reality for the new year, and make your decisions accordingly.
As I said earlier in this blog: data helps you make decisions about your business. So use the data when it becomes available to make the very best decisions for you.
The year-end reviews are providing a lot of information about the state of the industry. What’s surprising to me is how unsurprising most of that information is to those of us who have been paying attention.
Yet more signs that this indie revolution is maturing.
I’m digging into the blog, as those of you who support me on Patreon can see. I’m a couple of posts ahead at the moment, and hope to remain so.
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“Business Musings: The Data Divide,” copyright © 2017 by Kristine Kathryn Rusch. Image at the top of the blog published by permission of Data Guy. (Thanks, DG!)
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