Mary Sisson's Blog, page 128

Oh, and yeah, there hasn't been a lot progress

It's not the blog's fault: Saturday was a lost cause because I had mild food poisoning the night before, yesterday was crazy with appointments, and today I have the kid. Tomorrow I should be back on track.

On-line book retailing in the future

I was thinking about potential rivals to Amazon and what they might look like.

If you are a reader, Amazon does two things very well: It enables book discovery, and it sells books.

But Amazon isn't the only Web site that does a good job enabling book discovery: Goodreads and Library Thing are also good at that. They don't sell books, though--instead, they link to where you can buy books.

Another way to enable book discovery is to specialize in a particular niche. And whaddya know, there's a site out there called All Romance that specializes in romance e-books (yes, of course, romance). It allows authors to upload books and set prices themselves, giving you 60% of the revenues.

Unlike Smashwords, All Romance doesn't do your file conversion for you--you upload what you have, and that's what for sale. From a technical standpoint, it's simpler, because the authors are doing the file conversion--all All Romance needs to worry about is having a reliable Web host. Like Smashwords, All Romance doesn't appear to have a big corporate backer.

I think that as server space gets cheaper, more sites like this will crop up, specializing in particular genres. They'll offer fewer titles than Amazon, and probably won't have as powerful recommendation software--but they won't need that because they'll be offering fewer, more-specialized products.

In addition, if server space gets really cheap, I could see a site like Goodreads or LibraryThing offering titles themselves--instead users clicking over to Amazon to buy a recommendation, they click a button to buy from the site itself.

The thing about e-books is, they don't really play to Amazon's strengths other than their ability to make stuff easy to find. Amazon is very, very good about getting what you ordered into a package and to your door. But what does that matter with electronic goods? Look at other e-things--movies, music--and Amazon isn't the dominant player. That's why they're offering freebies to Prime members and soliciting exclusive offers--they know they have to sweeten the pot to keep people buying from them.

Progress report

I went over through chapter 21--for whatever reason, the chapters in this part of the book are long, so that's actually a good deal of work.

I haven't really been getting the B tasks done, though, and there's other crap I need to do that I haven't been getting to. I think part of it is that I've been writing these huge blog posts--obviously, I find the subject as interesting as hell, but I probably need to pare back....

Niche retailing and books

When I was a business reporter, in addition to enjoying covering entrepreneurs, I liked covering retail (and yes, there is considerable overlap between the two). The nice thing about retail is that you can see how it works, even if you don't realize at first glance what it is you're seeing.

One thing that baffles people at first glance is when they see, say, a Chinese restaurant open up, and then another opens up across the street, and a third opens two doors down, and a fourth opens one block over. They think, Oh, that must be bad for the first guy!

But it's usually not. If you have a bunch of Chinese restaurants in the same area, you have a district! The Chinese-food district! Got a hankering for Chinese? You'll go there, and then you'll look around and pick a place--the first place is really fancy, the second place just does take-out, the third specializes in seafood, and the fourth does spicy Sechuan.

Being located together helps all four restaurants.

It also helps that the restaurants don't all have the exact same menu or ambiance. They're not actually in competition, even if it seems that way at first glance. If you're in your sweats and just want something quick, you're going to go to the take-out place, not the fancy place. There may be some overlap (the fancy place probably carries some seafood, for example), but not a lot.

Each has a niche to serve.

Niches are key to retailers. Wal-Mart has a niche--low prices. The Wal-Mart shopper is extremely price-sensitive and doesn't care about anything else: You could put an $4,000 Cartier watch on sale at Wal-Mart for $500, and no one will buy it because $500 is still a lot to spend on a watch. Wal-Mart has for years attempted to move out of its niche and appeal to more-upscale shoppers, and for years it has gotten slammed for it--your Wal-Mart shopper goes to Dollar General when Wal-Mart's prices go up, and your upscale shopper will not shop at Wal-Mart. Ever.Wal-Mart could carry organic milk at half or a quarter of the price of Whole Foods, and your Whole Foods shopper wouldn't even know it.

Book retailing is niche-y, even if book retailers seem to be bent on pretending it's not. Take this Publishers Weekly article (via PV), which mentions a South Carolina regional publisher called Hub City that opened a bookstore last year to serve its niche market:

Last March, Hub City executive director Betsy Teter explained that "We have a Barnes & Noble in town, but it isn't terribly friendly to regional and local book producers." In its first year, Hub City Bookshop sales exceeded projections by 77 percent.

 

Of course, the body of the article isn't about how indie bookstore realized long ago that they can't chase the same customer as Barnes & Noble and survive. No, it's about them getting upset about Amazon.

Do you hear the CEO of Cartier getting upset because Dollar General is challenging Wal-Mart? No? But, hey, they all sell jewelry--why shouldn't the CEO of Cartier give himself an ulcer over Wal-Mart's problems? Oh, because he knows his niche. He knows the average customer at Cartier would rather get shot in the face than buy jewelry at Dollar General or Wal-Mart. Likewise I'd bet the average Hub City customer doesn't even think about either Barnes & Noble or Amazon when they are looking for some South Carolina flavor--they just go right to Hub City, home to all books South Carolinian!

If you are selling your book as an author, it also makes a lot of sense to know your niche. It will not only help you position your book when you pick the cover and craft the jacket copy, it will also help you chose how to spend advertising dollars. You don't want to waste money advertising your romance to true-crime enthusiasts, for example, and if your book appeals to a relatively narrow niche, advertising that reaches a more general audience may well prove less effective.

When writers point out that getting press coverage or having a popular blog or using social media doesn't help sales (or conversely, that sucking at social media doesn't hurt sales), that happens because of niches. I think Joe Konrath's blog is wonderful--I read it regularly and really appreciate it. I also don't like horror novels, so I don't buy his books. His blog appeals to one niche (self-published authors) that I occupy, but his books appeal to another (lovers of the thriller/horror genre) that I do not. If Konrath wanted to, he could monetize his blog by selling ads, but his blog would still be a discrete business from his books--success in one does not translate to success in the other, because they appeal to separate niches.

Could Amazon create a monopoly on books?

One of the concerns I've seen expressed around and about, both by apologists for traditional publishers and by proud-to-be-indie authors, is that Amazon could create a monopoly on books. The concern is that Barnes & Noble will go down the toilet, and the major publishers will follow, and the only one left standing will be Amazon.

I don't doubt that Amazon would create a monopoly on books if it could--any company (really, any person) would love to have a monopoly on anything at all. If you have a real, honest-to-God, Ma Bell-style monopoly, you are in Fat City. You don't have to spend money on research and development, or customer service, or new infrastructure, or technology. You don't have to keep up with the times, keep clients happy, or hustle in any way. You are at that spot on the supply curve where everybody wants to be. That's why we have to have antitrust laws, and that's why they have to be enforced--monopolies are just too tempting.

But is it possible for Amazon to create a monopoly? Keep in mind that there's a huge difference between dominating a market and having a monopoly. You could control 90% of a particular market and not have a monopoly. If everybody buys a GM car because GM makes the cars everybody wants to buy, that's market domination. If everybody buys a GM car because if you buy another kind of car, the police come to your house and shoot you in the head, that's a monopoly. The same is true if gentler forms of coercion are used: If you buy a non-GM car and cannot buy fuel for it because GM owns all the gas stations, then you are facing a monopoly.

Right now, Amazon is selling the majority of e-books, and a number of authors are making their titles exclusive to Amazon, because Amazon does a better job selling indie titles than other Web sites. It might be fair to say that Amazon currently dominates the indie e-book market; it's certainly fair to say they are a major player.

But could they create a monopoly on books? Now, I have argued that Amazon poses no special threat to indie bookstores, but let's say I'm totally wrong. E-books get so fully adopted that you can't give your paper copies away, brick-and-mortar bookstores have nothing to sell, and they all go under--every last one.

On the Web, there is Amazon and...oh, there's Barnes & Noble and Smashwords and Google Books and the Sony Reader store and Kobo and the iBookstore. Oops.

Not a monopoly.

No, you say, Barnes & Noble is going down! Well, OK, that leaves Smashwords and Google Books and the Sony Reader store and Kobo and the iBookstore.

Not a monopoly.

Plus, I could sell e-books from this Web site. You could sell e-books from your Web site. People kick up this huge fuss over Amazon's proprietary system of Mobi files and Kindle readers, but I can and do make my own Mobi files, I could sell them here if I wanted to, and Smashwords certainly sells them. It may be more convenient for someone to buy Mobi files for their Kindle on Amazon, but they don't have to.

Where are the barriers to entry into this market? You don't have to build your own bookstore chain; you don't even have to tangle with Ingram. Look at Smashwords, a company that began operations all of four years ago. They're not some huge corporate entity with phenomenally deep pockets--Mark Coker describes the company's financial backers as "me, me and me." And yet, there they are, reportedly profitable and also a major player in indie e-books.

How could Amazon create a monopoly? They could try underpricing everybody, selling books at a loss, and that might work...for a little bit. Drive Smashwords under, though, and another will take its place, because the barriers to entry are not that high and there's money to be made off indies.

Amazon could also turn on authors, demanding exclusivity and offering increasingly-crappy royalties in exchange. That would require them to believe that people buy books on Amazon because they're on Amazon--not because they're written by an author the reader likes. The problem with that strategy is that the authors could always say, "Screw you!" and offer their books elsewhere. That's actually kind of what the traditional publishers are doing right now, and I think that strategy would work for Amazon just as well as it's working for them.

The change to self-publishing and e-publishing isn't a simple exchange, where you swap one group of corporate overlords for another. It is a completely different ecosystem. It is technology at its most disruptive.

Progress report

Read through chapter 16, tightening and fiddling. Looks pretty good at this point, but of course I may just be burnt out....

More self-publishing economics

The Passive Guy does a great post on the economic advantages of self-publishing here, and in the comments M. Louisa Locke notes that you may be a good writer, but if you're traditionally published, good luck beating her sales, because her book is $10 less than yours (except she says it much more nicely).

Progress report

So, I finished going over the epilogue, and now I'm giving it another read-over and then printing out the chapters to read as hard copy after I take a couple of days off to get fresh eyes. I've finished chapter 8.

This makes me glad I had a writers' group and a beta reader who haven't read the first book read the first few chapters, because to me, especially now, those chapters seem so slow because they contain so much exposition. But it's clearly necessary if you aren't profoundly familiar with the fictional world and the events of the first book. And you know, when I read out a series, I do just sort of skim over the exposition in the beginning, but it's not like I resent it or anything--I know why it's there, even if I don't really need it.

And when it gets ugly...

...publishing gets really, really ugly. Watch out, people.

Fantasy vs. reality in publishing

There's an interview with the publisher of Grand Central about how they really, REALLY care about their books, and do all sorts of wonderful things for them, and love and cherish their authors, and are just the best thing for writers.

It's very touching. You read it, and you wonder why anyone would self-publish. And then you read things by people who have been or who know people who have been published by Grand Central, and a rather different picture emerges. Crappy advances. Authors who are expected to do so much promotion they don't have time to write. Poor financial returns. Minimal and ineffective marketing.

Basically, the publisher of Grand Central has a fantasy about what the company is doing for writers. If you're trying to understand traditional publishing, a big part of the challenge is that the people in it tend to talk about what they wish they were doing. Very few people go into publishing because they want to get rich (and those who do are as dumb as rocks). The vast majority really and truly want to be contributing to literature and don't think they ought to worry about money. The rest are trying to rip you off.

Which is why they all lie about the bottom line--it's a culture that believes it is nobler than filthy lucre. That's why I saw an agent tell a roomful of writers that there was only maybe a tiny bit of truth in the notion that agents are interested in commercial books, when the truth is that any agent who wants to stay in business won't touch a non-commercial book with a ten-foot pole. That's why the nation's largest bookstore chain can tell implausible lies about market share, and everyone else in the industry backs them up.

The problem with this from an author perspective is that figuring out what you should do in traditional publishing is really difficult, because despite the pretentions it is still a business, and you can't make good business decisions without accurate information about how the money is made. And no one is willing to tell you that--they either want to believe the fantasy themselves, or they want you to believe it so they can steal from you.

What's really nice about someone like Joe Konrath is that he'll break down the numbers for you. But even if he didn't, or even if he was lying through his teeth, self-publishing is just far more transparent. The amount of money a writer makes off of, say, selling an e-book at a certain price on Amazon is public knowledge. It's why, if you're nosy like I am, it's so easy to do the math and figure out who's making what. It's why you can easily see what's a good deal and what's not. The information is there, it's verifiable, and you aren't reduced to taking the word of someone who has an agenda.