3 Reasons Why The E-Book Money Train May Be Over
If you got into the e-book business when sales of the Kindle were taking off, you probably made quite a bit of money. There wasn’t much Kindle content available in the “early” days, so you could easily dominate a category if you simply had a book with a half-decent cover and a couple of positive reviews. But those days are long gone. The mainstream has heralded the rise of self-publishing to such an extent that I wouldn’t be surprised if your mom was planning on writing a book.
Here are three reasons why you’re likely to make less money from e-books than if you started three years ago:
1. Increased competition. Now everyone is writing a book, with 100,000 new books being released a month. Dozens of self-publishing web sites that make it easy for anyone. Even long-time internet marketing guru Ryan Deiss is pushing ebook businesses. There is a flood of self-published books on Amazon with fancy covers and attractive packaging that are indistinguishable in style from published works.
2. Decreased sales of dedicated e-readers. Tablets have won while black and white e-readers have lost. Of course you can still read books on tablets, but I suspect that a tablet owner will read far fewer books than a e-reader owner. You read less when web, email, and Facebook is only one swipe away.
3. Pending decline of Amazon’s influence. Amazon is getting resentment from all corners (media, customers, publishers, and indie authors) because of its massive power. People are now actively embracing half-baked alternatives. With the insane number of iPads that Apple is moving, I would expect the iTunes store to be in the best position of taking some of Amazon’s money.
Here are two strategies that don’t work as good as they used to:
1. Cheap pricing in the $0.99 – $2.99 range. Too many customers have been burned by crappy self-published works that were priced cheap, so they’re being conditioned to believe that higher price equates to quality.
2. Lots of positive reviews. Very few intelligent customers trust Amazon reviews these days. Even I’ve been tricked a couple times by products that had glowing reviews. I now buy books based on excerpts and word-of-mouth.
The CEO of Smashwords, who helps indies distribute to iTunes, Kobo, and Nook, has a rosy outlook for 2013 that calls for some reading between the lines…
[We will see] a surge of new titles that never stop coming, and never go out of print. In 2013, self-published ebooks will swamp the titles put out by traditional publishers. This is good for the future of authors, readers and publishing. We’re in the early stages of a full scale publishing renaissance. Readers now have access to an amazing diversity of high quality books.
Some industry participants – some authors included – fear this glut, because they think it’ll either increase competition or decrease discoverability. Yes and no. More high-quality titles than ever will be released, because the barriers to publication have been eliminated. Readers will discover the best books and propel them forward through word of mouth. More poor-quality books than ever will also be released, and these books will be summarily ignored by readers, reviewed poorly, and will fail to spark word of mouth. Yes, competition will increase, but so will author opportunity, because more readers than ever will be reading ebooks.
Barriers to publication have already been removed, so I believe competition will make it harder for an average book to be successful. Even if you have a high-quality book, it could get lost in the noise whereas it wouldn’t before.
I remember the good old days where my Kindle sales jumped every month without me having to do anything. Right after Christmas, the money poured in when people loaded up their new Kindles, more than doubling my sales until February. But this year, it “only” increased by 75%, probably due to a decreasing rate of Kindle e-reader sales and more books in my niche. The gold rush has passed, and my personal strategy will be more about maintenance more than growth. I doubt I’ll sell more Kindle books in 2013 than 2012.
Established authors need to weather the storm until the newbies realize this is a challenging business and give up to move on to the next popular biz trend. I predict that growth won’t jump again until 2015 or so when people get bored of tablets and become nostalgic for reading again.
E-book success will be easier for those who have a blog platform that is independent of Amazon, where loyal readers buy because of the value you give them instead of a fancy cover, cheap price, or dubious reviews. Those who already have a readership or popular web site will find it most easy to survive. There’s still plenty of money to be made in ebooks, but you’ll have to earn it.