2010 Year In Review

 Posted by at 7:33 PM  Tagged with: , , , , , , ,
Dec 312010
 

As 2010 comes to a close, it’s a good time to take a moment to reflect on everything that’s happened this year with e-books, e-readers, the publishing industry, and writing. I’ve included plenty of links to posts with more detail on individual topics you may be particularly interested in.

E-Books

In 2010, e-book sales roughly tripled, increasing from about 3% of total book sales to about 9% — a figure that finally seems to have the publishing world sitting up and taking notice. As we transition from paper books to a paper + digital world (and perhaps eventually to a primarily digital book world), we’ll see many changes in the centuries-old print publishing industry: bookstores will close, publishers will struggle, and new companies will step in and pick up the slack. In the digital world, in 2010 we’ve seen a proliferation of available e-book titles (the Amazon store roughly doubled its catalogue to over 750,000 e-books), e-books starting a global expansion (including the launch of the Amazon UK Kindle Store), and we’ve even seen e-book sales on Amazon overtake hardcovers and overtake all print books for best-selling titles.

We’ve also seen a battle over e-book features — with publishers generally fighting some of the very things that make e-books so useful and convenient for many of us. Publishers lined up to block text-to-speech functionality (which lets your Kindle read e-books aloud to you); add restrictive, annoying, and mostly ineffectual DRM copy protection; provide many e-books as poorly-formatted, non-proofread scans of print books; and we’re still stuck in an era where readers in many countries can’t buy the e-books they want to pay good money for, as geographic legal restrictions serve to partially negate the huge e-book advantage of instant, inexpensive, global distribution.

In 2011, I predict e-book sales to continue to increase (perhaps continuing the trend of doubling or tripling each year for another year or two), especially considering the technological advances in e-readers (and lower price points) and how many people probably just unwrapped new e-readers last week. I’d expect slow improvement in worldwide e-book availability and improved formatting of e-books, as publishers realize that they’re losing money and start to take e-books more seriously. But I’d expect large publishers to continue fighting certain e-book features, as they’re still in the mode of protecting print book sales, not fully embracing e-books yet. However, the pressure will continue to increase on them next year.

E-Readers

2010 brought us the introduction of Apple’s iPad, Amazon’s new Kindle 3, a new round of Sony E-Readers, and the Nook Color, among others. We’ve seen improvements in technology, including the new e-Ink Pearl screen with better contrast, and a battle between tablet computers with LCD screens (like the iPad) and dedicated e-readers with easy-on-the-eyes e-Ink screens (like the Kindle); at the same time, we’ve seen prices come down from $259 for the Kindle 2 to only $139 for the Kindle 3 Wi-Fi. This has combined to make e-readers much more affordable and a better value for more and more people. Estimates put e-reader sales from about 5 million in 2009, to 12 million in 2010, and predict 27 million in 2011.

Personally, I’ve tried the iPad, and found it better suited for Internet surfing, movie watching, and game-playing than for reading. I also recently upgraded from a Kindle 2 to a Kindle 3, and I am very, very pleased with the Kindle 3 — I think it’s the best device available for e-book reading, and I am finding it considerably better than the already-quite-good Kindle 2. I especially appreciate the increased contrast (much darker blacks and slightly lighter background) of the e-Ink Pearl screen, which is why I wouldn’t recommend either an LCD-based device (which has short battery life and is harder on the eyes), or an older-generation technology like the e-Ink screen in Barnes & Noble’s Nook. I’ve written a Holiday E-Reader Buying Guide here that compares and contrasts the options available, if you’re still trying to decide which one is right for you.

Next year, we can expect to see (a) more tablet computers being introduced, and many of them will masquerade as “e-readers,” although they are really Jacks-of-all-trades that are better suited for other tasks, (b) continued improvements and refinements in e-readers, and (c) perhaps even lower prices, as we’re approaching the $99 price point for e-readers — remarkable when the Kindle 1 debuted just 3 years ago for $399.

Publishing

As I mentioned above, the continued rise of e-books will have a profound effect on the publishing industry. First, print book sales declined in 2010, being replaced by e-book sales. This shift has strained the margins of publishers and bookstores, who are finding it difficult to adapt to an online e-book-selling world. Publishers have long-entrenched ideas, facilities, processes, and business models that can’t turn on a dime, and they’re seeing increased competition from online retailers (like Amazon and B&N) and smaller publishers, who don’t need the huge economies of scale and financial capital that the print book business requires. Predictably, these businesses have responded by trying to fight e-book adoption, trying to protect their print book business for as long as they can, and squeeze out a few more profitable quarters. They, so far, don’t appear to be interested in making the tough changes and painful downsizing required to succeed an an e-book world, and they (rightfully) fear that their spot at the top will be jeopardized during the upheaval, as newer, leaner, more forward-thinking companies replace some of the “Big 6” publishers at the top of the heap.

To that end, publishers, fearful of Amazon’s e-book dominance, in April embraced the agency model, which stopped Amazon from selling best-selling e-books for $9.99 and allowed publishers to retain control of e-book pricing (most best-selling e-books then increased to about $12.99). This caused a temporary dip in e-book sales, which have since recovered. Publishers complained that low e-book prices “devalued e-books” and were unsustainable, while many independent authors (like myself) argued that selling more units at a lower price was a win-win scenario.

2010 will also be remembered as the year of the rise of self-published authors, with a couple I know of in particular (Joe Konrath and Amanda Hocking) selling over 100,000 e-books and earning a very nice living — without traditional publishers. Several other indie authors joined Amazon’s “Encore” publishing program, competing directly with large publishers. In 2010, we saw e-book royalties for self-published authors (through Amazon, B&N, Apple, and most other outlets) increase from 35% to 70%, which compares quite favorably to the 8% authors used to get from publishers for paperback sales, or the 17.5% (net) they normally pay for e-book royalties.

As large publishers continue to decrease the amount of advances paid, hold the line on e-book royalties, overprice their e-books, block features, and reduce marketing services, my question to best-selling authors in 2011 is: why give 90%+ of the profits to a large publisher, when you can hire someone to do your covers and formatting for you, and keep 70% for yourself? I think we’ll see more and more big authors strike off on their own — and do very, very well. After all, when you buy a Stephen King or J.K. Rowling or Dan Brown book, you’re buying the book for the author, not the publisher (quick: who can even name the publishers for those 3 authors without looking it up?).

Writing

2010 was a milestone year for me personally, as I finished writing and editing my third novel, The Twiller, and released it for sale in June. Of course, being independent, I was also responsible for doing my own formatting and creating my own cover, along with doing my own marketing, which can take more time than actually writing the book! I was very pleased by the launch of The Twiller, which had the following results:

  • Ranked #1 on Amazon’s “Movers & Shakers” List.
  • Ranked in the Top 5 in both “Humor” and “Science Fiction” in the entire Kindle Store.
  • Ranked #188 overall in the Amazon Kindle Store.

My other novels also exploded in sales in 2010 (I only made them available through Amazon for the Kindle in late 2009). I ended the year with several new sales records, selling several thousand copies and earning several thousands of dollars from my writing for the first time — not yet enough to make a living, but certainly a nice start. More importantly, I reached thousands of readers, received dozens of positive reviews, and interacted with many great and passionate readers by email, through my Facebook Fan Page, and more. I sincerely do appreciate all the readers who have read my book, taken the time to contact me, written a review (they really do help!), and generally been supportive in my writing endeavors this year.

For my first novel, Right Ascension, I had the following encouraging and exciting milestones:

The sequel, Declination, also showed encouraging signs:

  • Sold over 3,000 copies this year — so more than 60% of the people who bought Right Ascension went on to purchase the sequel as well.
  • Both Right Ascension and Declination were on the Top 25 best-seller list for “Science Fiction” at the same time.
  • Ranked #827 overall in the Amazon Kindle Store.

As for this blog, its popularity has steadily increased since I launched it in April, with over 18,000 visitors. Average hits per day increased from about 40, to 60 in August, 90 in October, and over 100 a day in November and December. My most popular blog posts from 2010 were:

  1. E-Ink vs. LCD: What’s The Difference? (2,075 views)
  2. E-Book Market Share: Amazon At 75% (760 views)
  3. Kindle 3 Announced: 3G for $189, Wi-Fi for $139 (675 views)
  4. Kindle 3: Hands-On First Impressions (607 views)
  5. E-Book Sales Continue Rapid Growth (483 views)

Thank you again to everyone who visited my blog, left a comment, bought or read one of my books (available in the right nav bar or through Amazon here), became a Facebook fan, or shared some encouraging words this year. I’ve definitely excited to see what unfolds in 2011, and discuss it with all of you. Happy New Year!

Oct 2010 E-Book Sales Stats: $40.7 M

 Posted by at 5:25 PM  Tagged with: ,
Dec 092010
 

October 2010 e-book sales: $40.7 M

Continuing last quarter’s trend, e-book sales in October 2010 reached $40,700,000, just below the record $40,800,00 in July, but trending upward from the last couple of months. This figure represents a 112.4% increase over October 2009, when sales were $19.2 M. year to date, January – October 2010 e-book sales ($345.3 M) increased 171.3% over the same period in 2009 ($127.3 M).

In comparison, print book sales were down across the board. Adult hardcover sales were down 6.5% to $242.9 M (down 7.7% year-to-date), adult paperback sales were down 11.8% to $115 M (no change year-to-date), and adult mass market paperback sales were down 1.1% to $60.2 M (down 14.3% year-to-date).

Of note, e-book sales for October were more than 2/3rds as much (67.6%) as mass market paperback sales ($40.7 M compared to $60.2 M).

For review, the monthly sales figures so far this year:

  • Jan 2010: $31.9 M
  • Feb 2010: $28.9 M
  • Mar 2010: $28.5 M
  • Apr 2010: $27.4 M
  • May 2010: $29.3 M
  • June 2010: $29.8 M
  • July 2010: $40.8 M
  • Aug 2010: $39.0 M
  • Sep 2010: $39.9 M
  • Oct 2010: $40.7 M

E-book sales so far in 2010 are 8.7% of trade book sales

So far this year, e-book sales figures are 8.7% that of printed trade book sales ($345.3 M compared to $3,969.7 M). This number is down slightly from a couple of months ago, when year-to-date e-book sales were 9.03% of print’s figures, but is still up dramatically from previous years (0.58% in 2007, 1.19% in 2008, and 3.31% in 2009).

It will be interesting to see the holiday sales in December 2010, and maybe even more so, the post-holiday sales in January 2011, when millions of people unwrap their Kindles and other e-readers and go looking for new e-books to buy.

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Google E-Books Launches

 Posted by at 11:27 PM  Tagged with: ,
Dec 062010
 

Google E-Books joins the e-book party

Finally, after announcing its intent over a year ago, Google arrived on the e-book scene today with Google E-Books (formerly “Google Editions,” formerly the “Google Partner Program”). Before today, Google’s book service (“Google Books”) existed as a place to locate books and search the text therein, where Google would merely provide links to other retailers that sold the books you found, but now Google is selling e-books itself. So, how does Google compare with the existing e-book retailers (Amazon, B&N, Sony, Kobo, Apple, etc.)?

Google E-Books probably fields the world’s largest single e-book library, of 3 million titles or so. Perhaps you’ve heard about the ongoing Google Books class-action lawsuit and settlement? Essentially, Google grabbed up a bunch of library books and scanned them into its archives, where users could find them using Google’s search engine tools (search results could find not only book titles and author names and other metadata, but could actually find passages from within books). In collecting books for its archives, Google essentially grabbed every book it could find unless the rights-holder (the publisher or author) learned about it and complained to opt out. So, Google captured large numbers of out-of-copyright public domain books, in-copyright books where publishers explicitly gave permission, and a whole gray area of books of indeterminate copyright status. This enabled Google to scan and have access to about 3 million texts, more than any other platform; however, over 2.5 million of those titles are public domain, leaving only a few hundred thousand modern, in-copyright titles (for comparison, Amazon has over 750,000 mostly in-copyright titles available in the Kindle Store, and Apple has only 30,000 in the Apple iBooks Store).

Another interesting feature of Google E-Books is that it is device-independent: Google doesn’t make an e-reader (like a Kindle or Nook), but allows you to read e-books purchased from Google in multiple ways. First, you can read e-books online, through a web browser (accessed through your computer or smartphone). Second, you can download PDFs to read on your computer or tablet computer. Third, you can use the Google for Android or Google for iOS (iPhone, iPod, iPad) apps to read from your smartphone or tablet. Finally, you can use Adobe Digital Editions to read e-books in DRM-protected ePub format on compatible e-readers, including the Nook and Nook Color, Sony E-Readers, and Kobo E-Readers — but notably not the Kindle (which uses the MOBI file format and does not support Adobe DRM). Google E-Books has a “buy once, read anywhere” focus, and touts how you can read e-books purchased from Google without downloading anything — just start reading right in your browser. Personally, I prefer to download and own the e-book files I purchase, but the simplicity may appeal to some people who enjoy reading on LCD computer or smartphone screens.

The ability to download and read purchased Google e-books (some public domain titles remain free) on various e-reader devices is the most interesting feature to me — I have no interest in reading novels off my computer screen (let alone a tiny smartphone screen). But being able to use Google E-Books as a source for content, and reading that content on an e-Ink based e-reader has a certain appeal, especially since you can switch from a Nook to a Sony to a Kobo and keep reading from your same e-book library. Of course, Amazon and all the other e-book retailers already offer apps for various platforms (PCs, Macs, iOS, and Android), allowing you to read your e-books in multiple ways and sync your progress in each of them, but this adds another level of interoperability.

So what does this mean for readers? Well, if you have a compatible e-reader, or feel like reading off a computer screen, you may want to give Google E-Books a try. A quick check showed that most books are similar in price to Amazon and B&N, but a few are slightly more or less expensive. On the plus side, you’d be able to read any e-books you purchase on almost any e-reader you eventually decide to buy (other than a Kindle — although Google says they “are open to” eventually being compatible with Kindles). There haven’t been many details yet, so we’ll have to wait and see how well the e-books are formatted, if they allow returns, or how many new releases show up for sale through Google. (I uploaded my books months ago, and they are now available through Google E-Books at launch.)

Google also eventually plans to allow third parties (other websites, or independent bookstores) to sell Google e-books and keep a cut of the revenue. That might be an interesting twist, and forward-thinking independent bookstores might jump at the opportunity to suddenly have a full-fledged e-book store through their own websites.

As for the balance of power in the e-reading world, it remains to be seen if Google will make crossroads into the market. While the interoperability is impressive, it doesn’t include Amazon, which owns roughly 75% of the market. That cuts both ways, of course — but I think it hurts Google more than Amazon. Amazon doesn’t have much incentive to make it easier for its millions of Kindle users to start buying all their e-books from Google instead of Amazon.

On the one hand, Google is a well-known brand with lots of money and talent, they have a huge library of e-books, and they offer unprecedented interoperability amongst multiple e-book devices (for anyone out there who happens to own a Nook Color, a Kobo, and an old Sony E-Reader, you’re probably off buying e-books from Google already). On the other hand, Google is very late to the e-book game (which started way back in the late 1990s, and really took off in earnest with Sony and Amazon in 2007), and I can’t help but think that a whole lot of avid e-book readers have already started building an e-book library and have allegiance to someone else. Not having a dedicated device may also hurt Google, as it’s definitely easier to shop on Amazon from a Kindle, or on Barnes & Noble from a Nook. Another demerit: while Google search and Maps are pretty user-friendly, every other Google service I’ve used (especially Google AdWords, AdSense, Analytics, and the Partner Program set-up) are incredibly difficult to use and the help documentation is confusing and contradictory — they have a long way to go to match Amazon’s ease of use and customer service.

I also wonder how seriously Google will take the e-book business: they still can’t even seem to figure out their own name (the website will bounce you from Google E-Books to Google Books to the Google Partner Program with a tab for Google Editions), they haven’t yet announced lots of details (like how rights-holders will get paid), and you have to wonder what took them so long and why they don’t have their own e-reader. My advice: keep an eye on them, but I’d take a wait-and-see approach on this one for a while.

Give Kindle E-Books As Gifts

 Posted by at 6:16 PM  Tagged with: , ,
Nov 192010
 

Kindle e-books can now be given as gifts

I’ve been waiting for this one for a while: you can now buy Kindle e-books and give them to friends as gifts through Amazon’s Kindle store. The process seems pretty easy:

  1. Choose from 1 of over 750,000 e-books available through Amazon’s Kindle Store
  2. Click the “Give as a Gift” button in the upper right of the screen
  3. Provide your friend’s email address so he/she can collect their gift

What’s cool is that your friend doesn’t even have to have a Kindle — they can download one of the free Kindle Apps (for Mac, PC, iPhone/iPad, Blackberry, or Android) to read their e-book. Presumably, if I know Amazon, they’ll provide all that information in the email sent to the gift recipient.

It seems this option is available for every book in the Kindle store — it’s enabled for all three of my books, and every other one I checked.

One note: the recipient has the option to accept the e-book gift, or apply the amount to an Amazon gift card instead (which they can use on anything available at Amazon.com, which is, well, pretty much anything). This is what would happen if your recipient already owned the e-book you’re trying to give them, for example.

I think lots of people will be getting a Kindle 3 (or the $139 Kindle 3 Wi-Fi) as gifts this holiday season, and even more people will get a few e-books as gifts to get them started. This is a feature that was long overdue.

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September E-Book Sales Stats: $39.9M

 Posted by at 12:18 AM  Tagged with: ,
Nov 112010
 

September 2010 E-Book Sales Stay Strong at $39.9M

The September industry e-book sales statistics are in, and sales have remained strong, coming in very close to July and August’s strong figures. Sales increased a bit from the previous month, hitting $39,900,000 in September 2010. This is down slightly from the record $40.8M sales of July 2010, but well above the pace from the first two quarters of this year.

These numbers constitute a 158.1% increase over last September, and year-to-date e-book sales are up 188.4%. This, amidst print book sales declining 12.1% from last year.

For review, the monthly sales figures so far this year:

  • Jan 2010: $31.9 M
  • Feb 2010: $28.9 M
  • Mar 2010: $28.5 M
  • Apr 2010: $27.4 M
  • May 2010: $29.3 M
  • June 2010: $29.8 M
  • July 2010: $40.8 M
  • Aug 2010: $39.0 M
  • Sep 2010: $39.9 M

Q3 2010 Sales Up 38.4% Over Q2 2010, Up 157.4% over Q3 2009

After averaging $28,833,333 in sales for April, May, and June, e-book sales have now averaged $39,900,000 for July, August, and September, a 38.4% increase in just 3 months’ time. The $119,700,000 Q3 2010 total easily surpasses the previous record of $89,300,000 in Q1 2010, and it puts e-books on pace to be nearly a half-a-billion-dollar per year industry.

Of note: Q2 2010 marked the only decrease in quarterly e-book sales in at least the past 3 years. Back then, I wondered if the Q2 dip was caused by agency model pricing, and predicted it would be merely a “one-time dip” on an overall upward trajectory. My predictions were confirmed, and then re-confirmed by Amazon. Will it be enough data to convince publishers to abandon the agency model? Or are they hoping to slow the ascension of e-books to protect the printed book as long as they can?

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Where Can I Read My E-Books? DRM and Format Issues Explained

 Posted by at 3:42 AM  Tagged with: , , , ,
Nov 062010
 

Look at all the colors.

One aspect of e-books that can be confusing is the question of which e-books can be read on which e-reader device. E-books from Amazon, B&N, and other vendors can come in different file formats, and Kindles, Nooks, Sony Readers, Kobos, and other e-readers may each read certain e-book formats and not others. It’s a mess that’s similar to where digital music was 5 or 10 years ago, with various confusing file formats (thankfully, music has pretty much standardized on the MP3 file format now).

There are three major e-book formats: PDF, ePub, and MOBI, along with a host of minor ones.

PDF is a file format you may already be familiar with; it’s not specific to e-books, but was designed by Adobe as a “Portable Document Format” that retains formatting and can be read on many different kinds of computers or other devices. It’s useful because PDFs can be read on almost any computer or e-book reader, and because the formatting and any pictures or charts should be well preserved. However, it’s not an ideal format for e-books because it doesn’t normally allow for re-flowable text: a PDF is like a photograph of a printed book page, so you can’t adjust the font size or style.

ePub is the closest we have to an industry standard e-book format, as it’s used by Barnes & Noble, Sony, Kobo, Apple, and others — pretty much everyone other than Amazon. ePub is based on HTML, and allows for re-flowable text (so you can increase or decrease the font size, which is an important feature for e-book readers) and other e-book features.

MOBI is the other big e-book file format, and may be the most popular of all since it’s the format used by Amazon and read by the Kindle — the most popular e-book platform. MOBI, also called PRC, is quite similar to ePub, as it’s also based on HTML and has many of the same features, like re-flowable text. (There’s really no advantage or disadvantage to ePub vs. MOBI, they’re essentially the same.)

There are a few other minor formats, like LRF (the old Sony Readers used this), PDB (Palm Pilot format), and regular old TXT (plain text) or RTF (rich text) formats — like you might see on your computer.

While all of that sounds confusing, the part most people don’t realize is that the format doesn’t really matter. There are plenty of free computer programs that will quickly and easily convert one file format to another (my e-book file format conversion / organization program of choice is called Calibre, and it’s free). So, if you can convert ePubs to MOBI and PDFs to LRFs, what’s the problem? (Sure, it’s an extra step and a bit of a hassle, but really not that big of a deal.)

The problem lies in another acronym altogether: DRM. DRM stands for Digital Rights Management, and it’s a type of copy protection that many publishers and retailers add to e-books in order to prevent piracy (unauthorized copying and distribution). DRM has plenty of plusses and minuses I’ve discussed before and won’t get into right now, but publishers are pretty enamored with it for the moment, so the fact is that most best-selling e-books from most retailers have DRM attached.

When DRM is added to an e-book, it prevents that e-book from being converted from one file format to another. So, if it has DRM, you’d be blocked from converting a MOBI e-book you bought from Amazon to the ePub format to read on a Nook (and vice versa).

Even worse, it also prevents e-books from being read on a different e-book reader — even one that reads the same format! So, while Nooks and Sony eReaders both read the ePub file format, an e-book bought from B&N that has DRM attached can not be read on the Sony eReaders! There are a few exceptions (I believe Sony e-books can currently be read on Nooks but not vice versa), but generally e-books with DRM attached that are bought from one retailer can only be read by that retailer’s corresponding e-book device:

  • Amazon.com e-book store: Kindle e-reader
  • BarnesandNoble.com e-book store: Nook e-reader
  • Sony eReader Store: Sony eReaders
  • Kobo.com e-book store (also Borders.com): Kobo e-reader
  • Apple iBook Store (currently only available through iDevices): Apple iPad, iPhone, & iPod

Wait, it gets even better. You can’t read a DRMed, ePub-formatted e-book purchased from B&N on your Sony e-reader … even though both e-readers (the Nook and Sony) both read ePub files … and both use the same type of DRM by Adobe. But B&N uses a newer version of the Adobe DRM that the Kobo doesn’t support, so you’re out of luck. It’s madness.

Now, I’ve probably made clear my stance on DRM (if it’s this confusing and restrictive for legitimate, paying customers, I can’t be a huge fan of it), but one important thing I hope you get from this article is that it turns out the e-book format isn’t really important: it’s easy to convert any e-book format to any other e-book format with the right free software. But books with DRM attached — no matter what format and no matter where you buy them — can cause issues if you try to read them on a different device than they were originally intended for. That means, for most e-books sold by large publishers, you’re stuck in one e-book “ecosystem.”*

* Note: Amazon, B&N, and Kobo each make e-reading apps that allow you to read their e-books on various devices, including Macs, PCs, Android phones, and iDevices, so this alleviates the problem somewhat.

There is some good news here. As I said, most best-sellers from large publishers have DRM attached. But there are literally millions of e-books out there without DRM attached — which means that, no matter what format you find them in, you can easily convert them to any format you need, even years later if you get a new e-book reader. (Of course, since it’s so easy, most DRM-free e-books will already come in multiple formats, and you can just pick the one you need anyway.) So, where can you find DRM-free e-books?

  1. Project Gutenberg. They have hundreds of thousands of public domain titles — books that were written before 1923 and are no longer under copyright. This includes many of the greatest works of literature of all time, including Pride & Prejudice, Sherlock Holmes, The Odyssey, The Count of Monte Cristo, all of Shakespeare’s works, and many more.
  2. Smashwords. Looking for something a bit more modern? Notice how I said earlier that most books from large publishers have DRM attached. Many smaller publishers and independent authors decide not to attach DRM to their e-books. Smashwords specializes in inexpensive, DRM-free e-books (in multiple formats) from independent authors.
  3. Amazon and B&N allow independent authors to upload their own e-books for sale — and they give us the option to use DRM or not. I’ve chosen to release my books in both places without DRM, so you can buy my e-books from Amazon and convert them to read on your Nook or wherever you want. (Hint: if the e-book says “Simultaneous Device Usage: Unlimited” on Amazon.com, it’s DRM-free.)
  4. Directly from authors. I, and several other independent authors, will sell e-books directly through our own websites in multiple formats, with no DRM attached. (A Google search of your favorite indie author’s name should pull up their website.) With books bought directly from me, I’ll not only send you whatever format you need, but you can always email me down the road if you end up needing another format and don’t want to fuss with converting it yourself. 😉

There are many other places to find legal, DRM-free e-books (both free public domain books and paid newer releases), these are just a few to get you started. Of course, if you’re sure you’re going to stick with one e-book / e-reader “ecosystem” (maybe you love Amazon and your Kindle and plan to stay with them forever), then DRM might not matter to you. But hopefully you’re now more aware of the interaction between e-book file formats and DRM, and what you can and can’t do with the e-books you purchase.

Kindle Sales Increasing, Bestselling E-Books Overtake Print On Amazon

 Posted by at 5:16 PM  Tagged with: , ,
Oct 252010
 

Today’s Amazon press release contains a number of Kindle milestones and sales figures, although Amazon does get a bit cute with the wording:

  • Sales of the “new generation Kindle devices” since their introduction surpassed “total Kindle device sales” for Q4 2009. This has a bit of tricky wording: are they talking just about the Kindle 3, introduced July 28, or the Kindle DX 2 (introduced July 1) as well? Removing the DX from both sides of the equation, this would mean the Kindle 3 sold more in its first 2 months and 28 days (July 28 through today, Oct 25) than the Kindle 2 over the last three months of 2009. True, holiday sales are Amazon’s busiest time of the year, but this one isn’t as impressive as it first sounds, since we’re comparing almost equal time periods and I’d expect a sales bump when a new model is introduced.
  • Over the past 30 days, Amazon sold twice as many Kindle editions of books in the Top 10 on Amazon.com as it did of print books (paperback and hardcover combined). They also sold more e-books than print books for the Top 25, 100, and 1,000 Amazon bestsellers. This statement is also a little clever, and notable because they DON’T just say they sold more e-books than print books over the past month. Clearly, their e-book sales are stronger on their bestselling titles, while print books have a more robust “long tail.” Still, it’s an impressive statistic that for the Top 1,000 bestselling titles on Amazon, more were sold in electronic form than printed form in the past 30 days.
  • Amazon also notes that they sold more than 3 times as many Kindle e-books in the first 9 months of 2010 than they did for the first 9 months of 2009. An impressive growth rate that pretty much equals (or slightly exceeds) the growth of e-books in general.
  • On a similar note, those same industry e-book sales figures claim that e-book sales increased 193% from January of this year to August of this year, and Amazon says their Kindle e-book sales surpassed that figure (although they don’t say by how much).

Overall, solid stats and figures, although I wish Amazon (and Apple, to name another culprit) would be a little more direct with their statistics, instead of couching things in intentionally-confusing language that requires decoding and sounds better than it really is.

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Kindle To Add E-Book Lending

 Posted by at 3:25 PM  Tagged with: , ,
Oct 222010
 

Amazon matches B&N's Nook, brings e-book lending to the Kindle

Amazon announced today that they will bring lending to Kindle e-books “later this year.” This is a feature that many users had been clamoring for: after all, they reason, you can lend printed books to whomever you want for as long as you want. With e-books, the process can theoretically be even simpler: instead of arranging to physically meet up with someone (or mail the book back and forth, which might cost more than the book!) or worry about getting your book back, you can just input a user’s email address and zip the e-book to them wherever they are. Even better, you could set a time for that e-book to “expire” and it would automatically come back to you — I’m sure we all have paper books we’ve lent out and never gotten back!

This is also an important move by Amazon, as it matches the Nook’s existing “Lend Me” feature, which enables e-book lending for some Nook titles (if approved by the publisher).

Of course, publishers aren’t generally too keen on the idea of unlimited lending, so there are understandably some limitations (which happen to be identical on both the Kindle and Nook): first, once you lend an e-book, you can’t read it while it’s lent out — so only one person can read the book at a time. Second, each e-book can only be lent one time, period. Third, the lending period is exactly 14 days, no more, no less.

Even with these limitations (which seem a bit too stringent for my tastes, but some limitations are perfectly understandable), it’s a cool and useful feature, and one that negates a previous Nook advantage. One of the reasons I am a fan of all e-book readers (not just my beloved Kindle 2) is that advances in one e-reader’s hardware or software capabilities generally trickle down to all e-readers soon enough. So far, the existence of the Nook has at least motivated Amazon to lower Kindle prices and add this lending feature, so that’s a win in my book.

One other note on lending: with Amazon’s Kindle, you have the option of registering multiple devices to a single account, including multiple Kindles or Kindle DXs, the Kindle for iPad/iPhone app, or Kindle for Mac/PC apps. Most Amazon e-books allow you to read them on up to 6 devices simultaneously (look for the part on the e-book product page where it says “Simultaneous Device Usage,” and there will either be a number or “Unlimited”). That means that you can register multiple devices to your Amazon account (including devices used by your family members or friends you trust to be on your account), and e-books you purchase can be read at the same time on your Kindle 3, your wife’s Kindle 2, your son’s Kindle for Mac program, and your daughter’s Kindle for iPhone app (as one example). Even better, the 6-device limit is only a simultaneous limit and is per e-book, so you can read an e-book on your Kindle, and then de-authorize it from that device and authorize it on your 7th device and read it there too. For certain families or close friends, this system is far better than any lending feature, and allows for multiple people to easily share the same e-book purchases, even if they live in different parts of the world. Try doing that with a single copy of a printed book!

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Amazon Says Agency Pricing Costing Publishers Sales

 Posted by at 6:16 PM  Tagged with: , , ,
Oct 152010
 

Amazon UK today made an announcement on its UK forums, apologizing to customers for higher prices by some publishers, who have insisted upon an “agency” pricing model. Under the agency model (described in further detail here), publishers set the final sale price of an e-book, and the retailer (like Amazon, B&N, or Apple) collects a cut, usually 30%. Under the retail model, which print books are all sold under and some e-books are still sold under, the publisher sets a “list price,” charges the retailer some percentage of that price (usually around 50%), and the retailer is then free to sell the book for the price they choose: at the list price, at some discount, even at a loss if they want.

When switching to the agency model, publishers almost universally raised prices on e-books across the board: Amazon had sold new releases at $9.99 (often taking a loss, paying publishers about $13 for e-books with a $26 “list price”), and backlist (older) titles around $6.39. Those prices have increased to about $12.99 and $7.99, respectively, increases of around 30%. (Note: 5 of the 6 largest publishers in the U.S., with the exception of Random House, embraced the agency model when Apple’s iBook Store opened in April as a way to break Amazon’s dominance of the e-book market).

Was this just a business decision to maximize revenue? A campaign to humble Amazon, as publishers were fearful it was gaining too much power in the book-selling (especially the e-book-selling) world? Or a way to slow down the adoption of e-books and keep people buying printed books, which is, after all, what large print publishers are best at? I’ll let you decide.

In any event, how did the agency model work out for publishers? According to Amazon, not so well:

Unsurprisingly, when prices went up on agency-priced books, sales immediately shifted away from agency publishers and towards the rest of our store. In fact, since agency prices went into effect on some e-books in the US, unit sales of books priced under the agency model have slowed to nearly half the rate of growth of the rest of Kindle book sales. This is a significant difference, as the growth of the total Kindle business has been substantial – up to the end of September, we’ve sold more than three times as many Kindle books in 2010 as we did up to the end of September in 2009. And in the US, Kindle editions now outsell hardcover editions, even while our hardcover business is growing.

So, the growth of agency model books are less than half the growth of non-agency-model books. (Since e-books are growing so rapidly, an outright decrease in sales would be a true disaster — imagine two boats on a fast-moving river, one going with the current, and the other fighting it and being dragged more slowly along.) While some have hypothesized that publishers are intentionally shifting those sales away from Amazon and to Apple, I have serious doubts that many Kindle users are willing to buy a $499 iPad and change their reading preferences if they consider a book overpriced on Amazon — just to read the book for the same price on the iPad’s eyestrain-inducing LCD screen. No, I think they just find another book to buy instead. And, as the most recent sales figures show, e-book sales took a dip when the agency model was announced, but continue to show strong growth since then. So Amazon Kindle readers are buying e-books, just not as many e-books from agency model publishers as they used to.

Will this mean the upcoming end of the agency model? Do large print publishers even care if their e-book sales decrease, or only what happens to their print sales, which are still 91% of their total sales? (Note: August 2010 hardcover print sales are down 24.4% from August 2009, trade paperback sales are down 18.3%, and mass-market paperback sales are down 21.9%; so much for “protecting print sales.”) I think what publishers miss is that, once a reader switches to an e-book reader, they prefer the e-reading experience strongly enough to pretty much stop buying printed books (I know I’ve stopped buying print books, and a quick perusal of the Amazon forums will assure you I’m not alone). Further, they’re pretty much only going to buy e-books from the e-book store associated with their device — it’s just too convenient to get Amazon e-books on a Kindle in 60 seconds, not have to break DRM or convert files, have your e-books backed up for you, Amazon syncs your place in your books across reading devices, and Amazon already has Kindle users’ credit card info. Once a user buys a Kindle, the vast majority would never even consider the iBook Store, or any other e-book retailer. Why, when Amazon has the largest selection, all the benefits I described above, and the agency model ironically guarantees that, while Amazon can’t beat other retailers on price, neither can anyone else offer e-books cheaper anywhere else?

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August 2010 E-Book Sales: $39M

 Posted by at 4:53 PM  Tagged with: ,
Oct 152010
 

August 2010 E-Book Sales Still Strong, Cool Slightly to $39M

The latest e-book sales figures are in (see previous posts and analysis here), and e-book sales have pretty much continued their strong performance from July. They cooled off just slightly, totaling $39.0 million in revenue in August 2010, compared to the record $40.8M in July. That performance still puts e-book sales well above their pace from the first half of the year, and considerably above last year’s figures. For comparison, e-book sales for the first 8 months of 2010 total $263M,* compared to $165.8M for all of 2009, or $89.8M for the first 8 months of 2009 only — an increase of 193% year-to-date. August 2010’s numbers are an increase of 172.4% from August 2009.

* The AAP’s numbers don’t quite add up, as I’ve been tracking them each month (see below), and their monthly totals only add up to $255.6M. Perhaps they’re now including some late-reported sales stats or something. (Sorry, I like for math to add up precisely!)

Another interesting stat: e-book sales now constitute just over 9.0% of all consumer book sales: $263M for 2010 year-to-date, compared to $2.91 billion in trade printed book sales. This is up slightly from May of this year, when the AAP reported that e-books comprised nearly 8.5% of total consumer book sales. And it’s up dramatically from 2009, when e-books were at about 3.3%.

E-Books' percentage of the overall book market increased from a small fraction, to 1.19% in 2008, 3.31% in 2009, and 9.03% in 2010. It has more than doubled now for 3 years in a row.

One last tidbit: August’s $39.0M figure for e-book sales is over 71% as large as the $54.9M of mass-market paperbacks for the month. E-books are up 172.4% from last August, while mass-market paperbacks are down 21.9% from August of last year. Any guesses which figure will be larger in August of 2011? Or maybe even by December of this year?

For review, the monthly sales figures so far this year:

  • Jan 2010: $31.9 M
  • Feb 2010: $28.9 M
  • Mar 2010: $28.5 M
  • Apr 2010: $27.4 M
  • May 2010: $29.3 M
  • June 2010: $29.8 M
  • July 2010: $40.8 M
  • Aug 2010: $39.0 M

After a great start in January, but little growth for the first half of the year, Q3 2010 is on pace to jump a staggering 38.4% over Q2 2010’s numbers (38.4% quarterly growth over 4 quarters would equate to 267% yearly growth). I am tempted to attribute the strong August numbers to the debut of Amazon’s Kindle 3, but it wasn’t announced until July 28 and didn’t ship until August, so I didn’t see how it could account for July’s strong numbers. But something seems to have given e-books a huge shot in the arm this summer, and the strong sales numbers have continued for a second straight month…

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