Three Significant Announcements Regarding E-books and Audiobooks

Last week there were three significant announcements from Apple, Google, and Walmart of interest to all authors. First the three bits of news and then a few observations.

Apple announced that their iBooks app is being renamed to simply Books. Accompanying it will be a complete redesign of the reading app, their store, and the addition of an audiobook tab to make it easier for users to access their audiobook library. You will see the new design roll out over the next few months.

The audio tab is significant because last year Audible (owned by Amazon) and Apple ended their exclusive global digital audiobook agreement. There were competition complaints from the German Publishers and Booksellers Association, plus an investigation was started by the European Commission. The result is that Apple will now compete with Amazon for audiobook sales. A category that is growing very fast.

Last month, to head this new initiative, Apple hired Kashif Zafar, who was the senior VP at Audible (Amazon) and before that was the content VP at Barnes & Noble for their Nook division.

Google announced they too will be selling audiobooks via their Google Play Store. As of today they are offering 50% off your first audiobook purchase. They are launching with a long list of best-selling audiobooks priced at under $10. In addition they will allow buyers to share their purchases with up to five family members at no extra cost. Google Play focuses on individual audio book sales in contrast to the subscription model of Audible.

Walmart announced their new partnership with Kobo, the ebook retailer that is a major player in Canada (with about 60% of digital book sales). (Kobo is actually  one of the e-book and audiobook divisions of Rakuten, a Japanese e-commerce company, which also owns OverDrive.) Kobo’s e-reading devices have been available in the U.S. for a long time, but have struggled competing with Amazon’s Kindle, the smartphone, and the Nook from Barnes & Noble.

Kobo offers over six million e-books and audiobooks in their catalog which means those will become part of the online store of Walmart.

It is also assumed that Walmart will begin selling the Kobo e-reader device in their 4,600 locations. Walmart sold the Sony Reader a long time ago and also has previously sold both the Kindle and the Kobo. It will be interesting to watch those displays to see what devices they will be offering this Summer.

What Does This Mean?

The first thing that comes to mind? Books are selling and are a profitable source of revenue! Otherwise none of these e-commerce giants would invest in them. That is great news.

Second, these major companies are unwilling to cede market dominance to Amazon. Competition is a good thing for consumers.

Third, this means more opportunities for ebooks and audiobooks to be sold.

Fourth, audio is a common thread in all these moves. The category is no longer an afterthought. In case you had not heard, the latest premium Kindle dedicated e-reader device (the Oasis) is designed to also play audio books. Using Bluetooth technology the user can switch between audio and text with both remaining synced.

Fifth, seemingly left out is Barnes & Noble. But they already have their Nook e-reader and sell e-books online. However, they did have an announcement of their own. They changed the name of their self-publishing platform from Nook Press to Barnes & Noble Press. They redesigned their entire publishing web site and increased royalties to the authors.

Technical Matters as a Reminder

A reminder to everyone. There are two types of ebook formats.
1) the Kindle format used exclusively by Amazon. It is technically a .mobi file. Mobi and Kindle are nearly synonymous. One is the file (mobi), the other is the device or app that reads the file (Kindle). The file is proprietary to Amazon and can only be read using the Kindle reader, app, or online software. It provides the exclusive ecosystem controlled by Amazon.
2) the ePub format used by everyone else (Apple, Kobo, Nook, etc.)

Please be sure to understand the difference. You cannot easily read an ePub file on  Kindle without some conversion. You cannot read a mobi (Kindle) file on an epub reader. But you can read an ePub file on any non-Kindle device (Kobo, Nook, Apple, etc).

Note however, that although the ePub file is universal, each ebook retailer can require some massaging of the file to fit their specific requirements.

Indie Authors Must Decide

If you self-publish as an Indie author you have a decision to make. According to AuthorEarnings, Amazon controls over 80% of the e-book market in the U.S. For Indie authors Amazon offers many incentives to publish their ebooks exclusively with them. And if the author also has an audio version Amazon’s Audible division is even more dominant in the marketplace.

Thus the decision. Do you go exclusive with Amazon? Or do you expand your offerings? Up until now the Indie author didn’t risk losing too many U.S. sales by staying within Amazon’s system. But with Walmart making the entire Kobo catalog a part of their site and Apple renewing their interest, the Indie author could be leaving sales on the table if they remain exclusive.

I’d be curious to know what our readers plan to do.

Over at The Christian Writers Institute we publish The Christian Writers Market Guide and a few other books on writing. From the beginning I wanted our print books and ebooks available everywhere, which is the same philosophy the major traditional publishers follow.

To help with this, we use Draft2Digital.com to handle all our non-Amazon e-book sales. It is a one-stop shop and has a user-friendly interface and reporting system. Our non-Kindle user customers are grateful we make the books widely available. Recently Draft2Digital added support for Amazon Kindle files as well.



Leave a Comment

Print and Prejudice

For the last ten years, since the unveiling of the Kindle reader, there has been a constant conversation about reader’s preferences. Print or Ebook? While ebook sales grew exponentially and paper sales stagnated many declared victory for the ebook. I have a number of friends who have not purchased a …

Read More

Switching or Grinding Gears?

Each year in the U.S. more titles are published indie/self-pub than by all traditional publishers combined. Some authors publish only indie or traditional, but some entrepreneurial folks are known as “hybrid” and use whatever model works best for the situation at the moment. Many clients of the Steve Laube Agency …

Read More

Did You Feel the Tremor in the Industry Last Week?

by Steve Laube

I know what it is like to feel the earth move under my feet having experienced the ’64 Alaska earthquake firsthand. (The above picture is from the neighborhood where we lived called Turnagain Arm.) Therefore I know the difference between a 9.2 Richter scale quake and a tremor that registers near 2.0 on the scale.

Last Thursday Amazon announced they were reducing the royalty payments for authors and vendors who use their ACX service to sell self-published audio books. The amount will change on March 12th for new contracts to a flat rate of 40% instead of the 50%-90% rate they currently pay.

No big deal, right? Sort of like a 2.0 tremor. If you blinked you missed it. And since many don’t have an ACX account to sell audio books they are unaffected. However this should be a reminder to all authors and publishers who use KDP (Kindle Direct Publishing) that Amazon can change their royalty terms at any time.

This is the danger of putting all the proverbial eggs in one basket. If any author chooses to only utilize the economic system of Amazon for their sales they can be vulnerable to any changes. I once met a man who sold the foil that was used to make the dairy creamer packets for McDonalds. He had one client. His job was to search the world for the best price on foil. And he lived in terror of losing his client.

Be very clear, I am not suggesting that this is going to happen. Amazon’s 70% royalty rate on kindle ebooks has not changed. All I am suggesting is that it could.

Read More

Is Christian Fiction Dying?

Last year, a couple Christian publishers stopped publishing fiction.  Some publishers are nervous about it and in a wait-and-see mode. Others are excited about growth potential.  The answer to the title question is no, but it is certainly interesting to explore the reason behind such widely diverse opinions on the subject.

NOTE #1: For full disclosure, I am a member of the advisory board for the Christy Awards, had a substantial period of my time in publishing during growth years of Christian fiction and our literary agency is committed to Christian fiction and its authors (as well as non-fiction projects).  Therefore I have an interest in seeing Christian fiction grow both personally and professionally.

NOTE #2:  I am limiting my comments to traditional publishing only, not self-published novels.  

Here is why I think Christian Fiction is causing some publisher-confusion right now:

Read More

Embracing Change

On September 3, 1967 the world changed. It was a day remembered for chaos and disillusionment, despair and confusion.  No, it wasn’t because the last episode of “What’s My Line?” aired on U.S. television.

The above picture is what happened in Sweden the day the country switched from driving on the left to the right side of the road.  Their neighbors, Norway and Finland had already changed, but alas, Sweden held out until they could wait no longer.

Predictably, throughout history, big changes have been viewed first with skepticism and then as a threat to the groups that stand to lose the most or simply like the way things are.

In 1876 an internal memo at the Western Union Company, who were making a lot of money with telegrams stated, “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently no value to us.”

I wonder how that turned out?

H.M. Warner of Warner Brothers was making a lot of money in the silent movie business, so it was no mystery why he commented in 1927, “Who wants to hear actors talk?” (Expletive deleted)

Read More

E-Readers, Tablets and Bears, Oh My

The latest data from the Pew Research Center’s Internet Project released this Fall and confirmed in solid data what we all know to be true…that e-Book readers and tablets are becoming more prevalent in American society.

In a scientific survey conducted five times since May, 2010, the Pew Research Center concluded as of September 2013 that 24% of Americans age 16 and older have a dedicated e-Book reader (Kindle, Nook, Kobo, etc.) and 35% have a tablet computer (like an iPad, etc.).  Furthermore, 43% of those 16+ have one or the other, so a number of people have both.

Compared to the last survey taken in November 2012, this one reveals a 26% increase in ownership of e-Book readers and a 40% increase in ownership of tablets in the last ten months.

So who owns these things anyway?

Read More

Doomsday Words

“Nobody is buying print books anymore”

“Nobody is buying printed magazines or newspapers anymore”

“No one shops at bookstores anymore”

“No one is reading anymore”

“No one goes to the trade shows anymore”

“No one needs a traditional publisher anymore”

“Everyone should just self-publish”

When the speed of change is faster than we can easily comprehend, our language has a difficult time catching up with reality, so we have a tendency to use over-stated terms to describe what is happening.  Our very choice of words open the door to making some very poor business decisions.  How?  Rather than seeking wise solutions by understanding the facts, we make fast decisions based on incomplete information.   Simply…it’s faster.

Read More

A is for Agent

by Steve Laube

I thought it might be fun to write a series that addresses some of the basic terms that define our industry. The perfect place to start, of course, is the letter “A.” And even better to start with the word “Agent.”

If you are a writer, you’ve got it easy. When you say you are a writer your audience lights up because they know what that means. (Their perception is that you sit around all day thinking profound thoughts. And that you are rich.)

If you are an editor, you got it sort of easy. Your audience knows you work with words and all you do is sit around and read all day. In my editorial days I was often told, “I’d love to have your job.”

But tell someone you are an agent and there is a blink and a pause. If they don’t know the publishing industry they think “insurance agent” or “real estate agent” or “secret agent.” Or if they follow sports or entertainment they think “sleazy liar who makes deals and talks on the phone all day.” I resent people thinking that I talk on the phone all day. (Hah!)

Even at a writers conference I always have someone ask, “What is it that you do?”

Deal Maker

An agent works on commission. Fifteen percent of the money earned in a contract they have sold to a publisher on behalf of a writer. I will be bold to say that any prospective agent who asks you for money up front is someone you should stay away from.

This is the category that most people focus on when defining the role of the agent. But it is only one small facet of what we do. Two months ago I published a list of the activities our agency had recently done as a way to help dispel the myth that we are only deal makers. It is how we earn our living but only a small part of our work.

Don’t get me wrong. This is a crucial part of what we do. Our contract negotiations are critical to the long-term health of the publishing/author relationship. Last Fall I taught a course at a conference called “Landmines in Your Book Contract.” Each time I read one from an “offending” contract there were gasps in the room. There is a good reason to have a professional review any book contract you are ready to sign.

Read More

Author Accounting 101

by Steve Laube

You are a published author. You must be rich!
You are an agent. I know you are rich.

If it only were true.

A couple weeks ago we peered at the bottom line for the brick & mortar bookstore, now let’s attempt to do the same for the author. Please remember this exercise is generic, your mileage may vary. As before we will use some round numbers so we can all follow the math.

Let’s start with that $10 retail price book we dealt with before. The publisher sells the book for $6.00 to a store. That creates a “net price” for the publisher. Be aware that some contracts pay the author a royalty based on the retail price and some on the net price.

The net price is $6.00. They author’s contract pays them 15% of the net price. That would mean when this book was sold to the bookstore the author’s account was credited for 90 cents.

Read More