The market for eBooks

A recent study by Bowker shows that Australia, India, the UK and the US are leading the world in eBook adoption.

According to the study, 21% of online Australians over 18 years of age have purchased an eBook in the six months prior to the study and 69% are aware of eBooks but have yet to purchase one. There is an almost equal split between male and female Australian eBook buyers with the highest percentage of eBook buyers in the 18-24 year range.

If we mapped these figures against the population then current adult eBook buyers equate to a market of approximately 3.3 million in Australia with another  eleven million potentials.

The great advantage for many Australian eBook authors is their ability to now reach international markets, which were previously not available to them  – particularly the US. Data from eMarketer indicates that as of 2012 there were nearly 50 million US adult eReader users.  So Australian authors now have the ability to tap into this market.

ACTING BIG when you are small

A COMBINATION of outsourcing and cloud computing have now made it possible for small enterprises, to act big. It has also reduced the barriers to entry to starting an online business significantly. While a small business owner will always be a jack of all trades, the beauty of outsourcing and cloud computing is that one can focus one's energies into activities you most enjoy and that you can potentially add the greatest value to.

In creating BWM Books, two services have been very important: Freelancer and Google Apps.

Freelancer claims to be the world's largest outsourcing marketplace. At last count there were 3.2 million users, that have posted nearly 1.5 million projects and traded $117 million. It's big. I've used the site as both a Freelancer as well as an Employer.  As an Employer all you need to do is post a project and set your budget range. A budget can be as low as $30. If you have ongoing work you can specify an hourly rate budget rather than a fixed price budget. Alternatively you can set up a contest like a logo contest or website design contest. For a fixed price you can get literally hundreds of designs to choose from. For my BWM Books logo I received 472 different designs and paid $290. 

For things like graphic and website design, data entry, software and mobile app development, I've had a terrific experience and I continue to work with the freelancers I've sourced from the marketplace. And interestingly, I've worked with as many people from the US and Europe as I have from India and Pakistan. We aren't just talking cheap third world labour here.  

As a Freelancer, you set up a profile and bid on jobs that you are interested in. Freelancer makes its money by taking a cut of your winning bid. The site resembles eBay in many ways, with freelancer and employer ratings, dispute resolution services and payment and financial services. I'm a big fan of the service and it provides me with a potential workforce at my fingertips for a fraction of the cost if I sourced the work locally. 

Google Apps is a set of cloud computing tools and services which can be useful for both small and big business alike. There are a variety of tools which are free such as Gmail, Google Docs and Google sites as well as business packages which start at $5/month per user account. Basically if you want all your key services in the cloud : email, documents, website hosting and analytics, blogging and more, providing your business with flexibility and mobility, then Google can be a great help. I have found that some Google services do lack a certain intuitive user interface and structure making usage, at times, cumbersome. Google Books being one. But in general, email, document storage, website and blog updating and hosting are very simple and cost effective with Google Apps. An added bonus is that Google Apps has a large third party app market place where you can source complimentary services in all sorts of things from accounting software, to social media apps. 

I've just highlighted just a couple of companies here which I have found useful in creating an online business but I know there are a multitude of others. Which cloud computing or outsourcing companies have you found useful?

Will children read eBooks and Book Apps?

I'M CURRENTLY working with an author who has crafted some children's books and is quite keen on creating print books, eBooks and iPad apps of the books. But does a digital screen, such as a Kindle or iPad, distract a young child too much?  A blog post by Richard Curtis quotes some interesting findings in this regard.

According to a recent New York Times article, K, J. Dell’Antonia, Lisa Guernsey of the New America Foundation’s Early Education Initiative suggests that “when we read with a child on an e-reader, we may actually impede our child’s ability to learn.” She found that parents interact differently with children over an e-reader than over a physical book and suggests that difference may make children slower to read and comprehend a story. Parents and children can often get distracted with manipulating the screen or pushing buttons, rather than focusing on the story.

My own experience reading print books and eBooks to my 2 year old confirms this. The iPad is built for interaction. The screen is supposed to be touched and the thrill for a young child is when you touch the screen and it changes in interesting ways. So a young child will be far more interested in touching and manipulating the eBook than actually obsorbing what is being read to them. 

That said, many of the books designed for young children have less of a narrative component and are more like flash cards - farm animals seems to be the most poular subject.  As print books, these are dead boring. But as an eBook or interactive app, they are far more interesting and I believe absorbing for young children.

Digital and interactive learning are already subjects of considerable study but with the growing adoption of e-Readers, tablets and smartphones, early childhood learning via digital devices is likely to be an important area of scientific interest. 

The Bookstore's Last Stand - NY Times article

THERE WAS an interesting article in the New York Times the other day written by Julie Bosman. 

The article suggests that the book retailer Barnes & Noble, the last major bookstore chain standing, may be the one institution that can keep the traditional publishing industry alive.

A few thoughts:

• The book publishing world is going through some significant changes, no doubt, but so to has the newspaper sector, the music sector, and all media sectors. The internet is a game changer but it doesn't necessarily mean the death of a traditional product such as a CD or a print book. The key for businesses is to develop innovative business models that leverages the advantages of both traditional and digital formats. 
• Certain book genres will still be favoured as print books. Children's books and specialist non-fiction works are well suited to print. 
• The novel and narrative non-fiction works however, seems well suited to a digital form. 
• But why does it have to be one or the other? Publishers and retailers should allow readers the option to buy one or the other or as a bundle. For example, buy the print book for $12.99 and get the eBook for an extra $0.99. 
• In the article it is mentioned that real book stores have two distinct advantages over eRetail stores: the ability to browse the shelves and find a book you weren't even looking for and enabling a reader to mine the backlists of authors.  While we haven't worked out to browse a Web store like a real book store, it will only be a matter of time. One will be able to create digital displays of books in a virtual and immersive environment that will closely mimic real life. Secondly, the backlists of authors are easier to find online both as eBooks and within the second hand market.
• But, as the article says, Amazon is beginning to dominate the book world and no monopoly is a good thing. This is why services such as Smashwords, Lulu and others are important so readers can get choices and different types of books will be available. 
• In the new publishing world there are pros and cons for authors. eBook prices are lower - con. The reach is potentially greater - pro. Authors can potentially get a greater royalty share - pro. Authors can also take greater control of the sales and marketing of their titles if they wish - pro or con depending on your marketing aptitude. 
• The key or course is to stay abreast of developments so you can take advantage of opportunities as they arise. This is the purpose of BWM Books

A Good eBook Royalty Deal from your Print Publisher?

IN THE last blog post I explained about what authors can expect to get in terms of royalties from a couple of major eBook retailers: Amazon and Smashwords.  Basically Australian authors will not get less than 34% of the sale price no matter where the purchaser is located. If someone from North America or Europe purchases your eBook then it will be between 50%-85% of the sale price.

Now these numbers may change if Amazon sets up a local presence in Australia, as is rumoured, and then Australian authors may get 70% of the list price when Australians purchase their works from Amazon. We’ll see.

But in this blog post I’ll talk a little bit about what traditional publishers are typically offering to Australian authors in their print and eBook publishing contracts.  My father, Robert Macklin, a distinguished Australian author, has let me check out a few of his recent publishing contracts.  They don’t make great reading from the perspective of the author.

The Australian Society of Authors (ASA) crafted a free information sheet  a few years ago outlining what local authors should seek when negotiating their print/eBook publishing contracts.

The ASA suggests that a good deal for an author is 35% of net receipts of a 60/40 (publisher/retailer) split. Let me break that down. So if an eBook has a list price of $20.00, the retailer will take $8.00, the publisher will take $12.00 and out of the $12.00 the publisher gets, the author will get $4.20. So the author will receive 21% of the list price. 

Just to remind you of the previous blog analysis, when you publish directly to Amazon or Smashwords (BWM Books will of course help you) , you will never receive less than 34% of the list price.

Commonly, however, authors are getting between 15% and 25% of net receipts from their traditional publishers.  Furthermore,  I’ve seen some tricky legal clauses which make it very difficult for authors to ever get back the rights to publish their eBooks themselves or at least to review eBook rights after a period of time.

When negotiating a contract the ASA recommends 10 tips. I’ve pulled out what I think are the most important.

1. Retaining e-book rights. You don’t have to absolutely and in all instances bundle e-book rights in with print book rights. Authors are now, like never before, able to self-publish or utilise service providers such as BWM Books to publish, market and promote their eBook titles. This is a strong negotiating position to be in. However, if you sign a contract for a print book only, also make sure that any Competing Edition rights clause doesn’t prevent you from signing an e-book separately.

2. Argue for a limited electronic rights term. It is inadvisable to sign a publishing contract with ‘all-time’ implications for the e-book. Argue for a limited electronic rights term of, say, three years, with a periodic review at 12 months, and stress the fact of uncertain publishing and market conditions surrounding e-books.

3. What are you getting per book? If you are offered an e-book royalty of 25% of net receipts – a common offer – or something else, you’re entitled as a matter of ordinary commercial courtesy to know what it means in dollar terms per unit sold. What will you earn per copy/download? If the offered contract doesn’t tell you, ask the publisher. If the publisher can’t or won’t tell you, don’t sign. Furthermore, ask when and where your eBook is going to be published.

4. No ‘subsidiary’ rights.  In terms of publishing agreements and licensing of rights, you should assert that full e-book royalties are a primary right, alongside standard royalties for print books. They are not ‘subsidiary’ rights. Not a kind of ‘sub-license’.

5. Territorial rights.  If your publisher contracts for a print book and also wants world rights for an e-book, ask them why, and how exactly they intend to stage publication so as to exploit these rights to your advantage.

6. Seek advice from someone who will put your commercial interests first. 

eBook Royalties Explained

There are a number of eBook distribution channels that will publish and distribute your eBook, but for the purposes of this blog entry I’ll just deal with two: Amazon and Smashwords. 

Amazon

When you publish with Amazon at the US dot com site your title will also be available in the UK, German, Spanish, French and Italian Amazon sites. Sales reports are generated from each of these sites.

Amazon provides two royalty options for publishers: 70% and 35%.

The 70% royalty option is available only under two conditions:

1.      The list price of the eBook is between $2.99 and $9.99

2.      The customer who buys the eBook is from the following countries: Andorra, Austria
Belgium,  Canada, France, Germany, Liechtenstein, Luxembourg, Monaco, San Marino, Switzerland, Spain, United Kingdom (including Guernsey, Jersey and Isle of Man), United States, Vatican City (as of Feb 1 2012).

Sales to customers outside these countries will be as provided under the 35% Royalty Option.

Therefore if an Australian purchases your eBook on Amazon, the royalty option automatically reverts to the 35% option.

Delivery costs – downloads

For every download of an eBook Amazon.com charges $0.15/MB.  The author pays for this. An average text-based book of 300 pages would be less than 1MB.

The following chart shows the author royalty share on a list price of $9.99.

At the 35% royalty, you can list your eBook from $0.99 to $200.00.  The following chart shows a list  price of $18.99. An author will receive about the same return listing their eBook at $18.99 as they will if they list at $9.99.

It is worth noting that Amazon will match competitor prices. If they see your title priced lower than their list price then they are allowed to match that price. Royalties in these circumstances are calculated on the sale price of the item, not your list price.

Smashwords

Smashwords retails eBooks directly to the public as well as distributing its eBooks to Apple iBooks (32 countries), Barnes & Noble, Sony, Kobo, Diesel eBook store and more). When you make a sale directly on Smashwords you take approximately 82% of the sale price. Smashwords has no restrictions on minimum or maximum list prices, unlike Amazon.

 When a distribution partner of Smashwords such as Barnes and Noble or Apple iBooks sells one of your books, Smashwords will give you 60% of the (sale price – GST). So if you book is listed at $9.99 then you will receive 60% of $9.00 or $5.40.

BWM Books does not charge any royalty fee when you work with us in publishing and distributing your book. You will receive 100% of net receipts from the retail outlets.