I thought a post about the failure of blogging as search strategy for authors would be appropriate for my final Blogger based post. I do intend to continue the Self Publishing 2.0 blog in some other form, but it will look very different starting next week. The reason I started blogging back in 2005 was simple. I had been promoting my POD publishing book through a collection of chapters excerpted on my website and I thought there was plenty of potential to draw new search visitors by writing about the realities of self publishing. The potential was certainly there, but the tool I chose, blogging, turned out to be wrong for the long run. Here’s why:
Blogging is not, and has never been, an efficient tool for drawing search traffic. It is essentially a social networking tool, a means of supplying news or entertainment to an audience who likes the idea of being able to subscribe and occasionally talk back. Effective bloggers tend to write inspirational posts on topical issues that feed back into the Blogosphere, Twitterverse and Facebookcheeks, where people pass on the latest news or particularly sexy tidbits they feel their own readers may find interesting. The fundamental problem with blogging has very little to do with the underlying code or structure of the blog. The poor search performance over time is a result of the authors producing too much competing material, in effect spreading themselves too thin.
The original chapter excerpts on this website, a dozen pages amounting to less than 20,000 words, draw more search traffic than the nearly 500 blog posts, comprising some half million words. While some of the material in the blog posts is overly specific or time limited, I can state without hesitation that at least 20% of it, around 100,000 words, is much better than anything that appears in the book excerpts, or the book for that matter. So why don’t those blog posts draw five times as much traffic as the dozen static pages? The answer lies is in how blog posts versus static resource pages are linked.
The primary factor in search rankings is link context and anchor text. In plain English, this means that search engines try to match your query to a destination that other related pages refer to, with extra weight given to the wording of the link itself. While there are plenty of other relevant factors, including the content of the page the search engine ultimately decides to recommend, the linking from other reputable pages is the closest thing to a controlling factor.
Blogging is a disaster for contextual linking because of the way human beings assign links. Most people link to the main page of a blog, rather than to the individual posts. The consequence is that the main page of my Self Publishing 2.0 blog has far more incoming links than the 500 or so individual posts put together. Once those individual posts age off the “Most Recent” list on the main page, the links people have contributed become practically worthless. A simple example. You may decide to link the main page of my blog today referring to this post about how blogging sucks for search. After a few weeks pass, search engines trying to answer a query about problems with blogging and search traffic will be aware of your link and the proper context, but it will be pointing at the main page of a blog that no longer refers to the subject. The value of your link is essentially time limited.
Now take a standalone chapter excerpt or resource content, a page that has no natural “parent” on the website. Most people providing a link will link directly to the page with the information they are referencing, and the value of that link will persist for as long as the linking page remains online. Another factor boosting the value of a standalone page for search is its very appearance of worth and permanence. People are reluctant to link to blog posts as references. Part of the reason is that some people never realize you can link individual posts rather than the main page, and the other part is because blog posts have a reputation for being tossed-off opinions, even when they are full of facts, tables and graphs. Most bloggers eventually give up, frequently shutting down their blogs in the process. And most blog posts show the creation date, which screams obsolescence to readers, even if the material is still accurate and relevant. Static resource pages, on the other hand, can be updated from time to time, and you can move the copyright date forward.
Of my nearly 500 blog posts, only one has more organic links (and search traffic) than my worst performing static pages about publishing, and it doesn’t beat them by much. This has nothing to do with the popularity of my publishing blog posts. Some have gone viral and drawn far more traffic for a few days than any of my static pages. But after the buzz dies down, they disappear almost completely from search results, maybe showing up for some long tail six word search query that closely matches the title or anchor text from a link somewhere.
So why won’t this post do well for search traffic? The main reasons I’ve covered above, but another reason is that I’ve written about these issues before, including on a static page about blogging draft manuscripts as you write. If the search engines are inclined to send me visitors on the subject of blog results in search, they’ll send those visitors to some of my static page or more established blog posts. Ironically, blogging can actually damage your chances of successfully publishing static resource content at a later date because the search engines see repetition and dilution on your website. None of this is by design. It’s just the way search engines work.
A handful of logically related pages on a subject (ie, book chapters) will draw more visitors from search engines in the long run than a thousand blog posts that beat the subject to death. The only upside to blogging is subscription, an out-and-out popularity contest for short attention spans. A mere handful of entertaining writers will ever break the ten thousand subscriber mark, and the higher you go in subscription numbers, the more you see the self selection of ideas and closed social circles. It’s hardly surprising that social bloggers are losing ground to Twitterers who cover more ground faster, and are consumed by people who may follow thousands of Tweet streams.
Next week this blog will look very different since Blogger is discontinuing FTP support. I still haven’t decided whether I want to shift to WordPress on this site, to start blogging manually (which will limit comments to e-mail), or to simply start adding self publishing posts to my personal WordPress blog and to manually stuff those posts into my existing subscription feed. If you want to comment on this post, you have three days before Blogger disables my ability to update it. Whatever I do, I’ll update my feed to keep my subscribers in the loop.
Pirate Mashups And Promoting eBook Rip-Offs
Everyone who publishes eBooks is familiar with piracy and widespread redistribution on file sharing networks by this point. Filing DMCA takedown requests for copyright infringement usually results in the offending site removing the file, and the offended pirate quickly reloading it, sometimes with a change to the file name or title to get past crude filtering techniques. But what happens when the infringement isn't a mirror copy of the original but a mashup?
Last week, I came across such a mashup on the DocStoc website after Googling a unique phrase from one of my books. DocStoc was selling the book for $10.93, which I assume means the individual who uploaded it assigned a price and will get the majority of the earnings. I filed a standard DMCA takedown request with DocStoc, and received a reply from their technical support that while the title of the file was the same as my book and they would change that title, it wasn't an infringement and they wouldn't take it down. When I wrote back pointing out that their own search function brought up the file for unique phrases from my copyrighted work, I received no answer. So the next day, I purchased the file to be able to definitively show that the eBook they were selling had ripped-off my work. I documented this in the screen capture video below, my apologies for the broken commentary, but I wasn't going to make multiple purchases for multiple takes:
Finding that the eBook for sale was a mashup of book excerpts from my website and articles from a computer support website was no surprise, but the Trojan virus downloader took me aback. I would have assumed that DocStoc would at least pre-scan the files that were uploaded so they don't spread viruses to their user base. Another surprise was finding out that PayPal wouldn't refund my purchase. I had chosen PayPal thanks to seven years of a good working relationship with them, and thought that they offered the same protection as a credit card. It turns out that they won't refund for purchases of fraudulent goods or materially misrepresented items, unless the sale takes place on eBay. I invited PayPal to comment for this post without a response, though I did just hear from DocStoc thanking me for pointing out this problem, probably a damage control intern posing as the CEO.
I've seen a number of mashups with my copyrighted content over the years, some of which seem to have been created for the sole purpose of promoting the pirated eBook. Here's an example of a pirate who added a "bonus" infringement to an eBook I originally published in 2004 with Adobe DRM.
Pirates who do mashups can be quite indignant about being identified as copyright infringers. When I commented on a pirated copy of my Laptop Repair Workbook on ScribD that it was a copyright infringement, the uploader actually responded to me saying that his friend had bought a copy of the eBook and he himself had edited it (removed my name and license agreement and added "for ScribD") and concluded, "What are you doing on ScribD anyway?" I leave out the explitives. Another over-active pirate decided that the 2004 version of my computer flowcharts eBook he ripped-off needed an update. He found those updates on my website, and bundled them with the PDF for a file mashup.
My favorite creative rip-off to date was a user on Demonoid who posted a copy of my Laptop book, complete with a link to my Youtube book promotion video, to encourage picky downloaders who aren't willing to steal just anything. The thread included 57 thank you notes posted to the generous pirate patron, including one reading: "Gr8!! I've been looking for this... Ur #1!!" I guess that makes me #2, which isn't such a good thing in either baby talk or eBook publishing.
As I wrote just last month in concluding that DMCA encourages piracy , my primary concern is honest individuals being led to piracy sites by search. Searches on an author's name today often bring up a piracy site in the top ten results, either in the text search results or the integrated image search results. I first noticed a few weeks ago that half the images coming up above the fold on standard Google search results for my name led to piracy sites. I've been using the "Report image" option to try to weed them out with some success. As of this morning, only the last image led to a piracy site.
Add "ebook" to a search on an author's name, and the majority of the results may be piracy sites. I spent about 20 hours in the past week filing DMCA takedown notices and fighting off viruses. Maybe that will help keep the lid on for another few months, but it's clear that word-of-mouth customers searching for an author's books can easily be led astray into piracy sites, without ever realizing they are doing something wrong. In some cases, they may pay a subscription fee to the piracy site in the belief that the author or publisher is getting a share, just like buying an eBook on Amazon Kindle or Apple iPad. Unfortunately, unlike Amazon and Apple, some piracy sites specialize in trying to get you to install malware under the pretense of protecting you:
Hint: Never click "Remove All" on a pop-up window. Close the screen, preferably after severing your Internet connection to avoid mistakes.
Last week, I came across such a mashup on the DocStoc website after Googling a unique phrase from one of my books. DocStoc was selling the book for $10.93, which I assume means the individual who uploaded it assigned a price and will get the majority of the earnings. I filed a standard DMCA takedown request with DocStoc, and received a reply from their technical support that while the title of the file was the same as my book and they would change that title, it wasn't an infringement and they wouldn't take it down. When I wrote back pointing out that their own search function brought up the file for unique phrases from my copyrighted work, I received no answer. So the next day, I purchased the file to be able to definitively show that the eBook they were selling had ripped-off my work. I documented this in the screen capture video below, my apologies for the broken commentary, but I wasn't going to make multiple purchases for multiple takes:
Finding that the eBook for sale was a mashup of book excerpts from my website and articles from a computer support website was no surprise, but the Trojan virus downloader took me aback. I would have assumed that DocStoc would at least pre-scan the files that were uploaded so they don't spread viruses to their user base. Another surprise was finding out that PayPal wouldn't refund my purchase. I had chosen PayPal thanks to seven years of a good working relationship with them, and thought that they offered the same protection as a credit card. It turns out that they won't refund for purchases of fraudulent goods or materially misrepresented items, unless the sale takes place on eBay. I invited PayPal to comment for this post without a response, though I did just hear from DocStoc thanking me for pointing out this problem, probably a damage control intern posing as the CEO.
I've seen a number of mashups with my copyrighted content over the years, some of which seem to have been created for the sole purpose of promoting the pirated eBook. Here's an example of a pirate who added a "bonus" infringement to an eBook I originally published in 2004 with Adobe DRM.
Pirates who do mashups can be quite indignant about being identified as copyright infringers. When I commented on a pirated copy of my Laptop Repair Workbook on ScribD that it was a copyright infringement, the uploader actually responded to me saying that his friend had bought a copy of the eBook and he himself had edited it (removed my name and license agreement and added "for ScribD") and concluded, "What are you doing on ScribD anyway?" I leave out the explitives. Another over-active pirate decided that the 2004 version of my computer flowcharts eBook he ripped-off needed an update. He found those updates on my website, and bundled them with the PDF for a file mashup.
My favorite creative rip-off to date was a user on Demonoid who posted a copy of my Laptop book, complete with a link to my Youtube book promotion video, to encourage picky downloaders who aren't willing to steal just anything. The thread included 57 thank you notes posted to the generous pirate patron, including one reading: "Gr8!! I've been looking for this... Ur #1!!" I guess that makes me #2, which isn't such a good thing in either baby talk or eBook publishing.
As I wrote just last month in concluding that DMCA encourages piracy , my primary concern is honest individuals being led to piracy sites by search. Searches on an author's name today often bring up a piracy site in the top ten results, either in the text search results or the integrated image search results. I first noticed a few weeks ago that half the images coming up above the fold on standard Google search results for my name led to piracy sites. I've been using the "Report image" option to try to weed them out with some success. As of this morning, only the last image led to a piracy site.
Add "ebook" to a search on an author's name, and the majority of the results may be piracy sites. I spent about 20 hours in the past week filing DMCA takedown notices and fighting off viruses. Maybe that will help keep the lid on for another few months, but it's clear that word-of-mouth customers searching for an author's books can easily be led astray into piracy sites, without ever realizing they are doing something wrong. In some cases, they may pay a subscription fee to the piracy site in the belief that the author or publisher is getting a share, just like buying an eBook on Amazon Kindle or Apple iPad. Unfortunately, unlike Amazon and Apple, some piracy sites specialize in trying to get you to install malware under the pretense of protecting you:
Hint: Never click "Remove All" on a pop-up window. Close the screen, preferably after severing your Internet connection to avoid mistakes.
Selling Books Worldwide With Free Shipping
International reach is one of the advantages large trade publishers have always enjoyed over small presses and self publishing authors. The large trades developed their worldwide networks through a combination of foreign partnerships, overseas offices and subsidiary operations. In fact, some large publishers have used deep discount sales to overseas subsidiaries to cheat authors out of their full royalty rate, but that's an old story. What's new in recent years is the ability for small players to sell books overseas without gambling on rights sales at international book shows.
Yesterday I signed up for an affiliate account with The Book Depository, which stocks all of my titles printed by Lightning Source. I've been aware of original UK version of The Book Depository and their free international shipping for a couple years, thanks to a cousin in Israel who orders books through them. They are clearly losing money on many of the books that they sell, but so does Amazon, so I suppose they are in good company. What's particularly compelling about The Book Depository is that they offer this free shipping to 90 or so countries, including most of the English speaking world. One unfortunate exception is India, which I assume has to do with the interface between the Indian postal service and the rest of the world. They do offer free shipping to China.
So I started an experiment last night, adding Book Depository links to the order pages for my four current titles, and I'll see whether or not there's enough demand to keep them there. I'm not particularly concerned about the risk of diluting Amazon sales, which are the publisher's best force multiplier, because I believe most Americans will choose the Amazon ordering link without even thinking about options. Ironically, I'm more worried at this point that international book sales with free shipping will cannibalize my direct eBook sales. Wouldn't that be an interesting change? As I was setting up the links, I also noticed that my order pages are all different. I've run so many forgotten experiments over the years that they've become a mish-mash, so straightening them out will make a good project when I have the energy.
Many self publishers have been waiting for a practical overseas solution to selling paper books for as long as they've been in business. Other than my cousin's positive experience, I don't have any insight on whether The Book Depository is a good long term alternative, and I welcome any feedback that overseas users have to contribute. If you're waiting for the Espresso 2.0 book printing machine to take off before you begin selling overseas, you'll just have to wait a few more years.
Yesterday I signed up for an affiliate account with The Book Depository, which stocks all of my titles printed by Lightning Source. I've been aware of original UK version of The Book Depository and their free international shipping for a couple years, thanks to a cousin in Israel who orders books through them. They are clearly losing money on many of the books that they sell, but so does Amazon, so I suppose they are in good company. What's particularly compelling about The Book Depository is that they offer this free shipping to 90 or so countries, including most of the English speaking world. One unfortunate exception is India, which I assume has to do with the interface between the Indian postal service and the rest of the world. They do offer free shipping to China.
So I started an experiment last night, adding Book Depository links to the order pages for my four current titles, and I'll see whether or not there's enough demand to keep them there. I'm not particularly concerned about the risk of diluting Amazon sales, which are the publisher's best force multiplier, because I believe most Americans will choose the Amazon ordering link without even thinking about options. Ironically, I'm more worried at this point that international book sales with free shipping will cannibalize my direct eBook sales. Wouldn't that be an interesting change? As I was setting up the links, I also noticed that my order pages are all different. I've run so many forgotten experiments over the years that they've become a mish-mash, so straightening them out will make a good project when I have the energy.
Many self publishers have been waiting for a practical overseas solution to selling paper books for as long as they've been in business. Other than my cousin's positive experience, I don't have any insight on whether The Book Depository is a good long term alternative, and I welcome any feedback that overseas users have to contribute. If you're waiting for the Espresso 2.0 book printing machine to take off before you begin selling overseas, you'll just have to wait a few more years.
Over A Half-Million YouTube Video Views Means?
A year and a half ago I launched a new how-to website, IFITJAMS.COM, to find out if the advice I have been giving about creating a content based website was still relevant. I've written about the progress of that website as it passed various milestones, and this weekend, the little videos I shot while doing car repairs went over a half million views on YouTube. Unlike the little video lectures on self publishing that between preparation and multiple takes take me a couple hours, the car repair videos were done in the amount of time it took to shoot them, between thirty seconds and a few minutes.
Breaking the half million mark for video views is obviously an arbitrary milestone. What triggered me to make it the subject of an update was that I read all of the comments on the videos and censored (eliminated) the ones using foul language or wasting space through unrelated assertions of individuality. I left the criticism, and I learned a few things from it. First of all, the most popular criticism (thumbs up added by other viewers) was that I didn't title the videos in series. If I had four or five videos on repairing a stuck emergency brake, I didn't title them with a common phrase and #1, #2, #3, #4, #5. My reasoning was that the videos were all embedded in a web page I created about stuck emergency brakes, and my previous experience with the self publishing videos indicated that most of the viewers would view the videos embedded in my web pages. That didn't turn out to be the case for the car repair videos which are primarily discovered by people visiting YouTube.
YouTubers tend to ignore the text on the YouTube page explaining where the videos are from, ignore video caption telling them more information is available on the website, and ignore the fact I open and close the audio portion with the name of the website. Serious YouTube users see YouTube as the center of the universe and they send questions through private messages that I only remember to check every couple months. A little over 400 people a month click through to my site through the link on YouTube, another 200 find the site by searching on IFITJAMS or IF IT JAMS, and Google Analytics reports about 1,500 direct visitors a month, some of whom may be typing IFITJAMS.COM into the browser. But those are relatively small numbers compared to more than 500 visitors a day who find the site through text search, or the 2,000 people a day watching the videos on YouTube.
Many viewers offer constructive criticisms that would have been very useful had I created the website and video channel with a business in mind. As repairing cars is an occasional hobby of necessity for me rather than a business or an area in which I plan on publishing books, I don't have much motivation to jump through hoops for viewers who wish the videos were longer, shot differently, or covered subjects in which they have more interest. Sorry about that. Another interesting fact, at least for my channel, is that the wise-acre comments tend to get thumbs-up votes from other viewers. If the viewership was mainly kids, I would think that normal, but it turns out that the viewership is primarily guys my age!
At the current rate of around 2,000 views a day, YouTube is doing more for the IFITJAMS brand than the website, which averages around 750 unique visitors a day. I can't report on a conversion rate for all the IFITJAMS exposure because there's nothing for sale, but if there was a business behind this experiment, it's self evident it would be doing better than an identical business without the YouTube exposure.
So the question that remains is whether your publishing company has books for which you can create videos as a marketing tool. I would suggest yes, in almost all cases. The only question is the efficiency of that effort. If you produce videos about a book on some esoteric subject that only a dozen people a year search for on YouTube, you have a great shot at reaching those dozen people with the right title, but it's probably not worth the effort. YouTube is just another form of publishing where if you don't give the people what they want, you might meet critical acclaim, but you won't get any sales. So before you create a video for YouTube, spend some time searching the site for videos that have some similarity or relationship to what you are planning, and if those videos aren't drawing thousands and thousands of views, or if there aren't any, change your plans.
Breaking the half million mark for video views is obviously an arbitrary milestone. What triggered me to make it the subject of an update was that I read all of the comments on the videos and censored (eliminated) the ones using foul language or wasting space through unrelated assertions of individuality. I left the criticism, and I learned a few things from it. First of all, the most popular criticism (thumbs up added by other viewers) was that I didn't title the videos in series. If I had four or five videos on repairing a stuck emergency brake, I didn't title them with a common phrase and #1, #2, #3, #4, #5. My reasoning was that the videos were all embedded in a web page I created about stuck emergency brakes, and my previous experience with the self publishing videos indicated that most of the viewers would view the videos embedded in my web pages. That didn't turn out to be the case for the car repair videos which are primarily discovered by people visiting YouTube.
YouTubers tend to ignore the text on the YouTube page explaining where the videos are from, ignore video caption telling them more information is available on the website, and ignore the fact I open and close the audio portion with the name of the website. Serious YouTube users see YouTube as the center of the universe and they send questions through private messages that I only remember to check every couple months. A little over 400 people a month click through to my site through the link on YouTube, another 200 find the site by searching on IFITJAMS or IF IT JAMS, and Google Analytics reports about 1,500 direct visitors a month, some of whom may be typing IFITJAMS.COM into the browser. But those are relatively small numbers compared to more than 500 visitors a day who find the site through text search, or the 2,000 people a day watching the videos on YouTube.
Many viewers offer constructive criticisms that would have been very useful had I created the website and video channel with a business in mind. As repairing cars is an occasional hobby of necessity for me rather than a business or an area in which I plan on publishing books, I don't have much motivation to jump through hoops for viewers who wish the videos were longer, shot differently, or covered subjects in which they have more interest. Sorry about that. Another interesting fact, at least for my channel, is that the wise-acre comments tend to get thumbs-up votes from other viewers. If the viewership was mainly kids, I would think that normal, but it turns out that the viewership is primarily guys my age!
At the current rate of around 2,000 views a day, YouTube is doing more for the IFITJAMS brand than the website, which averages around 750 unique visitors a day. I can't report on a conversion rate for all the IFITJAMS exposure because there's nothing for sale, but if there was a business behind this experiment, it's self evident it would be doing better than an identical business without the YouTube exposure.
So the question that remains is whether your publishing company has books for which you can create videos as a marketing tool. I would suggest yes, in almost all cases. The only question is the efficiency of that effort. If you produce videos about a book on some esoteric subject that only a dozen people a year search for on YouTube, you have a great shot at reaching those dozen people with the right title, but it's probably not worth the effort. YouTube is just another form of publishing where if you don't give the people what they want, you might meet critical acclaim, but you won't get any sales. So before you create a video for YouTube, spend some time searching the site for videos that have some similarity or relationship to what you are planning, and if those videos aren't drawing thousands and thousands of views, or if there aren't any, change your plans.
eBook Piracy And The Moral Hazard Of DMCA
Through protecting “innocent infringers”, the Digital Millenium Copyright Act has done more to encourage Internet piracy than the invention of the file server. It’s no surprise to anybody that recently revealed court filings show YouTube’s founders were well aware of the massive infringements on their website, and in the case of founder Jawed Karim, actually uploading pirated videos. Perhaps, as many have argued, today’s Internet piracy is a disease of immaturity and poverty. But I think it’s more likely a symptom of the DMCA which puts the burden of proof on the victim, over and over and over again, with no penalty or shame falling on the serial “innocent” infringer. A law that protects reckless and illegal behavior by businesses is a fair definition of a moral hazard.
If Google didn’t index these piracy sites, the DMCA ensures that the other search engines would, and that many people would defect to them. The same holds true for the “legitimate” file sharing sites like ScribD and YouTube whose early growth was supported through large-scale copyright infringements. As long as enabling copyright infringement on a massive scale is viewed as an innocent activity, any Internet based corporation foregoing the opportunity for free content is ignoring its fiduciary obligation to its shareholders. Setting up a website for pirated eBooks (while protesting one’s innocent intentions with a DMCA link) is a great growth industry. The graph below shows a fairly new download site I never heard of before last week. It will soon be one of the top 500 websites in the world, according to Alexa. A good chunk of their traffic comes from search, some of which is supported by illegal copies of my eBooks.
The damage done DMCA in encouraging the widespread dissemination of illegal copies of digital works goes beyond the erosion of rights-holders earnings and the moral hazard for infringers. Innocent people using Google to search for books can be steered to pirate sites without understanding that they are infringing on copyright. That’s why I still go to the trouble of filing DMCA takedown notices with “legitimate” sites like ScribD, where a normal person could believe they are downloading an eBook that the author and publisher decided to offer for free. The version of my laptop workbook that I requested ScribD remove last week had been edited to remove my name, which had been replaced with:
and the entire copyright and license agreement page was replaced with:
Another problem with the moral neutrality of search engines is the indexing of file sharing sites which are likely to infect the user’s computer. You might think I would find it amusing for somebody trying to steal my computer troubleshooting books to end up buried in malware, but I don’t like seeing my work used as a stalking horse. I have too much respect for the technical talent at Google to believe that they couldn’t filter out these results in real time with their own malware site detection algorithm, which is why I attribute those results to the moral hazard of DMCA and the abdication of responsibility to do right. The results with the double exclamation points were judged potentially dangerous by AVG. Sometimes, not being evil just isn’t enough:
Any author or publisher of eBooks with an audience can do a search to see how many sites are using the lure of pirated versions of the eBooks to attract traffic. Just Google the title of an eBook in quotes, followed by the word “download” and tell Google to limit the results to the last 24 hours through the "options" link. During the occasional waves of piracy that sweep over my eBooks, the new notifications for potential downloads reach into the hundreds per day. But it’s a little trickier to find out how many people are intentionally (traditional spelling) searching for pirated eBooks. One rough measure is simply to start typing the title of the eBook and see what suggestions Google’s auto-complete function comes up with, as in:
Unless you’ve chosen to release your eBook for free, seeing the title paired with “torrent” or “rapidshare” is a bad thing. But to get some hard numbers, though dated from some previous month, I suggest the Google’s Adwords KeyWord tool. The results below are from the month of February, before the wave of new infringements that caused the number of webpages referring to a downloads of the laptop eBook to jump. That search gives an idea of the number of people who know exactly what they are looking for, vs the ones who might have heard about the book somewhere and want to learn more about it or even to make a legitimate purchase:
Ironically, freedom loving piracy sites never make the PDF versions of eBooks directly available to search engines for indexing. The reason? If search engines sent seekers directly to the downloadable eBook, the pirate site would lose the opportunity to show advertising and end up paying for bandwidth with no financial return. Pirate sites can’t embed advertising in the stolen eBooks without taking the legal risk that the DMCA would no longer protect their infringements. I say “risk” because it’s possible that by automating the addition of advertisements to all files uploaded, a sharing site could to maintain a gauziest veil of legal innocence under DMCA.
In the short term, I look at the piracy issue from the standpoint that the Internet giveth and the Internet taketh away. Whether or not I’ll continue bringing out new editions of the books that are popular piracy targets in the future depends in part on whether sales of the paperbacks and the legal eBooks justify the investment. If piracy impacts sales to the point that new editions aren’t logical, I’m not publishing for the sake of advertising supported piracy. And while I don’t laugh at people getting viruses in the process of ripping me off, I might find it amusing to Google around a bit in a couple years and see how many piracy forum wish lists I can find where people have requested the new edition of Rosenthal’s book. They may have a long wait.
If Google didn’t index these piracy sites, the DMCA ensures that the other search engines would, and that many people would defect to them. The same holds true for the “legitimate” file sharing sites like ScribD and YouTube whose early growth was supported through large-scale copyright infringements. As long as enabling copyright infringement on a massive scale is viewed as an innocent activity, any Internet based corporation foregoing the opportunity for free content is ignoring its fiduciary obligation to its shareholders. Setting up a website for pirated eBooks (while protesting one’s innocent intentions with a DMCA link) is a great growth industry. The graph below shows a fairly new download site I never heard of before last week. It will soon be one of the top 500 websites in the world, according to Alexa. A good chunk of their traffic comes from search, some of which is supported by illegal copies of my eBooks.
The damage done DMCA in encouraging the widespread dissemination of illegal copies of digital works goes beyond the erosion of rights-holders earnings and the moral hazard for infringers. Innocent people using Google to search for books can be steered to pirate sites without understanding that they are infringing on copyright. That’s why I still go to the trouble of filing DMCA takedown notices with “legitimate” sites like ScribD, where a normal person could believe they are downloading an eBook that the author and publisher decided to offer for free. The version of my laptop workbook that I requested ScribD remove last week had been edited to remove my name, which had been replaced with:
and the entire copyright and license agreement page was replaced with:
Another problem with the moral neutrality of search engines is the indexing of file sharing sites which are likely to infect the user’s computer. You might think I would find it amusing for somebody trying to steal my computer troubleshooting books to end up buried in malware, but I don’t like seeing my work used as a stalking horse. I have too much respect for the technical talent at Google to believe that they couldn’t filter out these results in real time with their own malware site detection algorithm, which is why I attribute those results to the moral hazard of DMCA and the abdication of responsibility to do right. The results with the double exclamation points were judged potentially dangerous by AVG. Sometimes, not being evil just isn’t enough:
Any author or publisher of eBooks with an audience can do a search to see how many sites are using the lure of pirated versions of the eBooks to attract traffic. Just Google the title of an eBook in quotes, followed by the word “download” and tell Google to limit the results to the last 24 hours through the "options" link. During the occasional waves of piracy that sweep over my eBooks, the new notifications for potential downloads reach into the hundreds per day. But it’s a little trickier to find out how many people are intentionally (traditional spelling) searching for pirated eBooks. One rough measure is simply to start typing the title of the eBook and see what suggestions Google’s auto-complete function comes up with, as in:
Unless you’ve chosen to release your eBook for free, seeing the title paired with “torrent” or “rapidshare” is a bad thing. But to get some hard numbers, though dated from some previous month, I suggest the Google’s Adwords KeyWord tool. The results below are from the month of February, before the wave of new infringements that caused the number of webpages referring to a downloads of the laptop eBook to jump. That search gives an idea of the number of people who know exactly what they are looking for, vs the ones who might have heard about the book somewhere and want to learn more about it or even to make a legitimate purchase:
Ironically, freedom loving piracy sites never make the PDF versions of eBooks directly available to search engines for indexing. The reason? If search engines sent seekers directly to the downloadable eBook, the pirate site would lose the opportunity to show advertising and end up paying for bandwidth with no financial return. Pirate sites can’t embed advertising in the stolen eBooks without taking the legal risk that the DMCA would no longer protect their infringements. I say “risk” because it’s possible that by automating the addition of advertisements to all files uploaded, a sharing site could to maintain a gauziest veil of legal innocence under DMCA.
In the short term, I look at the piracy issue from the standpoint that the Internet giveth and the Internet taketh away. Whether or not I’ll continue bringing out new editions of the books that are popular piracy targets in the future depends in part on whether sales of the paperbacks and the legal eBooks justify the investment. If piracy impacts sales to the point that new editions aren’t logical, I’m not publishing for the sake of advertising supported piracy. And while I don’t laugh at people getting viruses in the process of ripping me off, I might find it amusing to Google around a bit in a couple years and see how many piracy forum wish lists I can find where people have requested the new edition of Rosenthal’s book. They may have a long wait.
Cooking Up A New Social Blog - For Loners
As the Blogger deadline for cutting off FTP access for blogs like mine nears, I've started looking into alternative platforms for Self Publishing 2.0. But my new blog is more than a test for the WordPress software, it's also an attempt to use blogging as it's intended, as a social networking tool rather than as a content management tool. You can check it out at (I initially gave the wrong link when I posted:-)
From the technical standpoint, it's the first time I've offered e-mail subscription to a blog, (though you don't get the pictures that way), and included a Blogroll. More on that in a minute. I even created a custom graphic for the look:
The problem came with the subject. What do I know enough about that I can write something every day without putting myself to sleep? I concluded that the one subject I should really be able to hit out of the park is going through life alone. I realized I might have a different take on the subject when it came up in conversation a while back that I don't have a table for eating. I've been eating off my lap for the last dozen years because there's nobody to tell me not to.
I've written a handful of posts over the past week while learning the WordPress software, but I haven't hit my stride on the tone yet. It won't be a glorification of living alone which I see as a second class existence at best. I'm more interested in the cooking tricks and time trials of living alone, never having somebody to call to come pick you up. I'll also write about being in business alone, which has upsides and downsides and probably a wider audience. So my clear vision for the blog is a place for people to be alone ...... together. Huh?
Which brings us back to the problem of the Blogroll. There are plenty of blogs about business and finance that I can include, most are essentially giving advice to individuals, but I couldn't find a single blog about living alone that wasn't the result of a death or divorce. I'm interested adding blogs by people who are living alone because like me, that's all they know. I don't understand why I haven't found any yet, could they all be ashamed?
Let me know if you have any Blogroll candidates for me, I'm still looking.
From the technical standpoint, it's the first time I've offered e-mail subscription to a blog, (though you don't get the pictures that way), and included a Blogroll. More on that in a minute. I even created a custom graphic for the look:
The problem came with the subject. What do I know enough about that I can write something every day without putting myself to sleep? I concluded that the one subject I should really be able to hit out of the park is going through life alone. I realized I might have a different take on the subject when it came up in conversation a while back that I don't have a table for eating. I've been eating off my lap for the last dozen years because there's nobody to tell me not to.
I've written a handful of posts over the past week while learning the WordPress software, but I haven't hit my stride on the tone yet. It won't be a glorification of living alone which I see as a second class existence at best. I'm more interested in the cooking tricks and time trials of living alone, never having somebody to call to come pick you up. I'll also write about being in business alone, which has upsides and downsides and probably a wider audience. So my clear vision for the blog is a place for people to be alone ...... together. Huh?
Which brings us back to the problem of the Blogroll. There are plenty of blogs about business and finance that I can include, most are essentially giving advice to individuals, but I couldn't find a single blog about living alone that wasn't the result of a death or divorce. I'm interested adding blogs by people who are living alone because like me, that's all they know. I don't understand why I haven't found any yet, could they all be ashamed?
Let me know if you have any Blogroll candidates for me, I'm still looking.
Low Cost Digital Publishing Experiments
I've taken quite a few photographs in my life, and between the series of how-to books written for McGraw-Hill and my websites, I've published over a thousand of them. One of the things I've learned is that panoramic pictures almost never capture the same feeling you get when you're looking at some distant attraction. It cost me dozens of rolls of 35 mm film and hundreds of dollars in developing to learn how to frame photographs in the view finder so the final print didn't shout - "Why didn't you move closer, dummy!"
Then the new millennia arrived, and in 2000 I bought a Olympus D-360L, a 1.3 Megapixel camera with no zoom for $300. It took me a couple days to really internalize the fact that taking photographs was now very cheap. In fact, the more I've used the camera over the years, the cheaper each individual photograph costs as it's amortized against the original $300 purchase. I almost feel like NOT taking photographs is costing me money.
Web sites follow the same economics as digital cameras. Once you're paying for a website, adding web pages doesn't cost anything extra. It's NOT adding web pages that makes a website site seem like a waste of money. Starting a website with a half dozen pre-planned pages and never updating it is like buying a digital camera and never even filling up the memory card. Imagine if you had a friend who claimed to be a big photography buff, and every time you visited he just showed you the same half dozen photographs. How often would you go visit him?
The primary value of all this digital stuff to publishers is that it makes it cheap to experiment. Whether you're talking about blogs, eBooks, print-on-demand, eMail newsletters, videos or podcasts, production cost is limited to the first copy. Reproduction, as pirates all know, is basically free. That's why I'm such a strong advocate of the incremental approach to publishing. Why tie up all of your time and money in creating a comprehensive work before you know how it will be received? Take it a web page at a time, see what interests your readers, try to find a compromise between what people want and what you want to give them. The old publishing world said, "It's our way or the highway." On the Internet, the highway is just a click away, so try to unbend a little.
Unfortunately, the ease of creating digital products has led to quite a few con artists "publishing" eBooks that serve no purpose other than enriching the publisher. All it takes is a good sales pitch and some cut-and-pasted together garbage so that the buyer doesn't cry "Fraud" and reverse the charges through their credit card company.
Besides, some of the best digital publishing experiments involve giving work away for free. I try writing about new subjects on a regular basis to see whether there's enough interest for me to start thinking about writing a book, and if that writing isn't always top-notch, at least I'm not charging anything for it. And sometimes the results of a digital experiment will even surprise me. For example, I've known for a decade that my hands are too shaky to take photographs at night (the exposure time is long even for a digital camera), and I know that taking pictures of celestial bodies is a waste of time. But I made the experiment on a bright moon shining through the clouds the other night and was impressed with the result. Click on the small picture for the full size version.
Then the new millennia arrived, and in 2000 I bought a Olympus D-360L, a 1.3 Megapixel camera with no zoom for $300. It took me a couple days to really internalize the fact that taking photographs was now very cheap. In fact, the more I've used the camera over the years, the cheaper each individual photograph costs as it's amortized against the original $300 purchase. I almost feel like NOT taking photographs is costing me money.
Web sites follow the same economics as digital cameras. Once you're paying for a website, adding web pages doesn't cost anything extra. It's NOT adding web pages that makes a website site seem like a waste of money. Starting a website with a half dozen pre-planned pages and never updating it is like buying a digital camera and never even filling up the memory card. Imagine if you had a friend who claimed to be a big photography buff, and every time you visited he just showed you the same half dozen photographs. How often would you go visit him?
The primary value of all this digital stuff to publishers is that it makes it cheap to experiment. Whether you're talking about blogs, eBooks, print-on-demand, eMail newsletters, videos or podcasts, production cost is limited to the first copy. Reproduction, as pirates all know, is basically free. That's why I'm such a strong advocate of the incremental approach to publishing. Why tie up all of your time and money in creating a comprehensive work before you know how it will be received? Take it a web page at a time, see what interests your readers, try to find a compromise between what people want and what you want to give them. The old publishing world said, "It's our way or the highway." On the Internet, the highway is just a click away, so try to unbend a little.
Unfortunately, the ease of creating digital products has led to quite a few con artists "publishing" eBooks that serve no purpose other than enriching the publisher. All it takes is a good sales pitch and some cut-and-pasted together garbage so that the buyer doesn't cry "Fraud" and reverse the charges through their credit card company.
Besides, some of the best digital publishing experiments involve giving work away for free. I try writing about new subjects on a regular basis to see whether there's enough interest for me to start thinking about writing a book, and if that writing isn't always top-notch, at least I'm not charging anything for it. And sometimes the results of a digital experiment will even surprise me. For example, I've known for a decade that my hands are too shaky to take photographs at night (the exposure time is long even for a digital camera), and I know that taking pictures of celestial bodies is a waste of time. But I made the experiment on a bright moon shining through the clouds the other night and was impressed with the result. Click on the small picture for the full size version.
The Day The Self Publisher Took A Vacation
I should have been in New York for Tools of Change this week, as evidenced by an inbox full of invitations to press events, but I stayed home. This is no reflection on Tools of Change, which I think is THE conference for publishers trying to stay ahead of the curve and for working media in the publishing field. However, I'm trying to get away from blogging, and conferences are primarily about networking, establishing relationships. Since I'm not interested in any consulting or speaking work, I don't see the point.
Instead of traveling to Manhattan, I ran five miles this morning, will do laundry this afternoon, and follow-up with McGraw-Hill about getting the rights reverted for the last book I authored for them. "Build Your Own PC - 4th Edition" was published in 2004, and is horrifically obsolete at this point, but they only exhausted the stock from the last print run in recent weeks. I haven't done any writing in that area since 2004 because the original contract (signed in 1998) included a non-compete that's open to interpretation. Rather than interpret, I've just stayed away. But when I get the right reversion, I'll build a couple new PCs for the website, at least it will give me a definable project.
In the meantime, I'm reading the works of Charles Lever, which have the most interesting illustrations I recall seeing in years. Both the plates and the embellishments that start each chapter reflect the text, are well executed and clever. I'm not sure how that's supposed to help me as a self publisher, but it's good for a pleasant few hours every evening.
That's all the news from Northampton, Massachusetts this faux spring day. It took eleven minutes to write, so I think I'm finally on my way to beating the blog disease. All I need now is to see my subscription number start dropping in Google:-)
Instead of traveling to Manhattan, I ran five miles this morning, will do laundry this afternoon, and follow-up with McGraw-Hill about getting the rights reverted for the last book I authored for them. "Build Your Own PC - 4th Edition" was published in 2004, and is horrifically obsolete at this point, but they only exhausted the stock from the last print run in recent weeks. I haven't done any writing in that area since 2004 because the original contract (signed in 1998) included a non-compete that's open to interpretation. Rather than interpret, I've just stayed away. But when I get the right reversion, I'll build a couple new PCs for the website, at least it will give me a definable project.
In the meantime, I'm reading the works of Charles Lever, which have the most interesting illustrations I recall seeing in years. Both the plates and the embellishments that start each chapter reflect the text, are well executed and clever. I'm not sure how that's supposed to help me as a self publisher, but it's good for a pleasant few hours every evening.
That's all the news from Northampton, Massachusetts this faux spring day. It took eleven minutes to write, so I think I'm finally on my way to beating the blog disease. All I need now is to see my subscription number start dropping in Google:-)
NEWDEALPRESS Domain To Good Home
NetworkSolutions tells me that the domain name I purchased for a new publishing company six years ago, NEWDEALPRESS.COM, is up for renewal next month. I don't want to let it expire and get picked up by a spammer, but I'm not real enthusiastic about continuing to pay for it without using it either. I think it makes a pretty good name for a new publishing venture, easy to remember, and probably not a bad match for somebody with progressive politics, which I lack:-) I originally reserved the name because of another one of my shortcomings - cover design. I thought I'd use Depression era public domain art from the WPA (Works Progress Administration) for the covers and give the books a branded, professional look. I never launched that publishing company because I couldn't come up with a business model where I wasn't just donating my time to previously unpublished authors. So if you want the NEWDEALPRESS domain name, drop me a line and tell me why.
I'm frequently asked to publish books for other authors, even though there's nothing on my website suggesting I'm in that business, but I'm rarely tempted. The bottom line, even if somebody seems to have a good book idea, is that authors are a high-maintenance bunch. That's the nice way of saying that as a group, we tend to be non-conformist whackos who don't get along with authority in general and people we work for in particular. I've also noticed a strong hand biting tendency in authors, I think it has to do with lashing out at anybody who will actually pay attention. It's one of the reasons I gave up the POD publisher's group I started back in 2003, which is now over 1500 members if you're looking for a true publishers group to join. As the active moderator at that time, there was just too much correspondence with misunderstood geniuses who didn't believe the rules should apply to them, or that I should be the one to interpret the rules. Who needs it?
But I still get served my share of humility by way of blog comments. The comment below which came in this morning (anonymously) was too good to waste on a post that no one will ever read again:
Well, Anonymous. I suspect it's a good thing that you chose not to include your name or your website, as I would have looked at it and given you honest feedback as to what you're doing wrong. Since you chose to be anonymous, I'll assume that your website and books fall into the general category of unsuccessful websites and books and give you the general advice. Your website lacks content, it's just an advertisement for your books, with a lot of personal information about you and your life that doesn't serve any business purpose. If you want to share all that stuff, put it on a Facebook page. A publisher website needs to be a resource to attract visitors, it's that's simple. Perhaps you wanted a recipe for writing good resource content? Try acquiring hands-on knowledge in a field and writing about your actual experiences, numbers and all. And don't expect to please everybody, I certainly don't.
Thanks for the help in giving me an easy blog post today, saved me the four to six hours I usually spend trying to say something useful. In another month, Blogger will be shutting down their FTP service, which means I'll stop using them to generate this blog, which will be the end of anonymous comments. So if anybody else wants to vent, you only have a few weeks left to do it, and that's only if you get past the censor. And Anonymous, part of your problem is clearly time management. If you don't find my blog useful, why on earth do you read it? I'm hardly an inspirational writer, and I don't think I'm that entertaining. If you have to read blogs, try some of those inspirational guys who don't confuse the issue with their actual historic data and focus on how they made their first million as "thought leaders" and inspirational speakers. Maybe my "secret" to making a decent living is that I don't read any other blogs myself.
I'm frequently asked to publish books for other authors, even though there's nothing on my website suggesting I'm in that business, but I'm rarely tempted. The bottom line, even if somebody seems to have a good book idea, is that authors are a high-maintenance bunch. That's the nice way of saying that as a group, we tend to be non-conformist whackos who don't get along with authority in general and people we work for in particular. I've also noticed a strong hand biting tendency in authors, I think it has to do with lashing out at anybody who will actually pay attention. It's one of the reasons I gave up the POD publisher's group I started back in 2003, which is now over 1500 members if you're looking for a true publishers group to join. As the active moderator at that time, there was just too much correspondence with misunderstood geniuses who didn't believe the rules should apply to them, or that I should be the one to interpret the rules. Who needs it?
But I still get served my share of humility by way of blog comments. The comment below which came in this morning (anonymously) was too good to waste on a post that no one will ever read again:
I've read your stuff off and on for years looking for help with my POD business, but I have to say that although you SEEM to be saying some instructive things, I can find no way to apply anything helpful from your advice. I already have Adsense, but who on earth except you can make $25,000 a year with it? And really, you aren't helping with your blog except in a very general way. Nothing to take away and use oneself. I guess that's part of how you got where you are. At least, you haven't blown it all on fancy clothes and expensive haircuts.
Well, Anonymous. I suspect it's a good thing that you chose not to include your name or your website, as I would have looked at it and given you honest feedback as to what you're doing wrong. Since you chose to be anonymous, I'll assume that your website and books fall into the general category of unsuccessful websites and books and give you the general advice. Your website lacks content, it's just an advertisement for your books, with a lot of personal information about you and your life that doesn't serve any business purpose. If you want to share all that stuff, put it on a Facebook page. A publisher website needs to be a resource to attract visitors, it's that's simple. Perhaps you wanted a recipe for writing good resource content? Try acquiring hands-on knowledge in a field and writing about your actual experiences, numbers and all. And don't expect to please everybody, I certainly don't.
Thanks for the help in giving me an easy blog post today, saved me the four to six hours I usually spend trying to say something useful. In another month, Blogger will be shutting down their FTP service, which means I'll stop using them to generate this blog, which will be the end of anonymous comments. So if anybody else wants to vent, you only have a few weeks left to do it, and that's only if you get past the censor. And Anonymous, part of your problem is clearly time management. If you don't find my blog useful, why on earth do you read it? I'm hardly an inspirational writer, and I don't think I'm that entertaining. If you have to read blogs, try some of those inspirational guys who don't confuse the issue with their actual historic data and focus on how they made their first million as "thought leaders" and inspirational speakers. Maybe my "secret" to making a decent living is that I don't read any other blogs myself.
Amazon Profit Driven By MarketPlace Sellers?
Everybody knows the old business school joke about selling at a loss and making it up on volume. A casual analysis of Amazon’s balance sheet and press releases suggests that they sell many things at a loss and make it up with MarketPlace revenue. Another way to look at it would be to say that Amazon runs a highly successful MarketPlace for third party sellers with a struggling retail store attached. I’ll run through the rough numbers, and you can make up your own mind. Feel free to call me an idiot if you think my estimate of MarketPlace impact is too high, I tried to be very conservative. Just do me the favor to point out the flaws. Estimates are necessary because Amazon doesn’t break these numbers out in their financial reporting for competitive reasons. They don’t give any data about Kindle sales or eBook purchases in their reports. In fact, it’s not even clear to me whether Kindle device sales are counted as “Media” or “Electronics and other Merchandise”.
Amazon reported in their 2009 Annual Statement that 30% of their unit sales came from MarketPlace vendors. MarketPlace vendors vary from large retailers taking advantage of Amazon’s storefront to sell their items, to college kids reselling textbooks and grandparents reselling gifts from their progeny. The only difference between the large sellers and the small sellers, in terms of revenues earned by Amazon, is that small sellers pay $0.99 per listing before other fees, while serious sellers pay $39.99 a month to list as many items as they desire. Both pay closing fees on certain items (it’s $1.35 for books) and a percentage of the selling price to Amazon, varying from a low of 6% on PCs and 8% on electronics and cameras, to 15% on books and 20% on Jewlery.
Now let’s estimate how many items they sell. Amazon used to report the total number of items shipped during the holiday season in a press release each year, but they stopped after 2005. That year, the Delight-O-Meter reported over 108 million items ordered from Amazon worldwide from November 1st through Christmas. I’m leaving October out of the estimate for the time being, we’ll stick it back in a couple inches down. Amazon’s 2009 sales were more than double 2005 sales (2.8X), so could lead us to estimate that Amazon’s 2009 holiday sales were 302 million items ordered. This extrapolation is a weak point in the analysis as the averaging selling price in 2009 might be appreciably higher than 2005, especially given growth in Electronics. So instead of 2.8X, I simply doubled the 108 million items to 216 million for the 209 holiday season. From Amazon’s 10K, we know that 4th quarter 2009 sales accounted for 39% of the year’s sales (it was 35% back in 2005). If we assume that holiday items sell at the same average price as year round items, it yields a first order approximation of over 338 million items shipped during the first three quarters of the 2009.
If we now estimate that October was an average month, we can include another 38 million unit orders (338 million / nine months). This should make 216 + 338 + 38 = 592 million a first order approximation of the number of orders Amazon took in 2009. For a second iteration, we now add the 38 million estimate for October to the 216 million holiday season estimate for 254 million units ordered in the 4th quarter, and recalculate the first nine months as 397 million units. That puts the total year (minus the week after Christmas) at 651 million units worldwide. I’m not going to try for a third iteration or we’ll be here all day.
Since Amazon sold about $24.5 billion in total merchandise in 2009, that would put the average item a little under $38 dollars. I expect that MarketPlace orders would average much less, unless there are lots of people buying computers and diamond rings through third party vendors, but it’s important to keep in mind that both Amazon and Marketplace sell some big ticket items, like Kindles and big screen TVs. This leaves us with the estimate that Amazon processed orders for 651 million units in 2009, with MarketPlace vendors share at 30% amounting to 195 million units. This calculation assumes that the average MarketPlace item sold for the same amount as the average new-from-Amazon item, which I suspect is extraordinarily conservative.
So, the remaining question is how much does Amazon net from the average marketplace unit sale? For a book sold by granny, we know that the minimum is $0.99 + $1.35 = $2.34, and that assumes that granny sells the book for a penny. Serious sellers save the $0.99 listing fee, but at least one professional seller I spoke to won’t bother listing books for less than $10, which means Amazon makes a minimum of $1.50 (15% of $10) plus $1.35 = $2.85 on each of his sales. And I suspect these book examples are very conservative for Amazon marketplace, where I’ve paid around $100 (around $10 net to Amazon) for a replacement laptop battery, amongst other transactions. So let’s round down the average of the two book examples and say the average unit sold through MarketPlace nets Amazon $2.50 even.
We’re left with 195 million units at $2.50 profit each, for $487 million dollars profit. Yes, I know that it costs Amazon something to run the MarketPlace, but we’ve been so conservative at every turn that I’m going to ignore that as part of the noise and consider some other numbers. Amazon’s reported net income for 2009 was $902 million. That profit remains after they lost $849 million dollars on shipping. Under what I think is a very conservative estimate, more than half of Amazon’s net profit came from MarketPlace vendors. Another bit of conservatism was interpeting Amazon's holiday season as Nov 1st to December 25th (and not bothering with the week after Christmas), when in other places, they imply that the holiday season is Thanksgiving to Christmas.
Now let’s go back and look at a few of the variables. $38 dollars for the average unit selling price does seem awfully high, no matter what the Delight-O-Meter extrapolation suggests. If you had been asked to guess the average selling price of an item on Amazon, I wouldn’t be surprised if you’d chosen $20, which would almost double the number of units sold, and almost double the MarketPlace earnings so they accounted for all of Amazon’s profit. But let’s leave the average selling price alone and consider the average Amazon net per MarketPlace item. At $5.00 net per marketplace transaction, all of Amazon’s reported profit would come from MarketPlace. It true that some advanced MarketPlace vendors have been moving to “Fulfillment By Amazon” and saving a little on fees, but it really only makes sense for higher average ticket items, and my understanding is that it hasn’t really caught on yet. And if the average MarketPlace transaction was really $38, a number we stuck with to hold down the total number of items sold, it would almost certainly put Amazon’s net per MarketPlace transaction over $5.00. And don't forget our assumption that average item prices had risen. If the average selling price in 2009 was the same as 2005, what with all the inexpensive eBooks on Kindle, falling electronics prices, etc, the total items sold would have been a couple hundred million higher.
All of this suggests one conclusion. That it’s very difficult for any other bookstores selling new books, online or off, to compete with Amazon without losing their shirts. Amazon’s secret may be that they’re losing their shirt as well, but making it up in MarketPlace.
Amazon reported in their 2009 Annual Statement that 30% of their unit sales came from MarketPlace vendors. MarketPlace vendors vary from large retailers taking advantage of Amazon’s storefront to sell their items, to college kids reselling textbooks and grandparents reselling gifts from their progeny. The only difference between the large sellers and the small sellers, in terms of revenues earned by Amazon, is that small sellers pay $0.99 per listing before other fees, while serious sellers pay $39.99 a month to list as many items as they desire. Both pay closing fees on certain items (it’s $1.35 for books) and a percentage of the selling price to Amazon, varying from a low of 6% on PCs and 8% on electronics and cameras, to 15% on books and 20% on Jewlery.
Now let’s estimate how many items they sell. Amazon used to report the total number of items shipped during the holiday season in a press release each year, but they stopped after 2005. That year, the Delight-O-Meter reported over 108 million items ordered from Amazon worldwide from November 1st through Christmas. I’m leaving October out of the estimate for the time being, we’ll stick it back in a couple inches down. Amazon’s 2009 sales were more than double 2005 sales (2.8X), so could lead us to estimate that Amazon’s 2009 holiday sales were 302 million items ordered. This extrapolation is a weak point in the analysis as the averaging selling price in 2009 might be appreciably higher than 2005, especially given growth in Electronics. So instead of 2.8X, I simply doubled the 108 million items to 216 million for the 209 holiday season. From Amazon’s 10K, we know that 4th quarter 2009 sales accounted for 39% of the year’s sales (it was 35% back in 2005). If we assume that holiday items sell at the same average price as year round items, it yields a first order approximation of over 338 million items shipped during the first three quarters of the 2009.
If we now estimate that October was an average month, we can include another 38 million unit orders (338 million / nine months). This should make 216 + 338 + 38 = 592 million a first order approximation of the number of orders Amazon took in 2009. For a second iteration, we now add the 38 million estimate for October to the 216 million holiday season estimate for 254 million units ordered in the 4th quarter, and recalculate the first nine months as 397 million units. That puts the total year (minus the week after Christmas) at 651 million units worldwide. I’m not going to try for a third iteration or we’ll be here all day.
Since Amazon sold about $24.5 billion in total merchandise in 2009, that would put the average item a little under $38 dollars. I expect that MarketPlace orders would average much less, unless there are lots of people buying computers and diamond rings through third party vendors, but it’s important to keep in mind that both Amazon and Marketplace sell some big ticket items, like Kindles and big screen TVs. This leaves us with the estimate that Amazon processed orders for 651 million units in 2009, with MarketPlace vendors share at 30% amounting to 195 million units. This calculation assumes that the average MarketPlace item sold for the same amount as the average new-from-Amazon item, which I suspect is extraordinarily conservative.
So, the remaining question is how much does Amazon net from the average marketplace unit sale? For a book sold by granny, we know that the minimum is $0.99 + $1.35 = $2.34, and that assumes that granny sells the book for a penny. Serious sellers save the $0.99 listing fee, but at least one professional seller I spoke to won’t bother listing books for less than $10, which means Amazon makes a minimum of $1.50 (15% of $10) plus $1.35 = $2.85 on each of his sales. And I suspect these book examples are very conservative for Amazon marketplace, where I’ve paid around $100 (around $10 net to Amazon) for a replacement laptop battery, amongst other transactions. So let’s round down the average of the two book examples and say the average unit sold through MarketPlace nets Amazon $2.50 even.
We’re left with 195 million units at $2.50 profit each, for $487 million dollars profit. Yes, I know that it costs Amazon something to run the MarketPlace, but we’ve been so conservative at every turn that I’m going to ignore that as part of the noise and consider some other numbers. Amazon’s reported net income for 2009 was $902 million. That profit remains after they lost $849 million dollars on shipping. Under what I think is a very conservative estimate, more than half of Amazon’s net profit came from MarketPlace vendors. Another bit of conservatism was interpeting Amazon's holiday season as Nov 1st to December 25th (and not bothering with the week after Christmas), when in other places, they imply that the holiday season is Thanksgiving to Christmas.
Now let’s go back and look at a few of the variables. $38 dollars for the average unit selling price does seem awfully high, no matter what the Delight-O-Meter extrapolation suggests. If you had been asked to guess the average selling price of an item on Amazon, I wouldn’t be surprised if you’d chosen $20, which would almost double the number of units sold, and almost double the MarketPlace earnings so they accounted for all of Amazon’s profit. But let’s leave the average selling price alone and consider the average Amazon net per MarketPlace item. At $5.00 net per marketplace transaction, all of Amazon’s reported profit would come from MarketPlace. It true that some advanced MarketPlace vendors have been moving to “Fulfillment By Amazon” and saving a little on fees, but it really only makes sense for higher average ticket items, and my understanding is that it hasn’t really caught on yet. And if the average MarketPlace transaction was really $38, a number we stuck with to hold down the total number of items sold, it would almost certainly put Amazon’s net per MarketPlace transaction over $5.00. And don't forget our assumption that average item prices had risen. If the average selling price in 2009 was the same as 2005, what with all the inexpensive eBooks on Kindle, falling electronics prices, etc, the total items sold would have been a couple hundred million higher.
All of this suggests one conclusion. That it’s very difficult for any other bookstores selling new books, online or off, to compete with Amazon without losing their shirts. Amazon’s secret may be that they’re losing their shirt as well, but making it up in MarketPlace.
Is Amazon’s Kindle Killing Book Publishing?
Amazon filed their 10K annual report on Thursday and two numbers jumped off the virtual page at me. First, Amazon’s international media sales (no Kindle component to speak of) were up 19%, bringing the total to $6.8 billion. Amazon’s North American media sales were up 11%, bring the total to $5.94 billion. In the three years prior to Kindle’s release, Amazon’s International media sales (books, music, movies) grew just a little faster than their North American sales. Since the Kindle began to take off in late 2007/early 2008, the North American media rate of sales growth has lagged international media rate of sales growth by 37%. One possible explanation is the Kindle sales are cannibalizing growth from Amazon’s North American book sales, and Amazon is betting the future farm on capturing the eReader market.
Update: According to news feeds, Amazon has announced they will back down and compromise with Macmillan.
Most of the publishing world is Tweeting from the sidelines as Macmillan and Amazon face off in a power play over the future of book publishing. Trade publishers are finally waking up to the fact that Amazon’s growing power as the world’s leading book retailer puts their businesses in a precarious position of dependency. This isn’t a simple argument about the retail pricing of eBooks. Increasing eBook sales lowers the volume of paper books printed and forces up the marginal cost of publishing on paper. The result is a positive feedback loop for eBooks and a death spiral for paper books. Quoting myself from a couple years ago when pointing out that Amazon’s US book sales were poised to pass the bricks-and-mortar sales of the whole Barnes&Noble chain, "I can't predict exactly how far into the future the day of reckoning will arrive for large publishers, but it's clear that Amazon can control the timetable with the pace of their investment in POD and Kindle." It appears for Macmillan, the day of reckoning has arrived.
On Friday Amazon stopped selling books published by Macmillan, one of the largest publishing groups in the world, in a dispute over eBook pricing and distribution control. Nobody outside of Macmillan and Amazon knows for sure what their existing deal was, though it’s widely reported that Amazon was losing money selling Kindle versions of Macmillan bestsellers by paying Macmillan more than Amazon’s selling price. Nor does anybody outside of Amazon and Macmillan know what percentage of Macmillan’s overall sales have been going through Amazon. Macmillan’s heavy presence in the education market, from elementary right through university, makes them less vulnerable to Amazon’s boycott of their books than publishers dependent entirely on leisure readers. It’s also unclear whether the whole issue would have come to a head this week without the announcement of Apples iPad, and their support for a pricing model that leaves more control in the hands of the publishers.
Make no mistake about what’s at stake here. Publishers don’t want to find themselves in a position couple years down the road where Amazon can start dictating the wholesale pricing for publisher content. This can only if Kindle remains the dominant eBook reader, something I suspect has grown a little less likely with Amazon's actions this week. The current stand-off has brought out the usual commentary by instant eBook experts who have never published a book on paper or electronically. They don’t have a clue about economics of publishing, the time invested by an author or the money invested by a publisher, and endlessly repeat the mantra that authors and publishers are all stupid and will earn more money through increased volume. If the volume doesn’t materialize, that can only mean that the price isn’t low enough. I guess there’s a quantity of alcohol or emotional age that makes watching people falling on their backs while trying to limbo under a pole hilarious, but substitute “going out of business” with “falling on their backs” and you may sober up. For a hair of the dog, consider the “creative destruction” preached by our economic sages and how well that’s turned out for us all.
Just a week ago, Booklocker and Amazon settled Booklocker's anti-trust class action lawsuit over Amazon’s threat to remove “Buy it now” buttons from Booklocker’s titles on Amazon if Booklocker didn’t agree to have Amazon print their books. At the time, Amazon claimed that the move was necessary to better serve their customers, a nonsensical claim at best, yet one that is being used today in regards to the eBook distribution model. In the settlement agreement, Booklocker won what they had sought, Amazon’s agreement not to remove their “Buy it now” buttons, and Amazon paid $300,000 to Booklocker’s law firm for the legal costs of the suit. One wonders if Amazon’s lawyers had kept the button removal monster in a cage during the lawsuit, and set him free once the settlement was signed.
Given the lack of solidarity within the publishing "community" during Amazon's POD take-over, I doubt that Macmillan will see a groundswell of support from self publishers or small trades. The question of who will “win” the Amazon vs Macmillan war (and the winner appears to be Macmillan)can be influenced by the other large publishing groups. As much as they depend on Amazon for sales, Amazon depends on them even more for books. Nobody outside those publishers and Amazon knows if they have contractual commitments that will prevent them from telling Amazon that they are changing model under which they are will to provide Amazon with eBooks. But even if the CEO’s of the other publishing groups have the legal ability to turn the tables on Amazon, they may not have the desire. For the time being, Macmillan’s loss is their gain, and as far as anybody knows, the large publishing groups aren’t losing money on their Kindle titles under the current regime. The future? Well, that’s off in the future somewhere, and it’s much more fun to make money today and not worry about it.
Amazon also surprised the small publishing world last week with the announcement of a new Kindle business model to be launched this summer. The new model for Digital Text Platform users will up the author/publisher share from 35% to roughly 70%, in return for the author/publisher agreeing to a maximum list price of $9.99 and a minimum 20% discount from the paper price. The 70% royalty will be based on the sales price, which will be determined by Amazon in a manner that's not entirely clear at this point. The deal is nearly irrelevant for my own self publishing business since I only sell my weakest title through Kindle due to formatting constraints, but all of these events stacking up since the first of the year should serve as a welcome reminder that absolute power makes a negative impression. Or maybe that’s absolute numbers make negative signs positive, or some CEO's found courage in a bottle of Absolut and stood by Macmillan.
Update: According to news feeds, Amazon has announced they will back down and compromise with Macmillan.
Most of the publishing world is Tweeting from the sidelines as Macmillan and Amazon face off in a power play over the future of book publishing. Trade publishers are finally waking up to the fact that Amazon’s growing power as the world’s leading book retailer puts their businesses in a precarious position of dependency. This isn’t a simple argument about the retail pricing of eBooks. Increasing eBook sales lowers the volume of paper books printed and forces up the marginal cost of publishing on paper. The result is a positive feedback loop for eBooks and a death spiral for paper books. Quoting myself from a couple years ago when pointing out that Amazon’s US book sales were poised to pass the bricks-and-mortar sales of the whole Barnes&Noble chain, "I can't predict exactly how far into the future the day of reckoning will arrive for large publishers, but it's clear that Amazon can control the timetable with the pace of their investment in POD and Kindle." It appears for Macmillan, the day of reckoning has arrived.
On Friday Amazon stopped selling books published by Macmillan, one of the largest publishing groups in the world, in a dispute over eBook pricing and distribution control. Nobody outside of Macmillan and Amazon knows for sure what their existing deal was, though it’s widely reported that Amazon was losing money selling Kindle versions of Macmillan bestsellers by paying Macmillan more than Amazon’s selling price. Nor does anybody outside of Amazon and Macmillan know what percentage of Macmillan’s overall sales have been going through Amazon. Macmillan’s heavy presence in the education market, from elementary right through university, makes them less vulnerable to Amazon’s boycott of their books than publishers dependent entirely on leisure readers. It’s also unclear whether the whole issue would have come to a head this week without the announcement of Apples iPad, and their support for a pricing model that leaves more control in the hands of the publishers.
Make no mistake about what’s at stake here. Publishers don’t want to find themselves in a position couple years down the road where Amazon can start dictating the wholesale pricing for publisher content. This can only if Kindle remains the dominant eBook reader, something I suspect has grown a little less likely with Amazon's actions this week. The current stand-off has brought out the usual commentary by instant eBook experts who have never published a book on paper or electronically. They don’t have a clue about economics of publishing, the time invested by an author or the money invested by a publisher, and endlessly repeat the mantra that authors and publishers are all stupid and will earn more money through increased volume. If the volume doesn’t materialize, that can only mean that the price isn’t low enough. I guess there’s a quantity of alcohol or emotional age that makes watching people falling on their backs while trying to limbo under a pole hilarious, but substitute “going out of business” with “falling on their backs” and you may sober up. For a hair of the dog, consider the “creative destruction” preached by our economic sages and how well that’s turned out for us all.
Just a week ago, Booklocker and Amazon settled Booklocker's anti-trust class action lawsuit over Amazon’s threat to remove “Buy it now” buttons from Booklocker’s titles on Amazon if Booklocker didn’t agree to have Amazon print their books. At the time, Amazon claimed that the move was necessary to better serve their customers, a nonsensical claim at best, yet one that is being used today in regards to the eBook distribution model. In the settlement agreement, Booklocker won what they had sought, Amazon’s agreement not to remove their “Buy it now” buttons, and Amazon paid $300,000 to Booklocker’s law firm for the legal costs of the suit. One wonders if Amazon’s lawyers had kept the button removal monster in a cage during the lawsuit, and set him free once the settlement was signed.
Given the lack of solidarity within the publishing "community" during Amazon's POD take-over, I doubt that Macmillan will see a groundswell of support from self publishers or small trades. The question of who will “win” the Amazon vs Macmillan war (and the winner appears to be Macmillan)can be influenced by the other large publishing groups. As much as they depend on Amazon for sales, Amazon depends on them even more for books. Nobody outside those publishers and Amazon knows if they have contractual commitments that will prevent them from telling Amazon that they are changing model under which they are will to provide Amazon with eBooks. But even if the CEO’s of the other publishing groups have the legal ability to turn the tables on Amazon, they may not have the desire. For the time being, Macmillan’s loss is their gain, and as far as anybody knows, the large publishing groups aren’t losing money on their Kindle titles under the current regime. The future? Well, that’s off in the future somewhere, and it’s much more fun to make money today and not worry about it.
Amazon also surprised the small publishing world last week with the announcement of a new Kindle business model to be launched this summer. The new model for Digital Text Platform users will up the author/publisher share from 35% to roughly 70%, in return for the author/publisher agreeing to a maximum list price of $9.99 and a minimum 20% discount from the paper price. The 70% royalty will be based on the sales price, which will be determined by Amazon in a manner that's not entirely clear at this point. The deal is nearly irrelevant for my own self publishing business since I only sell my weakest title through Kindle due to formatting constraints, but all of these events stacking up since the first of the year should serve as a welcome reminder that absolute power makes a negative impression. Or maybe that’s absolute numbers make negative signs positive, or some CEO's found courage in a bottle of Absolut and stood by Macmillan.
eBook Case Study And Experience Selling eBooks
First, I should point out some major differences between my own eBook sales and selling eBooks for Kindle or iPhone. I am selling PDF files using eJunkie as the download service and PayPal as the credit card processor. This is a very different than selling to registered customers who are buying yet another eBook for their sunk-cost device with a single-click through from a trusted big name vendor. It also means that my eBook sales have zero dependence on the cataloging or ranking of a retailer site. This case study is a follow up to an earlier post in which I tried to establish if eBook sales were hurting print sales.
I chose the awkward time period of this case study, May 9th to Dec 31st of four successive years, because the eBook edition of my business title went on sale May 9th of 2008 and I wanted to compare apples-to-apples as much as possible. The reason I give paper book sales data for two years prior to the release of the eBook is to show that a downward trend was already in place for this eight year old title. In addition to actual eBook sales, I show Ingram sales (which represent the majority of paper book sales for this title), Amazon Associate sales (direct buyers from the FonerBooks website) and the number of hits on the order pages for the book. Now, on to the sales data:
Period May 9 to Dec 31st, Paper $14.95 (Amazon $13.45), eBook $11.95:
2006 – 807 Ingram, 0 eBooks
2007 - 694 Ingram, 0 eBooks
2008 – 498 Ingram, 159 eBooks
2009 – 569 Ingram, 165 eBooks
Now the combined unit sales and a look at the website marketing, including Amazon Associates sales and hits on the order page(s) for the book:
2006 – 807 unit sales, 183 Associates, 5,348 Order Page
2007 – 694 unit sales, 160 Associates, 4,648 Order Page
2008 – 657 unit sales, 83 Associates, 4,691 Order Page, 777 eOrder Page
2009 – 734 unit sales, 97 Associates, 5,115 Order Page, 805 eOrder Page
Perhaps the economic events of 2008 had a direct impact on the sales for this title about starting a business. It’s also important to note that two directly competing titles appeared on Amazon in late 2007. The sell through for the eBook, once customers click through to the eOrder page and are confronted by the license agreement and the PayPal symbol, is higher than 20% for both years. The Amazon Associates sales for the paper book dropped by almost 50% when I started selling eBooks direct, yet the eBook sales nearly doubled the lost Associate sales. International eBook buyers who suddenly have a low cost way to get the book account for part of that difference.
The main sales drivers for this title are the extensive excerpts available for free on the FonerBooks website and its visibility on Amazon (paper book only), which was built over the years. The book seems to be widely available through piracy sites, and likely was before I even began selling an unprotected PDF version. I haven’t gone through the exercise of trying to download pirated copies because I don’t put that much trust in my antivirus software and I don’t find it beneficial to my mental health. Going by Google's auto complete results, there are plenty of people looking for a freebie on file sharing sites (my more popular titles also show similar queries, including the word "free"):
The experience of selling eBooks using the simple combination of eJunkie and PayPal is working very well. Of the 1207 eBooks sold (four different titles) in 2009, there were a total of eight PayPal disputes initiated, less than one tenth of one percent. Six of the eight disputes resulted in somebody getting a free eBook, whether or not it was the intended customer isn’t clear. PayPal labeled two as “bank returns”, two as “temporary holds” that apparently became permanent, one as “non receipt” (I assume they couldn’t find the file on their hard drive) and one as a credit card company “charge back” which resulted in a $10 loss. Two of the disputes were resolved in my favor. I also issued six refunds unilaterally after noticing customers never downloaded the eBook they had paid for, and I don’t believe I ever heard from any of them. The only other overhead has been regular requests, perhaps one a month, to replace lost eBooks. Overall, I may spend fifteen or twenty minutes a week managing the eBook sales. The graph shows a strong seasonality to my eBook sales, I wonder if other publishers have seen anything similar?
I also started selling my most recent print title as an eBook for the first time this month, and overall eBook sales are up around 40% over the previous January. This should give me some data to contrast with the book published earlier that year, when I started selling the eBook a couple months before releasing the print book. Now that I’m selling three eBooks on a related subject, I’ve started seeing triple orders, one a week so far. When somebody purchases an eBook, comes back a half hour later and purchases the next one, and then returns an hour after that and purchases the last one, I take it as a vote of confidence in the quality. Only one of the three eBooks makes any mention of one of the others, and that’s at the very back, so it’s not a question of push marketing.
Readers may also be interested in a full life cycle, six year case study for a POD book I posted a few months ago. Also note that Andrew Savakis of O'Reilly has published several interesting number posts on O'Reilly's eBook sales in the past couple months, along with an argument that smartphones are the future of eBooks.
I chose the awkward time period of this case study, May 9th to Dec 31st of four successive years, because the eBook edition of my business title went on sale May 9th of 2008 and I wanted to compare apples-to-apples as much as possible. The reason I give paper book sales data for two years prior to the release of the eBook is to show that a downward trend was already in place for this eight year old title. In addition to actual eBook sales, I show Ingram sales (which represent the majority of paper book sales for this title), Amazon Associate sales (direct buyers from the FonerBooks website) and the number of hits on the order pages for the book. Now, on to the sales data:
Period May 9 to Dec 31st, Paper $14.95 (Amazon $13.45), eBook $11.95:
2006 – 807 Ingram, 0 eBooks
2007 - 694 Ingram, 0 eBooks
2008 – 498 Ingram, 159 eBooks
2009 – 569 Ingram, 165 eBooks
Now the combined unit sales and a look at the website marketing, including Amazon Associates sales and hits on the order page(s) for the book:
2006 – 807 unit sales, 183 Associates, 5,348 Order Page
2007 – 694 unit sales, 160 Associates, 4,648 Order Page
2008 – 657 unit sales, 83 Associates, 4,691 Order Page, 777 eOrder Page
2009 – 734 unit sales, 97 Associates, 5,115 Order Page, 805 eOrder Page
Perhaps the economic events of 2008 had a direct impact on the sales for this title about starting a business. It’s also important to note that two directly competing titles appeared on Amazon in late 2007. The sell through for the eBook, once customers click through to the eOrder page and are confronted by the license agreement and the PayPal symbol, is higher than 20% for both years. The Amazon Associates sales for the paper book dropped by almost 50% when I started selling eBooks direct, yet the eBook sales nearly doubled the lost Associate sales. International eBook buyers who suddenly have a low cost way to get the book account for part of that difference.
The main sales drivers for this title are the extensive excerpts available for free on the FonerBooks website and its visibility on Amazon (paper book only), which was built over the years. The book seems to be widely available through piracy sites, and likely was before I even began selling an unprotected PDF version. I haven’t gone through the exercise of trying to download pirated copies because I don’t put that much trust in my antivirus software and I don’t find it beneficial to my mental health. Going by Google's auto complete results, there are plenty of people looking for a freebie on file sharing sites (my more popular titles also show similar queries, including the word "free"):
The experience of selling eBooks using the simple combination of eJunkie and PayPal is working very well. Of the 1207 eBooks sold (four different titles) in 2009, there were a total of eight PayPal disputes initiated, less than one tenth of one percent. Six of the eight disputes resulted in somebody getting a free eBook, whether or not it was the intended customer isn’t clear. PayPal labeled two as “bank returns”, two as “temporary holds” that apparently became permanent, one as “non receipt” (I assume they couldn’t find the file on their hard drive) and one as a credit card company “charge back” which resulted in a $10 loss. Two of the disputes were resolved in my favor. I also issued six refunds unilaterally after noticing customers never downloaded the eBook they had paid for, and I don’t believe I ever heard from any of them. The only other overhead has been regular requests, perhaps one a month, to replace lost eBooks. Overall, I may spend fifteen or twenty minutes a week managing the eBook sales. The graph shows a strong seasonality to my eBook sales, I wonder if other publishers have seen anything similar?
I also started selling my most recent print title as an eBook for the first time this month, and overall eBook sales are up around 40% over the previous January. This should give me some data to contrast with the book published earlier that year, when I started selling the eBook a couple months before releasing the print book. Now that I’m selling three eBooks on a related subject, I’ve started seeing triple orders, one a week so far. When somebody purchases an eBook, comes back a half hour later and purchases the next one, and then returns an hour after that and purchases the last one, I take it as a vote of confidence in the quality. Only one of the three eBooks makes any mention of one of the others, and that’s at the very back, so it’s not a question of push marketing.
Readers may also be interested in a full life cycle, six year case study for a POD book I posted a few months ago. Also note that Andrew Savakis of O'Reilly has published several interesting number posts on O'Reilly's eBook sales in the past couple months, along with an argument that smartphones are the future of eBooks.
Advertising Revenue For Book Publishers
Update:
I dropped Adsense from my FonerBooks website in 2011 in protest of their support of copyright infringements. Thanks to DMCA dashboard, it's gotten easier to combat infringements, so I'm reconsidering.
Back to 2010 I had written:
Foner Books earns a little over $25,000 a year from the Google Adsense program for publishers. It’s been fairly consistent over the past four years, with the total amount over $100,000. I don’t show Adsense ads on all of my pages, in fact, Adsense appeared on less than a quarter of the total page views my site attracted during this period. I’ve never tried running more than one ad block on a page, and I prioritize book marketing, sending potential customers to Amazon or selling eBooks direct, over generating advertising revenue. It seems to me that advertising on the top of the page works best when the audience is primarily interested in purchasing a product or a service, and that advertising at the bottom of the page works best when the audience is primarily interested in information, i.e., how-to material. I once worried about advertising making the site look spammy and reducing organic linking, but Adsense has come to be seen as a standard design feature for professional websites, and is a welcome addition for active shoppers.
The best feature of online advertising for Foner Books is that it allows us to earn something for our publishing efforts without having to sell a book or an eBook (we don’t sell subscriptions). It opens up a whole world of monetizing content on a chapter or article basis, and importantly, allows us to earn some return on research and time spent developing material for books that may never reach the publication stage for one reason or another. Traditional book publishing is a hugely inefficient enterprise, with a small number of “hits” paying for a large number of “misses”, but through the distinct economics of online advertising, the “misses” may earn more from advertising in the long run than some of the “hits” in print. For authors and publishers who follow the approach of publishing draft material online to generate feedback and gauge demand, early advertising revenue offers another metric to predict the ultimate commercial viability of the work.
So, given all of the upside to advertising, why do I bother with books or eBook at all? For starters, paper books remain my primary source of revenue. I earn more from my paper books printed through Lightning Source on demand than I do through eBooks, Adsense, Amazon Associates and special sales combined. Next, Google Adsense is essentially a black box for publishers. I don’t know how they choose the advertisers for my pages, how they decide on my share of the advertising revenue (the ads themselves are sold through the Adwords auction process), or what they have in mind for next month, much less next year. Book sales, while greatly dependent on my “partnerships” with Lightning Source and Amazon, neither of which would notice if Foner Books ceased to exist, are less dependent on Google. Direct eBook sales, the fastest growing share of my publishing revenue, are heavily dependent on Google as the main source of search traffic and potential eBook customers.
Advertising is a brilliant match for publishing, but as newspapers and many other publishers have learned, that doesn’t mean that the economic model that worked in the pre-Internet print world can be migrated online without serious modification. One reason publishers give for ignoring the potential of advertising revenue has nothing to do with economics and everything to do with snobbery. It’s the perception that serious book publishers shouldn’t sully themselves with advertising, which by definition, they assert, targets the great unwashed. Unfortunately, by holding back quality book content from the Internet, publishers are hurting themselves and the public. Perhaps one in a thousand of the people who read my work online buy a book from me, but many of the other nine-hundred and ninety nine find exactly what they need or learn that my books and writing approach don’t suit them, which is equally valuable. The individuals finding my website through search don’t glance at the page and say, “Oh, here’s another scam site where they’ve published tens of millions of pages about nothing to cash in on advertising.” Ironically, the reason that a large chunk of web searches lead to pages whose only content is automatically generated questions (without an answers) or top ten lists ground out by contract writers for a low hourly wage is because they don’t have any competition on those search queries.
Another argument book publishers make against online advertising is, “We tried that once and it didn’t work.” At the risk of creating more competition for myself, let me suggest that you try it again, and make a real effort this time. Experimenting with monetizing a high traffic website isn’t something you can leave to the intern or assign to the web design team, it has to be carried out by somebody with a business head and the authority to carry out large scale trials on the website. That person needs to be able to modify web pages without calling three meetings and writing an action plan for committee approval for each trial. It doesn’t take weeks or months to figure out whether advertising will work well with particular content, days or hours can be sufficient on a high traffic site. Just make sure the person in charge has hands-on experience with online advertising, even if it’s through a hobby site. If you need outside help, make sure you find a consultant who has experience with advertising on a publisher site where the primary goal remains selling the publisher’s books and media products.
Some publishers simply believe that their content won’t do well with advertising. I don’t know any way of determining that without systematically experimenting with an ad network like Adsense and its nearly infinite universe of advertisers. If all of your books are about getting through life with nothing but old newspapers and masking tape, there may be a limited number of advertisers interested in that content and they probably won’t pay very much. But you never know. A book about traveling overseas while dressed in newspapers may monetize well with ads for high fashion or mental health services while abroad. I’ve been pleasantly surprised by the Adsense’s ability to find relevant products and services for even the most eclectic content on my website. Although the Foner Books advertising revenue is all brokered by Adsense, it’s diversified across a dozen topics within the site, the largest of which accounts for less than a third of the total.
Advertising alongside book content or professional journalism isn’t some get rich quick scheme based on shady search engine manipulation or requiring wholesale link generation. If your content is good, the search traffic side of the equation will largely take care of itself. Book publishers have a tremendous advantage over community websites and newspapers when it comes to advertising because they can be assured of generating a large portion of their visitors from people looking for information or products (also known as shopping), as opposed to people who are simply socializing or getting their daily fix of aggravation. The main question you’ll be faced with is whether you want to establish your own ad sales effort, or simply sign up with a network like Adsense, let them do all the heavy lifting and be satisfied with the results. If nothing else, take a look at your competition and see if they are monetizing any of their book content through advertising, because any incremental income they earn will directly impact your ability to compete with them in the print book world.
I dropped Adsense from my FonerBooks website in 2011 in protest of their support of copyright infringements. Thanks to DMCA dashboard, it's gotten easier to combat infringements, so I'm reconsidering.
Back to 2010 I had written:
Foner Books earns a little over $25,000 a year from the Google Adsense program for publishers. It’s been fairly consistent over the past four years, with the total amount over $100,000. I don’t show Adsense ads on all of my pages, in fact, Adsense appeared on less than a quarter of the total page views my site attracted during this period. I’ve never tried running more than one ad block on a page, and I prioritize book marketing, sending potential customers to Amazon or selling eBooks direct, over generating advertising revenue. It seems to me that advertising on the top of the page works best when the audience is primarily interested in purchasing a product or a service, and that advertising at the bottom of the page works best when the audience is primarily interested in information, i.e., how-to material. I once worried about advertising making the site look spammy and reducing organic linking, but Adsense has come to be seen as a standard design feature for professional websites, and is a welcome addition for active shoppers.
The best feature of online advertising for Foner Books is that it allows us to earn something for our publishing efforts without having to sell a book or an eBook (we don’t sell subscriptions). It opens up a whole world of monetizing content on a chapter or article basis, and importantly, allows us to earn some return on research and time spent developing material for books that may never reach the publication stage for one reason or another. Traditional book publishing is a hugely inefficient enterprise, with a small number of “hits” paying for a large number of “misses”, but through the distinct economics of online advertising, the “misses” may earn more from advertising in the long run than some of the “hits” in print. For authors and publishers who follow the approach of publishing draft material online to generate feedback and gauge demand, early advertising revenue offers another metric to predict the ultimate commercial viability of the work.
So, given all of the upside to advertising, why do I bother with books or eBook at all? For starters, paper books remain my primary source of revenue. I earn more from my paper books printed through Lightning Source on demand than I do through eBooks, Adsense, Amazon Associates and special sales combined. Next, Google Adsense is essentially a black box for publishers. I don’t know how they choose the advertisers for my pages, how they decide on my share of the advertising revenue (the ads themselves are sold through the Adwords auction process), or what they have in mind for next month, much less next year. Book sales, while greatly dependent on my “partnerships” with Lightning Source and Amazon, neither of which would notice if Foner Books ceased to exist, are less dependent on Google. Direct eBook sales, the fastest growing share of my publishing revenue, are heavily dependent on Google as the main source of search traffic and potential eBook customers.
Advertising is a brilliant match for publishing, but as newspapers and many other publishers have learned, that doesn’t mean that the economic model that worked in the pre-Internet print world can be migrated online without serious modification. One reason publishers give for ignoring the potential of advertising revenue has nothing to do with economics and everything to do with snobbery. It’s the perception that serious book publishers shouldn’t sully themselves with advertising, which by definition, they assert, targets the great unwashed. Unfortunately, by holding back quality book content from the Internet, publishers are hurting themselves and the public. Perhaps one in a thousand of the people who read my work online buy a book from me, but many of the other nine-hundred and ninety nine find exactly what they need or learn that my books and writing approach don’t suit them, which is equally valuable. The individuals finding my website through search don’t glance at the page and say, “Oh, here’s another scam site where they’ve published tens of millions of pages about nothing to cash in on advertising.” Ironically, the reason that a large chunk of web searches lead to pages whose only content is automatically generated questions (without an answers) or top ten lists ground out by contract writers for a low hourly wage is because they don’t have any competition on those search queries.
Another argument book publishers make against online advertising is, “We tried that once and it didn’t work.” At the risk of creating more competition for myself, let me suggest that you try it again, and make a real effort this time. Experimenting with monetizing a high traffic website isn’t something you can leave to the intern or assign to the web design team, it has to be carried out by somebody with a business head and the authority to carry out large scale trials on the website. That person needs to be able to modify web pages without calling three meetings and writing an action plan for committee approval for each trial. It doesn’t take weeks or months to figure out whether advertising will work well with particular content, days or hours can be sufficient on a high traffic site. Just make sure the person in charge has hands-on experience with online advertising, even if it’s through a hobby site. If you need outside help, make sure you find a consultant who has experience with advertising on a publisher site where the primary goal remains selling the publisher’s books and media products.
Some publishers simply believe that their content won’t do well with advertising. I don’t know any way of determining that without systematically experimenting with an ad network like Adsense and its nearly infinite universe of advertisers. If all of your books are about getting through life with nothing but old newspapers and masking tape, there may be a limited number of advertisers interested in that content and they probably won’t pay very much. But you never know. A book about traveling overseas while dressed in newspapers may monetize well with ads for high fashion or mental health services while abroad. I’ve been pleasantly surprised by the Adsense’s ability to find relevant products and services for even the most eclectic content on my website. Although the Foner Books advertising revenue is all brokered by Adsense, it’s diversified across a dozen topics within the site, the largest of which accounts for less than a third of the total.
Advertising alongside book content or professional journalism isn’t some get rich quick scheme based on shady search engine manipulation or requiring wholesale link generation. If your content is good, the search traffic side of the equation will largely take care of itself. Book publishers have a tremendous advantage over community websites and newspapers when it comes to advertising because they can be assured of generating a large portion of their visitors from people looking for information or products (also known as shopping), as opposed to people who are simply socializing or getting their daily fix of aggravation. The main question you’ll be faced with is whether you want to establish your own ad sales effort, or simply sign up with a network like Adsense, let them do all the heavy lifting and be satisfied with the results. If nothing else, take a look at your competition and see if they are monetizing any of their book content through advertising, because any incremental income they earn will directly impact your ability to compete with them in the print book world.
Negotiating A Book Contract by Mark L. Levine
Disclaimer: The author sent me a free copy, so the FCC says you can ignore my opinions.
I just finished reading "Negotiating A Book Contract: A Guide for Authors, Agents and Lawyers" by Mark L. Levine. It's certainly the best text about book contracts I've read, and very up-to-date with electronics rights and Internet issues. Unlike the other legal books for authors and publishers I've read, Levine sticks 98% to book contracts, with a minor excursion into author/agent contracts. There's no speculation about the true meaning of intellectual property, the vagarities of copyright law or the stages of the creative process - it's all about contracts. I highly recommend this book to any authors who are negotiating a trade contract or who are submitting manuscripts to trade publishers. You can purchase the book from Amazon for $17.96.
The best thing about Levine's approach is that he is evenhanded in his treatment of authors, agents and publishers. You'll frequently come across phrases like, "a prudent publisher" or "a prudent author" as he clues in both parties to clauses they should seek to protect themselves and establish a fair relationship, rather than treating contract negotiation as a confrontational "winner takes all" process. In fact, it could be that publishers need this book even more than authors:-) Publishers and agents who are deeply familiar with contracts might benefit from reading the book straight through, but I think for most authors, it will serve best as a reference. There is simply too much detail about various book contract clauses and unfortunate situations that may arise through minor differences in wording for the typical author to absorb in several readings. The ideal situation would be to sit down with a contract offer and this book, and to spend a day going through the contract, clause by clause, reading each corresponding book section as you go.
The funny thing I can say about publishing contracts in general is that I wouldn't be a successful self publisher today, earning more than I ever did as a bestselling trade author of how-to books, if I hadn't signed several contracts in complete ignorance of what I was getting into. When I finally learned what was in those contracts I had signed, and worse, how likely it was that the publisher would have simply dropped the objectionable clauses if I had asked before signing, it soured me on trade publishing. I came out of the experience believing that I had been greatly put upon, and if I was to work with a trade publisher again, I would only do so under a contract that was strongly in my favor. Since agreeing to contracts that strongly favor the author makes little sense for trade publishers, I haven't signed a trade contract since. But that's what happens when a publisher takes advantage of an author's ignorance to create a contract that serves the needs of the publisher to the exclusion of the needs of the author. Yes, it's a caveat emptor world, but at least in my case, the publisher lost an author who delivered every book ahead of schedule and contributed greatly to the promotion of the books.
My own experiences led me to write some basic book contact negotiation advice myself, which has led to many an interesting correspondence over the years. Unfortunately, some of that correspondence comes from authors who have signed up with various self publishing companies or vanity presses, paid a fee to get published AND signed bad contracts. There is no common ground between trade publishing contracts and self publishing company contracts. Trade publishers make their money through selling books, self publishing companies make their money through selling publishing services to authors. If you plan to use a self publishing company to publish a book rather than seeking a contact from a trade publisher or establishing your own publishing company as I did, a different Mark Levine has a different book for you. It's "The Fine Print of Self Publishing: The Contracts & Services of 45 Self-Publishing Companies Analyzed Ranked & Exposed." You can order that book through Amazon for $12.92, I think the title pretty much describes the content.
Here's a fun video on contract clauses from the WSJ, if it's still active, excuse their commercial lead, it's just 15 seconds:
I just finished reading "Negotiating A Book Contract: A Guide for Authors, Agents and Lawyers" by Mark L. Levine. It's certainly the best text about book contracts I've read, and very up-to-date with electronics rights and Internet issues. Unlike the other legal books for authors and publishers I've read, Levine sticks 98% to book contracts, with a minor excursion into author/agent contracts. There's no speculation about the true meaning of intellectual property, the vagarities of copyright law or the stages of the creative process - it's all about contracts. I highly recommend this book to any authors who are negotiating a trade contract or who are submitting manuscripts to trade publishers. You can purchase the book from Amazon for $17.96.
The best thing about Levine's approach is that he is evenhanded in his treatment of authors, agents and publishers. You'll frequently come across phrases like, "a prudent publisher" or "a prudent author" as he clues in both parties to clauses they should seek to protect themselves and establish a fair relationship, rather than treating contract negotiation as a confrontational "winner takes all" process. In fact, it could be that publishers need this book even more than authors:-) Publishers and agents who are deeply familiar with contracts might benefit from reading the book straight through, but I think for most authors, it will serve best as a reference. There is simply too much detail about various book contract clauses and unfortunate situations that may arise through minor differences in wording for the typical author to absorb in several readings. The ideal situation would be to sit down with a contract offer and this book, and to spend a day going through the contract, clause by clause, reading each corresponding book section as you go.
The funny thing I can say about publishing contracts in general is that I wouldn't be a successful self publisher today, earning more than I ever did as a bestselling trade author of how-to books, if I hadn't signed several contracts in complete ignorance of what I was getting into. When I finally learned what was in those contracts I had signed, and worse, how likely it was that the publisher would have simply dropped the objectionable clauses if I had asked before signing, it soured me on trade publishing. I came out of the experience believing that I had been greatly put upon, and if I was to work with a trade publisher again, I would only do so under a contract that was strongly in my favor. Since agreeing to contracts that strongly favor the author makes little sense for trade publishers, I haven't signed a trade contract since. But that's what happens when a publisher takes advantage of an author's ignorance to create a contract that serves the needs of the publisher to the exclusion of the needs of the author. Yes, it's a caveat emptor world, but at least in my case, the publisher lost an author who delivered every book ahead of schedule and contributed greatly to the promotion of the books.
My own experiences led me to write some basic book contact negotiation advice myself, which has led to many an interesting correspondence over the years. Unfortunately, some of that correspondence comes from authors who have signed up with various self publishing companies or vanity presses, paid a fee to get published AND signed bad contracts. There is no common ground between trade publishing contracts and self publishing company contracts. Trade publishers make their money through selling books, self publishing companies make their money through selling publishing services to authors. If you plan to use a self publishing company to publish a book rather than seeking a contact from a trade publisher or establishing your own publishing company as I did, a different Mark Levine has a different book for you. It's "The Fine Print of Self Publishing: The Contracts & Services of 45 Self-Publishing Companies Analyzed Ranked & Exposed." You can order that book through Amazon for $12.92, I think the title pretty much describes the content.
Here's a fun video on contract clauses from the WSJ, if it's still active, excuse their commercial lead, it's just 15 seconds:
Music Downloads Pass Retail Book Sales
Two news items featuring Nielsen data caught my eye today. The first was a report in the PW Newsletter saying that Nielsen BookScan put retail book sales for 2009 at 751.7 million units. Since Nielsen estimates that BookScan accounts for 75% of retail book sales, that would put 2009 retail book sales in the U.S. at 1 billion units.
An article in the WSJ today quoted the Nielsen SoundScan numbers for the music recorded 1.16 billion individual paid downloads of songs, the majority probably coming from iTunes. In addition, they reported some 373.9 million albums sold in 2009, both as CDs and as downloads. Some of these "songs" are no doubt audiobooks, but I have no idea if anybody tracks those percentages.
What struck me, if you trust Nielsen data and their error band, is that in 2009 the number of paid downloads of music singles was greater than the number of books sold at retailers. That's a pretty stupendous social statistic, especially if you make the assumption that most singles are purchased by younger people and most books are purchased by older people.
I couldn't find the Nielsen VideoScan numbers for 2009 anywhere, it would have been interesting to see how DVD sales stack up against books and music.
If you want another context for these numbers, on their busiest day this year, Amazon shipped over 7 million items, worldwide. Amazon actually sells more books overseas these days than in the U.S., but just for fun, let’s say that half of all Amazon item shipments that day were in the U.S., totaling 3.5 million. Now let’s assume Amazon could get that many items packaged for shipping 365 days a year. That would mean that Amazon alone has an operation capable of shipping over a billion books a year, equal to the entire retail book market in the U.S. as estimated by Nielsen.
It's something to wonder at:-)
An article in the WSJ today quoted the Nielsen SoundScan numbers for the music recorded 1.16 billion individual paid downloads of songs, the majority probably coming from iTunes. In addition, they reported some 373.9 million albums sold in 2009, both as CDs and as downloads. Some of these "songs" are no doubt audiobooks, but I have no idea if anybody tracks those percentages.
What struck me, if you trust Nielsen data and their error band, is that in 2009 the number of paid downloads of music singles was greater than the number of books sold at retailers. That's a pretty stupendous social statistic, especially if you make the assumption that most singles are purchased by younger people and most books are purchased by older people.
I couldn't find the Nielsen VideoScan numbers for 2009 anywhere, it would have been interesting to see how DVD sales stack up against books and music.
If you want another context for these numbers, on their busiest day this year, Amazon shipped over 7 million items, worldwide. Amazon actually sells more books overseas these days than in the U.S., but just for fun, let’s say that half of all Amazon item shipments that day were in the U.S., totaling 3.5 million. Now let’s assume Amazon could get that many items packaged for shipping 365 days a year. That would mean that Amazon alone has an operation capable of shipping over a billion books a year, equal to the entire retail book market in the U.S. as estimated by Nielsen.
It's something to wonder at:-)