70%, $9.99, eReaders, Apps – Irreversible Changes

Freedom is like an incurable, infectious disease. People get one whiff of it and they’re hooked for life.

70% share for indie authors, $9.99 price for ebooks, eReaders that let you change fonts and read books to you, Apps for eReaders – These are all being disregarded as transitory and merely strategic moves by eReader companies.

Publishers think they can get back control and then undo all these changes.

However, each of these initiatives is one more stake into the heart of the vampire squid Publishers (due apologies to Matt Taibbi). A step closer to freedom for readers and freedom for authors.

Authors, Readers will never give up their new Freedoms

Authors and Readers are not going to go back to the abyss Publishers had them trapped in.

  1. Publishers decided what to publish.
  2. Publishers set prices. 
  3. Authors got scraps i.e. 8% to 15%.
  4. Readers and Authors had no insight into actual costs of book publishing.  
  5. Publishers were the only ones with the finances to market a book.
  6. Publishers had the hooks in the distribution channels.  

All of this is dissolving. The concept of Publishers as gatekeepers is fading away.

There is no way to fool authors and readers now.

Could new middle-men arise?

Yes, of course.

However, these will increasingly be benevolent platforms like Kindle and iTunes that want only 30% and handle nearly all the work.

70% is for the author.

Even if another middle-man or another company takes over -

  1. Readers will not forget the days of $9.99 eBooks.
  2. Authors will not forget the days of 70% of revenue/profit.

How do you fool people who, after centuries, have been liberated? You don’t. These are the people most acutely aware of how precious freedom is.

The Role of eReaders and eBook Stores and App Stores

 It’s crucial to understand all the contributions these have made (and will make) -

eReaders 

  1. An eReader is a device that allows for more value than a book could provide i.e. changeable fonts, greater capacity, new features like text to speech, and more. 
  2. eReaders let us work with eBooks and negate the advantage Publishers had i.e. economies of scale.
  3. An eReader basically liberates reader and author from the tyranny of the physical book as a non-ideal distribution mechanism. Also a mechanism that middle-men could control and use to enslave both readers and authors.

eBook Stores

  1. An eBook Store allows for extremely easy discovery and distribution of eBooks.
  2. eBook Stores are ridiculously convenient. Find a book in 5 minutes, buy it with 1 click, get it in 60 seconds – at any time of the day.
  3. eBook Stores allow for free distribution in the sense of no one is deciding what you can access.
  4. eBook Stores allow for cheap distribution in the sense that very little is added to the cost of the book.

 App Stores

  1. App Stores allow absolutely anyone to help readers and/or authors.
  2. App Stores allow readers to choose what their book can do and cannot do.
  3. App Stores allow developers to change publishing and eBooks.

App Stores make the eco-system very vibrant and rich and free of monopolies.

70% and $9.99 are ridiculously important and firmly established

Consider where we are at the moment -

  1. We all know that Books could and should be $9.99 or less.
  2. We all know that Apple and Amazon are both willing to give authors 70% of that $9.99 (or whatever price authors pick).
  3. We know lots of sales are happening at $9.99.
  4. We know Amazon has managed to keep the $9.99 price intact for over 2 years.

How do you un-teach the lessons of 70% and $9.99?

  • You just can’t. 
  • What possible rationale could Publishers come up with to convince readers that they ought to pay $15 or $20 for an eBook?
  • What story could they spin to authors to get them to accept 15% royalties?

What Happens Next? The 10% Platform is inevitable

Sooner or later a company is going to figure out how to create a 10% platform.

Yes, a platform that gives authors 90% of revenue.

How could you possibly survive on just 10%?

Well,

  1. 10% of $25 billion a year (just in the US) is a pretty huge number.  
  2. You’ll have billions of dollars a year in eReader revenue.

It’s possible and likely that a company will dominate both eReaders and platforms (via a 10% Platform).

In 2 years we’ve jumped from 8-15% royalties to 70% royalties – Does a jump from 70% to 90% really seem that improbable?

What Happens Next? Attacks on the Platforms

Amazon and Apple are doing two things that will get a lot of people upset -

  1. Breaking down barriers in Publishing – Publishers and retailers and distributors get upset because they lose out.  
  2. Creating Cash Cows – Rival companies get upset because Apple and Amazon get healthy revenue streams from both devices and eBooks.

We will see all sorts of ‘openness’ initiatives, eBook delays, threats, advertising based strategies, and a lot of dirty tricks.

The Platforms enable a lot of things – cheap books, advances in technology, new features. However, they are evil because they are not open.

Thanks to Amazon and Apple we have 70% profits for Authors (Apple) and $9.99 prices (Amazon) – and yet they are evil because they don’t let Publishers and new middle-men undo all the progress and put authors and readers back into shackles.

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