The Relentless Fall of eBook Prices – 55% of Top 100 below $5, 25% below $2

We are in the midst of a relentless fall in both the value perception of books and in the actual prices of books in the Top 100 Bestsellers List.

It’s easy to get distracted by the Big 5 Publishers’ $13.99 new releases and assume nothing has changed. However, the hard facts indicate a massive upheaval is going on.

Let’s take a quick look at prices of the Top 100 Bestselling books in the two top ebook stores – Kindle Store, Nook.

Kindle Store – 55% of the Top 100 are below $5, 24% are below $2

  1. Kindle Store Top 20 – 11 books below $5 and 4 books below $2 in the Top 20. That’s 55% below $5 and 20% below $2.
  2. Kindle Store Top 40 – 24 books below $5 and 11 books below $2 in the Top 40. That’s 48% below $5 and 27.5% below $2.
  3. Kindle Store Top 100 – 55 books below $5 and 24 books below $2 in the Top 100. That’s 55% below $5 and 24% below $2.
  4. Kindle Store Summary – 1 out of every 2 books in the Top 100 is $5 or less. 1 out of every 4 books in the top 100 is $2 or less.
  5. To put that in perspective – In 2008, there were just 2-3 books below $5 in the Top 100. Additionally, at that time there were hardly any free kindle books from indie authors and small publishers.

This is really quite stunning. Keep in mind that Amazon uses weighted algorithms to try and keep cheaper books out of the Top 100. It obviously isn’t working.

Perhaps having 55% of the Top 100 below $5 means that we are, in effect, approaching a world where the best-selling books will be in the $3 to $5 range. Of course, we then look at the fact that 24% of the Top 100 books are below $2 and a scary thought strikes – perhaps the end result will be a world where best-selling books are all in the $1 to $2 range.

Nook Store – 56% of the Top 100 are below $5, 25% are below $2

  1. Nook Store Top 20 – 11 books below $5 and 8 books below $2 in the Top 20. That’s 55% below $5 and a massive 40% below $2.
  2. Nook Store Top 40 – 21 books below $5 and 14 books below $2 in the Top 40. That’s 52.5% below $5 and 35% below $2.
  3. Nook Store Top 100 – 56 books below $5 and 25 books below $2 in the Top 100. That’s 56% below $5 and 25% below $2.
  4. Nook Store Summary – 1 out of every 2 books in the Top 100 is $5 or less. 1 out of every 4 books in the top 100 is $2 or less.
  5. I don’t have figures from 2009 for the Nook Store. However, in 2009 and 2010 there used to be just 3-6 books below $2 in the Top 100 in the Nook Store. Now there are 25.

This is even more stunning.

B&N doesn’t have weighing algorithms to hide cheaper books – so you would expect cheap books to have more of a shot. However, most people who want lots of free books flock to Kindle. Amazon has focused on free kindle books for the last few years and it has attracted most of the free-seeking crowd. B&N has always had a less price-sensitive crowd. If you don’t believe me, think about it for yourself – Everyone knows Amazon has cheaper ebook prices. What does that say about people who choose Nook? That they are probably less sensitive to price.

How on Earth are the figures so similar for Kindle Store and Nook Store?

What’s uncanny is how close the figures are –

  1. Kindle Store has 55 books below $5 in the Top 100 while Nook Store has 56.
  2. Kindle Store has 24 books below $2 in the Top 100 while Nook Store has 25.
  3. This might just be a coincidence or it might mean that the two top ebook stores are seeing the exact same trends. That they are evolving in the exact same manner as far as the value perception of books and the price of bestselling books are concerned.

I really don’t know what to say.

It’s quite stunning that 25% of the Top 100 are $2 or below. It’s even more stunning that 55% of the Top 100 are $5 or below.

We’ve talked about how books might settle in the $3 to $7 range in the long-term. Well, the change is already happening. Furthermore, the prices seem to be shifting to two bands – Below $2, between $3 and $5.

Are we going to continue to see ebook prices drop in the Top 100 Lists?

My assumption would be – Yes, definitely.

  1. There are obviously two price bands that are gaining traction. The first is $2.99 to $5. This is already 25% of the Top 100. The second is $1 to $2. This is also 25% of the Top 100.
  2. The first possibility is that we reach an equilibrium with both bands present. 30% to 40% of the Top 100 will be books in the $2.99 to $5 range. Another 35% to 45% will be in the $1 to $2 range.
  3. The second possibility is that we keep seeing a drop in prices and stabilize only in the $1 to $2 range. Imagine that – a world where 80% of the books in the Top 100 are $1 or $2. For $100 to $200 you could buy all 100 books in the Top 100 Bestsellers List.
  4. The third possibility is that the stores try extreme measures. B&N has tried to hide prices of Books in the Top 100 in the past (this is on the Top 100 List). Amazon does algorithm manipulations and handicaps cheap books. I doubt these will work – you can take a horse to the water but it might just kick you if you try to force it to drink.
  5. 55% of books below $5 means a lot of the change has already happened. This isn’t a blip or a temporary thing. It’s obvious that something big is going on. Something so big the stores are powerless to stop it (trust me, they have tried and are still trying).

The more you think about it, the more it seems that an irreversible change is taking place.

An unstoppable wave driving ebook prices to $1 and $2?

Everything I have seen and read over the past 5 and a half years is screaming to me that the end point is going to be a world where 80% of the books in the Top 100 are at $1 or $2.

Why?

Because there is infinite competition.

The world we’ve been sold is a world manufactured by Publishers and Booksellers. That there are a select few authors who are worth reading and their books are worth $10 to $25. After that there is a massive and steep fall. All the other authors aren’t even worth reading. So say Publishers.

  1. What if instead of a cliff there is a slope? What if the Authors who just missed the cut with Publishers are only 5% worse? What if there are thousands of such authors – good enough to be read and willing to sell their books for $1 and $2?
  2. What if instead of a cliff there is a slope rising upwards? What if Publishers are terrible at picking winners and the Authors who missed the cut completely are actually better? What if there are tens of thousands of such authors – better than Published Authors and willing to sell their books for $1 or even give them away for free?
  3. What if there are an infinite number of authors and the separation between them is miniscule? What if Publishers are picking up only a fraction of the best ones?

My assertion would be that all three of these lines of thinking are true. Publishers are missing most of the best authors, the separation between authors is miniscule, and there are a very large number of authors who are good enough to be read. Far larger than what Publishers or Published Authors would have us believe.

The second myth is the polish and magic and fairy dust that Publishers supply.

  1. What if giving an author artistic freedom is worth more than Publisher spit and polish?
  2. What if authors writing what is in their hearts is worth more than what Publishers think will sell?
  3. What if Publishers are just chasing profits and not publishing the best books?

Publishers fail more than they succeed. Publishers often miss absolutely great authors. Publishers often make a hash of things.

It’s a crazy assumption that there would not be great books without Publishers. Even if it isn’t crazy, it’s still an assumption.

If the only people making this assertion are Publishers, their stable of Published Authors, and their partner stores and distributors – then we have to wonder what the truth is.

Free Market + Infinite Competition = Prices Fall to Zero or the Lowest Amount Possible

With the walls between authors and readers down to imaginary ‘Stores’ run by Amazon and B&N. With readers able to buy ebooks from anywhere. With anyone able to distribute and sell ebooks. We are rapidly moving towards a world of Books that is a Free Market.

Authors can sell to any Reader. Readers can buy from anywhere.

That’s the first part of the equation – A Free Market.

The second part is the ever-increasing number of books and authors that are worth reading.

With a near infinite supply of authors. With an ever-increasing number of good indie authors. With ever more carelessly published Publisher ebooks. With ever larger number of published authors going solo. We are rapidly approaching a world where there are a very large number of good authors – with very little to separate them.

That’s the second part of the equation – Infinite Competition.

If Author A is 93/100 and Author B is 94/100, guess who wins? The one who goes from $9.99 to $7.99. Except these are ebooks – Author B cuts prices, then Author A cuts prices more. Then this continues until they both hit $1.

Note: If Author A and Author B strike up a chat and agree to stick with $7.99, then Author C and D cut prices and steal sales.

Prices keep getting cut until we reach $1 and $2 and just can’t go any lower. Of course, some authors will go for free too. The vampire hunger to be read is not to be underestimated.

Free Market + Infinite Competition = Prices Fall to $1 and $2 (or worse, they fall to $0).

That’s the thought I’ll leave you with. 55% of the Top 100 Bestselling Books being below $5 and 25% of the Top 100 Books being below $2 are a sign of things to come. This isn’t equilibrium – this is the beginning of a wave. The end point is a world where either $1 and $2 books rule, or where $0 books rule.

Where are the price-insensitive customers in Books?

With the advent of the Kindle, Nook, the Kindle Fire, and the iPad we’ve seen an explosion in ebooks. In 2012, eBooks accounted for 25% of Publishers’ revenues. 25% of revenues suggests actual unit sales for ebooks might have been 30% to 40% of book sales.

What’s interesting to me is the sheer number of people who want cheap kindle books and free kindle books. Strangely, there doesn’t seem to be any way of finding the opposite type of customers – those who don’t care about price and/or are willing to pay for a good book.

If we assume there are 5 major groups of readers –

  1. Readers who don’t care about book price.
  2. Readers who are OK with prices above $9.99.
  3. Readers who want book prices below $9.99 for newer titles, and below $7 for older titles.
  4. Readers who want books below $5.
  5. Readers who want free kindle books and all books below $3.

Well, there is ample evidence of the existence of the latter two groups. Go to any website or forum and you’ll find people looking for free kindle books, looking for and sharing deals, and generally focusing on finding the lowest book prices.

There is also a large group of readers who are OK with what they would consider ‘reasonably priced books’. $9.99 or less for new titles, and prices lower than $7 for older titles. They’d like ebooks to always be the same price or cheaper than the corresponding paperbacks.

The first two groups aren’t easy to locate. In fact, it’s downright hard to find more than a scattering of readers belonging to the first two groups.

The natural question that arises is – Do these two groups actually exist?

Is there a price-insensitive market in Books?

Yes, there obviously is. We wouldn’t have hardcovers if there weren’t. People were paying $15 to $25 for hardcovers, and still are. The market obviously exists.

It’s a fair assumption that there are a non-trivial number of readers who are well-off. It’s also safe to assume that there are lots of readers for whom reading isn’t measured in terms of money. Another reasonable assumption is that there is a group of readers who simply can’t wait and must get a book instantly. Yet another safe assumption is that there is a group of readers who value their time a lot more than money and don’t mind paying a high price for a very good book that’s worth their time.

If we consider these readers and other ‘not sensitive to the price of the book’ readers, there should, in theory, be a large group of readers that are price-insensitive. Perhaps even 5 to 10 million such readers in America.

Well, these price-insensitive readers exist with physical books. Where are all these readers when it comes to eBooks?

What happened to the price-insensitive readers when we shifted from Books to eBooks?

We have two groups of readers that comprise the ‘Price Insensitive’ Readers.

  1. Those who simply don’t care about price.
  2. Those who don’t mind paying higher prices (prices above $9.99, prices higher than paperback prices, $9.99 for older titles).

With physical books they were snapping up Hardcovers and spending freely.

What happened with eBooks? Where are the high-end customers?

Well, there are a few possibilities –

  1. They still exist. We just never hear from them. The latter seems incredible – that a large contingent of $13.99 ebook buying users exist but never participate on the Internet. However, if we look at the Bestsellers lists, there are enough $13.99 books in the Top 100 to suggest that price-insensitive readers exist and they are buying books.
  2. They shifted their attitudes as Books shifted to ebooks. A hardcover is a very physical thing – you hold it, you treasure it, you put it up on your shelf. An ebook is in the ether. It’s hard to spend $13.99 on something that doesn’t even really exist. Perhaps the price-insensitive customers in books are the ones that now want $9.99 ebooks.
  3. Most of them didn’t shift from Paper Books. Keep in mind that eBooks still have just 25% of revenues and perhaps 30% of book sales. Which means 70% of book sales are hardcovers and paperbacks. Perhaps most of the price-insensitive customers are buying physical books.
  4. Amazon and B&N are gathering them up and keeping them safe from the price-sensitive parts of the reading market. This also seems incredible. However, it might be the case that Amazon and B&N have simply gathered up most of the price-insensitive readers who’ve shifted to ebooks. They are showing these readers a completely different world. A world where lower priced books don’t play much of a role.
  5. They have started buying Hardcovers as their ‘don’t care about price’ books, and are supplementing them with very cheap ebooks as ‘binge buys’. This is a stretch – to assume that price-insensitive customers are turning into ‘Price-Insensitive with Physical Books, Price-Sensitive with eBooks’. However, it isn’t impossible.
  6. They are waiting to see what happens. Perhaps price-insensitive customers are waiting to see if an Easy Solution for price-insensitive readers materializes. One that makes it easy to find high-quality, well-formatted ebooks that will be worth their time. Think of it from their perspective – they might not want to wade through a sea of cheap and free to find quality and worth-your-time.

At this point, it’s worth looking at why certain readers don’t mind spending money on a high quality book.

Time vs Money

We’re swamped by authors offering free books as marketing. We are swamped by bargain hunters who want free kindle books and cheap kindle books.

This creates an environment where it’s easy to forget what a book means to people, and what the book reading experience is for people.

  1. A book can be a source of pleasure, entertainment, knowledge, learning, advancement, fun, sharing or something else entirely.
  2. Different readers have different amounts of time available for reading.
  3. Different readers have different reading budgets.
  4. Different readers have different thresholds for what will impact the enjoyment of their reading experience.
  5. Time can’t be bought.

Different people value Money and Time differently. Mostly because they have different amounts of them and different ways of viewing them and spending them.

Let’s consider some example readers with different personal circumstances –

  1. Alex has no money because she spends her pocket-money on movie tickets. She likes YA novels and wants to find good ones for free or for a few dollars. She reads every day and thus needs 3-4 books a week.
  2. Jonathan is a busy doctor. He gets to read just 1 or 2 books a week. Money is no object. However, since the reading is one of his few entertainment/mind-refreshing activities, the book absolutely has to be a very good book.
  3. Tina is studying to be a nurse. She’s looking for books that will supplement her school studies. For her, the most important criteria is acquiring knowledge that’ll help her become a better nurse. She doesn’t have much money – But for nursing-related books she’s willing to pay anything provided the book helps her.
  4. Trevor loves to read but having two young kids means he only gets to read a book a month. For him, it’s absolutely imperative that the book is really good. Trevor also has zero patience for grammatical and spelling errors.
  5. Nancy loves romance novels. She has a few favorite authors and she buys all their books. She’s also on the lookout for new authors. Since she already has a good set of authors she reads, she only has time to try out one or two new authors a month. Also, since she already spends most of her reading budget on her favorite authors, she’s looking for free and cheap books from new authors to try out. If they make the cut, then she doesn’t mind paying full price for other novels from the same author.

If you consider these readers, we can easily see why some of them would gravitate towards free and cheap kindle books, while others would focus on the ‘safest’ and ‘best reviewed’ books.

We can also see the price factor. Some readers simply don’t have much money for books. Some readers won’t spend money on untested authors. On the other hand, there are readers for whom either money isn’t a concern, or the time spent is far more important.

Jonathan might feel that $13.99 spent on a book he enjoys is worth 100 times more than getting a cheap $1 book that is a waste of his time. Worse, now he has to wait until next week to get his reading high.

Nancy, on the other hand, might think of her 1 new author a month as ‘experiment time’. Since she is already getting guaranteed good reading from her regular authors, and since she’s spending most of her reading budget on them, she doesn’t mind taking a gamble on a cheap or free book occasionally.

Jonathan and Nancy, when searching for a new book to read, will go in diagrammatically opposite directions. That’s OK. That’s the whole point of having books and ebooks and Publishers and Indie Authors. To provide readers whatever they want.

The Question becomes – Where do we find the Jonathans and Trevors and Tinas of the Reading World?

Where can we find the ‘Time is worth more than Money’ Price-Insensitive Readers?

This is the $25 billion a year Question.

The Books Industry in the US is approximately $25 billion a year in revenues. Replace it with whatever figure you prefer – it’s just meant to illustrate the point.

If the shift from Books to Books+EBooks leads to a mostly price-sensitive market, then we’ll fall to $10 billion to $15 billion a year in revenues. This will have repercussions and might lead to a decline in quality of ebooks (MIGHT).

If, however, we can find and retain the price-insensitive customers. Retain = Keep them as price-insensitive customers. Then we can ensure the market stays at or above $20 billion a year.

Finding these price-insensitive customers, and giving them a path to being price-insensitive ebook customers, is absolutely critical.

Why?

Because all the price-sensitive customers are getting addicted to free and cheap. They are going from bargain hunters to extreme bargain hunters.

Regardless of what your personal preference for book prices might be, it’s safe to say that –

  1. Free Books becoming the norm has a very high chance of hurting authors and therefore the quality of books authors produce and the number of high quality books they write each year.
  2. Very Cheap and Free Books becoming the norm has a good chance of hurting the entire infrastructure. The Publishers and Platforms would gradually die out, bookstores would die out, and we’d be left in a world where no one is providing all the ingredients for a thriving books market.

If Authors can’t make a decent living from books, and chances are they won’t be able to if we end up in a world of $0 and $1 books, then the amount of time they can devote to writing books, perfecting their craft, and polishing their books decreases. As a result both the number of great books they produce and the quality of such books diminishes.

This is an Assumption. It might happen that hunger drives authors to more beautiful work.

For now, let’s assume that we need some basic reasonable book prices (perhaps $3 to $7) to keep authors going strong – writing great books and writing lots of them.

Price-Insensitive Customers drive the behavior of Price-Sensitive Customers (and vice versa)

Imagine you’re a price-sensitive customer. That book you really want is for $13.99. Yet, thanks to price-insensitive customers, it’s at #2 in the Charts. You give in and buy it for $13.99 – because you can’t wait another 7 months.

That leads to a sale from a price-sensitive customer at a very high price.

Now imagine you’re a price-insensitive customer. You notice that price-sensitive customers have driven a $1 book all the way to #5. The reviews seem good. You take a gamble and are rewarded. That author has 7 more titles. You read them one by one. You decide to take a few more gambles on new indie authors.

Now the price-sensitive customers have turned you from spending $13.99 per book to $1 per book.

Please Note: This trend of price-sensitive customers influencing price-sensitive customers – This is perhaps the reason Amazon tries so hard to keep $1 Indie Authors out of the charts.

Finding Price-Insensitive Customers and catering to them might determine the long-term viability of the Publishing Industry and Platforms

At one end of the spectrum is a world where there’s no money left in books in 20 years. At the other end of the spectrum is a world where Publishing and Books are generating a lot of money in 20 years – even more than they generate now.

For the latter to happen, three key things need to happen –

  1. Platforms and Publishers need to find Price-Insensitive customers and create a great situation for them. So they feel their time and money is well-spent, and keep spending.
  2. Platforms and Publishers need to use Price-Insensitive customers to influence Price-Sensitive ones. They need to do this while avoiding the reverse as much as possible.
  3. Platforms and Publishers need to find a way to ensure books are worth paying for. They do this by using various levers – Convenience, Curation, Quality, Time Efficiency, Author Scarcity.

Currently, Platforms and Publishers are messing up the first, they are doing decently on the second, and they are messing up the third.

It’s simple. If Price-Insensitive customers get really high quality ebooks, get them conveniently, and get them perfectly tailored to their tastes, then they will spend their money freely. They will feel it’s worth their money and time to spend on ebooks and they will remain price-insensitive readers.

If not, then Price-Insensitive customers will either cut down on their reading or they will turn into price-sensitive readers looking for $3 and $1 books.

Curation, Kindle & the Future of Books

We now have devices like Kindle Fire HD, iPad, Kindle, Nook HD that enable reading ebooks easily and relatively well. We have ebooks flourishing and continuing to grow rapidly. We have entire armies of self-published authors rising up – hungry for a piece of the reader pie.

Books are going through a very interesting Transition. Perhaps Transitions. One of the biggest challenges is ‘connecting’ Authors with Readers.

  1. The number of readers is increasing. Perhaps eventually ebooks will reach a state of equilibrium with paper books. By then, the number of people reading books and ebooks might be double the number of people reading books before eReaders arrived. When you consider children, college students, people with weak eyesight, people with weak hands, people who had lost touch with reading, people who can only afford free and cheap books, and similar groups of readers, a doubling doesn’t seem out of reach.
  2. There’s really astonishing growth in the number of authors. To be precise, the number of authors publishing their books and reaching readers has grown exponentially.
  3. If you check out Twitter (Kindle Review at Twitter – follow us, we follow back), there might actually be more authors on Twitter than readers. It certainly seems that way to me.

This influx of authors, who are finally getting a shot at reaching readers, leads to a very obvious problem.

Too Many Options for Readers

Imagine you are checking out the Hot Dog stands and Ice Cream stands at a country fair. You used to have –

  1. A number of big companies (the Big 6) running the stands.
  2. A few smaller companies running their own little stands in the corner.
  3. Readers lining up at these stands. For every 100,000 or so readers, there were perhaps 1 or 2 stands.
  4. Key: The Reader to Stand ratio was roughly 100,000 to 1. Even if we are generous and include all the smaller publishers, the ratio was still at least 10,000 to 1.
  5. Key: There was a very well-established hierarchy. Everyone knew Sally makes the best lemonade and Rob makes the best burgers. Everyone knew the stands to go to, and what to expect from each.

Now we’re transitioning to a world where –

  1. Tom, Dick, and Harry and their aunt Daphne and her three sisters and their 2 cousins all have stands. Their best friends, their high school classmates, their great uncle, their dog, and their alligator are thinking of setting up stands too.
  2. Pretty much anyone who wants to set up a stand, can set one up. Everyone who ever wanted to set up a stand, is thinking about it. The number of food stands and drink stands are exploding.
  3. Readers don’t know where to line up. They still have the Big 6 stands they are used to, so they often go there. However, the new stands are intriguing and the food is ridiculously cheap. That yellow stand which sells Crocodile Corndogs for 10 cents each seems mighty tempting. As does the red polka dot stand with lamb burgers for 50 cents. Pretty much everyone wants to check out Billy’s Free Lemonade Stand.
  4. Key: The Reader to Stand ratio is changing fast. We’re down from 10,000 to 1 to 100 to 1. This is a huge change. Now, for every 100 readers, there’s one stand. That’s 100 times more stands than there used to be. New stands keep popping up. We might even reach a stage where there is a stand for every 10 readers.
  5. Key: No one knows which stand to go to, other than the old established ones from the Big 6. There are 2,371 stands selling home made mango ice cream. Which one is best?

If we tune out all the noise, we can identify and focus on the two main challenges –

  1. How does a stand accurately convey its quality and options to readers? How does a stand even let people know it exists? Perhaps the only space it could get is in the dark corner behind the rollercoaster. Perhaps the only people who even notice it are the ones not enjoying the ride.
  2. It’s absolutely overwhelming for readers. Firstly, choosing a stand is terribly hard. Secondly, what the food will be like is a complete unknown. If a random stranger on the street stopped you and offered you a free cheeseburger, what would your first reaction be?

We have created huge problems for both Authors and Readers. Too much choice for readers. No way to know quality for readers. Too much competition for Authors. No way to convey quality for Authors.

Three of the Big Challenges for Authors

The first challenge, and for most authors the insurmountable challenge, is to get Discovered.

No one can buy your book if they don’t know it exists.

This is a core truth. A tautology if you prefer fancy words.

Users can’t buy your book if they don’t know it exists.

This is the step that most authors get stuck at. It’s also the step that kills most companies, most bands, most artists, most technologies.

Discovery is Step 1. The reader discovers the book. Then good things happen.

If Authors do get discovered, there are several new challenges –

  1. How can readers figure out if the book is a good fit?
  2. How can readers gauge quality?
  3. How do readers know if it’s worth the price?
  4. How do readers tell if the book is properly edited and formatted and typeset?
  5. How do readers know if it’s worth their time?

A reader finds a book. Then a reader needs data points to make a Decision.

Decision is Step 2. The reader decides to buy the book. Then the author gets read, hopefully.

Now that the author has sold a book, the challenge is – How do we delight the reader and retain the reader and get future purchases?

Delight & Retention is Step 3. Delight the reader so you retain her as a reader.

If we look at Step 1 (Discovery) and Step 2 (Decision) – There’s not very much the author can do without outside help.

  1. Discovery – The Indie Authors that are mastering marketing and social media and getting themselves discovered are anomalies. Absolute superstars, and yet anomalies. We can’t realistically expect authors to also become marketing experts.
  2. Currently, that’s what it takes to get Discovered. It’s not scalable.
  3. Decision – If an Indie Author does get discovered, how on Earth can that indie author convince the reader his/her work is worth the reader’s time and money. Things like Title, Cover, Description are proxies for book quality, but not good ones. Reviews are useful only when they are in sufficient number and when they are well written.
  4. Indie Authors in addition to mastering Marketing, have to master the Decision step. Things as obtuse as getting/coercing reviews out of reviewers.
  5. Both Steps are very hard. Both Steps are critical to convince readers to read your books.

The interesting thing is that both steps can be solved by Curation.

Curation – the Missing Link between Readers & Authors

We are seeing readers increase and we might see an eventual doubling of readers. We are seeing the number of authors grow exponentially.

We are not really seeing any big improvements in curation. We aren’t seeing significant increases in the number of curators.

Three Big Curation Problems

The first, and perhaps unsolvable, problem is that the number of books have increased so rapidly that curation becomes 10-100 times more difficult. It’s almost impossible for the existing curators to handle the new curation needs.

The second problem is that curators have to develop trust. They have to figure out how to reach readers. They face the same Discovery and Decision Steps that Authors do. The absolute best romance novel reviewer in the world perhaps has a blog that only 238 people in the entire world know about.

Yet, that one person could help 3 million readers a year find the best romance novels.

The third problem is that crowdsourced curation is being done as ‘sell-side curation’ and not ‘buy side curation’.

Sell-side curation – Curation done by the companies selling the books. This is a big problem because there is a clash in incentives. There isn’t any real financial incentive to be more efficient in curation – in fact, there is a financial incentive to be rather inefficient.

If Amazon & B&N are right only 33% of the time when recommending titles you end up buying. That means 67% of the time they sell you books you don’t end up finishing, perhaps not even the first chapter. They make money regardless.

Buy-side curation would be curation done by people who spent their hard-earned money on the book. It would be curation done in the right Curation Environment and within a suitable Curation Ecosystem. Yes, all reviews in the Nook and Kindle Stores are from people who bought the book. However, the system is set up to avoid things like ‘Formatting Scores’ and ‘Typographical Error Counts’. Things that would be absolutely obvious and necessary in a buy-side crowd-sourced curation model. These are completely, and perhaps intentionally, forgotten in sell-side curation.

Would a sell-side curation engine ever include ‘X% of people finished this book’?

I don’t think so. Because if readers saw ‘10% of people finished this book’, half or more of the ones likely to buy it, wouldn’t.

Would anyone care to guess what percentage of books bought at Amazon and B&N are never finished?

Perhaps more than half.

What percentage are never read beyond the first chapter?

Perhaps 25%.

How good is a Curation Engine if it’s selling people books where 50% of the books are books the reader won’t ever finish?

A Buy-Side Reader-focused Curation Engine would include things like ‘29% of people didn’t read beyond the first chapter’. That would save everyone who’s on the fence. The Sell-Side would never add this information. Well, perhaps they will once they realize that this would lead to more readers and happier readers and more sales from readers.

What is Curation?

This is a tough question.

Let’s start with what Curation is not.

  1. Curation is not some algorithm showing you things you might want to buy. That’s sales.
  2. Curation is not impersonal. It has to be aligned with the reader’s tastes.
  3. Curation is not complicated. It has to be easy to use and easy to understand.

Curation in ebooks should focus on connecting readers with the books and authors that are the best fit for them.

It’s part match-making and part magic.

Curation should work on both ends –

  1. Authors should be matched with the readers most likely to appreciate and enjoy the author’s work. Authors should be matched with as many such readers as possible.
  2. Readers should be matched with the books and the authors they will enjoy the most. Readers should be matched carefully, while keeping their best interests at heart (best use of time, best use of money, ease of experience, long-term enjoyment of the author’s works).

Curation is the bridge connecting empowered readers (who have more options than they can handle) with newly free authors (who now have all the freedom in the world but little clue how to reach readers).

Where does the Kindle fit in Curation? Where do devices fit in Curation?

The foundation on which a Buy-Side Curation Engine could be based is recommendations and data input and usage data from real readers.

The Kindle (or for that matter, whatever device the reading is done on) is important for many reasons –

Please Note: All the sharing and connection features would be opt-in. So users who wanted out wouldn’t be forced to participate. Additionally, it would be trends and statistics. No personally identifiable information would be provided.

  1. The Kindle captures reality. It captures what people actually buy. It captures what people actually read. It captures relationships between books.
  2. The Kindle connects readers to each other. The network effects, if Amazon and B&N were to enable reader to reader connections, would be incredible. Imagine knowing instantly what everyone else is buying, what they are saying about a book, what they are actually reading. I suspect Amazon and B&N have turned off true social networking features for this precise reason. The stores/platforms completely lose control if real network effects kick in.
  3. The Kindle is right there. What better time to review a book than right after reading it? What better time to recommend a book than while enjoying it the most? What better way to do a book club than on connected reading devices?
  4. The Reading Device is the natural place a ‘Decision/Recommendation Engine’ should sit. Each reader should have a personal decision engine that crunches their reading and buying trends and suggests books that are right for them. It would say – Look, Sally. You never read romance novels by Author X beyond the 2nd chapter. So don’t buy this book. Author Z, on the other hand, you devour. Here are 2 books from Author Z.
  5. This Recommendation Engine would have two parts. The intelligent evolutionary algorithm that is processing all your actions and conjuring up your next reads. This would be on your Kindle. The second part would be the crowd sourced Curation Engine that is figuring out what you will enjoy based on millions of data points from the 10,000 readers most like you (or the million most like you, or the 12 most like you). This would exist in the interconnection of all the Kindles and Nooks and Reading Devices.
  6. Devices like Kindle and Nook provide companies the ability to figure out Reader DNA and Book DNA and create a near-perfect match. Why is there no progress in these areas? Because these are buying machines and aren’t yet curation machines. These are store kiosks and aren’t yet intelligent servants to readers.
  7. Fundamentally, a Kindle should be your pet dog (or cat). A reading assistant. Always at your beck and call.

Most of this can be done, albeit rather inelegantly, without the reading devices themselves. However, the most natural place to fit everything is the Kindle (or the Nook).

If a truly efficient Curation Engine were invented, Reading would Prosper Greatly

Truly efficient Curation would result in a lot of good things –

  1. Readers would read more books they loved. That means their overall reading pleasure would increase. Reading would become more appealing than other activities.
  2. New Readers would have a greater chance of finding reading true love in their first few books. That means more readers.
  3. Authors who deserved to get read, would get read more.
  4. The dependence on bestseller lists and store searches would decrease. As a consequence, the importance of stores would decrease. As would their ability to tilt things in favor of their own ‘chosen’ authors and books.
  5. The dependence on Publisher approved books would decrease. The importance of Publishers would decrease greatly.
  6. There would be a better fit between readers and authors. This would lead to reader-focused authors getting more exposure. It would also lead to readers finding the exact right author for them more often.
  7. The absolute best authors would reach a level of sales and fame that is unprecedented. This might seem antithetical to the idea of a ‘Perfect Match’ Curation Engine. However, the very best authors are a LOT better than the next rung of authors. Curation Engines and eBooks will lead to even bigger Author Superstars.

It might seem that perfect curation would lead to lower book sales, a wider distribution/democratization between authors, less reading, and a general reduction in book revenues.

However, the pleasure of reading would increase. The bang for the buck would increase. The pleasure per reading minute would improve. This would make people tend to read more. We tend to do more of what we greatly enjoy. It would make people read the authors that deserve to be read more often. It would lead to people-created superstars. Sometimes these would be the ones the Big 6 and the Towering 2 are pushing. Sometimes it would be the People’s Champions.

We needed eBooks and eReaders to allow Reading to compete with video games, TVs, movies. They have delivered. Reading is adding readers and authors. It’s flourishing. There has never been a time, ever, when so many people were excited about writing books and reading books.

The next step is a Really Efficient Curation Engine. The Evolutionary Algorithm part tracks your reading habits and your reading reality and suggests new books. The Crowd-Sourced part finds your ‘reading twins’ and helps deliver suitable candidates for your future reading. This Curation Engine really is the next big step. It would greatly increase Reading’s ‘Pleasure Per Reading Minute’ and ‘Pleasure per Dollar’ scores. It would make reading more attractive than many of the other pursuits and passions competing for readers’ time and money.

The next big Inflection Point in books isn’t when Amazon gets 90% market share or when color eInk arrives. It’s when we get an Efficient Curation Engine that pushes Reading well ahead of readers’ other pursuits and passions.