A two-speed economy: How traditional publishers are benefiting from Amazon Kindle and the impact on Indies.

I’ve mentioned before the way Amazon publication has entered new territory since the Big Five managed to get their own way about e-book pricing. It’s become increasingly apparent that conventional publishers have worked out how the maximise their gains from e-books and distributors, and while still bemoaning their existence have seized on the new opportunities now available.

There is no doubt that a traditional publishing deal remains the aim of most writers. Other than genre fiction of a certain kind (explicit erotica, shape-shifters, Space Opera romance and so on) every serious writer still wants a deal with a “real” publisher. But a lot of readers don’t want to buy physical books, and want to buy e-books online.

Now the traditional publishers have worked out that they can offer e-books at the same time as they publish print books, and preserve the powerful traditional ecosystem. By ensuring the price of the e-book version is not far from the print version (which may indeed be available in bookshops and will receive traditional marketing, recognition and publicity) they can make profits from e-books which are virtually cost-free since they only need to prepare the files once, there are no publication costs, distribution costs, warehousing costs or any other costs to speak of. The writers meanwhile have presumably signed contracts for the standard royalties, like 10% or whatever, and the publishers are pocketing the difference. And keeping the e-book costs high for the readers.

So a newly published book, like Liane Moriarty’s Nine Perfect Strangers (2018) is selling on Kindle for $14.99 and in paperback on Amazon.au for $16.00.  And Sydney-based author Shirley Barrett’s The Bus on Thursday (2018) – a most unusual read about a woman who has breast cancer by an author who learns that she does in fact have breast cancer after she has finished writing the book – is published by well-known Australian publisher Allen and Unwin on Kindle for $14.99 and in paperback at $22.99. I have no idea whether these authors have made special royalty deals with their publishers regarding the e-book version, maybe they have and good luck to them.

But the point is, this process is pushing the distinction between self-published books and books from traditional publishers further and further apart, so most indie books on Kindle are $2.99 or even less and the trad pub books are now well above $10.00.  Do readers know, or care? Well, they probably don’t care about that, as such, but they DO get to hear about the books because the publishers have established methods of publicity which benefit the e-book sales in a way that the randomised chaos of Amazon Kindle at present cannot equal. So the traditional publisher sells lots and lots of e-books but makes the reader pay almost as much as they would for a paperback even though they don’t get to actually “own” the book, can’t lend it to anyone or do anything else with it. But somehow still think they are getting a good deal because it costs less than the paperback they saw in the store.

What a mess it has become. I wish some clever statistical analysis was going on right now to clarify what the effects of all this are. You can glean a bit from services like Alex Newton’s K-Lytics and Data Guy at the Author Earnings Report, but I haven’t found anyone who is tackling the divergent effects of the way traditional publishers are now using the e-book market to enhance their reach while re-consolidating their influence over publishing and pushing independent authors back down to where they think they belong. Is genuine independent publishing doomed? Does anyone know of any updates on this?

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