Tuesday, May 10, 2011

What about EBooks revenues repartition ?

In the previous post, I concluded that "readership" would greatly grow with the "advent" of ebooks. But how could that translate into authors revenue ?
First thing, the presentations : On my left side, we have readers, wanting to spend time, and money on books for reading. On right side, we have sellers : publishers(indie or traditional), authors and distributors wanting to make money from it. First of course, publishers choose at which price they set the books, and readers choose to buy or not. If the books are priced too high, readers will be reluctant to spend the money, and hence will limit their spendings. If on the other side the books are priced too low, readers will not be limited by the financial aspect, but by their time constraints hence lost money for the sellers.
So sellers have to price wisely their books, as to reach the best revenue. And yes, the "best price" for different books may be vastly different, while it also may fluctuate in time ...

As "readership" augments, it is clear that total "money" on the table will also augment, but what about the author's cut of that pie ?
First thing, authors are finding out that -- under old style contracts -- traditional publishers get a percentage for work they don't need to do anymore for ebooks. At the same time, they discover that they now have the choice of self-publishing, new works, as well as back-listed books. It seems the "final reseller's" percentage (the last 30%) are mostly there to stay, be it through Amazon, Kobo, or Smashwords.But yes, these companies meet a demand of presentation, distribution, customer's service, reviews and ratings sharing etc. While direct sells from authors website are possible, they are far from the majority, so I think that for a majority, this "part" won't change. However, the rest is devided between the publisher and the authors (for self-publishers that's the same person). By allowing authors to "short cut" the traditional publishers, ebook give more power to authors who will be able to rebalance the "standard" royalties rate from 15% to a much higher value. Of course, self-publishers will stay at 35%-70%, but my take is that for new traditionally published contracts 35% will be reached in a near future.
That means at least twice as much money for the authors (as a group).

As for individual writers, that's an other matter. For now, indie authors are having great days, as Traditional Publishers leave a big part of the field open, by trying to limit the DTB's erosion and pricing their books too high, but they may start to understand the new rules, and compete truly with self-publishers. However, I don't think they'll be able to regain control of the market as before, and that as customers become more and more conscious of the alternatives, (through authors re-publishing their backlist, or jumping ship allready), they will find their "power" dissolve, and finally limit itself to that of providing "a la carte" services regarding editing, covers, marketing etc...

Do ebooks increase readership ?

In a topic on Kindleboard's Writer's Cafe, people wonder (and I do with them), about the "are ebook sales forever ?" question. One element for answering this question if whether "readership" will augment or fall down with ebooks advent. For the purpose of the discussion, I'll consider "readership" as a combination of "reading time per reader", with "number of readers". A simple equation Readership = Time * Number can easily show that if both Time and Number augment, so will readership (and for you math lovers at a quadratic rate !).
I postulate that ebooks will lead to increase of both parts of that equation.

Reading time per reader will increase :
Ebooks make reading easier and more comfortable, hence more incentive to read, hence more time read. I remark that most people who read ebooks have increased their reading time.
One new device family can increase reading time : ereaders. How do they do ? First by doing at least as well for general comfort : ereaders have (when done right) the same general reading properties as paper. By beeing non light emissive, it doesn't induce eyestrain the way LCDs do, page turning attains at least the same rate as with paper, ereaders are in the same "encumbrance/weight" class as their fellow Dead Tree Books.
While sharing this, they have a few discerning points : some people are uneasy to take their ereaders with them in some places (the beach, transports etc...) while they may be happy to take paper books. However this is counterbalanced by ereaders features : text size that can be varied (hence people with reading difficulties who can read the same books as others, without having to wait for a special edition. Ereaders also  caters for impulse, and online buying. An other feature is "No Cover" : While when buying or choosing a book to read, you can look at it's cover, people don't see it when you're reading. Hence readers don't need to fear to show what they're reading. While that may seem to be only to impact "erotic fiction" readers, I know that some people may be less than thrilled to be seen reading "romance", "science-fiction", or other "lesser genres" books.
But ereaders are not the only device that can be used to read ebooks : there are also tablets, smartphones, PCs ... So people can easily extend their reading time by taking their ebooks with them wherever they have their phone. More portability --> more read.

Number of readers will increase :
Just the same way reading time will increase, people will find out that reading is becoming more "accessible" and easy. Since the gatekeeping barrier is way openned, some otherwise neglected categories will be better "served", and people will be able to sample, and buy "specialty" books without having to go to a bookstore (which may have incomplete shelves...). Of course, you all will think that the "category" above relates to "erotica", and it's partly true, but you can easily replace it with your/your SO's Hobby, which he/she most probably considers neglected ...
So would-be readers who can't find DTB they like but don't find will become readers of ebooks they like and find... hence an increase of readers.

So if number of readers increases, and reading time increases, readership increases, and everyone is happy, right ? Well, depending on how it translates in author's revenue is an other question, that I'll try and address in an other post ...