The state of the NZ book market

Last year, New Zealanders purchased 5.3 million printed books — not bad for a country of just 4.6 million people, but a long way behind Australia. While Kiwis purchased an average of 1.3 print books per person, the Aussie average was 2.3. (24.5 million people bought 56.4 million books.)

Where the figures get really interesting is in the number of ebooks sold. Almost every Aussie also bought an ebook each last year: 22.4 million sold, or the equivalent of 28% of total book sales. Ebook sales for New Zealand are harder to measure because we have no country-specific Amazon store so most of our purchases go through either amazon.com (the US) or amazon.com.au (Australia). Still, even without figures from Amazon, Apple and Kobo sold 1.3 million ebooks here in 2016 — which makes up around 20% of total book sales. Given Amazon’s market penetration overseas, I suspect the real number of ebooks sold here is at least double that figure.

  Population Reported
Print Book Sales
(annual units)
Ebook Sales
(annual units)
Ebooks as
% of
all book sales
  U.S.A.   325,700,000  675,000,000  487,298,000  42%
  U.K.     65,400,000 187,500,000  95,623,000  34%
  Canada     36,500,000  50,500,000  26,017,000  34%
  Australia     24,500,000  56,400,000  22,463,000  28%
  New Zealand       4,600,000  5,300,000  *1,306,000  20%*
         
  5-Country Total:  456,700,000  974,700,000  632,707,000  39%

*(New Zealand ebook total only includes Apple & Kobo stores; Because Amazon has no country-specific store for New Zealand, Kindle ebooks are purchased in NZ through Amazon.com and thus included in the US total)

The figures above come from yet another brilliant Author Earnings survey, this time of the top five English-language countries the US, UK, Canada, Australia, and New Zealand.

As usual, there’s tons of fascinating data in the report for both writers and publishers. It’s all clearly illustrated and presented from a non-partisan perspective, but one graph in particular caught my eye:

The report’s authors note:

That represents a wildly dramatic shift in fortune for non-Big Five traditional publishers; three years ago, their combined $ ebook sales were less than half of what the Big Five’s were.

A detailed breakdown of precisely who those “small or medium publishers” really are is promised in a future report.

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A respectful question to authors using traditional publishers

… “Do you realize how much are you paying for the services provided by your publisher?”
 
For a middle-aged writer, a publishing contract in today’s standard form will likely last well over 100 years. The book’s US copyright will last for the remaining years of the author’s life plus 70 years thereafter and so will the publishing contract. Copyrights in other nations are of similar duration.
 
Under a typical publishing contract, the author will be paying others over 80% of the retail revenues from ebook sales and licenses. If print books continue to be a mass market product for the next 100 years, the author will be paying others 85-95% of retail revenues.
 
Of course, the author won’t be writing checks to these other parties. They’ll pay themselves before the publisher sends any money to the author, but the financial result is the same as if the author were writing the checks.
 
Those percentages are fixed under a standard publishing contract signed today and, regardless of what happens in the future, nothing in that contract obliges the publisher to change the royalty structure included in the contract until it terminates along with the copyright in 100 years.
 

 
Virtually everything about today’s book business other than stories and storytellers will evolve in 100 years. Does it really make sense for an author to contractually commit her stories to an organization that will almost certainly cease to exist in a form she would recognize before that contractual commitment expires?

from The Passive Voice,
A Lawyer’s Thoughts on Authors,
Self-Publishing and Traditional Publishing

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Publishers and authors: Behind the scenes

Do you really think publishers have authors’ best interests at heart?

willpublishforfoodMost writers don’t make a lot of money. Forget the James Pattersons, Lee Childs and J K Rowlings. They’re outliers; the exceptions. 99% of writers only make a pittance from their work and are dependant on daytime jobs or grants or university tenures in order to be able to afford to write. So when you hear of a Big Five publishing house deliberately setting out to rip off its authors, paying them only a few cents per book sold, it’s sickening.

Back in 2012, Ann Voss Peterson wrote a guest blog for Joe Konrath. Author of 25 books for Harlequin, with copies in all the book stores, an office overflowing with foreign editions from countries she’d never visited, and around three million books in print, Peterson couldn’t afford to write for them any more.

“Let me share with you the numbers of a book I wrote that was first published in January, 2002, still one of my favourites. My life-to-date statement says this book has sold 179,057 copies so far, and it has earned $20,375.22. That means the average I’ve earned is a whopping 11 cents per copy.”

It seems that Harlequin leased authors’ ebook rights to a company it also owned, effectively reducing their royalties from 50% to 3% for contracts signed between 1990 and 2004.

Here’s Peterson’s original breakdown:

This is how the numbers break down when Retailer X lists the ebook for $4.00 (doesn’t matter what they sell it for).

Retailer – $2.00 (any discounts are taken from this amount)
Harlequin’s related licensee – $1.88
Harlequin – $.06
Author – $.06

So Harlequin makes a total of 1.94, and I make .06.

A few months after her blog posting, three Harlequin authors filed a class-action lawsuit against the company, and four years on, Harlequin — now owned by HarperCollins — settled out of court to the tune of US$4.1 million.

Not that the company admits any wrongdoing, of course:

“The Settlement does not mean that any law was broken or that Defendants did anything wrong. By settling, Defendants are not admitting any wrongdoing or liability. Defendants continue to deny all legal claims in this case. Plaintiffs and their lawyers believe the Settlement is in the best interests of all class members.”

In her original post, Peterson said she loved writing for Harlequin:

“I had four editors during that time, and all of them were great to work with. The senior editor [had] a strong vision for the line … and Harlequin throws the best parties in all of publishing, hands down.”

All of which brings to mind a line from the classic 1975 film Dog Day Afternoon. Trapped in a bank by the cops during a bungled robbery attempt, Al Pacino’s character, Sonny Wortzik, is offered unconscionable surrender terms by Sergeant Moretti:

Wortzik: Kiss me, man.
Moretti:  What?
Wortzik: Kiss me. When I’m being fucked, I like to get kissed …

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The collective insanity of the publishing industry

“Publishing is about she who writes and she who reads.
Everyone else can lend a hand or fuck off.”
Hugh Howey

Gene Doucette has a few things to say about the collective insanity of the publishing industry …

Gene Doucette on publishing insanity In 2014, there was a drawn-out dispute between Amazon, and Hachette. The latter is one of the largest publishers in the world, and Amazon is a company that sells things, such as books.  The essence of the dispute was that Hachette—and all the other publishers we affectionately refer to as ‘the Big 5’—wanted more control over the list price of their e-books on Amazon.

That sounds thoroughly reasonable, and it sort of is, but please let me explain because the crazy is in the details.  What was happening was that Amazon was discounting the price of the ebooks, and it may seem like this is something the Big 5 would want to stop, except the markdown was coming off of Amazon’s end.  In other words, if Hachette wanted to charge $15.99 for an ebook, and Amazon marked it down to $9.99, Hachette was still paid their cut of the full price of the book.

More people will buy a book at $9.99 than at $15.99, so essentially, the Big 5 was coming out ahead in this arrangement in every conceivable way.  They collected royalties at an unreasonably high price point while moving the number of units that corresponded to a lower price point.

So of course that had to be stopped right away.

Hachette fought for, and won from Amazon, the return to something called the Agency Model, whereby they set their price and Amazon wasn’t allowed to reduce that price.  So that $15.99 book stayed at $15.99 until Hachette decided to change it.

Soon after that contract was signed, the other Big 5 contracts came due, and they all asked for the same Agency Model arrangement.  Thus, the finest minds in publishing—or one might assume—negotiated themselves out of an arrangement whereby they sold more units at a lower cost without suffering the financial impact that comes with a lower unit cost.

On purpose.

This isn’t even the crazy part.

After securing the right to price their ebooks unreasonably high and having those prices stick, the first thing the collective brain-trust of the Big 5 did was raise their ebook prices even more.  Often, the prices were higher than the price of the print edition, which is just fundamentally insane.

It should come as very little surprise to you that after jacking up the prices of their ebooks at the start of 2015, the Big 5 sold fewer ebooks.

Now here’s the fun part, the part that just makes me shake my head and giggle and wonder how I can live in such extraordinary times.  After six months of depressed ebook sales, the Big 5 announced that the ebook market was slowing down.

Not: “we priced ourselves out of the market and stopped selling as many books”. No no no.  The ebook market!  Is slowing down!

This was celebrated!

I mean it.  One article after another, from the New York Times on down came news pieces declaring that print was making a comeback at long last, and the long national nightmare was over.

All it took was the biggest publishing companies in the world deliberately murdering their own share of the market.  And it wasn’t even true.

 

The Wall Street Journal highlighted declining sales last September with the headline “E-Book Sales Fall After New Amazon Contracts. Prices rise, but revenue takes a hit.” In January, with the annual figures in, The Bookseller positively gloated about it:

… we can without a shadow of a doubt say that e-book volume slid for the Big Five publishers for the first time since the digital age began, collectively down 2.4% to 47.9 million units last year.

 

But what they failed to mention was where those sales went. Here’s what Hugh Howey, co-author of the quarterly Author Earnings Report has to say (his bolding):

more than half the market is now in ebooks, and half of what’s left is online print sales. 75% of your market is online, and publishers are willing to nuke your career in order to protect historical relationships with the 25% that’s left. We have this in their own writing. This is not speculation. Even industry insider Mike Shatzkin has blogged about this strategy and how it has backfired.

 

So the Big 5 are celebrating lower sales and therefore reduced income for their authors. Hugh Howey again:

I’m still pro-author and pro-reader above everything. If Amazon and the Big 5 all go out of business tomorrow, all I’ll care about is whether and how writers and readers can commune. The middlemen are only useful in how they serve these two parties.

Publishing is about she who writes and she who reads. Everyone else can lend a hand or fuck off. According to our data, publishers are mostly doing the latter. I hope they turn that around.

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Two more ways publishers shaft writers

contractThe latest posting on Writer Beware
looks at the arbitration clauses buried in almost all publishing contracts. These clauses say that in the event of a dispute between author and publisher, the matter will be dealt with by an independent arbitrator — which at first sight seems reasonable enough, except that;

  • Arbitration clauses are binding, and supersede your right to go to court.
  • Going to arbitration is NOT like appearing before a judge. Arbitrators are “largely at liberty to determine how much evidence a plaintiff can present and how much the defence can withhold.”
  • Arbitrators are supposed to be impartial, but aren’t necessarily.
  • Arbitrators’ decisions are hard to challenge. Courts are reluctant to reverse them, even where they are obviously unfair.
  • Arbitration can cost you, even beyond any judgement that may go against you. In addition to travel and filing fees, you may have to pay the arbitrator.
  • Christian organizations sometimes require Christian arbitration. Prayer and scripture may be given preference over law and evidence.
  • Some arbitration clauses include bans on class actions. “By banning class actions, companies have essentially disabled consumer challenges to practices like predatory lending, wage theft and discrimination. … Once blocked from going to court as a group, most people dropped their claims entirely.”

Meanwhile, The Passive Voice, highlights deep discount clauses in many publishing contracts that let publishers offer titles to booksellers and wholesalers at big markdowns while disproportionally marking down the author’s share.

The original posting comes from the US Authors Guild which says:

We’ve seen these discount double-crosses applied for sales to book clubs and book fairs, for “special sales” in bulk outside the usual book trade, for large-print editions, for export editions. Let’s say the publisher sells our sample book in bulk for just $2.00. The discount double-crossed author would get one thin dime per copy, a royalty cut of an astounding 93%—even though the net to the publisher would decline by less than 33%.

Even crazier, some reductions can apply even to direct sales from publishers to readers, despite the fact that the publisher gets to keep the share of the transaction that would normally go to a retailer or wholesaler. If anything, an author’s royalty rate on such direct sales should be higher than normal.

Passive Guy, (a lawyer himself), notes:

Standard publishing contracts from large traditional publishers stand out in the constellation of business contracts for their one-sidedness and, in some cases, outright duplicity for anyone who fails to read them very carefully. The way that Randy Penguin and its cohorts write their standard contracts is not the way that Apple, Microsoft, Morgan Stanley, Bank of America, Disney, Intel, Hewlett-Packard, American Express, Merrill Lynch and similar entities write their contracts.
 
PG doesn’t agree with many initiatives undertaken by the Authors Guild, but he’s pleased to see their latest efforts to shine a light on some of the most abusive contract provisions routinely employed by Big Publishing.
 
However, the cynic in PG holds little hope that AG’s efforts will bring about any meaningful reform. Treating authors badly is too much a part of the corporate and cultural DNA of traditional publishing to change. These dinosaurs will die before they evolve.

And in the Comments section, author/publisher Kristine Rusch (AKA Kristine Kathryn Rusch, Kristine Grayson and Kris Nelscott) adds:

It’s really ugly in trad pub contract and royalty land these days. That’s why I continually tell writers who want to be trad pubbed to hire a LAWYER to negotiate their contracts, not an agent (even if it were legal for an agent to do it, which it is not. [sigh]). But do these writers listen? Nope.

 

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Indie or traditional? An author’s dilemma

tradVsIndie

Should you opt for indie publishing or go the traditional route? There’s no easy answer. Every author has to make his/her own decision. I’ve made mine, so consider me biased. But also consider the following words from Kristine Kathryn Rusch.

(If you’ve not come across her before, Rusch is a best-selling author of science fiction, fantasy, mysteries, mainstream fiction, non-fiction, and the occasional romance. She writes under her own name and several pseudonyms. (Here’s a list of her books.) She’s also an editor, publisher and inveterate blogger.)

quote_open-light


… if you want a
career as a writer, if you don’t want to have a day job, if you only want to write, then it seems to me the safest path to take is the indie path. You’ll have more opportunity. You can work hard and publish a lot and make money doing so.

Will every indie writer make six-figures per year? Hell, no. Nor will every traditionally published writer. But what this particular Author Earnings report shows is that if you want the chance of making six-figures or more per year with your writing, the best publishing path is indie.

(Provided you continue to learn your craft, are a damn fine storyteller, have excellent covers, do the right amount of marketing … and on and on and on.)

Is it guaranteed that you’ll even make a living? Not on either road. But that hypothetical writer that Hugh and Data Guy mention in the front of their report, the one standing with a manuscript in hand, trying to decide which road to take? That writer should ask himself: Do I want to keep my day job for the rest of my life? Or do I want the chance to be a full-time writer?

If he wants a chance at being a full-time writer, he needs to learn how to be an indie writer.

I think it’s that simple.

And that hard.quote_close-light

 

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The Myth of The Lazy Writer

Hugh Howey, writing in Publishers Weekly;

hugh_howeyThe hardest part of getting a book published is the actual writing. All it takes to see this is the number of people who dream of publishing a book but never manage to hammer out a rough draft. I spent 20 years trying to write my first novel before I finally pulled it off. It’s not unusual for an aspiring writer to struggle for years and never produce a finished product to submit to agents or editors.

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Big publishers – Trouble brewing?

Dinosaur-brontosaurus-Almost 60% of traditionally published authors think that publishers have been lazy and uninnovative when it comes to matters digital, and almost 50% of them agree with the statement that “Publishers have ever less to offer. They don’t know how to market books anymore.” (Seriously, did they ever?) Only 25% thought that publishers treated authors well in non-financial ways, and a measly 7.6% thought publishers paid authors well. 16% of authors think conventional publishing will cease to exist in the next 10-20 years.

These results come from a survey released last month called Do You Love Your Publisher? Further commentary here and here.
There was one big plus for publishers. 70% thought editorial input was excellent or good, but only 50% thought publisher communications before, during and after the publication process were excellent or good. The wheels really came off on the question of feedback: “Did your publisher ever solicit feedback?” 74% replied “No,I was never asked for my opinion.”

On the subject of self-publishing, 24% of authors said they were excited by the prospect of having control, while 37% said they’d be “horrified” at the prospect.

68% reckoned Amazon was killing bookshops, 44% said it evades taxes, and 31% thought Amazon would like to destroy publishers. But 65% thought it was a boon to readers and 66% saidit was a “superbly efficient retail machine”.

In The Bookseller writer Sara Sheridan noted that authors are “100% invested in the book [they have] written”, while an “editor has a stable of books coming out in the same month or season and the reality is that they only need one or two of those books to make it big.” She added;

Corporate publishers are engaged in a kind of intellectual property gambling. In this environment, your precious book is less important to them than it is to you.

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American reading habits (2014)

Last year, nearly a quarter of American adults didn’t read a single book–hardback, paperback or e-book–a figure that’s almost tripled since 1978.

US book reading
(The graphic comes from Seth Godin’s blog posting Telling the truth with charts–but that’s another story!)

 

These figures come from this Pew Research Center report (PDF), which also shows that e-reading is on the rise.

  • 28% of adults read an e-book in 2014 (up from 17% in 2011 and 23% in 2012)
  • 69% read a print book
  • 14% listened to an audio book
  • 4% of readers are “e-book only”

Overall, 76% of adults read a book in some format over the previous 12 months. The typical American adult read or listened to 5 books in the past year, and the average for all adults was 12
books. Neither the mean nor median number of books read has changed significantly over the past few years.

  • 50% of Americans own a dedicated handheld device–either a tablet computer or an e-reader
  • 92% of adults have a cellphone
  • 55% have a smartphone
  • 75% have a desktop or laptop computer

E-book readers who own tablets or e-readers are very likely to read e-books on those devices—but those who own computers or cellphones sometimes turn to those platforms, too.

Of e-book readers:

  • 57% use a dedicated e-reader (up from 41% in 2011)
  • 55% use a tablet (up from 23% in 2011)
  • 29% use a computer (down from 42% in 2011)
  • 32% use a cellphone (up from 28% in 2011)

(Clearly, e-book readers use multiple devices.)

Though e-books are rising in popularity, print remains the foundation of Americans’ reading habits: Among adults who read at least one book in the past year, just 5% said they read an e-book in the last year without also reading a print book.

 

 

 

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The case against Author Solutions

No_ASIAuthor Solutions Incorporated (ASI) claim to represent authors, but 170,000 (“or more”) of them are cited in a class action lawsuit against the company.

The lawsuit, filed on February 26,  claims to be  “a case about a publishing company that makes money from authors, not for them” and that ASI “operates more like a telemarketing company, not a publisher, that employs a large, commissioned sales force to sell books and services to its target audience: the Authors themselves, not the general public.” (My italics.)

Amongst other things, the suit alleges that ASI:

  • Deceptively sells publishing packages and other services by making false, untrue, or misleading statements.
  • Conceals critical information from authors — in particular that its “consultants” are actually telemarketers who don’t necessarily have any experience in publishing.
  • Lies about being “invested in Authors’ success”.
  • The company’s so-called ‘services’ “are not reasonably designed to help authors sell books or to accomplish their stated goal and are effectively worthless.”

Back in June last year, David Gaughran, writing in his Let’s Get Digital blog began his opening salvo against the company like this:

The more you study an operation like Author Solutions, the more it resembles a two-bit internet scam, except on a colossal scale.

In another posting, Gaughran described ASI as:

a company infamous for overcharging writers, doing a terrible job of publishing their books, and forcing ineffective and expensive marketing services upon those authors when their books (inevitably) fail to sell.

Needless to say, Author Solutions is no solution for an indie publisher. But perhaps the most disturbing thing about the company is their parentage. According to a banner on their website, ASI is “A Penguin Random House Company”:

 

"A Penguin Random House Company"

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