Romance, Historical, Contemporary, Paranormal, Young Adult, Book reviews, industry news, and commentary from a reader's point of view

Ebooks

To Infinity and Beyond (or at least to India)

To Infinity and Beyond (or at least to India)

Business World

Long time readers of Dear Author know exactly what I mean when I say “geographical limitations.” In traditional “trade” publishing which is dominated by U.S. publishers (or U.S. arms of international companies), there are two primary types of contracts as it pertains to geographical rights. Usually an author will sell to the publisher “North American” rights or “World” rights. These geographic denominators indicate where the publisher can distribute a book.

North American means United States and Canada. If an author sells just her North American rights then individuals outside of US and Canada have no legitimate path to purchase the book except by importation of the US/Canada printed book.  If an author sells World Rights, the publisher has the right to distribute but often does not. Instead, the publisher re-sells those rights to another local publisher.

When these “subsidiary” rights are sold, they are sold in a bundle which includes the rights to translate and the right to sell the English language version in that region. Generally, the geographic territories are UK (which for some reason includes New Zealand and Australia), Spain, Italy, Germany, France, Japan, China, India, and the like. Each one of those geographic regions are separate so a book that has been licensed for sale in France may not be available in Spain and vice versa.

A publisher will often pay more if they can obtain World rights because of their ability to sell these into foreign publishing houses. And authors will often hold on to their foreign rights because they can achieve additional advances from foreign publishers for the territory and translation rights.

When digital books gained momentum in the mid 2000s, geographical rights became a hot button reader topic (here and here) because these books were one click away from being purchased if only the reader had a credit card with the right address or could somehow mask her IP address. These books were tantalizing fruits just out of reach what with message board forums, blogs, then twitter and Facebook exploding.

Geographic limitations were an anathema to readers all over. Many small digital publishers gained readers because of their international access. Harlequin has always been available worldwide as well. Enter self published authors. They, too, controlled access and more often than not would publish a book worldwide.

One caveat for both digital publishers and self published authors. The books were in English.

Now we have digital adoption leveling off in the US. Most analysts believe based on the flattening rate of adoption for the past two years as well as the lack of any big technological push (most of the tech world is looking toward wearables and home electronics) will result in a digital adoption percentage of around 40% of trade. (Note, this does not mean for individual authors or genres, the percentage isn’t going to be much more different.) I thought for sure it would end up being a higher digital ratio but for some reason there are a huge swath of casual readers (and power readers) who refuse the lure of digital books or, at least, prefer print books.

The next big expansion will be international territories and foreign language translations. Bella Andre stated this at a recent BEA panel. Courtney Milan is one of the first self published authors I know of who has self published her books in German. Not just in the territory of Germany, but in the German language.

Indie publishing in foreign languages is tough. First you have to find a reputable translator and if you don’t speak the language, how do you know if the translator is any good. Second, you’ll likely have to pay for proofing as well as formatting in that other language.  The cost of that can be four times what it would cost to produce an English version of the book.

If there is any place where I can see huge growth potential, it would be in the international author services market where translators, proofreaders, formatters, and distributors (like US based companies Smashwords and Direct to Digital). Harlequin (and now HarperCollins) as well as Random Penguin both own author service companies. But guess who else is exploring this? That’s right. Amazon.

Rumors are that Amazon is ramping up to explore native based language translations for self published authors. Authors won’t have to deal with the hassle of finding translators, proofreaders, and formatters. Instead, you’ll just check a box to indicate what countries you want to work with and presto, it will happen.

There’s a huge potential for digital growth in non English speaking markets. The question is who will become the anchor for digital first authors. Amazon or someone else?

 

The First Digital Plateau

The First Digital Plateau

Cliff road

From all the reports, it appears that digital book adoption has reached a small plateau. Driven in large part by Amazon’s release of the Kindle, digital book adoption grew by huge percentages in 2010, 2011, and 2012. 

  • 2009 – $291 million
  • 2010 – $869 million
  • 2011 – $2.109 bn (15 % of revenue of major publishers was due to ebook sales)
  • 2012 - $3.04 bn
  • 2013 – (coming in June but percentage increase per AAP is around 3.8%)

As you can see, the percentage increase each year has gotten smaller. These numbers do not include self published sales which likely accounted for a several million units and millions of dollars.[1]

The majority of the power buyer (defined as those who buy or acquire at least one book a week) has likely already made the transition from print to digital and some experts believe that digital book adoption will end somewhere around the 40% mark.  Around this blog, many of our readers are digital only or digital primary buyers. Many vocal online authors have high digital to print ratios but the digital to print ratio varies according to genre, demographic, and interest.

Romance is particularly high and within romance, certain subgenres are even higher. Generally speaking contemporary and paranormal romance authors enjoy high digital to print numbers whereas women’s fiction and historicals have higher print to digital numbers. This is not to say that there are authors within those subgenres that outperform the generalities because obviously there are. Other genres like mystery and even science fiction have strong print followings. Nonfiction, Lit Fic, Young Adult and Children’s have higher print numbers and lower (much lower) digital numbers.

Nicholas Carr of Rough Type wrote in August 2013 that ebook adoption seems to be plateauing in other English speaking markets like the UK and Canada. This is likely due to a combination of factors.

  1. Exponential growth is easy to show when you are starting from a low figure. Now that ebooks represent a sizeable portion of the overall book market, it takes larger increases of revenue and per unit sales to represent more than an incremental change. Therefore there are still increases but because of the large size of the ebook market, it seems small.
  2. Carr speaks of the switch from dedicated ereaders to tablets. There are simply more entertainment options battling for a reader’s attention including the binge television watching, casual gaming like Candy Crush or Flappy Bird, and digital movies. Tablet users are not primarily readers but rather multimedia consumers.
  3. There will be no transformative device again like the Kindle that spurs mass adoption.
  4. The power readers have already switched.

Let’s look at the Power Buyer (which is everyone who reads this blog). According to researchers, we buy at least 1 book a week and contribute to 48% of ebook revenue and 60% of ebook units. By all accounts we’ve migrated from print to digital within the years of 2010 to 2013. Over 50% of adults already own a tablet or ereader.

Digital book growth can occur in three instances:

  1. Overall number of readers grow.
  2. Power Buyers buy more and at higher prices.
  3. Non digital readers migrate to digital.

Of the three above scenarios, number three is the most likely. Number two isn’t likely to happen because of the increasing number of lower priced ebooks. 99c books and box sets dominate lists these days. The Power Buyer is already contributing nearly half the revenue of ebooks and there’s nothing to suggest that their overall expenditures will increase (even if the units purchased do).

A fourth way for digital book growth to occur would be the decline of retailer access such as grocery stores, big box stores declining to stock books or drastically reducing space given over to books. The closure of Barnes & Noble would likely result in a migration toward ebooks for some readers, but there would be thousands of casual readers lost entirely (as the market for books contracted after Borders’ bankruptcy). And some would simply buy print books from an online source.

The first two scenarios are not likely to contribute or assist digital book adoption.

Overall reading is not increasing.

Among all American adults, the average (mean) number of books read or listened to in the past year is 12 and the median (midpoint) number is 5–in other words, half of adults read more than 5 books and half read fewer. Neither number is significantly different from previous years.

This may be attributable to a decline in young reading.

Research released today from Common Sense Media shows that not only do reading rates decline as kids get older, but they’ve also dropped off significantly in the past 30 years. In 1984, 8% of 13-year-olds and 9% of 17-year-olds said they “never” or “hardly ever” read for pleasure. In 2014, that number had almost tripled, to 22% and 27%. Girls also tend to read more than boys, as 18% of boys say they read daily, while 30% of girls do.

That leaves the migration of existing readers from print to digital. The question is what will make them move and in what numbers? If digital book adoption doesn’t grow in the US, then perhaps the only source of growth for digital only authors would be foreign markets.  We are definitely in the first digital plateau. Where do you think digital ebook adoption will end up? Do you agree we are in a plateau? What will power digital ebook adoption in those who haven’t switched yet?

1. Amazon announced that one quarter of its sales were from indie publishers. Indie publishers include anyone who uses the KDP platform which includes digital publishers like OmniFic and Entangled and the like as well as individual authors. It should be noted that this is unit sales and not overall revenue.