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fjtorres · 10-12-2015, 06:48 PM

Exclusivity in digital media is one of those that everybody does but nobody wants to talk about.

Apple does it.
Netflix does it.
Hulu.
Yahoo.
Microsoft.
Sony.
Nintendo.
All digital content providers want exclusive content to differentiate themselves from the competition.

In ebooks?
Apple does it.
Nook did it first.
Kobo does it when they can.
Even Google does it. (If you count the pirate ebooks.

)
And yes, Amazon does it.

I'm no fan of exclusivity but I can understand why platform holders want it and why content providers agree to it. Hint: $$$$

On paper, Amazon has a bit more than two thirds market share in ebooks.
Problem number one is that is only for BPH titles.
It is higher than that for the market as a whole, higher still for non-BPH tradpubs, and verging on scary for Indie, Inc titles.

The real danger that I see ahead for ebooks isn't the negotiated exclusivity behind KDP Select (where Amazon offers benefits in return for 90 days exclusivity) but rather PS2 style exclusivity, where small and medium developers went PS2-exclusive by default without negotiated benefits simply because porting to the other platforms of the day didn't return enough sales to justify the effort.

If we can believe the Author's Guild, Amazon holding 84% of Indie sales is approaching that danger zone: KU already delivers more net income monthly to authors than Nook grosses in a month from all its sales. That is a scary number because, going by the ratios in the AE report, that is more than what Indies net from all non-Kindle sales so it is a tossup as to whether KU revenue can supplant sales revenue from the other stores for those titles. And KU is still growing its pool monthly...

Not. Healthy. For the industry...
But it might be good business for the writer-publishers...

(Note:

http://the-digital-reader.com/2015/0...losses-shrink/

Nook monthly ebook sales run $12.3M a month and they currently hold about 7% share or a quarter of the non-Kindle market in dollar terms.
18% of that $12.3M is gross Indie revenue. That happens to be the highest Indie gross of the non-Kindle world so if Indies get the same gross at the other 21% from the other stores (which they don't) then the most they can get from going wide is $9M a month. And KU is already paying out $11M a month.

Sales *will definitely* vary for each individual author and each author will have different goals and audiences (quite a few report significant income from Apple or Kobo) but when sizing up the relative revenue pools KU is already a bigger income source for Indies than all the other channels combined. Easy to see why so many bite the bullet and go exclusive.

As I said: Not healthy. Not when Indie, Inc constitutes 25-30% of ebook unit sales.)

Thing is, it's not just Indies getting the short end of the stick: small and medium tradpubs also underperform at the non-kindle stores.

At Apple, Small/Medium tradpubs get 15% of the revenue
At Nook, small/medium tradpubs get 13% of the revenue
At Kobo, small/medium tradpubs get 22% of the revenue
At Google, small/medium tradpubs get 29% of the fiction revenue
At Amazon, small/medium tradpubs get 19% of the revenue (30% if you consider Amazon a medium publisher) from a much bigger pie. (6-7X!)

Google and Kobo seem to run slightly more level tradpub operations but they're also the smallest revenue sources.

When you consider that Apple and Nook combined hold two thirds of the non-Kindle market share, where the smaller tradpubs (the other 1195 members of the AAP) combined barely out earn the much cheaper Indie titles, that 19% share at Amazon looks mighty tempting and can easily make up 75-80% of their ebook revenue. And the added KU revenue...

For now KU isn't big enough to tempt too many of the smaller tradpubs but if it keeps on growing...

KU exclusivity is a transient thing. 90 days. And a publisher doesn't have to commit all its titles. But for some older, low-performing titles it could bring in much needed cash.

In an ideal competitive environment exclusivity would be an expensive sweetener to a vendor's catalog, like Apple's Potter enhanced ebooks or Amazon's matchbook program. But in the world that Agency made exclusivity is anything but expensive for Amazon. And soon they might end up as Sony's PS2 did: getting exclusivity for free.

The good news is times change. As Sony found out in the PS3 era.

10-12-2015, 06:48 PM	#62
fjtorres Grand Sorcerer Posts: 11,732 Karma: 128354696 Join Date: May 2009 Location: 26 kly from Sgr A* Device: T100TA,PW2,PRS-T1,KT,FireHD 8.9,K2, PB360,BeBook One,Axim51v,TC1000	Exclusivity in digital media is one of those that everybody does but nobody wants to talk about. Apple does it. Netflix does it. Hulu. Yahoo. Microsoft. Sony. Nintendo. All digital content providers want exclusive content to differentiate themselves from the competition. In ebooks? Apple does it. Nook did it first. Kobo does it when they can. Even Google does it. (If you count the pirate ebooks. ) And yes, Amazon does it. I'm no fan of exclusivity but I can understand why platform holders want it and why content providers agree to it. Hint: $$$$ On paper, Amazon has a bit more than two thirds market share in ebooks. Problem number one is that is only for BPH titles. It is higher than that for the market as a whole, higher still for non-BPH tradpubs, and verging on scary for Indie, Inc titles. The real danger that I see ahead for ebooks isn't the negotiated exclusivity behind KDP Select (where Amazon offers benefits in return for 90 days exclusivity) but rather PS2 style exclusivity, where small and medium developers went PS2-exclusive by default without negotiated benefits simply because porting to the other platforms of the day didn't return enough sales to justify the effort. If we can believe the Author's Guild, Amazon holding 84% of Indie sales is approaching that danger zone: KU already delivers more net income monthly to authors than Nook grosses in a month from all its sales. That is a scary number because, going by the ratios in the AE report, that is more than what Indies net from all non-Kindle sales so it is a tossup as to whether KU revenue can supplant sales revenue from the other stores for those titles. And KU is still growing its pool monthly... Not. Healthy. For the industry... But it might be good business for the writer-publishers... (Note: http://the-digital-reader.com/2015/0...losses-shrink/ Nook monthly ebook sales run $12.3M a month and they currently hold about 7% share or a quarter of the non-Kindle market in dollar terms. 18% of that $12.3M is gross Indie revenue. That happens to be the highest Indie gross of the non-Kindle world so if Indies get the same gross at the other 21% from the other stores (which they don't) then the most they can get from going wide is $9M a month. And KU is already paying out $11M a month. Sales will definitely vary for each individual author and each author will have different goals and audiences (quite a few report significant income from Apple or Kobo) but when sizing up the relative revenue pools KU is already a bigger income source for Indies than all the other channels combined. Easy to see why so many bite the bullet and go exclusive. As I said: Not healthy. Not when Indie, Inc constitutes 25-30% of ebook unit sales.) Thing is, it's not just Indies getting the short end of the stick: small and medium tradpubs also underperform at the non-kindle stores. At Apple, Small/Medium tradpubs get 15% of the revenue At Nook, small/medium tradpubs get 13% of the revenue At Kobo, small/medium tradpubs get 22% of the revenue At Google, small/medium tradpubs get 29% of the fiction revenue At Amazon, small/medium tradpubs get 19% of the revenue (30% if you consider Amazon a medium publisher) from a much bigger pie. (6-7X!) Google and Kobo seem to run slightly more level tradpub operations but they're also the smallest revenue sources. When you consider that Apple and Nook combined hold two thirds of the non-Kindle market share, where the smaller tradpubs (the other 1195 members of the AAP) combined barely out earn the much cheaper Indie titles, that 19% share at Amazon looks mighty tempting and can easily make up 75-80% of their ebook revenue. And the added KU revenue... For now KU isn't big enough to tempt too many of the smaller tradpubs but if it keeps on growing... KU exclusivity is a transient thing. 90 days. And a publisher doesn't have to commit all its titles. But for some older, low-performing titles it could bring in much needed cash. In an ideal competitive environment exclusivity would be an expensive sweetener to a vendor's catalog, like Apple's Potter enhanced ebooks or Amazon's matchbook program. But in the world that Agency made exclusivity is anything but expensive for Amazon. And soon they might end up as Sony's PS2 did: getting exclusivity for free. The good news is times change. As Sony found out in the PS3 era. Last edited by fjtorres; 10-12-2015 at 06:53 PM.