Prediction for 2011 from Smashwords Founder

[Elfwreck]

Originally Posted by dsvick

If the prices are falling and the royalties to the authors are increasing then the profits for the publisher must be falling. If that is the case then what is being lost - editing? marketing?

Wasted overhead for returns and printing-delivery-storage costs. Inventory tracking. "Shrinkage"/theft costs. Damaged goods costs.

A lot of people aren't buying the notion that "print costs only cover about 15-20% of the book's cover price"--or if they do accept that, they assume those costs are related to trade or mmpb cover prices, not hardcover.

Also, if royalties are rising but prices are falling I have to wonder if that will really mean anything for the author in the long run. After all a 10% royalty on a $20 book is the same as a 25% on an $8 book - granted they may sell more books at $8.

Authors who come into mainstream publishing from successful indie/self-publish routes are going to demand to know why publishers want more than 50% of the list price of the book. (Or rather, why they should sign a contract to that extent. Why publishers *want* that much money is obvious.) 10% of a $20 book is $2--so's 50% of a $4 book. The author is going to want to know why the publisher thinks they won't sell five times as many $4 books.

Publishers are going to have to get over the idea that "higher price = more valuable product," because a lot of readers aren't accepting that anymore.

[dsvick]

Originally Posted by Elfwreck

Wasted overhead for returns and printing-delivery-storage costs. Inventory tracking. "Shrinkage"/theft costs. Damaged goods costs.

I was not, in any way defending the publishers, I was just trying to point out that there are values they can add that do have a cost. However, like you pointed out, there are also things that physical publishing does to reduce the bottom line as well.

Over the next few years, as the battle rages, it will all shake out and people will vote with their money where the final line will be drawn.

Originally Posted by Elfwreck

Authors who come into mainstream publishing from successful indie/self-publish routes are going to demand to know why publishers want more than 50% of the list price of the book. (Or rather, why they should sign a contract to that extent. Why publishers *want* that much money is obvious.) 10% of a $20 book is $2--so's 50% of a $4 book. The author is going to want to know why the publisher thinks they won't sell five times as many $4 books.

Publishers are going to have to get over the idea that "higher price = more valuable product," because a lot of readers aren't accepting that anymore.

I agree completely, the authors will want and think exactly what you said. On the other hand, the big publishers will want and think the exact opposite. Ultimately it will end up somewhere in the middle, after both of them find out what most of the people that actually buy books think.

[James_Wilde]

Originally Posted by SlowRain

I only skimmed the article, but I have an issue with the marketing comment in #7. I know of no industry where marketing doesn't dictate what people buy. I don't see the publishing industry successfully breaking that trend. The publishing industry lags every other industry.

I agree with you in the short term, SlowRain, but in the longer term I can envisage a world where, say, Facebook is going to be a force to reckon with both for (e)books and for other entertainment industries. To be sure Sony's heavy dollars will always push their pets, but social media are going to make a hole in traditional marketing - or perhaps change it.

[screwballl]

The only thing I partially disagree with is #6, prices dropping. The big publishers will still hold to their guns for another few years trying to grab every penny they can that they have rights to. This means while independent or self publishing means the author gets $3 per $4 book, the same authors may still only get $3 per $12 paper book. This also means they will continue to push paper books by keeping ebook prices artificially high, or purposely keep ebook prices high since there is no manufacturing or storage costs, and VERY low distribution costs making a much higher percentage of profit per ebook.

One perfect example of this is Hachette Book Group that publishes the Twilight series. Paperback of most of the books can be had for $4.99 new, yet the ebook is still $8.99.

[SlowRain]

Originally Posted by James_Wilde

I agree with you in the short term, SlowRain, but in the longer term I can envisage a world where, say, Facebook is going to be a force to reckon with both for (e)books and for other entertainment industries. To be sure Sony's heavy dollars will always push their pets, but social media are going to make a hole in traditional marketing - or perhaps change it.

I hope you are right. I'd like to see less corporate control/manipulation over things like this. I probably have less faith in humanity than you do, but more social-media influence would be a good thing in this case.

[jasonkchapman]

Originally Posted by SlowRain

I hope you are right. I'd like to see less corporate control/manipulation over things like this. I probably have less faith in humanity than you do, but more social-media influence would be a good thing in this case.

It probably won't last, though. Right now, the social Web is the alternative to mainstream marketing. As that changes, corporate marketing will as well. Already, we're seeing corporations, large and small, creating Social Czar positions and hiring freelancers to "work" social media.

It'll become increasingly difficult to spot the shills in the crowd. I can easily see people hiring themselves out as members of virtual flash mobs to shill for a particular product in the same way street promotion companies work.

[kennyc]

Originally Posted by jasonkchapman

It probably won't last, though. Right now, the social Web is the alternative to mainstream marketing. As that changes, corporate marketing will as well. Already, we're seeing corporations, large and small, creating Social Czar positions and hiring freelancers to "work" social media.

It'll become increasingly difficult to spot the shills in the crowd. I can easily see people hiring themselves out as members of virtual flash mobs to shill for a particular product in the same way street promotion companies work.

Yep. It's already there and will continue to grow.

[Ankh]

Originally Posted by leebase

I mean, yeah, somebody can now find you on the internet -- but they can find 100,000 other indie authors as well. Thus the value of a publisher with the ability to market is going to increase, not decrease. Internet social network marketing is still just marketing. Professional marketing efforts are still going to be quite valuable.

Could you be more specific, please?

I understand that we are discussing the behaviour of the average consumer, but I can not but draw on my own experiences... I am becoming increasingly unreachable to "professional marketing efforts". The nail in the coffin was decrease in visits to the local book shop, so now even shelf space is not working on me.

The top of the list of things that influence me was before, and now is even more, the word of mouth; the recommendation by friends, forum members, authors I like or, rarely, trusted critic article. Loyalty to genre-specialised publishing house (Baen) comes second. The best-seller lists trail by the very large margin the two mentioned influencers.

How are those professional marketing efforts reaching our average ebook reader owner today? What, from their arsenal, works on you or on the rest of us?

[screwballl]

Companies are hiring random kids (teens or college kids or whoever does not really have a life) to plug their products all over; Facebook, Myspace, all the social sites, digg, Twitter, and so on down the line. I have seen some of these people that just try to add as many friends as possible on these sites in order to get the word out to as many people as possible. This is typical of many of these larger, somewhat more trustworthy companies.

Some of the smaller shady groups even employ groups to purposely report with good ratings on rating sites like ebay, google, resellerratings, amazon, newegg, buy.com, zipzoomfly or whatever rating type page they can find to make the company sound better and drive sales. This tends to be small shady companies like "ConsumerDepot" and a lot of the "top rated" but never heard of companies listed on resellerratings.com

[leebase]

Originally Posted by Ankh

How are those professional marketing efforts reaching our average ebook reader owner today? What, from their arsenal, works on you or on the rest of us?

All of us have our personal networks that influence our buying choices....there is nothing new about that. If you don't know what role marketing has in making a book (or any product) popular, than there's not much point in me trying to describe it.

Just ask anyone who has created a website or a web business and discovered they don't instantly become the next Ebay or Amazon how easy it is to get noticed.

eBooks can let Authors get around the need for publishers to get their books into stores. Fine. Now a book is no different than a web page. What does it take to get traffic to a web page? Web pages are cheap to put up on the web. So much so that there are billions of such web pages.

How do you get NOTICED? That's the job of marketing.

Lee

[SlowRain]

Originally Posted by jasonkchapman

It probably won't last, though. Right now, the social Web is the alternative to mainstream marketing. As that changes, corporate marketing will as well. Already, we're seeing corporations, large and small, creating Social Czar positions and hiring freelancers to "work" social media.

It'll become increasingly difficult to spot the shills in the crowd. I can easily see people hiring themselves out as members of virtual flash mobs to shill for a particular product in the same way street promotion companies work.

True. However, even now I think people posting on social-media outlets are just regurgitating what the marketing industry is telling them to buy anyway. As it currently is being used, I still see it more as an extension of marketing, not an alternative.

[jasonkchapman]

Originally Posted by SlowRain

True. However, even now I think people posting on social-media outlets are just regurgitating what the marketing industry is telling them to buy anyway. As it currently is being used, I still see it more as an extension of marketing, not an alternative.

Unfortunately, there is no mechanism that I can think of to overcome that, because it's something of a human failing. Too many people are eager to rate the judgment of others more highly than their own. It may be based on numbers (10 million people can't be wrong!) or some perceived expertise (movie reviewers) or that nebulous "cool" factor (celebrity endorsements).

[abookreader]

Publishers are going to have to get over the idea that "higher price = more valuable product," because a lot of readers aren't accepting that anymore.

Spot on!

I see us moving into an environment were the gatekeeping function of Publishing will by far be the most valuable service they provide. Unfortunately for them, that is also a task that can be performed by Blogs, Agents, and a myriad of other social networking tools that are probably in their infancy.

I foresee that by the end of 2011 we are going to be in an environment where if you want to charge $12.99 for your eBook, you'd better make sure your eBook is infinitely better than the tons of material out there at 25% of that price or you are going to find your readers leaving in droves.

[screwballl]

I see this more as a transition... now the author holds the cards and the publishers will have to start coming to them if they want to produce their book in paper format, instead of the other way around. This also means the author has the rights to the book, not the publishers.

[Ankh]

Originally Posted by leebase

If you don't know what role marketing has in making a book (or any product) popular, than there's not much point in me trying to describe it.

Originally Posted by leebase

That's the job of marketing.

With all due respect, I asked for specific marketing strategies that work today, that belong to the category that can be delivered only by the professionals. Please be precise.

What was the last thing done by the professional that has influenced you to buy the book?