Are we in the midst of an ebook bubble?

[Jon Loomis]

Interesting article in The Guardian by Ewan Morrison.  Here's the first bit:

"...there is now a boom industry in "How to get rich writing ebooks" manuals, as well as a multitude of blogs offering tips and services, and a new breed of specialists who'll charge you anything from $37 to $149 to get your ebook into shape.

"This all seems like a repeat of the boom in get-rich-quick manuals and "specialists" that appeared around blogs and etrading. Did anyone actually get rich from writing blogs, you may ask? Well, according to Jaron Lanier (author of You are not a Gadget) there are only a handful of people in the world who can prove that they make a living from blogging: it's entirely possible that more money was made by those who wrote and sold the how-to manuals than by the bloggers themselves. But who cares, right? It's all part of the euphoria of digital change, and technological innovation is as unstoppable a force as fate. Reports show that paper book sales are "tanking" – down a massive 54.3% while ebook s.... The revolution will be epublished, and we're all going to be part of it.

"All of this ebook talk is becoming a business in itself. Money is being made out of thin air in this strange new speculative meta-practice: there are seminars, conferences and courses springing up everywhere, even at the Society of Authors (a writers' union which, until recently, was largely against epublication). Television and radio programmes are being made about self-epublishing (I've personally been asked to speak about it on 12 occasions since August). Everyone can be a writer now: it only takes 10 minutes to upload your own ebook, and according to the New York Times "81% of people feel they have a book in them ... And should write it"

"But all of this gives me an alarming sense of deja vu. There's another name for what happens when people start to make money out of speculation and hype: it's called a bubble. Like the dotcom bubble, the commercial real estate bubble, the subprime mortgage bubble, the credit bubble and the derivative trading bubble before it, the DIY epublishing bubble is inflating around us. Each of those other bubbles also saw, in their earliest stages, a great deal of fuss made over a "new" phenomenon, which was then over-hyped and over-leveraged. But speculation, as we've learned at our peril, is a very dangerous foundation for any business. And when the epub bubble bursts, as all previous bubbles have done, the fall-out for publishing and writing may be even harder to repair than it is proving to be in the fields of mortgages, derivatives and personal debt. Because this bubble is based on cultural, not purely economic, grounds."

Thoughts, oh Crimespacers?

[Jude Hardin]

It's not a bubble. It's a sleek new technology replacing a hopelessly inefficient and cumbersome old one.

It's true that anyone can publish a book now, but like always only a few become bestsellers. I really don't see any similarities between what's going on with ebooks and any of those bubbles he mentioned. 

[Jon Loomis]

Well, the .com bubble was based on a sleek new technology, too, but yeah--the analogy isn't as strong as Morrison would like it to be.  Most of the folks who are self-publishing on Kindle would be doing it even if there was no hope of making money, just to get their stories out there.  The next big change in the market will happen not when the world runs out of people willing to give their work away fro free, or nearly free (there's an endless supply, I think), but when the next cool new platform comes along.  I think Morrison's broader point is valid, though--ebooks have already wiped out Borders, and they're likely to wipe out B&N, which was relatively late to the market with the Nook, a device which isn't sufficiently differentiated from the Kindle.  Ebooks may well wipe out the legacy publishers, too--the squeeze is already on, and the legacy response has been flat-footed and slow so far.  

[Jude Hardin]

Read Joe Konrath's current blog post. There's a link to a post from a year ago that discusses and dismisses the whole "ebook bubble" meme.

[EDWARD C MORGAN]

Jon,

Fascinating reading. I particularly enjoyed the author's assessment of the stages of a bubble and how he applied that to what is going on

This trend seems to tie in with another trend - if you want to establish authority or expertise in a field, write a book. Of course, now, you can self-publish the book and literally give it away for free (most authority speakers I've spoken to don't care if they sell one-book - it's all about being able to say "I'm a published author.")

Authority was established by being as speaker, writing articles, writing newsletters, then blogs.

I don't know that we are entering into a bubble in the traditional sense. I do think authors who are serious about their craft AND serious about marketing themselves (learning how to utilize Amazon, etc.) will have the opportunity to make a go of it.

If there is a bubble, it will be caused, in my humble view, by people who try to make money by selling "information products." They will (already are) flood the market with how-to books. This area is the get rick quick scheme of the modern era.

Free books - will they undermine the value of content? I don't know, but you see an undermining of value of content online already. As a person who makes his living developing content, it is harder and harder to get folks to pay for it.

Yet, there are successes. The most recent Bloomberg's Businessweek, talking about Amazon, reports that Konrath is making about $4,000/day self-publishing (I still find it interesting that as valueless as he finds publicity, he sure seems to get a lot of it).

My long-term view is that categories will mirror what you saw in b&m stores. Self-help, whether the books actually help or not, will continue to sell well. The authors who shouldn't have been published will wallow in the sub-100 units sold that seems to be the current average for self-publishing.  I think the name authors will be able to do well for obvious reasons.

Its the middle ground I wonder about. Will a mid-list author who has or can find a legacy publisher succeed in self-publishing. In the end, it depends on that author I think. Will he or she do the work to see to it that the book gets the attention required to move units?

Ultimately that is the advantage of self-publishing - it is in your hands now. Authors will still blame the publisher, of course, but this time, in doing so, they'll have to blame themselves.

I think one of the more damaging things about self-publishing is this idea that you can do it all yourself. It is being perpetrated by people who are preying on those who want a quick buck - by those who want an easier way to make money. They are pushing doing it as quickly and cheaply as possible. That will deteriorate the value.

If it is a bubble, I don't think it will be a bubble in the traditional sense. In the housing bubble, yes, our home took a hit, if sale prices in our neighborhood are any indication. However, there is the thought that in time, we'll be OK in terms of value of our home.

What will it look like in time - bookselling that is. If there is a bubble, and it bursts, who will be hurt, and what will the recover be? That is my unanswered question.

Finally, one interesting question as I read the piece - due to the lowering of prices (even to free), and the fact that most authors will sell very very few copies, have we been duped into providing tons of free or virtually free content that allows Amazon, Apple, Kobo, B&N, Sony etc., to sell their eReaders?

[Jon Loomis]

Clay--I think the answer to your last question is "Oh, hell yes."  Not duped so much as desperate, maybe--there's a bit of a gold-rush mentality right now, with the charge being led by people like Konrath and Amanda Hocking, and of course by Amazon itself.  Why wouldn't I want to make $200,000 in three weeks, or whatever it is?  But of course the end result is that people are, in fact, providing a ton of risk-free, cost-free content to Amazon, which amazon needs to continue to promote its ereader.  You hate to call them suckers--what alternative do they have?--but you have to wonder if Amazon doesn't think of them that way.  

[I. J. Parker]

Bubbles have to do with putting your money in something that may not be a sound investment.  In this case, People are making money from their work.  And so is Amazon.  You can only lose, if you spend.

Jude is right.  This is new technology comparable to many other gadgets that seem to thrive.  If they are a bubble, then they are based on a sound principle of human psychology: people like to indulge themselves with ever new entertainment gadgets.

What it means for serious writers is an entirely different question.  Yes, there may be a falling off of sales as the market gets more and more crowded and people drown in the mass of trashy books offered at 99 cents.  It's a bit worrisome, but those of us who participate do so either because we have no other choice or because it's a great way to make a bit of money from stuff we can't get published because the publishers don't see big enough profits in it.

On the whole, it has been a tremendous blessing for me.  I'm a midlist author who was being marginalized by the publishers until I lost my patience and refused to accept their offerings.  I have since also lost my agent, who didn't like the idea that I self-published my out-of-print short stories.  Those short stories would have been totally lost and forgotten if not for Kindle.

In time, things may settle down.  Customers may reject the garbage.  If all those folks who "had a book in them" get no sales, they won't bother to write another. 

[Jon Loomis]

Had your agent tried and failed to place your story collection?  If so, she had no reason to drop you.  If not, she may have had a legitimate beef.  I wonder if there might not be a place for agents in the Kindle publishing world--if you can negotiate a contract with a legacy publisher, why not with Amazon?  I'm trying to start this conversation with my agent without much luck, as it turns out.

[Jude Hardin]

I wonder if there might not be a place for agents in the Kindle publishing world--if you can negotiate a contract with a legacy publisher, why not with Amazon?

My agent negotiated my deal with Amazon (Thomas and Mercer). Of course you can.

[I. J. Parker]

Yes.  Jude is right.  Some agents can and do.  My agent tried T&M and failed.  Not sure why after initial enthusiasm, but there was a change in editors.

I'm still open to an Amazon print deal but no longer interested in other publishers.

[Jude Hardin]

My books through T&M will be released in digital and paperback simultaneously, btw, so it's not just ebooks. Although ebooks are where I expect the bulk of the sales to come from.

[I. J. Parker]

Ah, yes.  I started that conversation a year and a half ago.  I also thought there was a place for my agent in electronic publishing.  I liked my agent.  I didn't blame her for what the publishers did to me.  But things did not go well.  Yes, the agency did put my novels on Kindle and it manages them to this day.  It wasn't an easy process. 

As for the stories:  she failed to place the collection with a publisher for several years.  Every time I asked, I was told that publishers weren't interested in short stories.  Eventually, I suggested the agency handle my novels and I handle the short stories (singly and in collection) for electronic publication.  She ackowledged and I thought we had an agreement and proceeded. 

It's regrettable, but doing it myself is actually easier, because I have the control and the process is smoother and faster.  Plus there's the 15 %.  Plus I sleep a lot better.  :)

 

I cannot speak for your agent, but publishers are turning fairly vicious over electronic rights. I have no doubt they put pressure on agents (as in, if you publish electronically, we won't look at your submissions any more) 

[Charles Kelly]

I don't think we are in an ebook bubble, because people make a lot of money out of bubbles before they crash. Then they lose a lot of money.  As someone else pointed out, authors can "invest" in their ebooks by spending only a few hundred dollars for formatting, or can actually do it for free, as I did, by learning formatting.  (Well, not entirely free: I still pay for professionally designed covers.) It is a "bubble" in the sense that writers are very excited about getting their work out there (and, yes, many still think they can make a lot of money out of writing), but the excitement will fade when they find that most aren't making much money and getting much attention.  However, the writers won't lose greatly.  And it's still a model that gives writers a fighting chance to make money: unlike the legacy model, which takes forever, often never pans out, and--when you "succeed"--means that you get some money, but very little, and are lied to and frustrated by publishers who are used to getting by with a level of incompetence that would horrify people in any other business.