On the face of it this is just a piece about the gaming industry, though a fascinating one. In fact this article raises issues for all content industries from games, to books, to newspapers, magazines and music.
It covers the gamut, the explosion of content, the role of market makers (in this case Apple – though to a lesser mentioned extent, Google), the use of price as a lever and the challenges of making money in markets that have become so large, diverse and saturated.
I’m reminded of two realities most forcefully when reading it, firstly that while digital unleashes greater freedom to create and make content of all kinds available, thus empowering the creator relative to the middlemen and women of the previous era, it also (in its current guise by power of platform) shackles them to the power of another middle-person (for books, mostly Amazon) AND makes a sustainable career even less likely because of the huge increase of content such freedom unleashes. Secondly, I am reminded of just how little information is publicly available to those looking at the book trade. Consider the information in this article about the nature of games sales in the iOS store and ponder how different our conversations might be about ebooks if these facts were more openly shared (some notable exceptions on that front would be Smashwords who share quite a lot of data).
Getting people to play your game in a market of 150,000 alternatives requires a different kind of marketing. For example, if the user can choose to pay $0.99 for your app, or pay zero for another app that’s probably just as fun, they’ll pick the free one. The result follows: 90% of apps are free in 2013 when weighted by monthly average users. And when you look only at those apps that use an experiment/test/data-driven approach for their pricing, you see a strong upward trend in more free apps. So the pricing experiments that these developers are running (you know, actual flipping research, not just speculating baselessly in an HN comment) are telling them it’s better to go free.
via How in-app purchase is not really destroying the games industry | Sealed Abstract.
Mark Coker continues to be one of the smartest and most insightful thinkers on ebooks, what they mean and where they are going. His predictions post for 2014 is interesting but this point in particular strikes me as very relevant:
Ebook growth slows – Here comes the hangover. After a decade of exponential growth in ebooks with indies partying like it was 1999, growth is slowing. We all knew this day was coming. Year over year growth of 100% to 300% a year could not continue forever. The hazard of fast-growing market is that it can mask flaws in business models. It can cause players to misinterpret their success, and the assumptions upon which they credit their success. It can cause successful players to draw false correlations between cause and effect. Who are these players? I’m talking about authors, publishers, retailers, distributors and service providers – all of us. It’s easy to succeed when everything’s growing. It’s when things slow-down that your mettle is tested. The market is slowing. A normal cyclical shakeout is coming. Rather than fear the shakeout, embrace it. Let it spur you on to become a better, more competitive player in 2014. Players who survive shakeouts usually come out stronger the other end.
via Smashwords: 2014 Book Publishing Industry Predictions – Price Drops to Impact Competitive Dynamics.
Smashwords keeps doing interesting and exciting things, no question about it. I’m intrigued by two things here, the first that with such a decent catalogue, Smashwords can now, almost on its own, create a viable market offering for a start-up with an innovative idea, the second that self-published material, as a block, is becoming more important by the day:
I expect Smashwords titles to begin shipping to Oyster in about three weeks. At least 72 hours before we begin shipping to Oyster, I’ll send out an email alert to all Smashwords authors and publishers. The email will contain complete financial details, including royalty rates and sampling thresholds, so you can make an informed decision about your participation. It’s an author friendly deal so I expect you’ll be pleased.
Unlike KDP Select, Oyster does not require exclusivity. It’s open to all Smashwords authors. A single Oyster user could conceivably read multiple books by the same Smashwords author in a single month, and the author will be paid for each book. Smashwords authors will earn their royalty whenever an Oyster subscriber reads more than a sample of their book.
Oyster’s subscription service will help our authors connect with a segment of the reading audience they’re not reaching anywhere else. Oyster will also give authors yet another reason to steer clear of exclusivity and embrace full distribution with Smashwords.
via Smashwords: Smashwords Signs Distribution Agreement with Oyster.
Awesome, in so many way:
This purchase is an example of the Smashwords Library Direct program, which allows libraries and library consortia to purchase large numbers of self-published titles in a streamlined and automated fashion using whatever selection criteria they see fit; additional large library consortia, such as California’s Califa, are expected to follow DCL’s suit. Smashwords permits its authors and publishers to set their own library prices using a web-based pricing tool; the majority of its participating authors have opted for library prices at below-market levels, reflecting the premium value they place on library exposure and promotion.
via Digital Lending, In Agreement | PWxyz.
One of the things I think Smashwords has gotten right is their start with Word focus of conversions. It makes SO much more sense than building ebooks from crazily complex design platforms. With the launch of Smashwords Direct, the company has bowed to pressure, but Mark offers a rather nice defence of the “Meatgrinder” tool that Smashword’s has used to date (and will continue to use:
Meatgrinder has been vilified and demonized over the years, despite its proven ability to produce high-quality ebooks. Although Meatgrinder’s not perfect, some of the criticism has been unfair. Many authors have needlessly avoided Smashwords out of misplaced fear.
One author volunteered that they’d heard such horror stories of Meatgrinder from their publisher that they kept their books off of Smashwords for that reason. That’s really unfortunate, both for the author and Smashwords, because the vast majority of Smashwords authors have received professional-quality results with Meatgrinder. Our Meatgrinder-generated Premium Catalog books are pleasing millions of readers each month with rarely a complaint. Our retailers have told us in the past that our books have dramatically lower failure rates (measured in the fraction of a percent) compared to others. This tells me many authors who have avoided Smashwords out of misplaced fear have unnecessarily missed out on up to five years of sales and platform-building opportunity. I suppose if there’s a silver lining to the launch of Smashwords Direct, it’s that maybe we can help writers do the right thing (achieve full Smashwords distribution) for the wrong reason (availability of Smashwords Direct).
via Smashwords: Smashwords Supports EPUB Uploads With Smashwords Direct.
Nice revenue figures there from Mark Coker in Forbes. Even at a low percentage commission charge (and Smashwords charge 10% of retail price for sales through their retail and library distribution network and at their Smashwords store) this would yield quite a chunk of change. Nice work by Mark and his team:
Indie ebooks are starting to sell in a big way. Our revenues are going to be over $12m for 2012, which means that our retail partners are going to sell between $18m and $20m of books. And our books are starting to appear in bestseller lists. Today, when I look at the Apple iBook stats for the US store, Smashwords’ authors occupy five of the top 20 bestselling slots, and one of the top ten, maybe even two today. A year ago, we didn’t have any books in the top ten at Apple. I think that’s really exciting!
via Mark Coker: Significant Disruption For Traditional Publishers Still To Come – Forbes.
That Mark Coker is one smart fellow!
8. International ebook market explodes, causing publishers to rethink territory rights restrictions – The proliferation of affordable, high-quality dedicated ereading devices, smart phones and ereading apps, and the international expansion of big US-based ebook retailers into green field markets, will power significant revenue for US authors, publishers and retailers. Large publishers will miss some of this growth due to self-inflicted territory rights restrictions, whereas indie authors and small publishers won’t face the same limitations. Publishers begin to realize geographic territory rights hinder ebook sales by limiting distribution, and will instead look to carve rights (or hold on them) language by language.
via Predictions for 2011 from Smashwords Founder – GalleyCat.