Creative Destruction, or How to Survive the Ebook Apocalypse

This is a guest post with some fantastic tips for ebook publishing from J. Daniel Sawyer, prolific author and podcaster extraordinaire.

By now we all know that ebooks are either The Future ™, a passing fad, or the apocalypse which will consume us all. If what Joseph Schumpeter calls “creative destruction” has any meaning, I doubt I’ve seen a more effective example in my lifetime than what’s happening in entertainment media — it started with the record labels, and now it’s hitting publishing in a big way.

What is creative destruction?

It’s not merely the leveling of a previously well-developed field, it’s leveling that enables new development. By first breaking the distribution lock, then creating a demand, then making other companies hungry to share in the potential profits, Amazon has created what will be considered an exemplar of the phenomenon.

Opportunities like this do not come around often, and I aim to capitalize on it, even if only in small measure. So I watched the markets, gathered intelligence, and kept track of pricing and sales information.

I learned quite a lot, but I can distill it down into a few major points:

1) The biggest problems in the new marketplace are the same ones as the old marketplace: discovery and credibility.

2) Big Publishing isn’t going away. Oh, there will be some turnover. Some houses will fold, some houses will stumble, but some will survive and adapt. And a lot of small presses are already on the rise–in this sense, what we’re seeing is similar to the collapse of newsstand distribution in the 60s and the renaissance of genre literature in the 70s when most of today’s big presses were the new little guys.

3) Cover art REALLY matters. It’s impossible to overstate this.

4) The optimal price point for a non-NYT bestseller is between $2.50 and $4.50 (the sweet spot is flat between these two price points for the months I was tracking bestseller lists).

5) Genre fiction does best in the ebook market, in this order: Erotica and romance first, mystery and suspense (including thrillers) second, fantasy third, science fiction fourth. Mainstream and Literary fiction don’t get noticed yet without a NYT slot. Nonfiction is largely a curiosity at this point, with the exception of material written specifically for writers.

Based on these lessons, I developed an experimental business model, and that model has spawned a number of experiments. I’m currently engaged in conducting the first one.

The model and experiment go something like this:

1) Write a series of novels specifically for the ebook market. I already had one tailor made waiting in the wings. My ultra-snarky hard-boiled detective Clarke Lantham, who has a propensity to go on darkly comic adventures through the borderlands of science on the fringes of society. I’ve been working on his stories and his world for quite a while, so he was the natural fit with what I learned about the market.

2) Make damn sure the books going to market are something special. Love them, and put out your best possible work. For this, you are the publishing company, and the quality of the work should reflect that. For me, this meant the opportunity to play in one of my favorite genres, and to do it with a lot of dark humor. I struck out into experimental waters and have had the delight of getting feedback from people who were laughing out loud on one page and shaking with terror on the next–and it makes me very impatient to write the next volume.

3) Do, or have done, some very eye-catching cover art. It should look interesting at thumbnail size, and striking at full size. For me, I’ve got a graphic design studio, so you think this would be easy, but it’s not. It’s a weird market, and the space is worth studying before you pick your final design.

4) To aid in the discovery process, send out a couple dozen ARCs to people who already enjoy my work, along with an email soliciting honest reviews. The “honest” part is important — 10 ultra-squee reviews looks like astroturfing, even when it’s not. Why? Good books polarize people, and readers intuitively realize this. If something’s not garnering strong reactions in more than one direction, it’s probably not getting honest reviews. 20 or 30 reviews of mixed ratings with lucid explanation looks more credible than fannish uber-squees.

It can be hard on an author’s conceit when you read that review that says “I liked this but…” or “Much as I like this author, this book was a piece of crap,” but so long as the balance of reviews skews heavily positive, what’s hard on the ego is good for the pocketbook.

5) Price the series reasonably. For me, this means book 1 is $3.20. Later books and stories might go as high as $3.50, or as low as $0.99, depending on their length, but I always bear in mind Heinlein’s Dictum: “We’re fighting over their beer money.”

6) Leverage your existing audience to attract new readers. I have a podcast audience in the neighborhood of 4,000. If all of them bought a book in the next couple months, I’d be selling like Konrath or Patterson in the ebook space (at least for a little while). Of course, only a fraction of them will buy, but even that fraction can make a huge difference. It takes very little to move up into the 10,000s on Amazon. It takes more to move up into the 1,000s, but indies do it all the time. For me, I’m asking all of my listeners who can do so to hit Amazon, Smashwords, or Barnes and Noble on October 29th to pick up the first book in this new series. The bump in rankings should attract new readers–and if it doesn’t, I have a few backup plans.

7) Be patient. This is a long tail business, and momentum builds slowly.

8) Continue the series, with both short stories and novels, for a year or two. to keep the momentum building.

And, finally…

9) Keep properties in New York. One of them will eventually sell. New York sales (and magazine sales for short stories) mean greater visibility; in other words, it’s advertising. Every title you have with a mainstream publisher or periodical exposes your name to thousands more people than you can reach on your own, and when they go online to see what else you’ve written, they’ll find your ebooks. So long as the big mainstream markets exist, don’t pass up them up. They are literally paying you for the privilege of advertising your brand..

So, in the spirit of shameless self-promotion and practicing what I preach, allow me to invite you to enjoy my new novel, the first of the Clarke Lantham Mysteries. It’s a lurid little tale called “And Then She was Gone.” It is now available, without DRM, at Barnes and Noble for Nook, for Kindle, and Smashwords for everything else.

Thanks much to Joanna Penn for the generous loan of the blog. Keep up with my doings, and enjoy my full-cast audio fiction productions at

See you around the net!

Top image: istockphoto

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  1. Lisa Horn says

    I’m curious about the pricing strategy from a business perspective. I understand about making a reasonable offer, but $.99 – $3.50 seems very low–and almost devalues the product. I expected somewhere in the $7-$10 range–about half what I’d pay for a printed version.

    I must admit that I’m not all that familiar with purchasing e-books, and the ones I have purchased have been nonfiction and business related. So is the ultra-low price really what the market dictates? Are prices between fiction and nonfiction different?

    Finally, what is the average units sold? At such a low price point, it seems that you’d have to have a significant number of sales to recoup your time investment before the project became profitable–something one needs to consider before deciding to go down this road.

    • says

      Hi Lisa,
      Thanks for your comment and I also wanted to point you to this article by JA Konrath on the $2.99 price point where the argument is nicely laid out

      You have probably hit the nail on the head re fiction vs non-fiction. Fiction books (can) sell a lot more, and so can be priced lower – and also most people will take a chance on a lower priced fiction ebook. $2.99 is less than a coffee whereas $10 is too much to take a chance on an unknown writer.
      The great thing about ebooks is you can play around with pricing, so you can price at $10 and see how sales go, then change to $2.99 and compare sales. Those fiction authors with evidence like JA Konrath and Dan as above, are recommending lower prices.
      Thanks, Joanna

    • says

      Hi Lisa –

      On the issue of devaluing the product, it’s not one that particularly phases me. Products are worth what people will pay for them, and the trick with setting prices is to find the sweet spot where you can move the maximum number of units for the maximum amount of profit.

      The profit on an ebook priced at $2.99 is ~$2.03 per book, which is a little over double the standard 8% royalty on a mass market paper back (which sets the customer back $7). People have been buying books in used bookstores, borrowing them in libraries, and trading them between friends for 400 years, so I think the “value” of a book (in a metaphysical sense) has always been in the experience of the reader, not on the price tag.

      On the topic of units sold, for time-sensitive nonfiction this is a big issue (books on tax preparation, or legal references, etc.): It takes a set amount of time to research, write, and produce the book, then you have a set window within which it sells. With fiction and more perrenial nonfiction, this isn’t a consideration, as it’s a long-tail business.

      “Long-tail” means you sell a little bit of a lot of things, rather than a lot of a few things. So, you have a number of titles available in bookstores, and you expect them to sell at a trickle. A lot of trickles add up together to a nice river, but each trickle on its own is just a trickle, unless one of them seriously captures the public imagination on a grand scale (this does happen, but like with all bestsellers, it’s statistically unlikely). Fiction has always been a long-tail business–with self-publishing ebooks (particularly one’s backlist if you’re an established author) it becomes a lucrative one. Here’s how:

      Let’s say you have 1 book in each of the 5 major venues (Amazon, B&N, Smashwords, iBookstore, Sony). Let’s posit further that each of those stores sell 5 units/month of your title. At $2.03/book profit, that’s $609/year (not counting anything you get for minor markets, of which there are about a dozen, and assuming that you’re not also available in POD).
      The *average* genre fiction advance to a first-time writer is ~$5k, and if you can stay in print, it’ll take a couple years to earn out. Most never do- upwards of 90% are off the shelves in 3 months, but rights don’t revert for 5 years or more in most cases. So, $5k over the course of seven years (two years to get to press, 5 years to have your rights tied up) is your measure of success compared to the average advance. Over 7 years, selling one book at that very low level, you’ll earn $4263. But you can keep that book up for as many years as you’re alive, and over 20 years at that low rate, you’re up over $12k.

      Now, add a few more titles to that, and you’re building your long tail. More titles aids discoverability, it also gives fans who like one book more things they can buy from you, and your sales build. Even if you never make it onto the bestseller lists, you can still make a comfortable secondary income with 10-12 titles available selling at levels that are next-to-nothing.

      But it does take patience, and whether it’s worth the bother comes a lot down to what your discount rate is (i.e. how much more you value money today than you value money a year from now). A lot of authors are looking for big paydays, most never get them. Without exception, all of the pros I know (bestsellers as well as perpetual midlisters) are pros because they’re patient, they build their long tail, and they keep their work on the market in whatever markets are available. They’re starting to do well, using the ebook markets to augment their traditional print deals.

      So, anyway, those are the economics as best I can see them. I’ve got a post at my blog about how pricing works in the book markets, which you can find here:

      Hope it’s useful!

  2. Elle Strauss says

    I’m interested in the mechanics of uploading an e-book–is there a special format or webiste you have to use? How do you get it available separately for Nook, Kindle and others?


    • says

      You get better rates if you prepare for different markets separately. The big three are Amazon, Smashwords, and B&N (in that order). iBookStore and Borders are a pain to get into without going through smashwords–in my opinion (it’s a value judgment) it’s worth the slice Smashwords takes to let them be your proxy to the other non-Amazon/non-B&N markets. This is how I see it today–my opinion on this could change next week if the market conditions do. Things are changing that fast right now.

      Each of these three major markets has different requirements to get in to. Get started by reading their docs. Amazon: B&N: Smashwords:

      Prepping the files is pretty straightforward if you follow their docs and know basic HTML.

  3. Pam Stucky says

    Thanks for this! The insight on pricing is particularly interesting. So much food for thought these days about e-publishing … it’s like Thanksgiving for the brain, day after day. A lot to digest! Best wishes in your own pursuits.

  4. says

    Lisa, I think most readers (including me) don’t want to pay the same for a digital product as for a print product. It doesn’t mean the content is valued less, but that the reader (reasonably) expects a tangible object to cost more than an digital one.

    • says

      Hi Tara – that may be true for “just a book” but people are paying a lot more for multi-media digital products i.e. an ebook with accompanying videos and audios. These are considered much higher in value and people pay hundreds or even thousands for these type of digital courses. Knowledge is worth paying for!

  5. Colleen Fong says

    Thanks for the great information.
    I’m interested in doing a small cookbook as an epub to see what happens. Any idea how that type of work would fare?

    • says

      Hi Colleen, the great thing is with epub is that you can do the images and other aspects of a cookbook without the high cost of print. Also, as the tablet market grows with such apps as epicurious , people will be used to taking the ipad to the kitchen so the “book” becomes more hands on. Remember you can always do a print on demand edition as well!


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