Ebooks and Readers | The Creative Penn- Part 2

How Readers Become Addicts: The Elasticity of Demand

August 28, 2011 by Joanna Penn 13 Comments

OLD POST ALERT! This is an older post and although you might find some useful tips, any technical or publishing information is likely to be out of date. Please click on Start Here on the menu bar above to find links to my most useful articles, videos and podcast. Thanks and happy writing! – Joanna Penn

This is a guest post from Patrick E. McLean, author of the Parsec Award-winning How to Succeed in Evil (which I am currently reading and it rocks!). Ebook pricing is something indie authors debate all the time so this unique perspective is fascinating. Thanks Patrick!

As a writer raised by Economists, I have some perspective that others don't have, and maybe don't want. (There's a reason it's called the dismal science after all.) But when approaching the question of how to price an e-book, sound economic theory (not that macroeconomic crap that everybody is currently lying their ass off about) can lend some interesting perspective.

Price vs. Cost

A price is only part of what a good or service costs you. Especially a book. In the economic sense, the true cost of something is what you give up to have or consume it. In the case of the book, you spend some money on the book, but the bulk of the cost is in the time you spend reading it. So book price + time cost = the true cost of the book.

So let's say I buy an e-book for $3 ($2.99) and it takes me 8 hours to read it. Apply some guesstimate for what my time is worth (say $30 an hour) and you get to a true cost of $243 dollars for me to read a book. A little over 1% of which is the actual price of the book.

This is fascinating. And moves me to ask.

Does it matter what the Price of an e-Book is?

If my estimate of the cost is correct, are people really that sensitive to a change in price? Or, more importantly, if I double the price of my ebook (a 1% rise in the true cost of consuming a book) are sales going to change at all?

Economic theory cannot answer this question for us. The only way to know the answer for sure is to try it for a specific book at a specific time. And even that is not a true experiment in the scientific sense because there are too many factors to control. All we can know it what happened with that one book for that one period. So here's what happened when I raised the price of How to Succeed in Evil from $0.99 to $2.99 —

Sales went up. I was averaging about nine copies a day. Now I'm up to seventeen.

It's crazy to think that an increase in price causes and increase in sales. I think if I had left the price at 99 cents I would now also be at 14 e-books a day. I don't think price matters that much. Especially within the accepted range. Economic theory can really say nothing about this particular case, but it can help us understand the forces at work. And before you discount this, please consider, this is really more help than it may first sound. To draw an imperfect analogy, even if you don't know what the gravitational constant is, it is still very helpful to know that gravity sucks.

The Elasticity of Demand.

The Law of Demand states that the lower the price of a good or service, the more of it any one person will buy. For example, When cars are expensive, a family only has one. When cars are cheap, everybody gets their own car.

The question is, how much does the price of something have to rise or fall to make a difference. That's the Elasticity of Demand. For example:

Cigarettes have very inelastic demand curve. They are addictive, so when you want them, you want them. Price goes up, still gonna smoke. Kidney Dialysis is inelastic. Unless you get another kidney, dialysis is perfectly inelastic. You get dialysis or you die.

So what about books?

Fans and the Elasticity of Demand.

By definition a fan is somebody who is addicted to an entertainment product. They have a highly inelastic demand curve for whatever that product is. For example, people who are fans of Game of Thrones or Harry Potter. When the next book comes out, they simply HAVE to have it. Fan is just another word for addict.

Creating Inelasticity

First, you've got to be able to write well. That's price of entry. If you can't do that, no knowledge of economic theory (or any other kind of theory) will make up for lack of talent. But assuming you are a fair hand at pushing a noun against a verb there are a couple of conclusions we can reasonably draw.

Be unique. If there aren't any other good substitutes for what you put out, then people have no alternative but to buy from you. I think that well-written fiction is a pretty inelastic thing. When somebody wants a Stephen King novel, pretty much only a Stephen King novel will do. Because he's the only guy who sees the world the way Stephen King does.

Create rich characters. This is pretty obvious. You can put a character in the most interesting suspenseful situation you like, but if the reader doesn't care what happens to them, why continue? I think this is why mystery is such a popular genre. It lifts a lot of weight off the characters. People can either like the character or need to know how it turns out.

Don't screw up the plot. There's an eternal tension between character and plot. And, in the larger sense, story construction is a gigantic, difficult subject. But the fact remains, if you plot well, you suck the reader in. They want to know what happens next. They need to know what happens in the next book. Which leads us to the last point.

Write a series. When a reader is bought in, they want more. They want more of you as a writer and they want more of the characters they have invested so much time in. It is not a coincidence that the best-selling Kindle authors, the ones that are really putting up some numbers have series. As a personal note, this may be kinda hard for me, as the number of ideas I have are always threatening to draw me off into new challenges. I believe that I, you and everybody needs to follow passion — that's what keeps us working — but, if your bliss allows it, a series is a good way to create that inelasticity which all authors crave.

To sum it up

I can't pretend that common sense won't get you to all of these conclusions. But having names for things allows us to think about them more clearly. The elasticity of demand is no exception.

—

Patrick E. McLean is the author of the Parsec Award-winning How to Succeed in Evil and Unkillable available at Amazon.com and as a free audiobooks at Podiobooks.com. He's also the creator and producer of the award-winning Seanachai Podcast.

How to Succeed in Evil is the story of Edwin Windsor, Evil Efficiency Consultant. He tries to help supervillains be more villainous. Or at least more profitable and sensible about the business side of Evil.

Along with his very proper and English secretary Agnes and his hench-lawyer Topper, he struggles to make the world of super-powered people make sense. But this is very difficult because, while Edwin’s advice is excellent, all of his clients are too egomaniacal to listen. There is, it must be said, a bit of comedy in this work.

You can learn more about Patrick and his work at http://www.patrickecmclean.com

Image top: Flickr CC Slinky from rhinoneil

10,000 Books Sold: Sales Figures For Pentecost, A Thriller Novel

August 22, 2011 by Joanna Penn 82 Comments

I'm not (yet) a Kindle millionaire but sales of Pentecost have now gone over the 10,000 mark which for me is significant, so I am sharing the figures and also what they mean for the next in the series, Prophecy. Hopefully you will find this interesting as it changes my personal publishing strategy considerably.

I did the figures on 19 August 2011 and total ebook and print sales through Amazon.com and Amazon.co.uk = 10,025
I sold so few through other ebook platforms that I am not even counting the sales. Because I am not a US citizen I cannot use PubIt for the Nook so everything is through Smashwords. I have just realized that the price was set to $2.99 though, so I have now changed this to 99 cents. Perhaps it will make a difference to the next batch of sales but I have sold very few through other channels.
Some people will ask about the money – you can work it out from the 99c price point, but as I have written before, this book is about getting readers involved with my series, not about income. Read about my 99c price point decision here.

Over 98% of these sales were ebook sales on the Kindle. This is huge for me because there is more cost and hassle to a print book than an ebook. I also priced the print books as low as possible to maximize those sales so I made more money on the ebooks. These sales figures make print books a vanity option for me i.e. I would only do a print book again if I wanted to have something to give my Mum or as a keepsake. I love print books but buy 99% on my Kindle now so I am also happy to target those kind of readers. I found the print book option difficult because it's harder to fix typos and problems which I fixed on the Kindle immediately. In conclusion, I will move to Kindle only for the next book, and potentially look at print books much later on.

This experience also makes me more interested in a print book deal. I enjoy every part of the process except the print side which I would gladly give to someone else. But I would like to keep the digital rights – and I'm not sure that would happen in this current publishing market! I have also been told that 10,000 sales is a good point to approach publishers as it demonstrates there is a market, but I'm not ready for that yet. I need one or two more books in the series and then I might consider other options.

87% of sales were from Amazon.com which is predominantly a US market (with some from other countries) but the sales on .co.uk are growing. I think this is based on the fact that the UK is still a print market, where there is no VAT on print books but there is on ebooks, and ebooks are about 18 months behind the US. I discuss the differences for ebooks between countries here. But the sales in the UK have been growing every month so I see that as a source of more sales in the future.

Sales were low during launch month. This is fascinating to me as so much focus is put on the launch itself but actually those sales are pretty small. The sales grew over time which must be related to the number of reviews and the Amazon algorithms kicking in. I am currently putting together a mini-course on How to Launch Your Book Online which will include everything to do with the launch but also the longer term things that have an effect like reviews and your Amazon sales page. I'll let you know when it's available.

Sales are bigger than my ‘platform'. I have spent years growing my online platform and brand but I absolutely realize that many of the readers of this blog are not interested in my fiction. That is the nature of having a writer's blog. We don't like to read the same books, which is absolutely fine. We can still talk about the aspects of writing, publishing and book marketing that are common to us all, but we just don't like the same books. In light of this, and also what I have learned from John Locke, I am starting a new blog for me as a fiction author that will hopefully appeal to my readers. Again, I'll let you know when that launches.

It is possible to make a full-time living as an indie author. I drank the Kool-Aid a while back but this is the first time I can actually see a future reality for my own writing life. Locke, Konrath, Hocking et al inspire us with stories of success, but I can now see that having multiple books selling thousands per month does add up. So I will be stepping up the book writing and production process. I'm still aiming to have Prophecy out by Christmas and there are currently 7 books planned in the ARKANE series. I also have an idea for a stand-alone novel that will not leave me alone so I will have to start writing that too. As we know, it's not about the ideas which are two a penny, it's about the execution… and that starts now!

I know 10,000 sales are nothing to more developed authors, but what have you learned from your own book sales? Have your publishing goals changed?

Why Small Ebook Presses are Thriving And How You Could Join Them

July 13, 2011 by Joanna Penn 12 Comments

This is a guest post from Ali Luke and Jim Maher from Espresso Books, a new digital-only publishing company.

If you read the news, you might despair of ever getting your novel published.
The book industry is undergoing a huge upheaval, with high street chains – like Borders – closing down. Big publishers are focusing on established authors, rather than taking risks on anything new.
Ebooks, though, are taking off. You might have been eyeing stories about Amanda Hocking, J. A. Konrath and Stephen Leather – and wondering whether you’ve got the time, skills and energy to publish your own ebooks.

There is a middle way.

Publishing may be in crisis – but small digital-only or “digital-first” publishers, are flourishing. And the great news is that they’re often actively looking for new authors with distinctive voices. For instance:

AddaBook (Sweden) is a new startup looking for “short stories, poetry, or shorter works of fiction in any genre – of between roughly 2000 and 10000 words.”
Lyrical Press (New York) publishes manuscripts in ebook format first, and considers works over 60,000 words for print publication. They are “actively seeking erotica, romance, and urban fantasy.”

Founding Espresso Books

Recently, I got involved in the world of small press publishing too. Back in January, I co-founded a digital publishing company, Espresso Books.
I already had a (rather more than full time!) business – writing blog posts and articles, publishing my own guides to blogging and writing, coaching writers and running ecourses. But at the end of 2010, I got a Kindle, and I found myself becoming more and more interested in the rapid changes in publishing and in the ebook world.

My brother Chris came to me with the idea for Espresso Books: an independent publishing house that would produce high-quality, great-value ebooks – “for the price of your morning coffee.” We were both especially keen to promote new authors, and we were hoping to find fast-paced, compelling stories with a strong narrative voice.

We hit the jackpot first time, with Jim Maher’s fantastic Hemingway Man, a fun, fast-paced novella about 16-year-old Will’s quest to “become a man”. From our perspective, Jim has been an absolute dream author – friendly, professional, and able to turn around edits in next to no time! I wanted to invite him to share some of his experiences here:

Interview with Jim Maher

Ali: As a writer myself, I get the question “where do you get your ideas?” quite a lot! So where did the inspiration for Hemingway Man come from?

Jim: I lost my dad when I was sixteen, and always wanted to write a story about it. Not about my experiences exactly, but about the horror of losing someone so close. I didn’t want to be maudlin and depressing about it, and when I came across the Hemingway list, the world of Will started to bloom immediately.
My ideas come from anything and everything: the news, some fun bit in a video game, chatting with my four-year-old, a line in a song. Most important thing is to write it down. Any idea. Even if it doesn’t become a full story, you could write a kick-ass scene based around the delicious chocolate chip cookie you got for free because you held a door open for an old lady. For example.

Ali: When you first got in touch with us, you’d already published Hemingway Man on Smashwords as a free download, along with some of your other novels. Would you recommend this?

Jim: Absolutely. It’s a great way to get your work out there, and start building up a potential audience. Smashwords gets your book to a huge group of people, with the author in total control of pricing, content (within reason) and where you want the book distributed.

Ali: I was really impressed by how polished the Hemingway Man manuscript was – you set a very high standard for our other submissions to match up to! I was also impressed that the document you sent me had “draft seven” in the filename…
…how long did it take you to write – and rewrite – Hemingway Man?

Jim: The first draft was about a year, and then a year and a half rewriting. I’m a firm believer in editing the heck out of stuff, but at some point, you just have to wash your hands and let the baby go.

Ali: Have you got any tips for other authors who’re trying to get their books out there into the world?

Jim: Keep writing. Even if you have short stories, novels, plays, a recipe for guacamole…whatever it is, out there and submitted, keep writing. You never know if and when something will be picked up and they want something else…fast. So, keep writing.

If you’d like to find out more about Hemingway Man, you can read an excerpt on the Espresso Books site, or download a free sample from Amazon.
(And if you want Jim’s recipe for guacamole, you’ll have to ask him on Twitter…)

And if the indie publishing world looks a bit terrifying – if you don’t want to learn about formatting ebooks yourself – then why not give digital publishers a try? You might well find that a small company is much more approachable, friendly and responsive than one of the big print publishing houses.

Have you had any experience with small press publishers, or with setting up your own company to produce your own ebooks? I’d love to hear your thoughts in the comments.

Bios:
Ali Luke is one half of Espresso Books, a new digital-only publishing company. She loves short manuscripts with a strong narrative voice and a fast-paced plot.
Jim Maher is a father of three boys, who loves writing, reading, hockey, video games, his lovely wife, and spending his days with his amazing sons as a stay-at-home dad.

Signed Ebooks? Really?

March 1, 2011 by Joanna Penn 23 Comments

This ebook has been signed

This is a guest post from Michelle Halket from ireadiwrite publishing. You can read/listen to an interview with Michelle on digital publishing here.

As a digital publisher, we get challenged on the fact that our books aren't ‘real'. A person can't hold the paper, they can't smell the glue – it's not a tangible product. I personally disagree, books aren't paper and ink – they are the stories that bring us away to places we've never been and to meet characters that are fantastical or horrible or lovable.

For ireadiwrite Publishing, ebook publishing represents a way for us to get authors with good books out into the marketplace at a lower cost so that they can get what every author wants – to be read. We can release far more authors than a typical indie press, because we specialize in ebooks. But that doesn't mean our books aren't ‘real'. They are treated like any other book out there: they are carefully selected, edited, typeset, designed, proofread, widely distributed and marketed. Our authors market themselves in many ways, and one of the most successful ventures is blog tours and book giveaways, just like with printed books. But for our authors, we give them a little treat to offer bloggers and other giveaway hosts – a personalized, signed copy of the ebook for the lucky winner.

There's no technical feat in producing these ebooks, they're created in the same way that all ebooks are made: with conversion software using input files. For these signed books, one of the input files is a page dedicated to the reader written in the author's own hand. Check out this copy of AMBER FROST by Suzi Davis, shown here on my Kindle.

And so, the fact that ebooks can be professional works of art – combined with the ability to distribute signed copies of them – don't ever let anyone tell you that an ebook isn't a ‘real' book.

Michelle Halket is the Creative Director for ireadiwrite Publishing, an independent press specializing in digital books. Passionate about technology and books, Michelle works with writers from submission to publication.

I now offer a multi-media online short course on how to publish your book on the Kindle, iPad, Nook and other e-readers as well as answers to all your ebook publishing questions. Featuring video, audio and PDF information for only $39.99.

Click here for all the details.

EBook Publishing Inspiration With Mark Coker From Smashwords

October 17, 2010 by Joanna Penn 5 Comments

Podcast: Download (Duration: 22:34 — 15.5MB)

Last week, I was honored to meet Mark Coker from Smashwords.com who is making it easy for indie authors to get their ebooks to the world through free upload and distribution to multiple ebook platforms. We discussed the opportunities available right now for authors who are embracing digital publishing as well as secrets of successful ebook authors, an upcoming bestseller list for ebooks and much more!

We are both passionate about helping people get their books into the world, and we had a great time discussing it so there are multiple ways you can get this information as I am keen to get it out!

Here is the short video version of our discussion [5 min 26], with the full length embedded below that. I have also added text highlights at the bottom of the post for anyone who just wants to read.

Here is the long version of our discussion [21:14]

In this podcast and videos , you will learn:

What is Smashwords anyway? An independent ebook publishing and distribution platform, available to any author globally with premium distribution to Amazon Kindle, Apple iBookstore, Sony, Kobo, Diesel and other platforms.

How Mark started Smashwords after his book ‘Boob Tube' wouldn't sell to mainstream publishing. It was questioned that it wasn't mainstream enough for publishers to make money. In solving his own problem for publishing, Mark designed Smashwords.com as an independent platform where authors could put books up, let readers read what they want and take the majority of the income. In Oct 2010, Smashwords is serving 21,000 books solving over 9000 authors around the world. Smashwords is a truly global platform and was really the first to allow international authors.

What is happening in the world of ebooks right now? The market is growing incredibly fast. 2 years ago ebooks were one half of 1% of the book market, in May 2010 8% of all book sales in the US, up from 3% in 2009. This is the growth curve of the hockey stick and no one knows where it will max out. Reading is moving to screens.

More and more book buying is moving to the web so the traditional publisher is less important as indie publishers can appear on the same virtual shelf as ‘traditionally' published books. Distributors are eager to carry self-published books as it brings them more revenue, and enables them to offer customers a great selection of books. Online retailers have no physical space limitations.

On selling ebooks and the reality of having to market it. The benefits of patience once ebooks are actually available for sale. Why Smashwords can never compete with Amazon Kindle which holds 70% of ebook market, but it has benefits of multiple platform distribution. Your book online is a fragile seedling that you must protect and send readers to, earn positive reviews and word of mouth. Once it achieves sales rank, the sales will grow.

Ebook covers are important, as is formatting. Outsource this for a very good price! It's a very low cost of entry. It's free to publish on Smashwords and they take 15% commission when the book sells, so there is no/little upfront cost.

On a Top 100 Ebook list – Smashwords are looking to put this together. I'm interested in best practices of ebook authors so we can emulate them.
Mark's article on Huffington Post – 7 secrets of ebook publishing success. Write a great book and then another one….. I also cover this in “What do the most highly paid authors have in common?”

The future of ebooks. Doom and gloom in the publishing industry (but not around here!) We're on the cusp of dramatic, wonderful change thanks to the internet and ebooks. The opportunities to reach readers has never been greater. It's an incredibly exciting time to be an author!

Go and check out Smashwords at www.Smashwords.com on twitter @markcoker