By J.D. Huffman
As a reader, writer, and an avid follower and user of technology, it has been fascinating to observe the evolution of books over the past 25 years. It’s my personal belief that understanding history is essential to preparing for the future, so let’s have a look at just how much has changed–and what it might mean in the years to come.
A quarter century ago, the Internet was a thing known only to academics and the military. It was much smaller, and used almost entirely for research, and communications about that research. Of course, online services aimed at the masses did exist: Prodigy, CompuServe, GEnie, and the like. But these were walled gardens–they usually didn’t offer access to the open Internet. Even if they did, the World Wide Web, which had only started to take off in 1993, didn’t have much to offer yet.
At that time, books were solidly in the realm of physical goods, sold pretty much like anything else: in retail stores. Large bookstore chains were popular. Borders, B. Dalton, Waldenbooks, and others were common sights on street corners and in shopping malls. These were often massive stores with wall-to-wall books, neatly shelved and categorized for perusal. Very little besides books got sold in these stores. There were small sections for music, sometimes a few toys and stuffed animals for kids, but the floor and display spaces were overwhelmingly devoted to books. After all, there weren’t alternatives. Department stores like Target and Wal-Mart had much smaller book sections, so if you wanted real selection, you had to go to a dedicated bookseller.
When Amazon.com officially launched as an online bookstore in 1995, hard anyone conceived of what it meant for the future. Amazon’s large catalog–including books that were difficult to find in physical bookstores–combined with their willingness to ship to anywhere in the US, put up the first real challenge that traditional bookstores had ever faced.
Here is a good place to stop and discuss the publishing side of the industry. Traditionally, the supply chain works like this: an author writes a book; the author’s agent shops it to publishers; once a publisher accepts a book and secures a contract with the author, then has the books printed; the printed books are sent to a distributor, which (sometimes in concert with the publisher), markets them to bookstores in order to obtain shelf and display space; the distributor may then send the books through a wholesaler who actually handles selling them to bookstores; then the bookstore stocks the books and sells them to you, the reader. What’s important to know here is that the book publishing industry is dominated by a handful of huge players like Simon & Schuster, Macmillan, and Penguin Random House. Likewise, the retail side was (and is) controlled by very few (but quite large) companies. These days, Barnes & Noble is the dominant physical chain. This arrangement is advantageous to publishers and retailers, because the supply chain relationship allows publishers to ensure the books they want prominently displayed will be displayed consistently across the country. Chain retailers like it because the publisher and distributor can guarantee lots of marketing and promotion, and move books off the shelves at retail. For authors, it is perhaps not the best arrangement, unless you are a J.K. Rowling or a Dan Brown. Most published authors who make any money at it are what is known as “midlist”: they don’t make blockbuster sales, but they do sell. It’s just that they’re only selling to the tune of a few thousand to a few tens of thousands ($20,000-$40,000) a year. Note that “midlist” authors only represent about 10% of published authors. Disregarding the 1% (probably less) that write huge bestsellers, this leaves an industry where 90% of writers make nothing or pretty close to it.
Although it began slowly at first, the Internet promised to disrupt this model in a major way. The first step was the advent of print-on-demand technology. While it was always possible to print single copies of books for sale, it was absolutely not cost effective, and quality was questionable. You could certainly walk into your local print shop and have them print your book, but selling it one copy at a time was no way to “make it” as a writer.
But this technology becoming cheap, widespread, higher quality, and available through online sources meant that anyone could have a book published, have it sold at a reasonable price, and have it produced with a quality competitive with mass market books. A big part of why traditional publishers choose bestselling authors to push is because large print runs are expensive and risky: unsold stock, by contract, usually has to be bought back by the publisher, and either pulped (destroyed) or sent to discount booksellers. Print-on-demand, while not beneficial to major publishers per se, offers writers with small audiences a low-risk means of producing their books. This technology really came into its own in the late ‘90s and early ‘00s, though it was nothing compared to the impending impact of ebooks.
Let’s go back to Amazon for a moment: this same period of time, around the turn of the millennium, was absolutely devastating to traditional booksellers. Though Amazon is the most famous example, there were many other online book retailers, like Half.com. All of them took bites out of traditional, brick-and-mortar bookstores, putting several big chains out of business. Print-on-demand only made the situation even more advantageous to online sellers. You could offer a massive back catalog of books, but not have to keep any stock! You could simply print copies whenever they were ordered, then ship immediately.
The emergence of ebooks–and especially, the development of high quality, affordable ebook readers–took physical considerations out of the equation even further. As with most technologies, ebook readers had been available in one form or another for many years, since the early 1990s at least. Technologies like Adobe’s PDF format allowed reading nicely-formatted books on computer screens since 1993, but this was a less-than-ideal experience. The invention of e-ink technology, which allows a screen to hold an image even without power, and which doesn’t suffer from glare under bright lights or cause eyestrain like lit screens do, promised an experience similar enough to traditional books that making the leap to digital finally made sense for many readers.
Ebook readers came to prominence in the mid 2000s, especially Amazon’s Kindle. With battery life lasting for weeks and storage capacities of hundreds of books, the dream of a truly portable, comfortable, hand-held library finally came to fruition. People with limited space in their homes, or who didn’t have much attachment to physical books, now had a great option to satisfy their appetites. There was just one big problem: traditional publishers hated it.
By 2009, Amazon had all but cornered the ebook market. About 90% of all ebooks were sold through the Amazon.com storefront. Major publishers were upset because a major revenue stream had been impacted. Again, this goes back to how traditional publishing works: most of the money made off of a bestseller is in its first year or so, when only a (relatively expensive) hardcover edition is available. Paperbacks come later, part of the “long tail” of book sales that can last for decades for a popular title. Publishers couldn’t eschew the Amazon store–they would miss out on sales. But they also hated the way Amazon’s prices undercut hardcover sales.
Apple, in the run-up to launching the iPad, approached major publishers at this key moment. Apple was going to launch its own online bookstore, too. If you know anything about Apple, you also know that consumers who buy into the Apple ecosystem tend to become very invested in it–that is, they spend a lot of money! Publishers saw a golden opportunity, here, and worked out a pricing system that was more favorable to them, including agency model pricing which let publishers set the prices to whatever they wanted, so long as Apple got a 30% cut.
Publishers intended to hold back new releases from Amazon. Amazon responded by appealing to authors directly, attempting to cut out the middlemen. This escalated into a lawsuit because–let’s be clear–this is price fixing, and illegal under US law. The end result was that publishers settled (and had to give refunds to customers, though these amounted to a few dollars per person), and Apple was hit with a massive $450 million fine, also to be paid out as restitution to customers.
This may sound like a victory for Amazon, but it wasn’t entirely. Publishers still demanded higher ebook prices, and on the threat of cutting Amazon out altogether, a new arrangement was made. Amazon sells ebooks from the “big five” publishing houses on an agency model now, too, although it does have some flexibility to offer promotional discounts. When this system was instituted, the effects were immediate: sales of print books went back up; ebook sales suffered, now that they weren’t priced much lower than print books anymore.
Amazon has since retaliated by leveraging the explosion of third-party Amazon sellers. Essentially, anyone can sign up to sell things (including books) on Amazon. Amazon transparently allows customers to buy from a randomly-assigned seller without actually choosing one, too. The problem is, there is no account for where these third-party copies are coming from. They can be promotional copies provided for free; they can also be lightly-damaged copies that were sold at a steep discount, now marked up for resale (even though they are sold as “new”). The truth is, nobody is sure where these third-party books come from, except the sellers themselves–who are, for obvious reasons, not talking.
All of this is about Amazon driving down book prices, in order to sell more books (and Kindle devices to read them on), while taking their own cut of 15-30% (depending on the book and format).
On the other hand, there has never been a better time to publish your own books. This practice used to be frowned upon–called “vanity publishing”–and typically resulted in blacklisting from any future opportunity to be published via a traditional publishing house. But now, self-publishing through services like Amazon’s Kindle Direct Publishing has made the practice mainstream and relatively stigma-free. Self-published books are sold alongside those put out by the major publishers. They come in print and ebook editions. They have all the same features as traditionally printed books–though Amazon, of course, cannot speak for the quality of the books’ contents. They let the reviews do that.
The Kindle Unlimited program, in which customers pay a subscription fee for unlimited access to a huge library of ebooks, pays authors (including self-published ones) based on how many times a given book is read. Naturally, some unscrupulous writers gamed this system to get themselves more money, which Amazon eventually cracked down on, just as they did on bogus, paid reviews.
All this is to say that the market landscape, today, is extremely competitive, but the barriers to entry are equally low. Anyone can sell a book, print or digital, on Amazon’s storefront, and it can be priced competitively against similar books while still being profitable for the author.
Physical bookstores are undergoing radical changes, too. Amazon has begun rolling out Amazon Books locations in shopping malls, though if you stepped into one you could be forgiven for mistaking the interior for a Barnes & Noble store. Both follow similar formats, including devoting a lot of shelf space to things that are not books (toys, board games, DVDs/Blu-rays, etc.), and some have in-house coffee shops. Books-a-Million is still out there, too, following a likewise similar format.
Independent neighborhood bookstores are, if not thriving, persisting. These remain an excellent option for writers who haven’t gone the traditional publishing route, too. Many of these stores will accept books on consignment. You have to get the books printed yourself, including paying for them, but the bookstore will give you shelf space and a cut of the sales. This can be particularly effective if your books fall into a niche that the indie bookstore specifically caters to, as many do.
The book publishing landscape has changed profoundly over the past 25 years. Selling books online was unheard of in the early ‘90s; today, it accounts for about 70% of all book sales. Ebooks, likewise, were an unknown technology, and one that avid book readers often resisted. Now? Ebooks are about 20% of all sales, and their share fluctuates a lot–highlighting a volatile, dynamic marketplace. Audiobooks are on the rise, too, which seem to be cutting into ebook sales. Print sales are, interestingly, on the rise again. And while independently-published writers used to be a tiny sliver of the market, making up only low single-digit percentages of book sales, they now represent over a third of all ebook sales. Traditional publishers still dominate, and chain bookstores are learning how to thrive in the new normal, but the market is tremendously more diverse and open to new writers than it was just a handful of years ago.
If you are a reader, you have more options than ever. And if you are a young writer, there has never been a better time to get your book out there, in front of the reading public.
Get to it!
The following sources were consulted for this piece, and are recommended reading if you want to know more about any of the topics mentioned: