The Power of Amazon to Kick Down Newbies

Let's face it, the new tech world's giants, Google, Apple, Amazon (and others for the Chinese) have incredible power over our lives. Some of it sweet, some not so sweet.

First, a sweet example, Google's doodle to wish you a happy birthday:

Those are some of the doodles you see when you do a search on your birthday (I just got the top one on the left). Surprised? Of course not, when you signed up for any of Google's services from Gmail to YouTube, you gave away your birthday. So the friendly giant with the clever algorithms whose famous motto is "don't be evil" gave you a pat on the back.

Not everyone is happy with this (see this person's complaint to the Daily Telegraph, here) but I must confess I was happy. I thought it was a rather nice touch.

Next, a not so sweet example, Amazon's book recommendations to you. The principle, of course, is the same: clever algorithms that "remember" your past purchases, possibly even the samples you download (? I'm not sure, but it's feasible). From those, your reading tastes are deduced, and Amazon suggests to you what you should read next.

Convenient? Yes and no. For people who are readers and not writers, it's probably very convenient. Though some unexpected hiccups can happen: for example, my husband lent his Kindle to my mother because when she got older (beyond 95) she had trouble with daily financial management (normal at that age). But she still read assiduously, at least one novel per week on her Kindle. I downloaded books for her directly to her Kindle, mostly thrillers and some romances. Result? My husband was getting from Amazon tons of recommendations for books in genres he never read simply because Amazon had no way of knowing who in fact was reading that Kindle.

But for writers, especially newbies trying to break through with their first novel, Amazon's system can be lethal. Simply because it is geared to zeroing in on the best selling books in any genre/sub-genre or descriptive keywords you use to search for books. As a reader, if you go to Amazon's website, you will see lists of book titles ranked by sales, i.e. most popular. And if you don't go to their site, you'll receive emails with similar recommendations filtered by the trail left by your past purchases. 

In both cases, what you get is what is most popular since for Amazon that is easiest to sell. 

A vicious circle. If you're a newbie, you need to break into that circle. But reaching the top selling 100 books on Kindle is not enough, you need to stay there. A tall order, one that very few newbies manage: individual marketing efforts, no matter how continuous (Twitter campaigns, free downloads, give-outs!) cannot match the marketing machine of Big Publishers who have access to all the Big Media, starting with the New York Times and the UK Guardian.

So traditionally published books sell ahead of indies: they turn up at the top of all Amazon sales lists while the few indies that make it in those lists are those that were once traditionally published and therefore have a recognizable name (they are often busy selling their back list to their fans and only more recently have moved to publishing new stuff). 

The point for Amazon is this: there's more money to be made from traditionally published books than from self-published ones. With publishers, Amazon makes more money: the price of indie titles tends to cluster around the "sweet price" of $3.99 while traditionally published books normally sell around $13.

Or at least, Amazon thinks it makes more money. It has allowed publishers to set their own prices and (surprise!) the high prices they have set are causing a drop in ebook sales. 

Ebook sales were reportedly down by 10% in the first half of this year according to the New York Times. But as it turns out, this was only a partial statistic concerning the books of 1200 publishers of the American Publishers Association (AAP) not the whole market.  See Fortune's article here

According to Authors Earnings that tries for a broader view through sampling the whole market, indies ebooks sales are not down: 

E-book unit sales

As you can see, AAP-reported traditionally published sales went from some 45% of the market in February 2014 to little over 30% in September 2015, that's a big drop for traditional publishing!

And it's a big drop for traditional publishers in a market that is holding steady, or growing by at least one percent this year, according to this interesting and convincing analysis in stratechery .

So what is really happening?

There is no question that a few indies are doing very well, from Bella Andre to Hugh Howey - both masters in the difficult art of marketing. Hugh Howey is excellent with videos about his writing life and Bella Andre uses teams of marketing consultants, something I discovered last year at the Matera Fiction Festival where she explained how she uses up to 30 specialized consultants to market her numerous books, she's like a small publishing house all by herself...

For newbies without this kind of marketing savvy, the story is very different. Their books gather dust on their digital shelves and automatically fall into the "long tail" in the Kindle Store because of Amazon's algorithms that always give pride of place to best sellers. There are over 4 million titles in the Kindle Store, so the tail is very long!

The solution?

Amazon should follow Netflix's example. If it did, it would show a "nice touch" and become less "evil" for newbies.

Let me explain. There is a huge difference in the algorithms used by Amazon and those used by Netflix. 

The reason? Netflix's business model is different. The price at which it sells its film streaming service does not cover the cost of blockbusters. Therefore Netflix has designed its algorithms in such a way that it sends its customers to view the hidden gems in the long tail. That is the way Netflix makes money.

If algorithms can do that for Netflix, surely they could do it for Amazon too. Indeed, Amazon needs to reflect on that drop in traditionally published ebook sales. It will soon reach the point where revenues from those sales will also drop (if it hasn't already). 

Amazon could make a lot more money from indies if it did like Netflix and sent its customers down the "long tail" to discover that overlooked read from a uniquely gifted writer...

Just a suggestion. But I hope someone at Amazon will read this and wake up to the possibility. There's money to be made from indies and Amazon has been way too much focused on the easy part of selling, limiting its efforts to traditional publishers. Time to look after the long tail!