E-Book Sales Tank

E-Book Sales Fall After New Amazon Contracts

Beware of your dream coming true.

For years we’ve heard that music is undervalued, that people must pay more. But maybe the consumer doesn’t want to. That seems to be the case with e-books.

When Amazon launched the Kindle no e-book was over ten bucks. A business burgeoned. Early adopters were ecstatic. But the old guard said they loved paper and the writers and publishers were wary of giving Amazon too much power.

So, after agitating in the press, Amazon gave them some of what they wanted, including the right to set prices.

And then they fell.

Now don’t tell me paper is where it’s at. If you read the story on backpacks in the “New York Times” you’ll see that college students no longer carry books, their courses are online. This is the trend, and to deny the trend is death. (“Backpack Makers Rethink a Student Staple”: nyti.ms/1Up6jf9)

So CDs are never coming back and track sales are decreasing, -5% for Universal in the last quarter, and streaming adoption is slow.

Why is it slow?

Because tracks are free on YouTube and Apple Music is nearly indecipherable and maybe $9.99 a month is just too much.

Forget about the fans, they’ll pay no matter what. But to really succeed you have to get the casual users, the looky-loos. And the larger the barrier, the less they’re interested.

Music has completely changed. Used to be tracks were parceled out on the radio with the hope that people would go to the store and buy singles. Now, the track is available instantly online and those who care check it out in droves. Which is how Justin Bieber broke the Spotify record this week. This is a good thing. Monetization comes last in today’s marketplace. First comes attention, you want people to check something out, and if it sticks…it’s forevermore. Hell, Major Lazer’s “Lean On” is still one of Spotify’s top tracks. As is One Direction’s “Drag Me Down,” which held the streaming record before Bieber.

So why is everybody agitating against the new model? Universal Music reported that streaming revenue grew significantly, by 34%, it overcame the decline in physical and downloads, it helped the company’s bottom line. But we’ve got the unwashed uneducated and the marginal protesting that they just can’t win in the new world.

Welcome to the twenty first century. That’s what I hate about America. No one can move backward, no one can lose. It’s like we’re dying to become Europe, where jobs are protected. Only they aren’t. Industry lays people off in droves and no matter what the musicians say their revenues are not returning, unless they’re stars or adjust their model.

We need to get more people paying for streaming.

And first we must expose them to it.

It’s hard to get someone to pay $9.99 a month if they don’t know what it is, how to use it. And most people still don’t. And Apple Music is a bad beginning. I still can’t figure it out completely. And if I can’t, what about the wannabe?

So freemium must exist. And family plans are a good thing. As is Spotify’s reduced student price.

The key is to get people hooked and then raise the price.

Not enough people were hooked on e-books. They’re only 24% of the market. Writers and publishers will be healthiest when the physical book dies. I know you’re screaming, but I’m right. Physical stores and physical books and physical distribution are an antiquated model that wastes money. And the public knows this, which is why it’s balking at paying the same price for an e-book as it does for a hardcover, which is oftentimes the case these days.

Which means the value of an album is no longer ten or fifteen dollars. People think that’s a rip-off.

But they’ll blindly play the same damn track over and over again for decades, putting cash in the pockets of providers under the new model.

This is what I love about the internet, this is what I love about modern life. The old gatekeepers, the people who had control and thought they still did do not. Turns out the public is in control, the public decides what is of value and what it wants to pay for something. And your only hope is to get ahead of people and corral them into a new system. Trying to take away the goodies they already have, that’s death.

So, once again, the enemy is not Google or Amazon or Spotify or Apple. Rather, the enemy is you. You refuse to take a risk. You continue to hold on to the old model, as it dies, dies, dies. I guarantee you the people who won in the past won’t necessarily win in the future. But if you don’t think people are already winning in today’s world you don’t know Bieber, who would have been a nonstarter without YouTube, you don’t know the Weeknd, who started out giving his music away for free, you don’t know Diplo, who’s used the internet to spread the word on tracks so infectious that he’s getting rich.

There’s plenty of money to go around.

Please don’t hold back the tide of progress.

Take chances.

Laud streaming.

Keep freemium.

Agitate for Apple to simplify its user interface.

Luxuriate in the new golden age.

Or be left behind.

P.S. If you’re frustrated that the above WSJ article is behind a paywall you’re testimony to the fact that sometimes the price is too high. The WSJ has decided to leave readers behind, which I believe is a mistake. One thing we know for sure, leaving listeners behind is a huge blunder, obscurity is your enemy in today’s world, and it’s so easy to achieve.  (EDITOR: Google search the WSJ headline and the article is free!)

 

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What's been said:

Discussions found on the web:
  1. Concerned Neighbour commented on Sep 6

    I love my e-reader, and think it’s disgusting that so many e-books are similarly priced to their hardcover or paperback equivalents. The marginal cost of delivering that e-book to me is negligible. There is no cost for the paper, ink, printing press, etc. that makes up a paper book, nor is there the large cost of operating a physical book store versus an online store. And given very little of the price I pay actually goes to the author, I would imagine the publisher and e-tailer are making huge margins.

    As a reader I want to support the author so that they can produce more content. I’m not against the publisher and e-tailer making a decent margin, but what we have now is ridiculous.

  2. Iamthe50percent commented on Sep 6

    I have one kindle e-book. It’s a computer technical reference that’s handy to have on my desktop. Much easier than trying to type with one hand while balancing a thick book in the other. But I don’t care to read for pleasure on a kindle, standalone or desktop. I have a Galaxy 5 Smartphone but it’s really difficult to read text (including your blog) on it. It’s bad for making and receiving calls too with all the swiping and tapping, usually to the wrong spot. My old flip phone was much better, flip open to receive, flip down to hang up, using the chiclet keys was much easier than that tiny touch typewriter on the Galaxy. All the smartphone is good for is cryptic text messages and watching tiny videos. OK, I can check the quotes and how many minutes I’ve used.

    Reading is going away anyway. Right now, schools are not teaching writing. In another generation they will stop teaching reading (video!) and we will become illiterate Eloi.

  3. Iamthe50percent commented on Sep 6

    Lest you think I’m a complete Luddite, I do have an Amazon Firestick and two Samsung Smart-TV’s. I have watched streaming content but the interface is clunky, showing lots of cutesy artwork but requiring massive page turning to find something. I don’t need a picture of the movie, I can read a title. I guess the younger generation can’t. No wonder China is eating our lunch.

    • WallaWalla commented on Sep 6

      You are not alone Iamthe50percent. Maybe it’s just us getting older, but UI an UX design seem to be regressing. The new ‘grid’ style popularized by Pinterest, is not efficient or user friendly. That cutesy artwork does not make it easier to find the content on the page. You are spot on.

      Regarding ebooks, I have met few people who prefer digital over physical unless portability is a major concern. Unlike ebooks, my headphones deliver the same content whether from a cd player or FLAC files on the phone. The same can’t be said for ebooks. The physical act of reading on a digital screen does not deliver the same value as reading from a physical book. That value will [hopefully] keep the industry alive.

  4. Crocodile Chuck commented on Sep 6

    re: music streaming:

    “The key is to get people hooked and then raise the price.”

    No, thanks. I listen to music on a proper valve hi-fi, through loudspeakers in my lounge room.

    Music is too important to me to fiddle with lo fi bullshit, tinny headphones, ear buds, etc.

    That’s for kids, poseurs & idiots.

    & ‘streaming’ as it is now constituted means death for artists.

    There’s got to be another model.

  5. willid3 commented on Sep 6

    not so sure reading is going away, since you cant convey much of any thing without text. and from hearing my grand daughter talk, they still teach writing, but as before every generation thinks the next is failing, but i suspect its just like before, some are as always. but they have a point about why is the price of a e-book as high as a regular book when there are no publishing costs (the paper, printing etc) needed, and we know its not that authors are raking in the money that was spent on publishing. and they arent really doing that much more marketing for ebooks are they? and you dont even have the cost of a physical store thats needed? so why is the price so high? and China is eating our lunch is some ways because they will work for a lot less, and companies can make a profit from that. but oddly enough, the US is still the largest manufacturer in the world. its that companies have moved lots of jobs that are tied to commodity products. problem is manufacturing isnt like it used to be. its become highly automated and computerized. its why GM for example can build more cars today than they did when had 300,000 workers (today its less than 100,000)

    • Iamthe50percent commented on Sep 7

      McDonald’s is a manufacturing company. look it up. They got themselves reclassified to get some tax break. They “manufacture” a burger from component parts, bun, patty, et cetera. What a travesty!

      I used to work for Motorola (television) and International harvester (farm equipment & road construction equipment) REAL manufacturers. IH is long departed and Motorola now only licenses their patents and trademark to others. It’s hard for younger people to believe but Chicago was television city with Motorola, Zenith & Admiral. Maybe RCA was here too, but I don’t remember them.

  6. lucas commented on Sep 7

    Personally, I hate reading anything on a screen, and I hate that I am so often forced to.

  7. rd commented on Sep 7

    I use an e-reader extensively, but rarely buy ebooks because so many are available for free from the library.

    When I buy an ebook, it is generally because I don’t think I will loan it to anyone else to read. If I want to keep it for a long time or want to loan it, then I buy it in physical form.

    Recently, I found that one of the standard textbooks that needs to get updated periodically because of changing technologies and testing methods in my field, is now being updated electronically at a fraction (@5%) of the past hardcover textbook prices ($7 instead of $120-150). The new edition was developed digitally and not printed at all by a different company than the original textbook publisher. The authors do provide a printed teachers manual with solved problems etc. that would be bought at a much higher price. I can’t imagine the old textbook publishers can be happy with this development. However, the typical consumer knows that it does not cost anything close to the old physical books to produce an ebook. You need to pay for the intellectual property and basic digital publishing, but the many costs associated with manufacturing, storing, and shipping simply don’t exist.

    • lucas commented on Sep 9

      The fact that textbooks are so expensive is actually an avoidable crime. Somewhere I read an expose of all the middlemen that could be easily eliminated and reduce textbook prices to a fraction of what they are now. Too often students are told to print the e-book themselves, and that costs a small fortune because economy of scale is eliminated. There is real opportunity in the textbook market for a disrupter. Amazon ain’t it.

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