People Get Ready, There's a Train a'Comin'

The ebook train hasn't pulled all the way into the station yet, but it is coming and not far away. Five years ago, the ebook share was less than 1% of the market. Now, it's at 6-8%. In five more years, I expect it will be considerably more; I've heard estimates from 30-60%.

The express carrying iPods rolled in and out in a hurry, and while I don't think book readers are going to take over the market as fast or as much as MP3 players did -- music draws more listeners than books do readers -- ebooks are going to change things.

Already traditional book stores are having troubles. A lot of the big chains have cut inventory, both in terms of titles and copies carried. Returns are up. Little stores are selling used books if they want to stay alive.

Traditional publishers are now competing with anybody who has a computer and a desire to see a book in print or online. True, the New York houses are the acme of the market now, in terms of production, advances, and distribution. But just as YouTube and MySpace have created musical stars and new video directors, it won't be long before somebody creates an ebook that hits it big, bypassing the traditional publishers.

Mostly, they still serve as filters -- at least there is a basic level of professional stuff. Anybody who can upload his or her own stuff without the chops probably won't do very well at it.

I like treeware and expect I will always prefer reading paper books to electronic ones, and I'm not alone. But there is a generation that doesn't care, or would rather read on their laptops or iPhones. They are jacked in. They are younger, and eventually, the market will cater to them. Paper books aren't going away, but the business won't be the same ten years from now.

When the etrain leaves the station, I don't want to be standing on the platform waving bye-bye. I'm getting my ticket now.

Some numbers:

Traditional publishers will give an advance against royalties, and then a rate -- at my level -- of 8-10% for a paperback book. The math is easy: Eight buck book, I might get eighty cents a copy sold, against my royalty. For the sake of argument and to keep the arithmetic simple, say I get a thousand-dollar advance. The paperback title has to sell 1250 copies for me to earn that advance, after which I start making eighty cents each. Twice a year thereafter, long as it is in print, I should get a royalty statement and a check.

Kindle's royalty rate is 35%. For a five dollar book, I therefore get $1.75. Twice as much plus as paper, on a title that costs 62% as much. 571 copies to get the $1000. They start paying after three months.

On my blog, a PDF for $5, the royalty rate is 100%. To get the thousand, only 200 copies. Payment comes before I email the book.

POD -- print on demand -- my costs for a book are about twice what I'm charging, a few cents less, and then the book has to be printed and shipped. An ebook gets there faster, no postage, and once done, almost no cost to me.

Granted, if I am suddenly overwhelmed with orders on my blog, I'll probably have to hire somebody to fill them. Not that I am ever likely to get that many orders this route. At the moment, however, it takes me about a minute. I click on the customer's email address, and send him an email with the PDF attached. I have enough bandwidth from my server to do that all day every day.

Neither Kindle nor my blog offer me a royalty up front. And the numbers of sales via them aren't anywhere near what I get on my paper books, even as a midlister. However, those numbers are probably going to get bigger as we roll along. Just as the music industry had to come to terms with the net, so are the book companies.

Ebook readers are still expensive and clunky. But there have been a couple million downloads of the Apple iPhone reader app, and readers will get cheaper. When you can get one for $99, which is less than the cost of four hardback books, watch. They won't be able to make them fast enough.

Barnes & Noble is about to jump into the fray with their own reader. Apple continues to lie about theirs, but don't believe them, one is in the works. Kindle has a million units out; Sony claims twice that. There are ten million iPhones out there. The Chinese are cranking up their factories.

Beat a better path and the world will build a door to your mousetrap ...

I'm not great at predicting the future, but you don't need to be a weatherman to know which way the wind blows ...