The statistical long tail distribution that governs book sales, and how Amazon leverages it to reinvent Gutenberg’s publishing model
How I reached Number One on Amazon (for a free download in an obscure niche)
by Dennis Posadas
Last March 20-24, I put an ebook that I had uploaded to Amazon many years ago on a free promo. I had written this book out of a documentary script that our group of former Intel robotics and computer imaging engineers had proposed to a Manila-based science museum at that time, but which did not prosper. So I took it and uploaded it to the world’s number one book retailer, mighty Amazon, and saw it languish for many years, until I placed it on the free promo a few days ago. Well lo and behold, on March 21-22 it ended #1 on the niche it was assigned to! Prior to this, a short story that I had also written and uploaded to Amazon also ended up at #5 during their free download program.
The author’s ebook hit #1 in its assigned niche, during its free download promo last 20-24 March 2016
Granted that it was free, and the niche is not that popular, nevertheless there are some important things to know for anyone aspiring to get to the Amazon paid bestseller list. Note that Amazon tracks the number of books being downloaded, so the tracking of revenue is separate.
THE LONG TAIL
Statistically, the distribution that governs book sales is a power law distribution called the Long Tail (note: former Wired magazine editor Chris Anderson has written extensively about the Long Tail in his book of the same name and in his blog here). You can look up what it means, but you are probably already familiar with it instinctively.
We are all familiar with the saying “winner take all (or winner take most).” The long tail is actually the opposite of that; it is in fact the occurrences that most of us are familiar with. We sometimes win (or get selected), but often we are not. We’re not in the major leagues, but maybe we are considered in our small circle as being good enough at something. The long tail is the tail end where most of us are. Sometimes we win or get picked. But most of us are there. And there are a lot of us.
When you ask your child to compete in a sports match that’s limited to your village or the local school, then you are playing in a small local pond. As your child gets better, he/she goes on to play in bigger and bigger ponds, from inter school meets, to regional meets, to national meets, and eventually if he/she is lucky, hardworking and talented enough, to the Olympics. It’s what’s called a power law because while there may be 10,000 authors who can sell 3,000 copies, there may only be 2,000 authors who can sell 10,000 copies, 500 authors who can sell 50,000 copies, 50 authors who can sell 200,000 and so forth. So it’s not a linear but an exponential curve. It gets harder and harder to move up.
Normally the NY publishers only take the authors who can sell at least 10,000 copies. Because cost pressures and the reality of free content on the web has set in, most of the bigger publishers (if they haven’t folded up or been acquired) only want to take a chance on highly sellable books. That leaves lesser known authors to try their luck with smaller less known publishers, or academic presses which only publish a few copies for a very limited audience. In short, most of traditional NY publishers service only the top of the long tail curve, with the smaller and academic presses more interested in quality rather than sales considerations – which should remain the case.
The traditional brick and mortar sales model basically involves the publisher vetting, editing and designing the book in exchange for a profit sharing scheme where the author gets a royalty. From its evolution from Johannes Gutenberg’s invention of movable type in the 15th Century, not much has changed.
Normally for most traditionally published authors (I’ve done three with Pearson, and one with Greenleaf), the author gets around 7% of net, depending how good he/she negotiates with or without an agent. For most, especially newbies, it’s a take it or leave it deal – and normally you end up taking it, especially after maybe twenty or more publisher rejections and several years of trying to get one. It’s normally a royalty based on the net revenue. Because of the final selling price at the bookstore, the bookstore actually takes a huge chunk of the sales revenue. Percentages vary but normally it can range from 40-60% depending on the terms agreed, who the author is, etc. So in short, most authors have to make up in volume the peanuts they gather from sales of their book.
Amazon is said to be the big gorilla that has been putting companies like Borders and other bookstores out of business. Barnes and Noble itself is struggling to become relevant with its brick and mortar stores as a lot of people still like to read paper books, especially those written by well-known authors from publishers like Faber and Faber, Farrar Straus and Giroux, Random House, Simon & Schuster, and other well-known imprints. It’s really hard to determine Amazon’s actual impact in numbers, because they refuse to publish their business figures, and so most industry analysts just go by with estimates from other experts.
One cannot deny the cachet from having Penguin Random House or Simon & Schuster as your publisher. However, it cannot be denied that the Kindle e-reader has made significant inroads, particularly in the ebook market, at least in the U.S. and most developed countries. Although there are other platforms for selling digital content, such as the Apple store, Kobo, B&N, Scribd, Smashwords, Lulu, and others, most industry analysts agree that Amazon still dominates in terms of volume and sales revenue. Analysts estimate that several million Kindles are out there, setup with their one touch purchase capability. So people just click, click, click away to buy several books.
In the case of Amazon, instead of playing only at the top of the long tail, it can play at any segment of the distribution. Amazon and other digital vendors can afford to upend the traditional model of publishing because the main cost of selling a book was already captured in trying to establish the capability to sell the very first book they sold. They have so much server memory that they are now even selling cloud storage space. Thus, every additional book they carry in their store costs them almost nothing, and they get a percentage of every sale. This works well for small players, even individual authors. Try negotiating by yourself to carry your paperback with a big bookstore chain. Chances are, it will be difficult for you to do so with favorable terms.
Folks like Andrew Weir have leveraged this. A few years ago, Mr. Weir tried to give away his novel, The Martian, for free on his website. But since his friends and fans had a hard time reading his book on screen, they suggested he just upload it on Amazon, where he ended up selling it for 99c (the lowest price you can set your book). After doing just that, and getting crowdsourced advice from scientists, etc., his novel ended up being picked up by Crown and optioned by Ridley Scott for the film rights. The rest, as they say is history, with seven Academy Awards to its credit. The same thing happened to that runaway bestseller, Fifty Shades of Grey, which also began from the Kindle store.
Read about Amazon’s 99c blockbusters here.
YOU DO JUDGE A BOOK BY ITS COVER
I’m sometimes guilty of this. There are those who think that it’s the content that matters, and the external packaging is just fluff. But in reality, people who don’t know you won’t buy your book if you have a lousy cover. Resist the urge (as I sometimes can’t) to design your own cover. As one professional cover designer said once, if a cover doesn’t evoke a subliminal positive response in a split second, then reject it and tear it up.
Zero or Free is undeniably an attractive price (or non-price). Although you can’t build a business or any venture (even a non-profit one) if you are not getting any money in, the hope is that if people enjoy your free read (normally it’s free only for four to five days), then they may actually turn out to be your true fans who will stick it out with you. Then again, this theory might simply be baloney, and you end up working your tail off for nothing. While some may say it devalues your work, in reality it is the entire Internet that has devalued books. The real problem is not whether you offer your work for free. The real problem is very few people are still reading books because there is so much free content on the web. I can even argue that most of what we read these days are our friends unfiltered social media posts.
One can be delusional sometimes and think that people will buy your book at $9.99 or up. But in reality, these price points now belong to the well-known authors. For most unknown authors (like me), the price point ranges from 99c to just above or below $5. If you are trying to sell a short story or something below 10,000 words, the $0.99-$2.99 price point might make sense. If you are trying to sell a lengthy book, maybe from 30,000-50,000 words, then perhaps the $5 mark might make more sense. Actually pricing is of course a subjective matter, that depends on how much you feel your work should be priced, and how much you think the reader would be willing to pay for your work.
There is however the Amazon Unlimited program to contend with. For $9.99/month, Amazon allows users to loan up to ten books at a given time. This means that for people subscribed to this service, they will probably loan your book instead of buying it. So how does one make money as an author from this fact. That’s where it gets a bit complicated.
Basically Amazon sets aside a pot of money per month (around $12M in March 2016) and pays you for every page that is read the first time. The pot is divided this way.
Amazon monthly pot x (No. of your pages read this month) / (No. of total Kindle pages read this month)
Although it varies a bit every month, on average it works out to around a penny or so per page read. So if your book has a hundred Kindle pages, you get a dollar for every loaned book of yours, assuming the borrower reads the entire one hundred pages of your book for at least one time. Subsequent reads of a page from a loaned ebook already read once don’t get paid anymore.
Traditional publishers don’t like this Amazon Unlimited program, and this is why many of them haven’t enrolled their books in this program. They feel it devalues their authors and their books. They don’t like it that their books can be given away for free. But many people are cheap skates – that’s about as plain as I can put it. What this also means is that the owners of those millions of Kindles out on the market have no choice but to wade through ebooks written by…you guessed it…YOU.
This is also one complaint I have about the traditional publishing business. Even if you actually do get your book published (like I said I’ve done it four times), if the price ends up to be too high for the market, then nobody ends up buying your book even if the prose is perfect and the cover is great. So that defeats the purpose of writing a book, which is to spread your message far and wide, just because there are too many middlemen who want to partake of your book revenue. So if my publisher decides to put a Kindle edition at an unreasonable price on Amazon, there is really nothing I can do about it, even if I know that price doesn’t make sense.
GOOD ENOUGH IS GOOD ENOUGH
When one opens a book published by Faber and Faber, FSG, WW Norton, Random House, Simon & Schuster, etc. one expects to find perfection in the prose, the cover, to the blurbs, back cover copy, etc. But don’t expect to pay 99c. Instead expect to pay more than $9.99 for the paperback and more for hardcover, although with Amazon’s pricing tactics, this has already changed. But these publishers won’t (unless the crow turns white) sell at rock bottom prices. If you are selling at the Amazon store, try to edit your work to the best of your ability, and remember that saying from Spiderman that “with great power comes great responsibility.”
But also remember that if you had made a mistake and attributed that “great power” statement to Batman, then you can always change it with digital ebooks. If you somehow made an error in your ebook that said Sting was the Italian singer who sang for U2, then say a thousand apologies and remember that you can push out a correction to the people who bought the earlier uncorrected version of your ebook.
SEARCH TERMS AND GENRE MATTERS
In my case, I had to figure out what search terms people would likely use by guessing what they would likely type to look for the kind of book I wrote. Amazon gives each author around seven search words he/she can play around with.
Genre also matters. In the case of Bay of Reckoning, I ended up in the war / naval genre, which I guess does not have much activity as say romance (which I heard is the most popular). The problem however with ending up in a very obscure niche is that no one actually goes to that part of the Amazon store, and no one buys anything. There is a reason why JK Rowling, Stephen King and John Grisham can probably buy several mansions, limousines, airplanes and the like. It is because they have reached the top of the long tail on genres where millions of people seek information, seek solace, seek instant gratification (I won’t elaborate on that), and for other needs, say education and entertainment. But then of course, that’s where you end up competing with thousands of authors going after the same pie.
So it’s a question of being king of the little pond or being a pawn in a very big pond. What genre or niche do you want to compete in? In my case, at least with this #1 download, I accidentally hit on this small pond niche.
Somewhat similar to a basketball player who decides to remain in the minor leagues as a big shot instead of staying in the NBA where he might only be marginal player, Amazon allows you some leeway to pick where you want to play – as long as the content of your book supports it.
LOVE FOR THE CRAFT OF WRITING
At the end of the day, I wouldn’t be doing B.I.C. (Butt in Chair) for hours on end writing books if I didn’t enjoy it. It keeps me sane, and is perhaps my equivalent to a good golf game. Well I figure, hey if I pass on from this Earth, at least I would have left a couple of short stories, novellas, novels and published opinion pieces and other books to remind you of who I was. That’s also my excuse if people ask how much I’m making.
I say this because there are no guarantees of success in this business (if I can call it that). In fact, more often than not, you will fail in this business. Sometimes you did everything by the book, and still you fail to even make a dent. But then there are times when you have absolutely no idea what you did, but then you aced it.
If despite the odds, you are willing to do B.I.C. and churn out book after book with no guaranteed return, then I dare say you ARE a writer. If you enjoy playing the guitar and singing or playing tennis or golf, then maybe what you ought to do is either form a band or play sports competitively. If you are just doing this for the money, then it is more likely that you won’t succeed.
Whenever I pick up Hemingway, Fitzgerald, or other writers books for the second or third time, it is no longer just to get the story from the book. It is to dissect and analyse how these masters wrote their books. That is what you call craft.
At the end of the day, if you somehow made it past most people’s defenses by having a great cover, doing your traditional and social media campaign and all that, it still boils down to what you wrote. If you do hit #1 (or even the Top 100) paid books on Amazon because of attention to the craft of writing, then you have paid your dues and deserve whatever reward comes to you my friend.
Dennis Posadas has had four traditionally published books, three with Pearson and one with Greenleaf UK. He has recently started publishing some short fiction works on the Kindle store.
His blog The Asian Spectator now syndicates to YaleGlobal, HK Economic Journal, Singapore Business Times, Japan Today, and soon to other newspapers worldwide.
Checkout his Amazon personal page at http://www.amazon.com/Dennis-Posadas/e/B001JOCGW6