Hugh Howey

Bestselling author of Wool and other books. Currently sailing around the world.

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A Shift Away from Indies?

Ars has a great article up on how smaller musical acts are being affected by streaming and subscription models, and how Apple used to be able to give these acts an enormous boost — but no longer seems to have that power (or interest).

It’s a must-read for authors or anyone interested in entertainment and digital disintermediation. Could the same thing be around the corner for indie authors? Will income diminish as all-you-can-read subscription services mature? Will breakouts be more rare as top authors vie for promo spots that used to be about the discovery of new art but are slowly becoming more useful as advertising for competing platforms? I think this last fear is a valid one, and it would be a detriment to readers as well as upcoming writers.

There’s also mention of how spreading yourself too thin as an artist by doing promos everywhere is not as powerful as the directed energy of a single major player. Could it be that a more competitive market for the consumption of art diminishes the cultural penetration of that art? As iTunes lost market share, did music lose some significance in our daily habits? Would video do the same if YouTube lost market share to dozens of competitors? What effect does dilution of platform have on buzz and word-of-mouth?

One other potential pitfall for authors is hinted at in the article: Devices like iPods that used to be about music have morphed into iPhone swiss army knives where tunes are one app among many. Similarly, I see the threat of people buying tablets instead of dedicated e-readers (the latter is far superior for reading and has fewer distractions). If you are a book-lover or an author, it’s a good idea to rave about your e-reader and maybe let people you know borrow the device and give it a try.

The article is long but seriously worth the read. I’ve learned a lot about the publishing industry by watching the music industry. We seem to lag behind them a few years in many developments. If possible, let’s learn from their mistakes instead of resigning ourselves to repeating them.

20 replies to “A Shift Away from Indies?”

i don’t think so. for many years musicians made most of their money from touring and the recorded music sales were a loss leader. except the last 30-40 some years where the record industry got fat changing media formats every decade and reselling the same music

for music it’s just going back to the old days where you have to tour to make money

You’re mixing together the music *industry* with the performing *musicians* themselves. There are not, and have never been, the same. And the industry types didn’t “get fat” by intentionally changing formats. They got that way by the unconscionable contracts and clauses that they forced on the musicians who wanted to be promoted by “the industry.” (And doesn’t THAT sound familiar!)

Thanks for the article, Hugh. Certainly worth pondering. But not worth worrying (or getting scared) about. That useless emotion is a flaming sack of poo (my rough translation of Epictetus from the Greek).

While there will always be new challenges in the future, there will also be new opportunities. The question is what do we do now, as individual authors? I do believe the writer who wants to continue making bank needs to be thinking in terms of multiple streams of income and steady productivity.

I also think the days of deep “penetration of the arts” are long over. Like 25 years over. It’s all about niches and catching fire within a niche. Catching fire is a matter of our good friend word-of-mouth, which doesn’t change, and requires us to be at the top of our game.

Changing consumption habits, techno-disruption, device innovation, platform proliferation, app madness, time crunching, and drought are all out of our hands. Thus, daily work mixed with wise planning and investment, with dashes of creative experimentation (R & D), should be our “business as usual.”

And staying involved with the community, as is done here and in other venues.

Apple is moving away from indies because it’s targeting a new segment of customers. The old segment – the audiophiles – really dug their obscure band choices. I have a friend who owns around a 1,000 cd’s (this was in the pre-digital era) and he once said if he’d ever heard a song on the radio, he wouldn’t buy the album because the band wasn’t unknown enough for him. He was the perfect iPod customer. Now that the iPod is dead, and two-thirds of device usage is devoted to non-music activities (i.e., apps), Apple is targeting the casual listener. And the casual listener isn’t moved by the Grizzly Bears. They’re moved by U2, a “safe” choice.

Books began shifting to streaming a while ago. Devices like the read-only Kindle are on the same extinction path as the iPod. The swing away from independent darlings can’t be far behind. Sadly, as one industry mimics another, the learning curve for the new guy becomes shorter, accelerating at a faster rate. What took the music industry decades to slog through is now taking the book industry only a few years.

To survive the creative industry, an artist must think beyond the device and focus on pure product, gaining as many fans as possible with their impossible-to-duplicate genius. But reaching these customers will become that much harder in the years to come. For indie authors complacent to operate in the niche market, it will be business as usual. But for those wanting to reach a wider audience, it’s going to take some true out of the box thinking. I really wish I could end with an answer and not a platitude. But I do know these things are cyclical. Saturate an audience with mainstream and they’ll eventually go looking for the unique. Except these cycles may last a decade. Not the best news for a Sunday morning.

If there is one thing big music and big publishing has taught indies in both sectors is that the adaptable survive. Kindle Unlimited has already affected my business strategy. I pulled some titles from other markets and dedicated them to Amazon. This month I have seen a major drop in the UK where I have had strong sales. Am I worried – goodness no – because I expect the UK readers are taking advantage of the initial offering of famous brands at a discount. The same way the US readers did. In the US that not only passed, something surprising happened. Since the launch of KU I have found an increase in the US kindle store where I have never really had traction – a lot of KU readers that may not have taken a chance before.

Will income diminish as all-you-can-read subscription services mature? Will income diminish as all-you-can-read subscription services mature?

Two forces push in opposite directions.

Increasing market share for independents is an upward pressure on income.

But the effect you highlight is a downward pressure. It pushes the income distribution curve to the left. That means everyone takes an income hit. Envision a bell curve showing income distribution. Now shift the hump in the middle to the left, in the direction of zero.

The above looks at the independent segment. All of it. However, competition among authors allows individuals to move from one spot on the curve to another. Thats how some prosper while most lose. Individuals can succeed by moving to a different position on the distribution curve, but that doesn’t change the aggregate curve.

How will the two forces play out? Market share is limited to 100%. Gains will stop sometime. But the increase in authors, available books, and subscription offerings is not limited.

Cutting through all the buzz words, there is so much supply that demand can never support prices needed for all those authors to prosper. It manifests in different ways. That supply pushes all the other phenomenon.

Even simpler, as James Carville would say, It’s the supply, stupid.

Are there other forces at work? Of course..

I don’t see how reading from a phone or tablet can be bad. Just means more people will buy books.

I have an iPad Air, an Android phone, and a Kindle Paperwhite. I read my ebooks on my iPad and my phone, but never on my Kindle. Probably because I have my iPad close, and my phone closer, and my Kindle more distant.

I think that because my iPad/phone display fills with the book I am reading, I am not distracted by other apps. Why not an iPhone? I liked the larger Android display, and I like to buy Kindle books with the Kindle app. Can yuh do that with an iPhone, can yuh, huh, HUH? YA CAN’T!

Indies have been getting a free ride via Select, and now Kindle Unlimited. (“Free” pun intended.) It’s been a great opportunity for authors to get attention.

Will “shove your ebook into Select and forget about it” continue to be viable as an indie marketing strategy in future?

It won’t be as useful as it used to be. Authors will need to spend time building a fan base. This isn’t easy, but it’s possible. And doable.

I’m an optimist. We’re still in the very early years of ebook publishing, and self-publishing. I haven’t had time to look at Amazon Scout (or whatever it’s called), but there’s an opportunity there to get known.

Call me Pollyanna, but my gut tells me there will be bigger and better opportunities for indies in 2015 and beyond. Write on. :-)

Writers are in competition with other forms of entertainment. If the music industry is in decline, that’s actually a good thing for writers.

The widespread use of tablets and smartphones is a plus also, as it gives more platforms for digital books to be sold on.

If there’s a parallel here, it’s only in regards to independent production of books vs. music. But in that regard, the difficulties to overcome are applies and oranges. Primarily because it’s much, much more expensive to produce music. A writer can spend almost nothing in writing a book. At most, a few thousand for a good editor and designer. But in the music industry it’s very different. It costs a lot of money to record good music. And talented music producers are hugely important to the success of most records. They make big bucks because of that. Not so much with book editors. So big music production companies are at a huge advantage over independents, which just isn’t the case with writers.

So I don’t see the publishing industry playing out anything like the music industry. The barriers to the successful writing and publishing of strong, competitive books are nothing compared to the barriers in the way of producing strong, competitive independent music. And on the promotional side of things, it’s also quite different. So independent authors, like Hugh, are quite capable of being very successful. And I don’t see how anything in the industry is going to change that, except to make it even easier for writers to achieve independent success. So the trends are very different for a reason. There’s no hidden icebergs out there waiting to sink the Indy writing ship. Instead, it’s a warming world for Indy writers.

Writers are in competition with other forms of entertainment. If the music industry is in decline, that’s actually a good thing for writers.

Income for musicians can be declining while consumption by consumers increases. It’s the consumption that competes with other forms of entertainment.

A low priced competitor is more of a challenge than a high priced one.

That’s true, but that’s also an advantage for independent writers. They can lower prices for consumers, and still make more money than traditionally published writers. It’s a win/win for both writers and consumers. (Though the publishing middlemen do suffer greatly). That’s seldom the case for Indy musicians.

I think it’s still too early to say what kind of impact streaming will have on the music industry, but I’m not sure it’s all bad news.

Streaming is still rather new to many markets, but in the few places it’s matured, such as Sweden, music industry revenue is increasing for the first time in many years. I don’t see why the same wouldn’t happen in the United States and other developed countries.

I have heard the chorus of artists saying their income from streaming is paltry compared to other sources, but I’ve heard a few indie musicians say different (Steve Aoki comes to mind, though he could be an outlier). I believe part of the reason for that is simply that the label is taking a big chunk, and it may push more musicians to publish independently and contract the physical distribution services of a distributor, similar to Macklemore’s deal with Warner.

It’s been interesting to see how Apple has slowly moved away from its focus on music as their iPod sales declined, but I’m curious to see if it will be renewed with the Beats acquisition, especially since they’re rumoured to be relaunching the Beats Music streaming service early next year at a reduced price, and iTunes Radio is the #3 streaming service in the United States.

It just seems to be more evidence to show that the income of a musician is increasingly dependent on touring and merchandise, not the actual music. At what point will they simply give their music away for free, without expecting any income, simply to try to drive people to live shows? I feel it can’t be too far away, and I see some indies doing it already through Soundcloud.

If you look at a chart of music industry revenue, there’s a notable spike with CDs. Labels complain that digital sales aren’t nearly matching their peak CD sales, but I’m not sure it’s realistic to expect such revenue again, since cassettes, 8-tracks, and vinyl never made them nearly as much money as CDs either.

What does that mean for indie authors? It’s hard to say. I can’t think of an author’s equivalent to touring. Will authors end up giving their books away for free digitally, and relying on physical sales, merchandise, or even patronage/donations for their income? We’ll have to see.

I am sure a lot of indies are curious like me to see what Joe Konrath is cooking up with his new channel: http://bookloco.com/

The books are free and the authors are going to be paid. Who knows how that is suposed to work? Maybe there will be advertising in the books? I guess we have to wait and see,

You have stumbled on a secret…. Big name companies would gladly pay 99 cents for a full page advertisement in an ebook, so books can be free to the reader while the writer still gets paid. Imagine if King or Patterson were paid a few bucks for each copy sold with advertisements in the back, they could still make their fortunes while the readers benifit.

I don’t see the death of the ereader having much to do with the death of indie authors, what I do see is Amazons fight to attract big name authors as damaging to indies. Many people do well because a lot of the big names are harder to find or too damn pricey, if they come to Amazon and lower their prices, the indies will have to fight harder.
I have been hearing for years that you had to get into the kindle early, but how many of those who rushed out books are still around? I have seen some guys pump out a hundred books on every subject they could think of, and all the books sucked, but because the kindle was still so new, they made good money….but i don’t get suckered by them anymore. I heard it was too late to jump on the kindle bandwagon in 2011, isn’t that when we found you, Hugh? I heard 2013 was too late too, and we found Bunker. I don’t think 2015 will be too late, it will be the year they find me, lol.
There were 6.6 billion people when the Kindle was first introduced, there are 7.3 billion today, that is 700 million new readers since 2007. The market will never stop growing as new readers are born, and old readers convert over to electronic books.
Keep writing and we will be fine.

All-you-can-read subscription services worry me. I get that there is a sweet spot between volume and price, where you will make the optimal profit, and also that there are different types of buyers and readers, people who only borrow, who only buy discounted books, who only buy bundles, and who only pay full-price for a hard-cover, the list is endless. This issue is complex. But I worry that eventually, everyone will stream their books via subscription services just like people today use Pandora (and others) to listen to their music.

As a writer who would like to make a living as an author, the low payment per read scares me. I only see the payment per read going down over time. And so as an author who writes epic fantasy (first book was 150k words) the current low payment ($1.56?) per read doesn’t even come close to compensating me for my time and won’t help me realize the financial goals I’ve set.

That said, I have enrolled two of my books in KU; I don’t know if I’ll continue to do so.

I’m a little suspicious of this meme that is getting pushed out there about how music subscription services are going to wipe out download sales (and destroy indy music). It strikes me a little like all the BS about there being an end to self-publishing’s early success and the sh*t volcano and such.

One thing that doesn’t get talked about is the fact that the record labels forced Apple to raise prices on some individual downloads to $1.29 for popular songs (after Apple fought them for a long time to keep all songs at $.99.) Isn’t it possible that at least some of the drop in download sales is due to raising prices? I know I think twice when a song is $1.29.

Meanwhile, the big record companies have been trying to force paid subscriptions on music lovers for a long time without any real success and keep reinventing reasons to hype it. (Since back in the Napster days.) They’ve also hated Apple’s market share power in music as much as the big publishers hate Amazon, and they have a history of trying to undercut Apple, just like the publishers do with Amazon.

After repeated failed attempts to get people to buy subscriptions for over a decade the record labels have adopted a new strategy, which is supporting free services that absorb enormous amounts of tech capital which is handed over the the record companies in big multi-million dollar cash payments and a large percentage of equity (none of which goes to the artists). The theory is that people will upgrade to paid subscriptions someday after getting used to free. So far, despite huge payouts to the record companies, none of these services are thriving and most are not profitable. It’s questionable whether they will survive in the long run (except possible for iRadio and Amazon Prime). Artists get screwed with subscription services because most of the money simply goes to the record labels for access to the libraries, not pay per play. (Having to split money with the artists appears to be the reason record companies hate download sales, even though they are very profitable.) Payments for individual streams are almost nothing because the record companies already took all the money.

Apple was forced to along with the big record companies, both in raising prices and setting up their own free streaming service iTunes Radio (which also meant big payouts for library access). They might have also caved in terms of promoting mainstream over Indy music. (But I’m not sure that really is the big issue there. I happen to think Willy Moon’s song just wasn’t as good as the Feist one.)

This is all the equivalent of the big five publishers suddenly shifting to free book subscriptions with all their major best sellers and catalogue titles in an effort to hurt Amazon and on the theory that people will eventually buy subscriptions. (And sucking up a bunch for venture capital money in the process.) Would that hurt Amazon Kindle sales? You bet. But once the venture capital money is gone, and people don’t upgrade to paid subscriptions, what then?

All that being said, iTunes sales actually aren’t down that much. Apple won’t break out actual figures, and there is a history of people underestimating Apple’s success. And record companies have motivation to promote the “end of the download/shift to streaming” meme. Nelson Soundscan says overall download sales are only down 5.7%.

http://www.digitalspy.com/tech/news/a541535/digital-music-sales-down-for-first-time-since-itunes-launch.html#~oTUVLpv8Dk1cr3

Interestingly, the same report says digital album sales are only down 0.1%. Does that mean people streaming individual songs might still buy the artists albums?

I think it’s too early to tell where the whole music streaming thing is going, other than to know that the big record companies did figure out a good way to screw artists while getting big fat checks from tech startups.

It also seems too early to know how subscription services will effect ebooks. But maybe a clue is with album sales. Maybe writers should put some books on Kindle Unlimited but have others that can only be purchased by fans who hopefully discover them. Like listening to a song and then buying the album.

Hugh, that was a great read, both your post and the Ars article.

I think the moral is that authors should never depend on a single channel for marketing. It’s the same for a business. If you rely on SEO and Google changes its algorithm, you’re screwed.

Authors and businesses should have their own platform to get the word out. Grow an email list, write articles, etc.

Speaking of which, it would be great if you had an email list for your indie publishing articles. I like having important things in my inbox so I don’t miss anything.

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