The Gravy Train has Run Out of Meat - by Debbie Bennett

2014 was a defining year for independent publishing. If we can’t see this yet, I’m sure we will be saying it a few years down the line – those people that are still involved that is. I predict that 2015 will be the year that the scales stop tipping, that more indies will try to move back to more traditional methods, or simply give up altogether.

Why do I say that? My ear is always to the ground. There are links I find on facebook and elsewhere. I often retweet these (@debjbennett), if I think they will interest others.

Kindle Unlimited is surely the biggest game-changer since KDP Select. Pay a monthly subscription and you can read/borrow as many books as you like. This follows the rest of the media industry; KU is to books what Spotify is to music and Netflix is to film. BUT – and it’s a big but – KU doesn’t treat independent publishers the same way as it treats traditional publishers. For the trads (and a few selected special indies), it’s another string – for the rest it’s a guessing game as the payouts are fixed; regardless of the length/price of the work, a 99c book earns the same as a $10.99 book. And the amount depends on the size of the “pot” and endless other factors. And it’s exclusive to KDP Select, ie: pull all your books from all other platforms and Amazon will pay you an arbitrary amount it will decide.

Like all new ideas, it started out sugar-coated. The payout was high initially in the Autumn launch, and indies scrambled to get on board – in many cases to earn less than they were getting for a direct sale! Many of us saw our sales figures plummet and some authors are finding they can no longer make a living at this job. Rumours abound that Amazon will reduce the payout further, non-KU books will lose “visibility” on Amazon, and at some point all Amazon ebooks will be forced into KU – whether we want to play or not.

Like it or not, it seems that subscription services may be the future for ebooks. But while sites like Scribd at least play fair and treat all authors the same, Amazon seems determined to create and maintain a divisive class structure amongst writers. Eggs and baskets, in my opinion.

Author Holly Ward sums it all up quite neatly here.

Tax Changes

And then there’s tax law. I don’t want to bore you with the intricacies of VAT, but instead of the VAT on an ebook being a paltry 3%, it is now 20% in line with VAT rates on everything else.

This has two effects – one of which I’m sure is unintentional on behalf of the government. The point of this new law was allegedly to stop Amazon trading from Luxembourg so it could use the lower VAT rate (3%) in force there. The effect will be to potentially shut down many small businesses which will be unable to comply with the new legislation. And where will their customers go for their ebooks and other digital downloads and services? Oh – that will be Amazon, of course.

The other effect of course is that ebooks now cost more. By the time you read this, ebooks in the UK will have increased in price significantly. And the author won’t benefit from this price increase – in fact many authors will absorb the cost themselves so as to remain competitive. And we’ll be in the bizarre situation in the UK where a paper book is zero-rated for VAT and a digital book is standard-rated at 20%.

Fantasy author Juliet McKenna summaries a lot of this on her blog. And business blogs are also reporting on the closure of online businesses.

And if that wasn't complicated enough, Italy now has a two tier VAT system (according to a recent Amazon email) - depending on whether your ebook has an ISBN or not! 4% VAT with an ISBN and 22% without an ISBN. You couldn't make it up ...

Other Stuff

What else has changed? Markets are expanding – in China, Korea and other parts of Asia, the ebook market is growing exponentially and they are not buying their ebooks from Amazon. For many indie authors, this market is still all but inaccessible as the two main aggregators Smashwords and Draft 2 Digital don’t yet have outlets there. There are other aggregators, but many charge annual fees for hosting and more fees for making changes. For many authors with ever-more uncertain incomes, paying up-front simply isn’t viable, not when we have to buy in our own editing and design services too. But there are pros and cons to every opportunity.

Many indie authors are going back to their traditional roots – or embracing traditional publishing for the first time. They go armed with knowledge of the real world, with different expectations and the rose-tinted spectacles removed. Hopefully this will enable them to take charge of their careers and negotiate better contracts that benefit everybody.

And many authors are giving up. They’ve had their fun, made a bit of money and have decided that now the shine is wearing off to go and do something else. Good luck to them.

Those of us who remain will need to be a lot more business-savvy in 2015. We’ll need to create our own opportunities and stand up for ourselves. The gravy train of indie publishing has long left the station.

Kristine Kathryn Rusch captures a lot of the zeitgeist in a lot more detail in this post. Essential reading for the indie writer.


Chris Longmuir said…
I've started targeting Apple in my tweets, instead of always putting links to Kindle I'm now putting links to iBooks with the hope it will pay off. According to a recent Mark Coker webcast I watched, Amazon has the largest share of the ebook market but Apple is catching up and now has the second largest share. He also quotes Amazon as trading in 14 territories, and Apple trading in 51 territories, so I thought it was worth a shot. It will be an interesting year!
Mari Biella said…
Wonderful post, Debbie. I think that EU VAT reforms might be one of the most ill-thought-out pieces of legislation in recent history, and - ironically, given that it was allegedly aimed at big retailers such as Amazon - will probably have the ultimate effect of bolstering Amazon's primacy. I really don't see how a small online retailer can possibly comply with the new law.

As for KU, heaven only knows what the ultimate outcome will be for authors...

I think it's probably true that the gold-rush mentality that once permeated the self-publishing world has begun to peter out. It might not be an entirely bad thing. A few years ago, there seemed to be a feeling in some quarters that anyone could type out anything in a Word document, upload it to Amazon, and make money. Now that it's becoming increasingly clear that it really isn't that easy, those who once treated it primarily as a money-making scheme and didn't particularly care about the quality of their products will in all likelihood move on to something else.
Lynne Garner said…
Interesting post. I haven't put my books in KU and at present have no intention of doing so. Having been writing professionally for almost 20 years I know this is not a get rich quick career. SoI'll keep writing whilst the market around me changes and adapt to those changes.

Chris - thanks for the tip about iBooks. Sales on these are low for me at the moment but as my books are available on there as well I'll start plugging these as well.

glitter noir said…
It isn't often that I find a post too alarming to finish in one sitting. But every now and then we all need to be bitch-slapped to attention. I've now finished reading this--and will begin to apply it as soon as I've fully recovered.
Lydia Bennet said…
Brave words Debbie, heralding the end of a brave new world! if the ebook boom is dying, it's also partly though its own weight - the original few who did well and got into all the algorithms have been superseded by gazillions of writers clamouring for attention and punters simply can't get through the hordes. But I can't see trad pub being as before, either. Too much has changed.
Debbie Bennett said…
Indeed. There are so many people running around online screaming that the sky is falling right now. For those who gave up their day jobs to write dino porn full-time, maybe it is... But for those of us who are in it for the long-haul, I think we just need to start thinking smart now.

I still think the best advice is write more books and write better books!
Interesting if faintly depressing post, Debbie, and I've been following all of this online as well. Diversification of distribution is, as ever, the answer I think. Chris - interesting too about Apple - I'm starting to head in that direction among others as well, and definitely not putting all eggs in one Amazon basket although I may leave the one novel that sells consistently well in Select for a while to see what happens. The consensus seems to be at the moment that KU may be useful for short fiction. And I agree about writing more books. I don't think going down the trad route is necessarily an all or nothing alternative though. And this is me speaking as a reasonably happy 'hybrid' - but anyone who thinks they are going to make money that way is almost certainly doomed to disappointment. And the time involved in querying (years and years and years) makes it unrealistic. Better, perhaps, to remain indie and query at the same time if that's what people decide they want to do. I'm certain that nobody should ever, these days, find themselves in the unhappy position of sitting on unpublished work for years waiting for the gatekeepers to make up their minds!
And of all those excellent links, I think Kristine Kathryn Rusch is the most illuminating and true.But then she always is brilliant on the business of writing.
glitter noir said…
Good points made by Catherine. As time seems to slow and age seems to race, some of us would be damned fools to change horses again, mid-stream. I was warned at the start that overnight indie success stories are few and far between...that most of us will need to put out 12 or 13 ebooks before our stars begin to shine. The best course seems to be: put out more books, write better books and acquire the marketing skills that we need.

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