eBook Industry: Does Amazon Have a Winning Hand or a Dead Man’s Hand?

Does Amazon have a winning hand or do they need to draw more cards to stay ahead in the game? Amazon is the dominate player in the ebook industry, hands down. In fact, they are so strong that they can sell some products at a loss and still win the hand.

They can do this because ebooks have a very high profit margin. Check this hand out. I can buy an ebook from Amazon and it’s never touched by human hands. No shipping. No warehousing unless you want to count their file servers. The first physical action is when I pay with my credit card and that can be automated if I chose. So the overhead is very low.

Amazon has attacked the ebook industry with a very aggressive marketing strategy. They have chased away bookstore chains and changed publisher’s ways of doing business. In a few words, they have played their hand perfectly by bluffing the other players into thinking that they can’t be beat.

But as most gamblers know the hand is not over until the last card is dealt. Can someone out draw Amazon by coming up with a better strategy or change the game itself?

The Strengths of Amazon’s Hand

So what is the strength of their hand?

Organization: They have setup an organization and internal software system to effectively manage an online business. A customer can buy an ebook online with immediate download and access the ebook, all at a reasonable price.

They approached the industry with deep pockets by leveraging their ebook products with their large pbook distributing system and a wealth of other products all sold online.

Marketing: They have successfully marketed the Kindle eReader and Kindle Fire as a lower than cost device. Readers have rushed to get the affordable devices not realizing they were committing to a controlled, lasting relationship.

Devices: The eReaders are tied to the Amazon format which allows Amazon to control the user and create a captive audience for their ebooks.

Software: Amazon created a software system to sell ebooks electronically and gather information for marketing at the same time.

Sales Tax: I feel the number one advantage Amazon used to defeat bookstores was the lack of sales tax on their products. This translated into a discount in price for all customer purchases. Customers were going to bookstores and reviewing the book. Then they would access the Internet and purchase the pbook or ebook online avoiding the sales tax.

They are starting to lose this winning hand as States across the country are attacking the free lunch tax advantage Amazon has over physical bookstores.

Self-Publishing: They developed an easy to use self-publishing system for would-be authors with a good royalty package. Now established authors are catching on to the added revenue they can earn and are moving their ebooks to the Amazon game.

Amazon Select: They have developed a program called Amazon Select. This program connects publishers who publish exclusively on Kindle to enter the ebook Lending Library. They will then share in Amazon funding, based on the borrowing of their title. Again EXCLUSIVELY is the key word.

Amazon Exclusives: Their Exclusives program is aimed at securing a captive author’s team. Successful authors can opt-in to sell their titles only at the Amazon publishing venture and avoid Apple and other competitors selling them. It is rumored that Amazon’s new retail store venture will handle only Amazon Exclusive titles.

The Weaknesses of Amazon’s Hand

We can see Amazon’s cards. They have a strong hand but the deal isn’t over. Other players will start to play at the ebook table. Here is the ‘tell’ as they say in the gambling world.

Control: Amazon doesn’t control or own the content. They are the distributor of the products but they don’t create it. The publishers and the authors control the ebooks and they can do anything they want to with it. The Amazon Exclusives program is another move to gain control of the marketplace. There is a good chance that the next big superstar author could start in the ebook self-publishing ranks and they are betting on it.

Single Device: One of the weaknesses is Amazon is betting on their own eReader to capture the market. The Kindle and the Fire are not the best or the fastest eReaders on the market. They have tried to buy the market on price and have done so up to this time. But what stands in their way is they will need to move from their proprietary ebook format to more accessible ebook strategy.

Internet Only: Amazon has no physical presence. They have recognized this and have started to setup a bookstore model in Seattle with only the books they publish and their Kindle devices available; again a closed product offering.

Publishers: Their continuing struggle with publishers is another major problem. For example, the problems have put a major hurdle in front of Amazon’s Lending program.

Prime: Amazon has initiated the Prime program with free shipping, movie streaming and ebook lending but there is no apparent ebook advantage or discount to the program unless you count the ebook exposure through lending.

Search Engine: They have developed a product search engine for ebooks that is becoming unwieldy. Amazon will need to limit their ebook selections at some point. My first novel was about President John F. Kennedy’s Assassination. A search for ebooks about JFK found 238 entries and 74 for the assassination. Would anyone look past entry number 50 on the lists? I doubt it.

Reviews: Self-entered reviews have little or no monitoring. Buyers don’t really know if they are true reviews or a friend of the family. Amazon will need a gatekeeper on ebook entries at some point in time to keep up the quality of their product offering.

Can Another Player Draw a Competitive Hand or Change the way the game is played?

If I could pick my hand from the rest of the deck, what cards would I select? Remember this is not like real poker. I wouldn’t have to leave it up to chance.

Multiple eReaders: First, I would sell multiple eReaders and tablets with multiple formats like Best Buy’s selection. I would pick the best devices for the price including Kindle, Nook (while still available) and the iPad because of the popularity.

Physical Stores: Next I would create stores in high density locations with a showroom of products using a physical, hands on approach. The Apple store model appears to be a winning model for this type of marketing.

On-line Marketplace: I would back this up with an on-line marketplace being fed information from surveys and professional reviews. Software is the key to the winning hand here. Software development is not an exclusive talent.

Franchise: I would franchise locations establishing a brand of quality and knowledge. The franchise would sell ebooks, accessories, author’s presentation, some pbooks and apps on site with a Club membership. The members would receive discounts and rewards for purchases.

Meeting and Classrooms: Each store would have in-store classrooms for special events, meetings, readings and guest presentations. The ebooks selection would be organized by genres. Possible one group would discuss Romance novels while another group would meet and discuss Science Fiction. The store would have demos of products on a continuing bases.

Personal Support: In-store product support would be one of the keys to the venture. The goal would be to provide unique hands on service. The staff would be knowledgeable, first in technology, and then the book sales environment.

Workshops: Author’s workshops would be provided for a fee to assist new authors in entering the ebook arena. The workshops would emphasis ebook concepts, formatting, cover design, where and how to sell and where to get professional help. Consulting workshops with experts in the ebook development process would be regularly scheduled.

Vertical Marketing: The new venture would use a vertical marketing approach to the type of ebooks sold. Each location would get access to local authors and seek out local ebooks for its customers. A key here is creating a human interaction using customer recommendations and selection advice. It would be like developing reading centers for groups of readers to share information. This would be backed up by blogging and social networking.

BN lost their chance. They drew to an inside straight so to speak. How BN has announced Sterling Publishing is for sale and are hunting for a buyer for their Nook product line. Their member’s program has failed in the ebook marketplace.

Know When to Hold Them and When to Draw New Cards

In the ebook industry, anyone can repeat what Amazon has done. There are no trade secrets here just aggressive marketing strategies and now deep pockets.

Like Wild Bill Hickok thought that fateful day in 1876 in Saloon No. 10; just when you think you have the winning hand, someone can come along and outdraw you. He had the Dead Man’s hand and he didn’t realize it until it was too late.

Amazon has the winning hand right now but the level of entry in this game has a relative low ante.  Can someone come up with a better solution or can they change the game by improving the products and services? Are there other things you would add this game to create a winning hand?

View my website: HBSystems Publications
Specializing in the ebook experience

Or EMAIL at: jrm@hbspub.com
Or go to my blog: The eBook Author’s Corner

LinkedIn Profile: James Moushon
Author: Call Off The Dogs, a rendered eBook

Real eBooks: Are We Still in the Stone Age?

So when will we start to see REAL ebooks appear on the market? You know the ebooks that take advantage of their digital environment. Ebooks that have been rendered to improve the reader’s ebook experience. As the number of ebook devices explodes into the book reader’s world, the readers are going to expect more. This statement is especially true with the younger generation whose world seems to center around instant access.

I just completed a study of twenty newly released ebooks just to see how far the art of ebook publishing has advanced in the last year. I choose ebooks from well-known authors, from self-publishing authors, some novels, some technical books. I wanted a variety for my study. I would like to share my observations and suggestions for their improvement.

My contention is that REAL ebooks should be a different product than their paper counterparts. They should be formatted differently; sections arranged differently and in some cases they should have different covers. In short, to be a REAL ebook, they should not be just a copy of the traditional book version.

The following is a list of certain areas that I feel need improvement; areas that you must consider when you create your ebook.

REAL ebooks Links

Rendering your ebook with links is a major step in the right direction in creating a REAL book. What items MUST have links?

1.      The Table of Contents must have links to the chapter headings. Most are doing this now.

2.      Author’s References – the ebook must include links to the author’s website, email address, blogs, online profiles and social networking connections (Facebook/Twitter). You need this to get your reader/audience involved.

3.      Author’s Other Books – there should be links to the buy pages for other books created by the author. Why miss this marketing opportunity.

      For example, in my study two of the ebooks were written by top 10 authors and published by traditional publishers. Both had a list of their other titles, provided credits for the book creation and the usual publisher information. Neither used links to assist the reader in buying other titles or helping their co-developers secure new business. One did have a link to the publisher’s web site. There was no links to the author’s website, blog, email address or social network information.

4.      In book Links – the REAL ebook should have links in the content to footnotes (held in appendix), to word and term definitions and to references. For example, one project I recently worked on was a pictorial about Omaha Beach with over 50 original pictures inserted in the content. With the picture, its title and the picture credits, the content became very difficult to read. The solution was to have a link from the picture title to the picture’s credits in the back of the ebook. If the reader wanted to check out the source they could follow the link and then hit the back key on the ebook device. If the reader didn’t, they could ignore the link and continue without interrupting the reading experience.

Another example in my survey was a technical book about the publishing industry. It was a well written book with lots of good information and references. But there were no links. None! It contained lots of hard coded website addresses and email contact information. All I had to do was re-enter the URL into my web browser and I could find the source.

Actually this is a missed opportunity. One of the problems that traditional books have that REAL ebooks can solve is the maintenance of links in the books. As we know we live in an ever changing world. Web and email addresses change on a daily basis, it seems. So there I am with a link to some interesting information and the link is no good. A broken link, if you will

If the REAL ebook is managed properly, you can avoid or limit this problem. You can create an online directory of links for your ebook. Then you setup a link monitoring process and a link maintenance routine and maintain a valid list of links in the directory. I call this the Goodlinks concept. Just include a link to the online directory in your ebook and you won’t lose your audience.

In fact you can draw the reader to your site and market other products and services. Of course, the beauty of the REAL ebook is you can republish it at any time with the updated links and information.

I believe the REAL ebook can help solve the read-back problems that all readers are faced with at one time or another. I watched a reader the other day try to deal with a novel that was riddled with acronyms and abbreviations. It was getting to be such a problem that half way through the ebook, she actually started writing them down on a separate piece of paper to reference later. Here is an example. “He called USAMRIID for advice.” I give up.

Other Considerations to Ponder

Covers

Sometimes the traditional book cover doesn’t work for the ebook. In this case, size does matter. That great book cover that you had designed is going to go small. On-line distributors try to catch the eye of would-be readers with thumbnail covers. The problem is that sometimes colors get in the way, the type size and face doesn’t look good small and the art gets distorted. A professional designer can solve this problem. You need one that can make the cover work in both environments. Check with our host for this site, Joel Friedlander.

One of the other cover issues is with the effort to get the prospective reader to view a sample of the ebook; some distributors will put a label over the right hand corner of the thumbnail which obscures that portion of the cover. A good designed cover will keep important information viewable like the author’s name or even the title of the book. I saw that in my study.

Copyright

REAL ebooks should include, with their copyright notice, the page number source document for the ebook, especially if the book has various editions. This is relatively a new process but it helps readers coordinate content between the paper version and ebook. This is increasingly important in the educational environment. Students using both hardbound and the ebook versions need a reference point sometimes.

Samples

One of the current ebook marketing strategies is to allow the prospective reader to read a sample of the ebook before buying. All distributors seem to go at this sample process differently but at the end of the day they want to provide the prospective buyer with something that can help with the buying decision. Most of them use a percentage basis.

The REAL ebook concept can help with this process but there has to be a rearranging of the book’s sections if the process is automated like most of them are.

Let me start with an example. I reviewed the buy page on Amazon for each book in my study. I choose one ebook in my study and downloaded the sample, comparing it to the full length version. Here’s what I found.

The ebook sample was in the same section sequence as the paper version. I know there is a traditional way to setup a book. This sample was no exception. It started with the cover followed by the title page, the table of contents, the dedication, the copyright page and a list of the writer’s other works.

So you ask what’s wrong with this. If this sample was going to help sell my ebook, it probably failed. The sample was 80 device pages long but the viewer had to page through 24 pages before they could start reading the book to make a decision.

I believe if you are going to use the sample as a sales tool, there are some slight changes you can make. I would include the cover and the title page with an abbreviated TOC up front along with the author’s other books with buy links. Also I would include upfront the author’s website and contact information. Move the copyright page, dedications and credits to the end of the ebook.

If you get to setup your own sample, keep this in mind. REAL ebooks and their samples should give the prospect what they need to make a decision and only that. A sample doesn’t need a complete table of content. This ebook had 80 chapters which took up four complete device pages and the kicker was; the links to the last 76 chapters were no good. Make the sample simple. Get the reader to your content as quickly as possible.

Bring on the REAL ebook

In most cases, ebooks are still just copies of the paper version but there is a huge opportunity to improve the ebook reading experience. Creative book design and digital links can help us move the ebook experience forward in acceptance.

Currently we have a problem. Let’s face it. Until traditional publishers start to treat ebooks as separate products with different properties and requirements, we have not taken advantage of the digital product. Their approach is simple but self-serving. Get it out the door. Get the copy into an ebook format, charge a higher price than needed and watch the money fall to their bottom line.

The advantage should go to the self-publisher because they control the process. They have the ability to correct the problems easily and make something really special.

Seek a professional to help you through the process if you’re really serious about marketing your ebook.

What do you think about the REAL ebook concept? Is adding links to an already completed product just too much work or would it move your book to the leading edge of ebook world and improve the readers enjoyment?

View my website: HBSystems Publications
Specializing in the ebook experience

Or EMAIL at: jrm@hbspub.com

LinkedIn Profile: James Moushon
Author: Call Off The Dogs, a rendered eBook

This blog was first published at the The Book Designer by Joel Friedlander.

Joel Friedlander is a self-published author and book designer who blogs about book design, self-publishing and the indie publishing life at TheBookDesigner.com. He's also the proprietor of Marin Bookworks, where he helps publishers and authors who decide to publish get to market on time and on budget with books that are both properly constructed and beautiful to read.

It was posted again on the Passive Voice blog hosted by the Passive Guy.

Together the two blogs have generated over 100 comments.