Low-priced ebooks and subscription options may be eroding traditional publishing fiction sales
As we’ve often reported in Hot Sheet, fiction sales for traditional publishers have been declining in recent years. Back in August 2016, when we noted a dry spell for new novels on the bestseller list, we asked industry experts for their best guess as to why. Explanations ranged from too-high ebook prices to audience segmentation—with an executive at Knopf dismissing the concern entirely, saying “Blockbusters are imperfect bellwethers.”
Yet the issue hasn’t gone away. If anything, it has become more pronounced. In late October, Publishers Weekly spoke with several industry insiders, looking for answers as to why fiction sales dropped 16 percent between 2013 and 2017 for traditional publishers (according to data from the Association of American Publishers). This time, theories included the following:
- The difficulty in generating exposure for novels and new authors rises as the number of physical stores declines—plus review space for books is shrinking.
- The abundance of low-priced fiction at Amazon makes it more difficult to develop brand-name authors who inspire premium-price loyalty.
- TV, digital devices, etc. compete for consumers’ attention. (More on that in part 2, below.)
- Nonfiction rules right now because of the political climate.
Some of these theories are rich in irony, given how the traditional publishing community is quick to celebrate the return of the indie bookstore and the resurgence of print. If brick-and-mortar book retail really is making a comeback, perhaps it is not so meaningful in terms of sales volume.
One area the article didn’t delve into: the effects of Amazon Publishing, Kindle Unlimited, and self-publishing on fiction sales. The article does quote Peter Hildick-Smith of the research firm Codex Group saying that cheap ebooks from Amazon are a factor insofar as they make it more difficult for publishers to establish or maintain loyalty for brand-name authors. So we followed up with Hildick-Smith to get more of his thoughts on this issue.
He told us that Amazon’s North American media revenue (which includes book sales) grew in the double digits from 2013 to 2016, despite them giving away an incredible amount of free content to Prime members: “If AAP is saying fiction is down, we don’t believe those sales have gone away. They’ve just become hidden behind the Amazon curtain … where 90 percent of Amazon’s own proprietary publishing titles are also in fiction.” He mentioned that in the last year alone Amazon Publishing has released more than 1,100 titles, putting them among the top 10 US publishers in total title output. However, their titles, unlike those of major publishers, are available almost exclusively through Amazon.
Hildick-Smith said that one might best describe Amazon Publishing not as a traditional publisher but as a content creator feeding a subscription machine. Subscriptions now earn $3 billion for Amazon in North America and are rapidly growing, so think of Amazon Publishing as a Netflix or Spotify. Amazon Prime members may look to Kindle First, Prime Reading, and the Kindle Owner’s Lending Library for free ebooks to maximize their subscription value; Kindle Unlimited subscribers who pay a monthly fee for access may rarely venture outside Amazon’s selection. Readers purchasing ebooks outright find that Amazon Publishing’s books are almost always priced under five dollars; self-published titles are often under five dollars as well. Hildick-Smith says this pricing strategy is lowering the reference price for books—what consumers think books are worth. Obviously this creates a challenge for traditional publishers charging $9.99 or more.
Established novelist MJ Rose also believes that pricing is at the heart of the issue. She points out, “BookBub’s sales numbers go up and up, with estimates of over 30 million sales under $2.99 a year. The fiction market for books under five dollars is not declining but very healthy.”
Bottom line: Hildick-Smith says the hallmark of successful fiction publishing is sustaining loyalty to a brand and that the number-one factor in a decision to buy a new book is whether the author is someone the reader knows and likes. However, he says, that loyalty is being eroded by low-price tradeoffs. The big question about the subscription programs: Even if they bring in a lot of money for Amazon and are growing year on year, will they generate the same revenue for authors? We don’t yet see a clear answer to that, but one thing is certain: authors should keep their eye on what Amazon is doing.
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
