Seth Godin launches his first publishing project on Kickstarter--hits his goal in three hours

This morning, author Seth Godin launched a campaign on Kickstarter to pre-sell his first print book in more than a year, titled The Icarus Deception. Godin is working with an unnamed print publisher that was only willing to commit to publishing the book if Godin reached his Kickstarter goal of $40,000. In fact, Godin reached the goal in the first three hours of the campaign, and as I write this, he's raised pledges of more than $95,000 with 28 days to go.

Is there a market for "enhanced" eBooks?

Shortly before Christmas, The Huntington Post published an interview with David Prichard, the President and CEO of Ingram's Content Group. Ingram is the largest book distributor in the U.S. and operates Lightning Source, which is one of the largest publishing-on-demand services companies, and a major vendor to self-publishers. In the interview, Prichard talked about the future of publishing, and one of the things he talked about were "enhanced" eBooks:

"Enhanced e-books are only in their infancy, allowing authors to add alternative endings or interviews. Down the road, who knows what's possible? Maybe we will have biometric devices that can sense your pulse and body temperature and change the plot based on your feelings -- and you think Stephen King is scary now." 

"...for example, a biography can to come to life in many ways. Jacqueline Kennedy: Historic Conversations on Life with John F. Kennedy has all of the interview audios, videos, photographs, text, and transcripts available. Even classics -- Penguin has updated Pride & Prejudice with clips from the movie and even instructions on dancing. For the 75th anniversary of The Hobbit, HarperCollins released an e-version with exclusives including J.R.R Tolkien's book illustrations and recently discovered Tolkien recordings. Publishers are still learning what added value readers will or won't pay for. I expect we'll continue to see lots of experimentation in this arena." 

Seth Godin, well-known author and marketer, responded on paidContent.org to Prichard's remarks:

"It (the interview) is filled with breathtaking visions of the future, and they are economically ridiculous. The Long Tail creates acres of choice, so much as to make the number of options almost countless. But at the same time, it embraces (in every format) much lower production values. For what Michael Jackson and Sony (NYSE: SNE) paid to produce the Thriller album, today’s artists can make and market more than 5,000 songs. You just can’t justify spending millions of dollars to produce a record in the long tail world." 

"The same thing that happened to music is going to be true of books. The typical e-book costs about $10 in out of pocket expenses to write (more if you count coffee and not just pencils). But if we add in $50,000 for app coding, $10,000 for a director and another $500,000 for the sort of bespoke work that was featured in Al Gore’s recent “book”, you can see the problem. The publisher will never have a chance to make this money back." 

"Sure, there will be experiments at the cutting edge, but no, they’re not going to pay off regularly enough for it to become an industry. The quality is going to remain in the writing and in the bravery of ideas, not in teams of people making expensive digital books."

Others have picked up on the discussion; for example, the Teleread blog summarized Godin's post, and as of now, every comment on the Teleread post opposes Godin's position. I agree with what Godin wrote, with some reservations. First, let's leave the "long tail" arguments aside--the long tail theory has largely been debunked. The long tail only makes money for distributors, who can aggregate small numbers of sales from a large number of publishers/writers/producers. However, the market is being flooded by titles from self-publishers, and it's harder than ever for consumers to separate the wheat from the chaff. Price is no longer an indicator of quality. The most likely outcome is that there will be a small number of titles that do well (as usual), and an ever-larger collection of titles that barely, if ever, earn back their investment in time and money.

Many of the Teleread commenters objected to Godin's statement that it costs "$10 in out of pocket expenses to write" an eBook. He doesn't include editorial, design and eBook conversion services, which can cost hundreds to thousands of dollars if an author farms them out, but that's not what the commenters objected to. Their concern was that Godin made no accounting for the value of the time that authors spend writing. I understand their arguments, but I'm not sure that they're realistic, especially in today's climate. In the 1990s, I wrote two computer books, one for Prentice Hall and the second for Ventana. The first one earned back its advance and sold around 12,000 copies domestically, as well as local-language reprints in a variety of markets. The second one was never released in the U.S., but was released by Ventana's partner in Japan as a local-language title. It didn't earn back its advance. Considering the time I spent writing the two books and the amount I earned, I would have made about the same amount on an hourly basis if I'd worked at Burger King. That's why I stopped writing books.

Your market value is what your customers or clients will pay for your time. In the case of a self-publisher, it's the income that you get from your title divided by the number of hours you spent working on it. If that number doesn't satisfy your financial requirements, you have to increase the number of copies you sell, change your pricing, or do something else that pays more money.

Now, to Godin's central point: Most publishers and self-publishers are very unlikely to recoup the additional cost for adding rich media and interactivity to their eBooks. His cost estimates may be off, but his logic is correct. The fact is that most "enhanced" eBooks to date have sold poorly. If you're creating a native app for iOS or Android and you have to hire developers to do it, that costs money. Even if you're sticking with, say, Apple's EPUB extensions for rich media, Barnes & Noble's extensions for Nook Kids, Kindle Format 8 (when it becomes available to all publishers) or, in the not-too-distant future, EPUB3, there's a cost in time and money for adding interactivity and rich media. For now, at least, you're unlikely to earn back that cost. Thus, the most reasonable approach is to create conventional eBooks.

At some point, enhanced eBooks will "crack the code" and become widely popular, and the additional front-end expense to produce them will be justified. Today, however, that's not the case.

The eSingle revolution

No, I'm not talking about online dating services or individual music tracks. eSingles are short (usually 30,000 words or less) eBooks, most often non-fiction. Amazon calls them Kindle Singles (hence the eSingles name); Apple calls them Quick Reads. There have been printed short stories and novellas almost since the birth of Gutenberg's printing press, but short non-fiction books haven't fared as well, especially in retail bookstores. There's an implicit connection in consumers' minds between the length of a book and its value: A thin book is simply worth less money than a thick one.

The manufacturing costs of books--printing and binding--are affected much less by the number of pages in a book with a given page size than they are by how many copies are printed and bound at a time. A 300-page book costs more than a 100-page book, but nowhere near three times as much. If consumers are predisposed to pay more for a bigger book, that makes the bigger book more profitable than a smaller one. The result is that publishers set word- and page-count targets for their authors that are intended to create bigger, higher-priced and more profitable books. In turn, the books are often padded out with unnecessary information--case histories, sidebars, interviews, etc., that may be interesting but that don't really contribute to the core value of the book. In other words, filler is added to increase the page count.

eBooks have changed how consumers perceive books, in that they no longer judge books by their cover (or, in this case, their size), and instead pay more attention to other factors: The author, subject and reviews. This has enabled eSingles to become viable. Seth Godin's The Domino Project, for example, publishes short non-fiction eBooks that are either primarily motivational or that focus on a single topic. Italy's 40Kbooks is bringing the same approach to fiction. Magazines and newspapers are publishing eSingles that either feature compilations of previously-published articles or new works; The U.K.'s The Guardian newspaper, for example, recently published an eSingle explaining how it broke the News International phone hacking story.

eSingles are generally less expensive than full-length eBooks--for example, they're typically priced between $1.99 and $7.99 at Amazon. Their short length means that they can be written, edited, designed and released much more quickly than full-length titles. That means that they can be more current than full-length titles from the "Big 6" trade publishers, which often take a year or more to get from submission of the manuscript into the hands of consumers as a printed book. Also, both writers and publishers can spread their risks across far more titles; a writer could potentially write and publish as many as four eSingles a year, vs. one full-length title.

Another factor in favor of eSingles, especially for self-publishing authors, is the aggressive royalty that they can get. Amazon, for example, will pay as much as a 70% royalty on each eBook sold, depending on the price and whether or not it gets exclusivity. Given that the Big 6 typically pay only 12% to 15% of the wholesale price to authors, self-publishing authors can make significantly more per copy, even at a much lower sales price.

Here's an example:

$19.99 eBook sold on agency terms (30% to reseller) = $13.99 wholesale price
15% author's royalty (before exclusions and deductions) = $2.10 per copy

$6.99 eSingle sold exclusively through Amazon with 70% royalty = $4.89 per copy

In this example, the author/self-publisher will have to pay all the costs of copyediting and design, but will still end up making substantially more money. That's why I believe that authors will gravitate to eSingles, non-conventional book publishers will embrace them, and "old line" publishers will be forced to respond.