Book Publishers, Big Data, and Illinois
I ran ten bots for a few days. Their mission was simple — tell me which Amazon Kindle category has the greatest opportunity right now.
My bots concluded that I should be writing a book about Illinois.
I guess I settled for an article.
“Illinois?” you say.
Yes, Illinois. Why? Because Illinois has the highest ratio of monthly sales to title count. Now, let me take this from the beginning.
What is the real job of a Book Publisher?
Once upon a time, the Publisher was the gatekeeper to the distributor. In that sense, the Publisher was a risk-management machine. Much like a hedge fund, a Publisher had to manage risk by investing in the right book titles, printing the right number of copies, and spending the right amount in marketing.
For this model to work, a Publisher had to spread their bets over a range of titles. The more titles, the less the risk, and the more a Publisher could afford to bet. In other words, size mattered.
That is, what a Publisher used to be.
Then Amazon changed everything.
Print-on-demand and eBooks eliminated the risk for left-over stock or storage costs. Moreover, the Amazon search engine created a level-playing field for small Authors and big Publishers, reducing marketing risk.
The risk for writing and producing a book has remained the same, i.e. every Publisher must risk resources to create something with uncertain returns.
So, with most of the risk wiped away, did big book Publishers disappear?
Nope.
Big Publishers lost market share to small Publishers and Authors who chose to publish independently. The new business model was clear. Size does not matter.
The question, however, remains. What is the real job of a book Publisher nowadays?
3+1 answers to this question.
1. No real job
Indeed, 40% of Amazon Authors think that a Publisher is of no value to them. They have chosen to publish directly through Amazon KDP and keep 35–70% of royalties. Good for them.
2. Book formatting, cover design, and marketing
Many Amazon Authors choose to publish through a KDP Publisher. These Authors typically give up 50% of the royalties to the Publisher (earning 17.5–35%) to avoid bothering with the technicalities.
3. Access to Book-stores, and Big Publisher Branding
Big Publishers are still the gatekeepers to getting your bock in stock in national retailers. Some of them have also strong brand muscles that can help a book launch, especially in non-fiction.
In the last few years, a new Publisher species has emerged — one that, by its nature, works stealthily like a snipper.
4. The fourth type of Publisher is the Data-Driven Publisher.
Data-Driven Publishers are like Big Publishers in the sense that they still manage risk, but they do so differently.
We already said that risk has reduced significantly. However, the risk in writing and producing a book remains. Data-Driven Publishers focus on managing this risk very efficiently.
To do so, Data-Driven Publishers use data to “write to market”, i.e. create books in niches with high and/or growing demand and low competition/supply.
Uh, oh! Does it smell like “programming”, “machine learning”, and “big data”?
You bet it does.
Data-Driven Publishers are either programmers and data scientists or must outsource the jobs of collecting, curating, organizing and interpreting the data.
In the end, Data-Driven Publishers are paid for making the book market more efficient, i.e. by allocating resources where they are most needed.
Show me an example
Fiveabook (my website) has started publishing monthly market reports on every Amazon Kindle category. The reports show where there is market opportunity on a sub-category basis, how easy it is to get book reviews, the degree of publishing activity, etc.
Here is an example graph that shows the opportunity of the top-level Kindle categories in January 2020. Each category is represented by a square. The larger the square, the greaterthe opportunity.
To measure “opportunity”, we take the number of monthly sales of a category and divide by the number of titles in that category. Monthly sales is a good proxy for demand, and number of titles is a good proxy for supply.
If you specialize in a niche or would like to zoom in to a specific category, you can select the Kindle Market Report for that specific category.
How does this mean if you are an Author?
Let me get this out of the way. You don’t have to change who you are or start writing books you don’t want to write.
“What if my hot new idea is not on any Data-Driven Publisher’s list?”
Publish it independently and prove them wrong.
“What if my Data-Driven Publisher insists on a different angle or title?”
Weigh the benefits and risks, listen to your heart, and make the call. Having the option to also listen to the market is a good thing as long as it remains an option.
Data-Driven Publishers are not only good at coming up with sellable topics. They are also good at spinning topics to sellable directions. Want to write another Paleo Diet book? A Data-Driven Publisher may be able to tell you what angle you should follow.
What does this mean if you are a Publisher?
Type 2 and 3 Publishers can start using data to enhance their strategies and offer more value. Since it takes time to gather data (in some cases it takes years), you should start gathering data asap, even if you are not ready to integrate it into your business model. Here are some examples of data you can gather:
Amazon book data and review data
Keyword search data
Amazon Advertising data
Goodreads data
Social data
Book content data
When the time comes, it is better to have more data, than less data. Most likely, you will end up using the data you have collected in ways you never imagined, and wishing you had collected even more data.
For example, you may gather review rating data on books because you have a hunch that it will be useful in assessing market opportunities. Five years into the future, Natural Language Processing advances to the point that you can automatically assess thousands of reviews and find what readers are hungry for. However, when you started collecting the data you forgot to record the review text. Bummer.
The Future of Book Publishing is — Looking into the Future
Eventually, you will be reading a book written just for you, by an AI that combines the expertise of people (or other Ais) of your choosing.
Until then, Publishers need to worry only about data giving other Publishers super-natural forecasting abilities. If you don’t mind not knowing which books are more likely to sell, or how to spin a title to make it sell, then you are most likely in the book formatting and cover design industry, cause Publishing… well, that’s about to get technical.
Get your bots on and good luck!
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