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E-publishing and Business Models - Cat Rambo [entries|archive|friends|userinfo]
Cat Rambo

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E-publishing and Business Models [Oct. 19th, 2010|07:54 pm]
Cat Rambo
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[music |Baaba Maal - Dikel]

Electronic publishing continues to encroach on print publishing. Sales of e-books are on the rise and a variety of e-reader options are floating around, with more due to wash over us by the Christmas buying season.

E-publishing has a lot going for it: availability, portability, scalability, the ability to hook into the power of the Internet. While I’ve resisted e-readers so far, my friend Louise Marley swears by her Kindle both for the amount of reading matter she can load onto it and the wireless card that lets her download new material anywhere.

This rise in e-reader popularity happens at a time when we’re seeing the speculative fiction print magazines floundering: Realms of Fantasy just announced its closure and The Magazine of Fantasy & Science Fiction has cut back on its number of issues. But who will supplant them in the electronic realm remains anyone’s game still, although the leading contenders are Beneath Ceaseless Skies, Clarkesworld, Fantasy, and Lightspeed.

Hindering e-published speculative fiction magazines has been the lack of a clear business model. The most traditional forms have been deriving revenue from selling advertising or functioning as a loss leader for a larger entity, thus serving as a cost-effective form of buying advertising.

The problem with depending on advertising for revenue is that it’s insufficient without enough eyeballs being drawn to the publication. To pursue advertising, you really need to be consistently offering something both high-quality and (somewhat) unique. It’s possible to build a site that can deliver advertising dollars, but it requires investing in a) a great site and b) advertising for it. Online offers some data-rich means of advertising such as Facebook and Google Ads.

Alternate business models, none of which have proved particularly effective, include:
  • Subscriptions, in which some stories or content are offered for free while the rest requires payment.
  • Selling associated merchandise, which requires establishing a visually appealing brand that people want to be identified with.
  • Tips and fund drives, which are dependent on good will in a time when the economy is in bad shape and everyone has their hand out.


The rise of the e-reader does raise the question as to whether the subscription-based model might become viable. Certainly if you’ve got enough people subscribing through their mobile device, you could end up with a significant chunk of change, and we’re seeing (imo) some movement towards lower prices but more buyers with e-books.

One possible direction in trying to arrive at a new model is to borrow the one used to good effect by Zynga, which is to sell virtual goods, things that don’t exist. Here’s two possible examples, but it would be possible to come up with others without too much brain-racking.

1) Promote and build community heavily, driving discussion and recognizing/encouraging participation. Sell customizations to user profiles/avatars. For example, a vanity title or a special decoration celebrating a holiday. Sell memberships to an event and give the user a special badge or award that shows they participated in the event. To make this effective, you need to make participating in the community a cool experience that answers one or more emotional needs in users.

2) Come up with a game associated with the publication. Make it point-driven, and give users points for actions like reading the website or posting on the message boards, but (important) also allow them to buy points. Points could be used for turns, character items/upgrades, special names, pets, and so forth. If you think that wouldn’t work, go look at Zynga’s earnings for last year.

Either of those efforts require a publisher’s budget to create, but it should be noted e-publishing does do some interesting things in terms of removing a market layer between author and reader by eliminating the need for publisher in some cases. Authors who have a significant audience or brand name already may be able to use e-publishing to bring in some income. All you can do is make sure you’re putting out good stuff, that you have a way to monetize a mention on BoingBoing or CNN, and the rest must be left in the hands of the gods.

Which is true of any business venture -- at its heart it’s a gamble, a prediction of market ups and downs, consumer desires and willingness to open their pocketbooks, whether they’re paying with coins or Paypal.
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Comments:
[User Picture]From: karen_w_newton
2010-10-20 03:13 am (UTC)
I was on a panel with Sheila Williams last year, and she said ASMIOV'S was doing really well with Kindle subscriptions. The number was about 3,000 last year, and I believe I heard that it has gone up to 4,000-- and, most importantly, Kindle sales don't not seem to have reduced the number of print subscribers. One advantage to an eReader with wireless delivery is the customer gets the issue delivered to their device (with either 3G or wifi), and thus has much more portability than reading it while online. My issue of Asimov's arrives once a month, and I don't have to do anything but turn the wireless on ever day or two when it's expected.

Of course, Asmiomv's is particularly well suited to an e-ink eReader because the only color is in the cover, and the page layout is pretty straightforward. There are now 84 magazines in the Kindle store and Asimov's is ranked #15 in sales. Analog is #30. I don't know how that compares to their number of print subscribers.

When/if the iBooks store on the iPad offers subscriptions (as opposed to requiring publishers to create their own apps) it will be interesting to see how magazines do with a color touch-screen that's large enough to replicate magazine layout.
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From: smodell1995
2010-10-20 03:19 am (UTC)
While I tend to run extremely hot or cold in regards to online gaming (had my share, much prefer face to face), the Zynga model does hold promise.

I am not certain what to think of e-Readers at this point as the initial outlay for one is still well outside my price range.
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[User Picture]From: jtglover
2010-10-20 09:41 am (UTC)

Not Just Zynga, but...

Ye Olde World of WarCraft Weekly Online Tales Compendium. Talk about a ready-made audience. I know there's been much argument about who reads short fiction and who doesn't, gamers vs. readers, etc., but if 1/1000 of WoW players gave it a try and liked it, you'd have a going concern.
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[User Picture]From: mattkressel
2010-10-20 04:19 pm (UTC)
Cat, my belief is that when the digital screens can do what print does BETTER, that's when people will switch. And it will be a subscriber model. Right now the only ereader platform that I know of that improves upon the print reading experience is the iPad. The Kindle feels to me like I've gone back a decade or so to when websites were mostly print and image-light.

You could not, for example, publish Sybil's Garage in its entirety on the Kindle (thought I have a plain-text version available). There is no way that e-readers can duplicate the experience of the marginalia and the heavy graphics. But the iPad can. When all ereaders have the iPad's functionality, we'll see the subscription model return. People will pay for content if it's easy to do so. No one wants to whip out their credit card for every site they visit. But if all they have to do is click a button, get charged $2.99? Sure.
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[User Picture]From: oldcharliebrown
2010-10-21 06:52 pm (UTC)
Do e-readers have to, though? Asimov's is selling 4,000 copies of their Kindle edition, and that's not small peanuts. On a mass-market level it could be argued that a dedicated device like the Kindle actually makes more sense than something like the ipad . . .
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[User Picture]From: jlapp
2010-10-20 08:34 pm (UTC)

Business Models

Cat,

At the magazine I run, Every Day Fiction, we have somewhere north of 2K >daily< readers and 30K uniques (to our main page, not our submission page) on an average month. In addition to that, there's another 2K readers who subscribe to us over e-mail. These are numbers that rival or surpass the pro-magazines (http://siteanalytics.compete.com/everydayfiction.com+clarkesworldmagazine.com+fantasy-magazine.com/) Despite that, we make less than $100 from Google Ads.

The problem is that Google Ads "senses" the content. So, in a story about caterpillars, heavy construction equipment is advertised which is of little interest to our readers. If we could get Google Ads to appear that were targeted at our readers, likely we'd do far better, but we haven't figured out how to do that yet. Even at $3/story, the only reason we break even is that 40% of the authors donate their payment back to the site.

We're going to try the "free on the web" model, with a charge for the Kindle and iPad versions of $1 a story. I'll let you know how it goes.
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[User Picture]From: jlapp
2010-10-21 04:17 pm (UTC)

Re: Business Models

The trick about compete.com is that they're equally inaccurate across all sites. They buy their info from ISPs, so if one ISP doesn't sell, info for >all< sites visited by their clients is lost.

Saying that you should ignore compete,com because it doesn't take into account every ISP is like saying that you should ignore Bookscan because it doesn't include Wallmart.

All I was saying was that if EDF only raises $100, if another magazine were to double or even triple that it's still only a fraction of what a pro-mag pays its contributors. Adwords is flawed for fiction mags.

Just as an aside, nowhere in my comment did I make note of the relative quality of the magazines. In fact, I posted those two because they're my favorite online sources of fiction.
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[User Picture]From: jlapp
2010-10-21 04:44 pm (UTC)

Re: Business Models

The regional issue with compete.com is real, but I don't know that an online fiction magazine has the bulk of its readers in any physical location.

I'm curious though, if you don't use compete, how do you establish how popular a site is (if you'd like to advertise on it)? PageRank (also unreliable in terms of actual traffic)?

I agree that you need to solicit targeted ads, but with certain exceptions, the skills involved with soliciting ads and editing magazines don't generally overlap. At EDF, we've solicited ads somewhat successfully, but so far we've been able to raise $120/month from them at best, which is also not enough to pay our contributors (if we were a pro mag). I think you need to be massive to really succeed at this.

In terms of advertising supported models, I'm watching DailyScienceFiction.com closely. They're pretty much perfectly SEO'd, and have same frequency of new content EDF does. While they don't have Sean Wallace or Cat Rambo, the editors do have experience in picking great content for other magazines and the pay rate to get it. To me, it looks to be the best of both models, if they can sustain that burn rate..
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[User Picture]From: jlapp
2010-10-21 07:38 pm (UTC)

Re: Business Models

No, it's just an uninformed shot in the dark that they are waiting for traffic to pick up before rolling out the ads (many sites do this). Otherwise, I can't for the life of me figure out their business model. Why else choose a perfectly SEO'd magazine name if they're not aiming for massive traffic?

Also, CW is probably going to do better with solicited ads because your readership is more specific (sf & fantasy readers) allowing for more targeted ads, whereas EDF, by virtue of publishing any and all genres, has a harder time and has to just target "readers".
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[User Picture]From: catrambo
2010-10-20 09:45 pm (UTC)
This got reprinted over at io9.com, there's more commentary over there.
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From: ext_299581
2010-10-26 11:41 pm (UTC)

E-publishing

Yes, Daily Science Fiction hopes to eventually use advertising as part of the mix to cover author payments. (As you've noted, we're not nearly big enough yet.)
We're trying on the SEO front, but honestly I'm not convinced that anything matters so much as content. We aspire to have great content like Clarkesworld and Fantasy-Magazine, but readily acknowledge that we're not Sean Wallace or Cat Rambo (though we've carried one of her stories!) or Anthony Clarke.
At the day job, we do use compete.com, but are perennially disappointed that it misses our numbers by more than 50%, heavily undercounting our rural readership apparently.

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[User Picture]From: theferrett
2010-11-09 05:12 pm (UTC)
Part of the issue is that webcomics have managed to make this model work very well - selling merch and ads. Admittedly, they have MUCH bigger numbers (I averaged about 20,000 daily visitors for my webcomic Home on the Strange just before its run ended, and that was considered small-fry) -

- but part of the problem is that you're dealing with collections of short stories. Webcomics do well with the merch because they can get people to buy merch based on recurring characters and clever gags - but for most of the short story collections, the stories themselves are one-shots. Furthermore, webcomics lend themselves to punchlines that are easily leveraged into merch; short stories don't (although one shudders to think about what kind of merch we could develop for Kij Johnston's "Spar").

I think one of the things that could actually help a publication is to have a shared universe - kind of like Edge of Propinquity or the Grantville Gazette, which could help to push merch and loyalty (I mean, every collection is a box of crackerjacks, but at least you know you're home).

Which is not to say that Strange Horizons should develop the Horiziverse, stat - it's just that for profitability, it might be interesting to see how a shared universe like that spins. The question of what we can learn from webcomics is still very much open.
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