Self-Publishing Challenges Book Industry Establishment

According to today's Wall Street Journal, authors are now able to bypass the publishing industry by selling their self-published books on Amazon.com--and the iPad looks to make electronic publishing the wave of the future:

Much as blogs have bitten into the news business and YouTube has challenged television, digital self-publishing is creating a powerful new niche in books that's threatening the traditional industry. Once derided as "vanity" titles by the publishing establishment, self-published books suddenly are able to thrive by circumventing the establishment.

"If you are an author and you want to reach a lot of readers, up until recently you were smart to sell your book to a traditional publisher, because they controlled the printing press and distribution. That is starting to change now," says Mark Coker, founder of Silicon Valley start-up Smashwords Inc., which offers an e-book publishing and distribution service.

Fueling the shift is the growing popularity of electronic books, which few people were willing to read even three years ago. Apple Inc.' s iPad and e-reading devices such as Amazon's Kindle have made buying and reading digital books easy. U.S. book sales fell 1.8% last year to $23.9 billion, but e-book sales tripled to $313 million, according to the Association of American Publishers. E-book sales could reach as high as 20% to 25% of the total book market by 2012, according to Mike Shatzkin, a publishing consultant, up from an estimated 5% to 10% today.

But some publishers say that online self-publishing and the entry of newcomers such as Amazon into the market could mark a sea change in publishing.

"It's a threat to publishers' control over authors," said Richard Nash, former publisher of Soft Skull Press who recently launched Cursor Inc., a new publishing company. "It shows best-selling authors that there are alternatives—they can hire their own publicist, their own online marketing specialist, a freelance editor, and a distribution service."

Amazon has taken an early lead, providing service tools for authors to self publish and creating an imprint last year to publish promising authors in print and online.

This month, Amazon is upping the ante, increasing the amount it pays authors to 70% of revenue, from 35%, for e-books priced from $2.99 to $9.99. A self-published author whose e-book lists for $9.99 on Amazon's Kindle e-bookstore will receive about $6.99 for each book sold. The author would net $1.75 on a similar new e-book sale by most major publishers.

FULL DISCLOSURE: I own stock in Amazon and Apple.