By Porter Anderson, Editor-in-Chief | @Porter_Anderson
Report: Big Five Ebooks: $10.31 in January, $8.67 in MayCalling their latest Author Earnings report “definitive” might seem risky. After all, Data Guy and Hugh Howey’s quarterly reports will always change, with new data. If we ever get the “final answer” that Merriam-Webster calls “definitive,” it will mean that All Literature has become backlist—much of it heavenly, some of it hellish. Charon and I will come by for you on the ferry.
But what Mssrs. Howey and Guy mean by “definitive” is, as Vanessa Amorosi’s song has it, “absolutely everybody” is in their sights now: they’ve moved beyond their earlier surveys’ focus on bestsellers to create a wider data set, which they describe as “a complete picture of Amazon author earnings—ebook, print, and audio sales combined—for every single author, traditionally published or indie, who is making any significant Amazon sales today whatsoever.”
If you’ve published anything more than a grocery list, their spider may know you.
This is an impressive assertion, of course, and all the more so because Guy and Howey pause to offer a helpful disclaimer of what’s not taken into account by their collection of digital data points, including: print sales through brick and mortar bookstores and other retailers, of course; ebook sales through Apple’s iBookstore, Barnes & Noble’s site, Kobo, and Google Play; audiobooks sold through iTunes; print books sold online but not by Amazon; library sales; publisher’s direct sales; authors’ direct sales; non-US digital and online print sales through Amazon (such as Germany’s Amazon.de); and other non-US sales.
Particularly after Guy’s useful appearance at the Digital Book World conference in March, a kind of truce has existed among many industry observers in terms of methodology debates. One can like or dislike the Author Earnings approach—many in the blog-comment pits still enjoy trading anger tokens about it—but it is what it is. Your best course is to look at their highlights and consider what they’re saying, evaluating it in the light of other industry metrics and deciding for yourself how much value it adds to your understanding of the business.
“The Big Five’s year-long plummet in overall ebook unit sales appears to have finally leveled off, leaving them with roughly 23 precent of Amazon’s ebook unit sales.”AuthorEarnings.com
What is possible to say definitively is that it’s the lack of ebook sales data from online retail, most notably Amazon, that requires this sort of exercise, at least at such scale.
This is an industry that cannot fully count its own output, particularly in the independent sector, which is primarily dependent on the Amazonian platforms and the ebook format. Guy and Howey are trying to determine a lot of what’s missing, and their introduction two years ago of the digitally devised Author Earnings series of reports was prompted by their desire to demonstrate that self-publishing could offer as good or better financial prospects to authors as being traditionally published.
Over time, the trade has become more interested in what they’re seeing, as well, in light of self-publishing’s sizable presence on the scene and because of the deepening darkness of unreported sales data. The trade, like the indie world, is interested in various effects on pricing, competition for readership, and alternative paths to publication for its authors.
“1,340 authors are earning $100,000 per year or more from Amazon sales…half of them are indies and Amazon-imprint authors.”AuthorEarnings.com
So, let’s look at some of the main points Author Earnings shows us this time. We’ll take these points without the bolds and italics that help define the drama with which the team likes to present each report. (“This report…may be our most shocking,” they write this time.)
And our intent is not to agree or disagree with what we find here but to acquaint you with some of what Guy and Howey want to say this time, especially in light of the expansion to what they describe as a “million-title data set.” That means to them:
“We were able to tally up precisely how many indie authors, Big Five authors, small/medium press authors, and Amazon-imprint authors are currently making enough from Amazon.com sales to land in a number of ‘tax brackets.'”
We’ve been in direct touch with Data Guy to confirm one thing not in the report: In terms of working out what the sales data scraped for these reports means in terms of earning power, Author Earnings now has the cooperation of some 50 authors who share their royalty information with the project. Their work comprises some 1,000 titles and provides Author Earnings with what Guy and Howey feel is the information needed to create a dependable earnings curve to use in estimating what a given round of sales data might mean about how much income it could produce for a writer.
It’s reassuring to know, as Data Guy tells us, that he has worked with industry insiders to calibrate Author Earnings’ curve for traditionally published authors and found that it holds up well by comparison when tested with industry figures.
Selected High Points of the New Report
Big Five Ebook Sales and Pricing
“The Big Five’s year-long plummet in overall ebook unit sales appears to have finally leveled off, leaving them with roughly 23 precent of Amazon’s ebook unit sales. A factor in this leveling-off may be lower Big Five ebook prices (the average price of a Big Five ebook dropped from $10.31 in January 2016 to $8.67 in May 2016)…But on the other hand, the Big Five’s loss of market-share in gross consumer dollar terms—and, more importantly, the ongoing decline in Big Five authors’ ebook earnings—have both continued relatively unabated.”
There is a separate update appended to the report relative to the total 157,000 Big Five titles of the newly broadened data set and what Data Guy has stressed could be a negative effect from pricing patterns on debut authors. You can find that sidebar here.
Bestsellers’ Benefits From Other Titles
A particularly interesting part of this report has to do with how much a bestselling author might expect from his or her non-bestselling titles. The Author Earnings answer:
“Indie authors with one or more bestseller-listed titles are, on average, receiving a significantly higher increment of additional revenue—30 percent more—from their other, non-bestseller-listed titles than Big Five authors who have listed best sellers, for whom their other titles add only 21 percent to their bottom line. For small or medium publishers who have listed best-sellers, the additional contribution from their non-bestselling titles is even less significant: only 13 percent. And oddly, for Amazon-Imprint Published authors with listed best-sellers, their other non-listed titles only contribute an additional 5 percent to their bottom lines. Perhaps this simply reflects the small number of both authors and titles that Amazon Imprints publish. Or perhaps, greater Amazon marketing adeptness, which keeps a higher percentage of their titles visible on the best-seller lists to begin with.”
Assertions relative to the scope of Amazon’s sales in this report include:
“More than 50 percent of all traditionally-published book sales of any format in the US now happen on Amazon.com…Roughly 85 percent of all non-traditionally published book sales of any format in the US also happen on Amazon.com. In other words, a comprehensive cross-sectional snapshot of Amazon.com’s sales, like the one we are describing here in our May report, is a definitive look at more than half of all daily US author earnings, period…
“Roughly half of Amazon’s daily ebook purchases are now going to indie authors.”
Author Earnings: Midlist
“More than 4,600 authors [are] earning $25,000 or above from their sales on Amazon.com. Forty percent of these are indie authors deriving at least half their income from self-published titles, while 35 percent are Big Five authors deriving the majority of their income from Big Five-published titles, and 22 percent are authors who derive most of their income from titles published by small- or medium-sized traditional publishers.”
Author Earnings: Debut Considerations
“The vast majority of traditional publishing’s midlist-or-better earners started their careers more than a decade ago. Their more-recently debuted peers are not doing anywhere near as well. Fewer than 700 Big Five authors and fewer than 500 small-or-medium publisher authors who debuted in the last 10 years are now earning $25,000 a year or more on Amazon — from all of their hardcover, paperback, audio and ebook editions combined. By contrast, over 1,600 indie authors are currently earning that much or more.
“The gap becomes even more pronounced when we look at those authors who first debuted in the last five years, or during the “ebook era.” And when we look at just the most recent debuts from each publishing path, only 250 Big Five authors and 200 recent small or medium publisher authors who debuted in the last three years are earning a midlist-or-better income from their Amazon sales.
“By contrast, there are over 1,000 indie authors who debuted in the last 3 years who are doing so…
“Out of more than 10,000 Big Five author debuts in the last five years, fewer than 220 are currently earning $50,000 per year or more on Amazon. Despite all the countless small and medium publisher debuts over the past five years, the tally of those authors earning a living wage is even more discouraging: barely 100 non-Big Five traditionally published authors launched in the past five years now earn $50,000 per year or more from all of their books on Amazon.”
Author Earnings: In the Six-Figure Range
“1,340 authors are earning $100,000 per year or more from Amazon sales. But half of them are indies and Amazon-imprint authors. The majority of the remainder? They come from traditional publishing’s longest-tenured ‘old guard.’
“Fewer than 115 Big Five-published authors and 45 small- or medium-publisher authors who debuted in the past five years are currently earning $100,000 per year from Amazon sales. Among indie authors of the same tenure, more than 425 of them are now at a six-figure run rate.”
Author Earnings: In the Seven-Figure Range
“As of May 5, 2016, only three Big Five authors who debuted in the past five years are currently making a seven-figure run rate from their Amazon sales—print, audio, and ebook combined. On the other hand, 14 indies who debuted in the same time period are right now doing the same.”
‘Invisible’ Authors and ‘Dark Matter’
Guy and Howey look at “dark matter,” the underbrush of the Amazon store that never shows up on even category lists in the online retailer’s pages.
They find that the bulk of the “invisible” authors behind the very lowest sales records are indies whose aggregated work comprises almost a million titles:
“The majority of these 2,600,000 titles comes from the lowest-selling 750,000 authors on Amazon, and 900,000 of them belong to the lowest-selling 160,000 indies.”
But they also outline the case faced by many trade authors whose publication hasn’t saved them from the same obscurity:
“It might be discouraging to consider the 300,000 lowest-selling Big Five titles that we find here in the ‘pure dark matter,’ belonging to 86,000 ‘invisible’ Big Five authors. Or the 750,000 lowest-selling titles belonging to 240,000 authors published by small or medium publishers.
“While some of these authors are now retired or deceased, a full 60 percent of them were still actively publishing as recently as two years ago. Each of these authors successfully fought their way through the traditional-publishing slush pile, and secured themselves an agent and a publishing deal—even a Big Five deal.
“Those achievements appear to have granted them little career advantage, in either sales or visibility. Today, these several hundred thousand traditionally published authors find themselves earning even less than the very lowest-selling indies are.”
A Bottom Line
There are several summary elements to each Author Earnings report, but the one that Howey and Guy want to share with us this time gets right back to the agenda of the original idea behind these reports: they want authors to know that self-publishing may be a financially valid way to go. And the way they put it this time is:
“Today it’s possible to be a full-time professional author, quietly earning $50,000+ a year—even six figures a year—without ever sending a query letter to anyone. On Amazon alone, the data shows over a thousand indie authors earning a full-time living right now with their self-published titles.”
In Response to the New Report
If you’d like to see an anecdotal case, the London-based author Joanna Penn has responded to the new Author Earnings report by releasing her May 2015-April 2016 earnings from her many books.
Penn describes herself as being part of the self-publishing heartland “making a decent living now” on their books. Many other writers in the indie camp, however, may see her in a comparatively singular position. She works as a well-known motivational blogger, speaker, and podcaster for other indie writers, with more than a third of her titles non-fiction instructional/inspirational books on the writing career. She also fields 12 works of fiction currently and is prolific: She writes here of working on seven projects in the last year, plus four single-author box sets.
Among interesting points you’ll find in her piece:
- She says that her ebook sales aren’t counted “in any official publishing reports, as I don’t use ISBNs on ebooks or audiobooks and I use free Createspace ISBNs for print.”
- Penn’s “print sales (8 percent) have remained a similar percentage of income to last year (7 percent),but my audiobook sales have dropped from 5 percent to only 2 percent of income. Many indies have seen a similar drop in audiobook sales as the subscription model takes hold and listeners can get audiobooks for cheap if they own the ebook.”
- Her leading sales for the year in question were made in the US (46 percent), UK (22 percent), Canada (20 percent), and Australia (7 percent).