What’s New in Author Earnings?

I will return to the series on writing myths next week (probably) but I wanted to comment on the latest report from Author Earnings while the news was fresh. As many of you know, the people at AE have been using computerized data-gathering and number-crunching programs to collate book sales data, particularly at Amazon. Since Amazon never releases official sales figures, this data is invaluable. Every single time AE has released findings since it began over two years ago, it has shown indie publishing sales on the rise.

Until now.

It’s true. In the October report, for the first time ever, AE data indicates that the indie market share has declined. Not drastically, but significantly. Basically back to where it was in early 2015. Traditional publishers have gained some ground in the eBook arena, and Amazon’s publishing program continues to grow.

First, please note that these figures pertain to market share–not how much money is earned by authors. Authors at traditional houses take a much smaller royalty percentage, so the two are far from the same. Authors at small and medium-sized publishing houses take home about the same amount of money as authors at traditional houses (in the aggregate). This amazing. Two years ago it would have been inconceivable.

But it has declined since the last report.

How can this be? Everybody’s got a theory. Early speculation was that the decline was attributable to traditional publishers finally lowering their eBook prices, but this turns out to not be possible–because they haven’t. A more likely explanation is that the Big Five, and many small and medium-sized publishers as well–have started adopting the marketing strategies and tactics pioneered by indie authors. That would include price pulsing, discount newsletters, Facebook ads, retailer-specific metadata, and similar tricks. Imitation is the sincerest form of flattery, I suppose. Especially when it works.

I think this explanation may be correct. Do you get the Bookbub daily newsletter? I do. It has a huge distribution list and it offers deeply discounted books, usually 99 cents or perhaps $1.99. I’ve bought way too many books because of this newsletter. (AE says Bookbub may be responsible for 5-6% of Amazon’s total eBook sales.) But I’ve also noticed how its content has changed. Originally, the books promoted by Bookbub were mostly indie books. These days, books from traditional publishers, who are presumably willing and able to pay more, take up an increasingly large share of the newsletter. By stealing indie thunder, they’ve managed to halt their sales decline. At least for now.

This doesn’t change anything. We are still fortunate to live in an age in which authors have options, not only publishing options but sales venue options. Your decision about how and where to publish should be based upon your book, your goals, and your personality. Digitalization and online sales have been the great equalizer and a great friend to many indie authors. Since the Old Guard has learned to imitate the first batch of tricks, indies will have to develop new ones.

I’m betting they do.

Author Earnings: http://authorearnings.com/report/october-2016/

What’s Really Going On in Publishing

If you keep up with the publishing “news,” you may be confused by recent contradictory indicators. Some sources claim that eBook sales are declining, but any popular-fiction authors who’ve looked at their royalty statements lately sees a different story. The NYTimes consistently suggests that Amazon is the Antichrist and destroying literature, but a growing number of independent authors credit Amazon for the ability to work without a corporate overlord. Who’s right?

Good numbers are hard to come by in the book world, because the Big Five  play their cards close and Amazon won’t release sales figures at all. As I’ve mentioned before, I believe the statistics coming from AuthorEarnings.com are, while perhaps not perfect, the most reliable statistics we have. Why? Because by using computer data-gathering bugs to collect sales information, they take into account Amazon sales, which is currently more than 50% of all books sold in the US and about 75% of all eBooks. Those articles about eBook sales declining are based upon data from the AAP or Neilsen–so they include the Big Five but not Amazon. EBook sales are declining at the Big Five, because they’ve raised their prices, which you’ll recall they fought hard for the right to do. At Amazon, the far bigger share of the pie, eBook sales and independent authors are increasing.

Image 1

So gross unit sales are rising, but…

Image 2

…the books that are selling are increasingly those from independent authors, not the Big Five. The Big Five have (somewhat) larger gross profits, due to the higher prices, but of course most of that money does not end up in the hands of authors:

Image 3

As a group, independent authors are taking home more money than Big Five authors. Remember, an independent author can claim a 70% royalty at Amazon, whereas a traditionally published author will get somewhere between 4-15%. So you can sell far fewer books but still take home more money.

I urge you to visit AuthorEarnings.com, read the report, and draw your own conclusions. Read May 2016 Author Earnings Report: the Definitive Million-Title Study of US Author Earnings.