February 2016 Author Earnings Report: Amazon’s Ebook, Print, and Audio Sales

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Two years ago, the first Author Earnings report revealed the growing market share of self-published ebooks. With data on hundreds of thousands of titles, it was suddenly possible to measure the relative sales and earnings power of ebooks according to publishing path. By sharing this data, we hoped to help authors understand the changing market in order to make sound decisions with their manuscripts. In the two years since, our quarterly snapshots have revealed emerging trends in the digital publishing world. Before we get into this month’s report, let’s look at those trends, with our new February 2016 data points included.

Ebook Market Share: 23 month trend

unit-sales-trend-20160110

In two short years, the market share of paid unit sales between indie and Big 5 ebooks has more than inverted. The Big 5 now account for less than a quarter of ebook purchases on Amazon, while indies are closing in on 45%.

gross-sales-trend-20160110

In the purple line above, we can see the decline in share of ebook dollars earned by Big 5 publishers. Despite the greater profitability of ebooks over print books, some of these publishers have touted their shrinking ebook sales as a positive development. Meanwhile, we know from our own data (more on this later) and from Amazon’s press releases, that overall US ebook sales have actually gone up in dollar terms. The blue indie line shows where most of that increase is being funneled. Today, a quarter of all consumer dollars spent on ebooks in the US is spent purchasing indie-published ebooks.

author-earnings-trend-20160110

The most important graph for authors shows the rapidly diverging rate of ebook author income by publishing path. The Big 5 publishers are now providing less than a quarter of the dollars earned by creatives for their ebook sales. Indies are taking close to half. As detailed in previous reports, higher prices and other missteps are a likely contributor to this accelerating trend, but the reality may be that major publishers simply are finding it difficult to compete with indie authors on diversity, price, quality, and frequency of publication, as this divergence has been increasing for the last two years — well before the Big Five’s return to no-discount agency pricing. But as we can see, the transfer of market share in author earnings from Big Five to indies did steepen significantly after the Big Five’s 2015 reinstatement of agency ebook pricing.

Now for a deeper dive into this month’s report, starting with details about our new and improved sales-to-rank curves and methodology.

 

February 2016 Author Earnings Report

Our previous Author Earnings reports employed conversion formulas based on crowdsourced sales data. Dozens of authors, all of whom have access to their real-time sales numbers and overall best seller rankings, recorded their numbers in spreadsheets and shared the collective results. Over time, these rank-to-sales curves have been pressure checked and refined by other indies. On the whole, they were pretty accurate. And since the same curves were used for all ebooks, regardless of publishing path, we have been extremely confident with our pie chart percentages. But we thought it was time to roll out a new and far more rigorous approach for 2016, which will also let us double-check our old methodology.

A brand-new rank-to-sales conversion curve…

For this report, Author Earnings threw out all of our previous assumptions. We built a brand new rank-to-sales conversion curve from the ground up. This time we based it on raw, Amazon-reported sales data on the precise daily sales figures for hundreds of individual books from many different authors, spanning a period of many months. Our raw sales data included titles ranked in Amazon’s Overall Top 5 — titles whose KDP reports verified that they were each selling many thousands of copies a day — and it also included books ranked in the hundreds of thousands — whose KDP reports revealed were selling less than a single copy a day. We combined that mass of hard sales data with a complete daily record of Amazon Kindle sales rankings for each of those books, pulled directly from individual AuthorCentral graphs. We ended up with nearly a million distinct data points in total.

Why did we need so many data points? Because Amazon’s Overall Best Seller Rankings aren’t a simple calculation based on each book’s single-day sales — they also factor in time-decaying sales from previous days as well. To reverse-engineer Amazon’s ranking algorithms, the more raw sales and ranking data we used, the more accurate our results would get. So we fired up some powerful computers, fed them all that raw data, and let them crunch the numbers.

For our fellow geeks: We applied both old-school statistical curve-fitting approaches and more modern machine learning techniques, iterating our underlying numerical model until we zeroed in on the solution that yielded the best predictive accuracy. Taking advantage of a neat mathematical series-convergence trick (one whose applicability was no accident, because Amazon’s algorithms undoubtedly rely on it, too), we ended up with a brand new, simpler, more elegant, and far more accurate rank-to-sales conversion formula for Kindle ebooks.

For the non-geeks: Our data-science awesomesauce now tastes even better.

Here’s what the new rank-to-sales curve looks like:

Screen Shot 2016-02-09 at 12.43.43 AM

In retrospect, it’s striking how well AE’s old, crowdsourced rank-to-sales curve (in black) matches our new data-derived one. Graphically, the old AE curve ping-pongs back and forth between the new computed upper bound (shown in red), defined by the higher number of daily sales required to first “hit” a rank when spiking up from a much lower sales baseline, and the new computed lower bound (shown in blue), defined by the more modest number of daily sales required to steadily “hold” the same rank through consistent day-to-day sales.

This new methodology revealed a few other interesting things about the current state of the publishing industry, too. As “Data Guy,” I’ll be presenting some of those findings in more detail onstage at the Digital Book World 2016 Conference, on March 9, 2016, in NYC. But for the purposes of this report, our key takeaways:

1) For relative market-share percentages (the pie charts for which we’ve become known), the old methodology proved to be absolutely reliable. The new rank-to-sales curve, generated from hundreds of thousands of points of raw Amazon-reported sales data, made almost zero difference. The way ebook sales and earnings divide up between self-published authors, small/medium publishers, Amazon publishing imprints, and Big Five publishers remained essentially unchanged: relative share shifted by less than 1% in every case.

2) For calculating absolute sales numbers, the old, crowdsourced AE rank-to-sales curve ran a little high — it overestimated overall Amazon Kindle sales by roughly 18%. The new methodology corrects that, letting us finally make authoritative, data-backed statements about how many total ebooks are being sold each day by each category of publisher, and overall by Amazon itself. And in the coming quarters, in addition to measuring how the pie gets divided up, our new methodology will also let us track whether the total size of the pie is shrinking or growing, and by how much.

So how accurate is our brand new rank-to-sales prediction model?

Let’s put it this way: The ranking-based sales predictions it yields for randomly selected 300-book groupings taken from a separate, held-back “validation dataset” always end up matching the actual Amazon-reported total daily sales for the group to within 6%… and most of the time to within 2%.

But the larger a set of books we are trying to measure total sales for, the smaller that variance becomes… making our model predict even more accurately at larger scales. For a 200,000-book dataset such as the one our AuthorEarnings reports are based upon, it’ll be more than accurate enough for our needs.

Armed with our brand new, data-derived rank-to-sales conversion methodology, we were finally ready to tackle our deepest, most comprehensive look yet at Amazon’s daily book sales. We fired up AE’s web-crawling spider bot across 250 high-powered 8-core servers and walked it down each of Amazon’s thousands of best seller lists and category sub-lists. In a little over an hour, we pulled almost a terabyte of real-time data from the product pages of over 500,000 of Amazon’s best-selling titles. Here’s what we found:

 

Amazon’s Kindle Ebook Sales

Our first graph reveals the total share of ebook bestseller “slots” held by titles from each publisher type. Remember, this is a real counting of titles on thousands of Amazon bestseller lists, all automated by our software spider. No math here, just a visualization of how many titles are ranked and how they were published:

amazon-titlecount-20160110

The aggregate share of indie self-published titles on Amazon’s best seller lists, at 27%, hasn’t changed since September 2015. It is still more than double the representation of Big 5 titles. But what has changed, very significantly, is the degree to which Amazon’s overall Top 20 Best Sellers, and even the overall Top 10, have come to be dominated by self-published titles from indie authors — nearly half of which were not priced at $0.99 but rather “full-priced” sales at prices between $2.99 and $5.99.

On January 10, the date our spider ran:

  • 4 of Amazon’s overall Top 10 Best Selling ebooks were self-published indie titles
  • 10 of Amazon’s overall Top 20 Best Selling ebooks were self-published indie titles
  • 56 of Amazon’s overall Top 100 Best Selling ebooks — more than half — were self-published indie titles
  • 20 of Amazon’s overall Top 100 Best Selling ebooks were indie titles priced between $2.99 and $5.99

We’re not the only ones to observe this trend, which seems to have now become the new normal.

These top-selling indie titles encompassed a wide variety of genres. Romance and Paranormal were well represented, certainly, but Amazon’s Top 100 Best Sellers also included quite a few self-published indie Science Fiction books, indie Thrillers, indie Suspense novels, indie Urban Fiction, and even Cozy Mysteries by indies.

But best seller slots held by each type of publisher is a far less interesting metric than share of daily ebooks sold, which is where we first bring our brand new rank-to-sales curve to bear:

amazon-units-20160110

Whether we use our new, scientifically-derived curve or the old original crowdsourced one to compute unit sales, the trend we see is exactly the same. When it comes to the number of ebooks sold each day, the market share of indie self-published titles has grown substantially since our September 2015 report, while traditional publishing’s collective market share has shrunk. Indie books now account for more than 42% of all ebook purchases each day on Amazon.com.

Some of that indie sales growth has come in the form of paid Kindle Unlimited borrows. Monthly KU payouts have grown to over $13 million a month paid directly to indie authors (at least $8.25 million of it in the US). In 2015, these payouts totaled more than $140 million, again all going to indie authors. But KU payouts do not account for all of the growth. Not even half of it. Direct retail indie book purchases are also up substantially.

The day we pulled the data for this report revealed 20 of Amazon’s overall Top 125 Best Selling ebooks were self-published indie titles NOT ENROLLED in Kindle Unlimited.

Our data also showed, once again, that reporting on ebook sales from traditional outlets are missing the majority of the action:

  • Fewer than 45% of the ebook purchases each day on Amazon.com are of traditionally-published titles.
  • Only 29% of the ebook purchases each day on Amazon.com get officially “counted” in the monthly StatShot reports from the Association of American Publishers (AAP).
  • 43% of the ebooks purchased each day on Amazon — nearly half of them — remain uncounted in any traditional industry statistics, such as those published by Bowker, Nielsen, et. al., because 43% of the ebooks purchased each day on Amazon do not have associated ISBNs.

So how many ebooks a day is Amazon.com actually selling?

As of mid-January 2016, Amazon’s US ebook sales were running at a rate of 1,064,000 paid downloads a day.

155,000 of these paid daily downloads — or 14% of them — took the form of Kindle Unlimited “full-KENPC” pages-read equivalents for self-published indie authors, while the remaining 909,000 were regular retail ebook purchases. The full breakdown:

Amazon’s daily ebook unit sales (January 2016):

 TOTAL 1,064,000
Indie Self-Published ebook KU full-read equivalents 155,000
Indie Self-Published regular retail ebook sales 293,000
Small/Medium Publisher ebook sales 204,000
Amazon-Publishing Imprint ebook sales 115,000
Big Five Publisher ebook sales 244,000
Uncategorized Single-Author Publisher ebook sales 53,000

 

Next, let’s look at how Amazon’s daily ebook sales break down in consumer $ spending:

amazon-gross-sales-20160110

Despite the higher ebook prices most traditionally-published ebooks now bear, self-published indie titles accounted for nearly a quarter of all daily gross consumer $ spent on ebooks on Amazon. Across all publishing types, consumers spent roughly $5,755,000 a day on ebooks on Amazon.com in January —a run rate of over $2.1 billion a year, including over $1 billion in consumer spending on ebooks not included in industry sales figures from the AAP. That’s a lot of money, and a lot that isn’t being counted anywhere but here and at Amazon.

And now for the pie chart that interests us the most:

amazon-author-earnings-20160110

When we ignore the dollars that publishers keep, and measure only dollars that actually go to authors, we can see that ebook sales on Amazon.com are generating $1,756,000 a day in author earnings.

But less than 45% of those author-earnings dollars — from the largest bookstore in the world — is now going to traditionally-published authors. And less than a quarter is going to authors published with the Big 5. Is it any wonder that the traditional publishing media and historic author advocacy groups are reporting declining ebook sales and shrinking author incomes for their members?

We humbly submit that, for author earnings, these organizations are looking in all the wrong places.

$140 million a year in Kindle Unlimited payouts is going directly to authors, and yet that enormous sum of income is somehow uncounted by traditional author surveys. And as we are now able to measure, that sum is only the tip of the iceberg. There is also a vast swath of the market not being reported on at all, along with a whole host of authors not paying dues to author advocacy groups and simply going about the business of earning an income with their art.

The publishing industry is still changing rapidly, and how things will play out long-term is anybody’s guess. But we suspect that for the largest traditional publishers, taking their digital ball off the court and going home — as they chose to do in 2015 — won’t remain a viable strategy for much longer. It certainly won’t be a viable strategy for authors to sit idly by while detrimental pricing decisions destroy their incomes.

 

While we are looking at daily sales on Amazon, why stop at just ebooks?

Why, indeed? After all, Amazon also sells at least a quarter of all new trade print books purchased in the US each year — and roughly two thirds of all online trade print sales. Amazon’s share of the downloadable audio market is even larger — their subsidiary Audible.com is also the primary supplier for Apple’s iTunes audiobook store.

Using the exact same technique we used for ebooks, we were able to compute a rank-to-sales curve for Amazon’s print-book sales, too, using months of raw Amazon CreateSpace-reported daily sales figures for many dozens of print-on-demand paperbacks from multiple authors. Our data set included best-selling print titles ranked in Amazon’s overall Top 50, which CreateSpace sales reports revealed to be selling over a thousand copies a day, as well as titles with sales rankings down in the several millions and selling less than a copy a month.

But we didn’t stop there. Using ACX-reported daily sales for dozens of Audible audiobooks and their corresponding Amazon ranking histories, we did the same thing for downloadable audiobooks.

When we ran our AE spider for this report, in addition to grabbing data on 200,000 of the best-selling Kindle books, we also grabbed 250,000 of Amazon’s best-selling print books, and 25,000 of their best-selling audio books:

Format   Best Selling Titles Captured
Kindle ebooks 204,197
Downloadable audio books (Audible) 25,737
Hardcovers 75,075
(Trade) Paperbacks 158,732
Mass Market Paperbacks 13,834
Board Books 1,823

So now let’s take a look at print.

Amazon’s Print Book Sales… and the Law of Unintended Consequences

For our brand new breakdown of Amazon’s daily print sales, we’ll use the same format we use for ebook sales, so the graphs below should look familiar.

print-titlecount-20160110

print-units-20160110

print-gross-sales-20160110

print-author-earnings-20160110

It’s interesting to note here that the Big 5 holds less than a quarter of print bestseller slots, and their unit sales, dollars, and author royalties are less than half of Amazon’s print business. This is a greater percentage than any other publishing type, but it again stresses the need for balance and perspective when the top publishers’ numbers are taken to represent the whole of the industry; they don’t even represent half of online sales in the format they are supposed to dominate.

And self-published indie authors, who are already taking home 14% of online print author earnings, have captured a significant share of the author dollars from online print sales.

But there might also be an even more interesting story found in Amazon’s print sales…

 

The Law of Unintended Consequences

Sometimes a change in strategy achieves the intended result… and sometimes it backfires.

The Big Five’s return to agency ebook pricing may have been just such a case.

Their ebook pricing strategy was intended, at least in part, to slow the erosion of brick-and-mortar print book sales.*(3) By preventing Amazon from discounting the Big Five’s ebooks at Amazon’s own expense, the Big Five could force the consumer prices of their ebooks artificially high — higher than what many consumers are willing to pay for digital books. The thinking among Big Five publishers was undoubtedly that this would encourage those consumers to buy fewer ebooks on Amazon, and instead buy more hardcovers and paperbacks in brick and mortar bookstores, thus preserving a legacy distribution advantage long held by the biggest traditional publishers… and one that was fading away fast as a higher and higher percentage of book purchases were being made online instead.

From November 2014 to September 2015, the Big Five publishers negotiated brand new two-year contracts with Amazon in which they fought aggressively for — and won — the right to prevent Amazon from discounting their ebooks. Prior to these contracts, Big Five ebooks were discounted steeply at Amazon’s own expense. Our data from 2014 and early 2015 revealed that Amazon was on average selling Big Five and other traditionally-published ebooks to consumers at breakeven prices and making zero or marginal gross profit from them. That’s almost no profit on traditionally published ebooks, while Amazon was earning a healthy margin on the sale of indie and Amazon-imprint ebooks. In effect, prior to the Big Five’s return to agency, Amazon was more or less selling traditionally-published ebooks at cost. They were subsidizing traditional publisher ebook profits and traditionally-published ebook author earnings by nearly 30%.

By reinstituting agency ebook pricing and forcing their own consumer ebook prices high while preventing Amazon from discounting those ebooks, the Big Five publishers put a halt to that. They willingly did financial harm to their own bottom lines and in the process also seriously damaged the sales and earnings of their own authors, in an attempt to wrest market share and control away from their largest and most profitable retailer.

Did they succeed in that goal?

According to both our data and Amazon’s own public statements, despite the Big Five’s return to agency ebook pricing, Amazon’s overall US ebook sales have continued to grow throughout 2015 in both unit terms and dollar terms. On the other hand, the Big Five’s share of those ebook sales has plunged precipitously in both dollars terms, and even more precipitously in unit terms.

That particular outcome was easily predicted — and probably inevitable. Perhaps the Big Five viewed it as a strategic sacrifice.

But at the same time, Amazon’s online print sales — driven by steeply discounted hardcovers and paperbacks, which in many cases were priced even lower than the ebook editions — ALSO went up. Significantly. In fact, our data points toward Amazon seeing even greater growth in their 2015 print sales than in their 2015 ebook sales.

As of mid-January 2016, Amazon.com’s print sales were running at a rate of 969,000 print books a day.

With the largest bookstore chains reporting 2015 book sales as flat or down, and book sales also down significantly for warehouse and club outlets, an uptick in local independent bookstore sales is a small brick-and-mortar bright spot. But it’s extremely likely that most if not all of print’s reported 2015 “resurgence” took the form of increased online print sales… at Amazon.com.

We suspect that the Big Five’s high ebook agency pricing, and Amazon’s steeper online discounting of print books, may well have had the opposite of the intended effect. It may have encouraged traditional hardcover and paperback buyers — including those who had zero interest in buying digital editions — to take advantage of those steeper discounts and purchase more of their books online, while buying fewer in brick-and-mortar bookstores.

Some very savvy analysts who cover the industry from the traditional side, and whose insights *(4) we value greatly, have pointed out that this particular outcome may not necessarily have been unanticipated by the agency publishers. But they still may have deemed it the lesser evil, if in the process they could also slow the consumer shift from buying print to “e”.

But either way, if true, it means that more print-book buyers are now shopping at a storefront where indie print books share a significant portion of shelf space alongside books from traditional publishers, and where indie print books are now fast-approaching a double-digit percentage of print sales.

It’ll be interesting to see in coming quarters if indie print sales continue to gain ground as more and more consumers are funneled into a marketplace that provides more equitable access to all authors.

 

Color Us Surprised….

In 2015, adult coloring books were a surprising trend. Many credit them with saving the traditional publishing industry’s overall 2015 sales figures… a claim borne out by Nielsen Bookscan’s print-sales numbers.

Perhaps it’s not surprising, then, that when we took our January snapshot, 11 out of Amazon’s Top 35 Best Selling print books were adult coloring books.

But what is somewhat surprising is this: 5 of those 11  — nearly half of them — were self-published coloring books by indie authors. 

But perhaps it shouldn’t be… Back when we did our September 2015 report, one of the Top 5 print best sellers in the USA was a self-published children’s book.

As print book purchasing increasingly moves online, self-published indie authors are demonstrating that they can compete head-to-head with traditional publishers in print sales. And indie authors are taking home a far larger share of the proceeds one each print sale (36% of list price, on average), compared to the 8%-of-list paperback royalties and 15%-of-list hardcover royalties that they would typically earn if they went through a traditional publisher.

 

Amazon’s Audiobook Sales

Downloadable audiobooks are one of the industry’s fastest growing segments, for both indie-published authors and traditionally-published authors. On Amazon.com, downloadable audiobooks — distributed through Audible — make up the vast majority of audiobook purchases. Physical-media audiobook editions — MP3 CDs, Audio CDs, and the like — comprise a tiny fraction of the audiobook total, making up only 5% – 6% of Amazon.com audiobook sales.

As of January 2016, Amazon was selling roughly 119,000 audiobooks a day — about $2,100,000 worth — which were generating $204,000 a day in author earnings.

Here are the familiar pie charts showing how those numbers break down by publisher type:

audio-titlecount-20160110

audio-units-20160110

audio-gross-sales-20160110

audio-author-earnings-20160110

A few things complicate the picture when it comes to how audiobook sales and revenues break down.

  • Many of the audiobooks in the red Small/Medium Publisher Wedge, especially those published through Brilliance, Blackstone, Tantor, and similar audio-specialized publishers, are audiobook editions of Big Five-published ebooks, Amazon-imprint-published ebooks, and even indie self-published ebooks whose authors sold audio publishing rights.
  • The green Amazon-published wedge represents audiobooks published through Audible Studios… but some of those also turned out to be audio editions of Big Five-published ebooks, indie self-published ebooks, etc.
  • A big chunk of the light-blue Uncategorized Single-Author Publisher wedge (more than half of it) consists of J. K. Rowling’s Harry Potter audiobooks, published through the publishing company she set up (Pottermore). While many would classify them as self-published, we figured it would be less contentious to simply leave them as Uncategorized Single-Author Publisher.

Just as for print sales, it will also be interesting to watch the audiobook market evolve over the coming quarters. We think audiobooks will be a huge growth area for self-published indie authors in 2016. We can’t wait to see what these audio-sales pie charts will look like, a year from now.

Conclusions

In 2016, the reach of indie self-published authors isn’t limited by any means to ebooks. Every indie author should seriously consider releasing print-on-demand paperback editions and — as soon as quality narration can be afforded or arranged — audiobook editions of their books. It’s also critical to note that 2015 marked a tipping point of sorts for online retail, with some reports claiming that fully half of online sales gains took place on Amazon.com alone. Sales on Amazon.com overtook Walmart in-store sales for the first time. More and more, online is where shoppers are going. And independent authors have equal access to this storefront. In fact, with lower prices, greater creative freedoms, the ability to publish to market much faster, and the ability to appeal to a wider variety of readers, indie authors have huge advantages online. As the market moves away from physical bookstores — which must necessarily limit their selection, and so limit the free expression of ideas as a consequence — we expect to see a greater flourishing of independent authors finding their voices and taking home an ever-growing slice of consumer dollars.

 

Download the raw Kindle data this report is based on (.xslx)

Download the raw Print data this report is based on (.xslx)

Download the raw Audio data this report is based on (.xslx)

Creative Commons License
Author Earnings is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

 


 

Appendix Notes

*(1) To reverse engineer Amazon’s ranking algorithm, we treated it as an engineering System Identification (SI) problem, and modeled Amazon’s ranking engine as a black-box dynamic system with a linear, time-decaying impulse response to instantaneous unit-sales inputs. We even built a two-hidden-layer neural network and trained it to predict current rank from historic sales, which informed how we structured the more classic closed-form curve-fits. We computed lowest-MSE fits to many different power-law model variants and distributions, measuring which fit our data best. We iteratively fine-tuned our models until we had the most accurate predictor. In the end, we zeroed in on a nice, clean simple formulation that yielded the best log-MSE accuracy over the full range of Amazon rankings and daily sales.

*(2) When applying the same new technique to raw sales data from previous quarters, the data shows Amazon’s overall ebook sales continuing to grow consistently quarter after quarter, throughout 2014 and 2015. The data for the first 3 weeks of January 2016 reflects Amazon’s highest run rate of ebook sales yet — higher than during any previous quarter to date. Unsurprising, perhaps, considering what Amazon themselves told the Wall Street Journal a few months ago. But interesting to see it independently validated with hard data.

*(3) the “keeps retailers” piece of the Big Five’s “Higher price slows Ebks/casual purchaser/keeps retailers/stops authors leaving” ebook-pricing strategy, as described by Simon & Schuster CEO Carolyn Reidy.

*(4) Another factor industry analysts rightfully raise, and which we acknowledge, is the relative dearth of 2015 mega-bestsellers on the traditional side: this past year there was no Fifty Shades, no Divergent, etc. to boost traditionally-published sales as a sector. A fair point, but also for 99.99% of authors choosing a publishing path, an irrelevant one… unless they are being offered eight-figure advances from the Big Five.

91 Responses to “February 2016 Author Earnings Report: Amazon’s Ebook, Print, and Audio Sales”

  1. Lisa Grace says:

    Wow. Thanks for sharing, once again, what is really happening in the publishing industry as far as sales go. It seems to me, publishers would want hybrid authors to take advantage of the built-in marketing they do for their books.

    I think I’m on the right track by increasing my targeted marketing, and including some of my works in multi-author box sets, along with rewarding readers for signing up for my mailing list. This report is encouraging to self publishers.

    • CIA Project says:

      Now I hope you all know that all the sales figures of Amazon are FAKE.

      Dr. Sol Adoni inventor of prime number theory PROVES IT here

      http://www.soladoni.com/ebooks-amazon-sell-day/

      Amazon is a CIA project and the sales of Kindle eBooks mostly goes to CIA Blackops

      http://247news.net/news/amazon-profits-feed-cia-nsa/

      Before Kindle under 20 Billion in Sales, now after Kindle over 110 Billion in sales

      The FAKE Amazon financial reports to the SEC are a joke, Amazon is selling mega billions of authors eBooks and using the money to fund CIA projects

      It’s why Amazon has been allowed to operate without profits for over 20 years by the SEC and IRS

      AMAZON IS THE CIA COMPANY

      Now all you kindle loving folks have the perfect spy tool in your home

      AMAZON KINDLES ARE CIA SPY TOOLS

      • Dr. Soladoni,

        Authors United is looking for a numbers expert of your caliber who is willing to help us make our case to the DOJ and protect us all from Amazon’s monopoly and threat to freedom of speech.

        Please contact me at once, with the greatest urgency. Or even better, come directly to see me at my Maine writing cabin ASAP, and we will discuss strategy — I will be awaiting your visit at your earliest convenience.

        Sincerely,
        Douglas Preston
        President, Authors United

  2. Aaron (aka G) says:

    Data Guy and Hugh have really widened my eyes with this new report. I feel like your opening salvos with the graphs displayed of Big 5 ebooks tanking while indies go straight up–is a visually stunning image.

    It tells a great deal of the story that’s been transpiring since 2010 or so.

    Indies have been kicking the Big 5’s ass in terms of ebook sales, and it’s only getting worse. I feel the trend may have once been reversible, but now is likely irreversible (thanks to trad publishers digging in their heals and the advent of KU).

    Bravo on another fine job, guys!

  3. Danielle says:

    Wonderful article. I would love to see data on sales relative to the cost of an ebook. It would be helpful to know if the extra cost of big 5 books is actually the reason more indies are selling or if it is just the quantity and variety of indies.

  4. thesfreader says:

    Thanks again Hugh and Data Guy !!!

  5. Amazing work, guys. Looking forward to seeing you at the DBW conference!

  6. Hugh, Data Guy et al, thank you as always. This is really encouraging. Reblogging it and linking to here to share the news 🙂

  7. Felix J. Torres says:

    Color me impressed DataGuy.
    Clean room Reverse engineering the Amazon algorithm is worth serious kudos.
    Take deep bows along with our gratitude for lighting the path before us.

  8. I am not certain what an uncategorized single-author publisher is versus indie published. The other categories seem self-explanatory, but I have no idea which of these my books would fall under. Thanks.

    • Felix J. Torres says:

      Think of Pottermore: it is Rowling’s operation but she contracted with Sony to build it and she shares revenues with her pbook publisher though there are no indications she is contractually obligated because she held on to digital rights.
      There are other Agent-mediated operations that fall squarely on the border of Indie and traditional.

      • Right, but that doesn’t help me know where *I* fit. I am indie, I have my own ISBNs and a business name, and I publish only myself. Am I indie, or an uncategorized single-author publisher? I wish the author of this article would make the difference clear.

        • Felix J. Torres says:

          You fit under Indie.
          Not that it matters overmuch: both categories are basically independent of the establishment.

          Me, I tend to lump their numbers (and Amazon’s–they are boycotted by most other retailers) into a single “growth” group, in contrast to the lumbering, declining BPHs (their aggregate unit share has been declining all century) and the treading-water small/medium tradpubs who aren’t actively sabotaging themselves.

        • Since you publish as GreenWords Media, you would be categorized as an “uncategorized single-author publisher” in the AE report. Many indies fall into that category in the AE report. I do, since I publish under Wild Unicorn Books.

          The way you can tell is to look at the portion of the Amazon product page that lists “product details.” That is: files size, print length, publisher, etc.

          Under publisher, you have GreenWords Media. I have Wild Unicorn Books. We are indie, but AE conservatively categorizes us as “uncategorized single-author publisher.” Many “uncategorized single-author publishers” are, in fact, indies.

          The writers that get put into AE’s “indie” category are the ones where the author’s name appears as the publisher in the “product details.”

          • TheSFReader says:

            If I get the metholology note (cf link below), HH and DG include a list of “known self-publishers” to complement. I suppose you could ask them to add you to that list of “known Self-Publishers who publish under their own publishing imprint”.

        • TheSFReader says:

          cf http://authorearnings.com/note-on-methodology/ :
          “So the vast majority of the remaining Uncategorized Single-Author Publishers are most likely “Indies in disguise.” But there are also a few examples of poor-selling imprints of small and medium traditional publishers in the mix (such as Baen), so again we didn’t want to overstate Indie market share by lumping them all in with the Indies.”

          So you fit under Indie, but are most probably accounted for under the “Uncategorized Single-Author Publishers” category

        • Latsnbrats says:

          Thank you JM and SFFReader,I was curious too.

          • Thank you so much for that clarification! So if they KNOW that person/press is indie, they count it under indie? That would explain why the single-author category is so small.

  9. Thanks for putting all this information together. I have ebook novels and print on demand for the novels and also coloring books. It’s an exciting time to offer your writing and artistic talents.

  10. Joe Konrath says:

    Incredible work. The shadow industry is getting light thrown on it, and it should scare the hell out of Big Publishing.

    But they’re going to choose to ignore it and stick to studies they commission, to goad their shareholders to keep investing.

    Have fun at Digital Book World. Walking into the lion’s den is always good for some laughs. 🙂

    • Data Guy says:

      Hi, Joe. 🙂

      I think it’ll be both fun and eye-opening for everyone. As you’ve demonstrated time and time again, transparency about our industry just helps authors, no matter how they choose to publish.

  11. Fascinating. Kudos for writing up so much data intelligibly. Your computers deserve a long weekend off!

    I wonder, does the distribution of sales and earnings by author look different for the big 5 compared to indies?

    Cheers!

  12. John Brown says:

    Guys, I’d like to suggest two stats for inclusion going forward–average revenue or earnings per author and average units sold per author.

    I know the earnings are NOT distributed evenly. But such an average would give a fuller picture. The aggregate hides differences like one slice of the pie having 10 authors making $1 million each and another having 1 million authors making $1 dollar each.

    The aggregate numbers show how big the market is. But they don’t show how big the market is for individual authors. I think it’s the one view that’s missing. Another way to look at this would be simple distribution charts, with the x-axis being dollars or units, and the y-axis being numbers of authors.

    What do you think?

    • Gordon Horne says:

      There is an immediate difficulty in that the class “Indie Published” includes large numbers of books that simply do not sell. These are boring stories poorly told. The class “Traditionally Published” does not include a similar population as they were weeded out by the acquisitions editors. Not every book rejected by the gatekeepers is a rough diamond. Mean and median are not comparable between Indie and Trad. Mode might have some utility if you ignore the mode of zero for Indie.

      You would need to establish new classes to compare like to like and to compare between classes. Obvious categories are income brackets and number of titles in print. It could be done and would be interesting, but it’s non-trivial and decisions made in setting up classes would influence the results. A fair amount of data crunching would be needed to find natural classes.

      This AE report Individual author earnings tracked across 7 quarters, Feb. 2014 – Sept. 2015 has some of what you’re interested in.

      • John Brown says:

        If I’m not mistaken, these reports already limit themselves to the bestseller lists. We’re not looking at all ~3m books (and however many authors wrote those) on Amazon, just those selling with a rank <=195,000, right? So they already lop off the ~2.8 million books that don't sell a thing.

        So I don't see the issue. Showing a distribution of the income across the authors in those pools, with counts of authors in each band, would only help authors see what's realistic in each category.

    • Data Guy says:

      I know the earnings are NOT distributed evenly… an average would give a fuller picture. The aggregate hides differences like one slice of the pie having 10 authors making $1 million each and another having 1 million authors making $1 dollar each.

      Hi, John,

      Let’s see how this comes out, formatting-wise… 🙂


      Publisher Type Titles   Authors   Titles / Author Sales / Title Sales / Author
      Indie Self-Published 53,656 29,582 1.8138 4.9899 9.0506
      Small/Medium Publishers 92,290 58,127 1.5877 1.4055 2.2315
      Amazon-Imprint Published 1,198 654 1.8318 55.9165 102.4281
      Big Five Published 25,659 14,440 1.7769 5.7104 10.1471
      Uncategorized Single-Author Publisher 66,569 39,952 1.6662 2.7851 4.6405

       

      Ugh. Sorry. 😛

      Averages, as you point out, have their own issues — Bill Gates walks into a bar… and on average everyone in there is suddenly a millionaire. But FWIW, there are the per-title and per-author averages.

      A distribution gives a much better picture, as you said. We’ve looked at those types of graphs in the past:

      http://authorearnings.com/report/the-tenured-vs-debut-author-report/

      But an update is probably long overdue.

      • John Brown says:

        Thanks, Data Guy!

        The average for Amazon imprint authors is very interesting indeed. Either there are a couple of Bill Gates in there, or Amazon knows how to select and then sell its authors.

        If we lump the single-author publishers in with the indie authors, it appears we get this.

        Publisher Type: indie + single author pub
        Titles: 120,225
        Authors: 69,534
        Titles/Author: 1.7
        Sales/Title: 6.5

        Which suggests that trad pub sells, on average, about 55% more units per author. However, I’m not sure that translates into more earnings per author.

        Can’t wait for the distributions.

      • John Brown says:

        Boy, those author counts are also interesting.

        69,534 indie authors

        72,567 trad and small pub authors.

        All of those authors who would have been channeling their efforts into getting in with a publisher now out on their own and finding readers. Some are probably hybrid. But still–what a massive change to the system.

        Virtually half of the authors people are reading are indie.

        And look at the sales of the small pub per author versus indie. Indies are selling 168% more units on average.

  13. John Brown says:

    And, as always, thank you so much for this!

  14. Mackay Bell says:

    Thank you for all the incredible hard work! Very interesting, but not surprising, that indies are starting to move into print books and grab market share. This is a trend that will keep growing and will prove that the real advantage indies have over traditional publishing is not low prices, but hard work and dedication. They are invested in their own success. And nothing motivates people more than that.

  15. Joseph Amiel says:

    The study talks about the rise of income to authors from Kindle Unlimited sales. What it fails to detail is how that has reduced the income of self-published or one-author publishers who did not submit their books to Kindle Unlimited, but found potential ebook buyers diverted to that service. My untested assumption is that authors make less from earnings of books in Kindle Unlimited than they did from ebook sales before that service was established. The corollary would be that Amazon has carved out a larger share of the revenue from these books for itself and a lesser share for the authors.

    • Gordon Horne says:

      It’s a complicated question. I have no data, but I’ve seen many anecdotes. Some authors rail about how KU has cut their income in half. Others say half their income comes from KU or that KU has significantly increased their income. The vast majority of authors don’t say anything at all on the subject.

      It seems reasonable to assume that Kindle Unlimited is a market as distinct from the Kindle Store as are Kobo or iBooks. A different population of customers with different habits and expectations. Discovery in one market doesn’t necessarily carry over to another market.

      • Rob Cornell says:

        “It seems reasonable to assume that Kindle Unlimited is a market as distinct from the Kindle Store as are Kobo or iBooks. A different population of customers with different habits and expectations. Discovery in one market doesn’t necessarily carry over to another market.”

        That is an interesting and important point. I hadn’t thought of viewing KU as a separate market, but it makes perfect sense. Also should put the question of whether to enroll in KU or not into better perspective.

        • Bill Hiatt says:

          Although I have seen anecdotes on both sides of the issue, my KU borrow income looks like an added source, not like a net loss to my sales. In fact, my sales have increased somewhat since the advent of KU. While there is no way to prove that KU borrowers are a separate market, logic suggests they will behave that way on some issues. If someone is paying $9.95 per month in the first place, isn’t that person going to want to get his or her money’s worth? That would suggest the person probably looks at KU titles first and tries to select from among them. That doesn’t mean such a person would never buy a book (from a favorite author, for example). It does suggest that they would look at the KU choices first and at other books only occasionally.

          Another interesting characteristic of KU borrowers seems to be that they read faster. (Someone with more time to read would be a logical customer for the service.) As a writer of a series, I do see buyers working their way through the series, but often quite slowly. The first book gets the most action, and then people gradually trickle through the others. However, the first book is not always the biggest source of borrows. If there are a large number at one point, then the second book bulges soon thereafter, then the third book, and so on. Borrowers sometimes appear to go through the whole series in a week (though it is hard to be sure, since we see only the number of pages, not the number of people).

  16. Ricci says:

    Another great report, thank you! Very cool to see how reliable the crowd-sourced data was in predicting market share. Such an exciting time for indie authors!

  17. Alan Spade says:

    Terrific work as always!

    Just to nitpick:

    “But less than 40% of those author-earnings dollars — from the largest bookstore in the world — is now going to traditionally-published authors.”

    In fact, according to the daily $ Unit Sales of ebook bestsellers graph, the figure is 43%: 23% Big Five and 20% small or medium publisher.

  18. Jim Johnson says:

    Great report, thank you so much! One question: The report states, in part:

    The day we pulled the data for this report revealed 20 of Amazon’s overall Top 125 Best Selling ebooks were self-published indie titles NOT ENROLLED in Kindle Unlimited.

    What are the stats of the other 105 top best selling ebooks? Were all 105 IN KU? What’s the breakdown beyond the 20 indie titles that weren’t in KU?

    • Data Guy says:

      Hi, Jim,

      Here’s what the rest of the Top 125 looked like on the day our spider ran:

      Self-published Indie Titles ENROLLED in Kindle Unlimited: 37
      Self-published Indie Titles NOT ENROLLED in Kindle Unlimited: 21
      Small/Medium Publisher Titles ENROLLED in Kindle Unlimited: 5
      Small/Medium Publisher Titles NOT ENROLLED in Kindle Unlimited: 6
      Amazon Published Titles ENROLLED in Kindle Unlimited: 19
      Amazon Published Kindle First Titles: 6
      Big Five Published Titles: 24
      Uncategorized Single-Author Publisher Titles: 7

       
      (oh, and those 7 Uncategorized Single-Author Publisher titles?
      You don’t have to go to wizardry school to figure out what books they were… 😉
      Suffice it to say, all 7 were by the same author.)

      🙂

  19. Fantastic, thanks – one figure puzzled me – same as Alan Spade above, but otherwise so much info I’ve bookmarked it to peruse at leisure! Thanks also to those who answered the single author / indie question – I wondered about that too.

  20. Jen Greyson says:

    I’m so grateful that I have you guys crunching numbers to this degree. This data is incredibly valuable! (Not to mention, pretty damn exciting)

    Thanks for the stellar math geekery.

  21. Linda Whitaker says:

    As a Data Scientist by trade (not in the book profession), this is brain candy to me. I truly appreciate the effort involved to put together such a comprehensive report, and to represent the results in an understandable, consistent and objective manner. Also, kudos to you for providing the raw data that supports your work.

    I was eagerly awaiting your assessment of KU impact, and cannot wait to see how this impacts the industry in the future. One thing I’d like to see is the relationship between a reported unit sale (which I think occurs upon download) and the payment (which occurs when book is read), and what percent of books downloaded are read….but a quick perusal shows you have that in your raw data. (I see some geeky late night analysis in my future 😉

  22. Mgon ♥ says:

    THANK YOU
    for all your hard work in providing such wonderful and encouraging free information to all of us!
    You’re both amazing 😀

  23. Sam says:

    would like to see data on sales for kid’s books, particularly MG between indie and traditionally published. It’s pretty clear romance and mystery do well self-published…but I’d like to see the overall data for all kid’s books, not one or two flukes that had a great week or even one good month.
    The overall line is, indie authors overall will take more of the revenue and sales from traditionally published authors, but not too many will take much home, due to the overwhelming volume of content that continues to pile up. Jeez, sucky time to write for those who want to earn money from their work, unless one merely aspires to pay one electric bill a year :/

    • Gordon Horne says:

      Go back to the Individual Author Earnings Tracked Across 7 Quarters report. It looks like more people are making respectable money (able to support themselves) than ever before. This seems to be driven by mid-list indies who pocket a lot more money than mid-list tradpub authors with similar sales numbers.

      Of course the vast majority still fail, but now they can fail in the market and curse the whole world rather than curse a few hapless agents and acquisition editors.

    • Data Guy says:

      Jeez, sucky time to write for those who want to earn money from their work, unless one merely aspires to pay one electric bill a year :/

      Hi, Sam,

      What Gordon said.

      See: http://authorearnings.com/report/individual-author-earnings-tracked-across-7-quarters-feb-2014-sept-2015/

      Writers have more control over their careers than ever before.

      Those who think they can, and those who think they can’t, usually both end up being right.

  24. Phyllis A. Humphrey says:

    Many thanks to Hugh and Data Guy for all the work you do to produce these results for us. It’s amazing.

  25. Phoenix Sullivan says:

    As always, Data Guy, thanks for keeping us abreast with your reports. I appreciate all the effort that goes into them as well as the raw data collection.

    Given some new benchmarks, I’d like to throw out some comments around one of the data points. While the professed focus of the reports is on *author* earnings, the analysis is heavy on *industry* trends, so I’d like to take a peek at dollar sales vs market share for the Big 5 now that agency has been in effect for a while.

    Using your figures for January 2016, we have:
    * $5,755,000 per day in ebook sales
    * 40% of the gross goes to the Big 5
    * That’s a $2,302,000 slice of the pie to the Big 5

    Since I played with the May 2015 dataset, I’ll use it as a comparison. You may remember I felt the AE analysis was over-reporting the total consumer dollars spent by about 19.5% (and the units sold over by 17.4% – and since your new “sales to maintain” values adjust units sold by about minus 18%, I no longer have that quibble over units sold). So I’ll compare May 2015 to Feb 2016 using both of our results, although I’m betting if you apply the new calculations to the May totals, your new results will come out closer to where mine landed ;o).

    AE – May 2015
    * $5,016,294 per day in ebook sales
    * 51% of the gross to the Big 5
    * $2,558,310 is the Big 5’s share

    Me – May 2015
    * $4,036,669 per day in ebook sales
    * 51% of the gross to the Big 5
    * $2,058,701 is the Big 5’s share

    So how much has the Big 5 lost in $$$ per day between May 2015 and Feb 2016 estimates?

    AE
    * Feb sales were up 12.84% overall over May
    * (11.13%) is the estimated LOSS for the Big 5

    Me
    * Feb sales were up 29.84% overall over May
    * 10.57% is the estimated GAIN for the Big 5

    So for me what the data indicates is that between May and Feb the Big 5 did not keep up with ebook market growth at Amazon, but they still gained in overall ebook dollar sales. The industry, of course, will look at year-over-year dollar gains, and while the AE report for Jan 2015 shows the Big 5 at the same 51% of gross as in May, there isn’t an overall daily total estimated for us to compare against (and I lazed out and didn’t run the calcs on the raw data to get it).

    Also, with no historic trending to calculate against on the print side, and with the way Amazon will do advance orders for POD books and pay up front for copies printed and warehoused and not yet sold, and because I don’t know how rank is affected by all that, I’m not as confident on how the print side money is derived. I’ll be interested to see how print changes in relation to ebooks in future reports.

    • Data Guy says:

      Hi, Phoenix,

      That’s a really interesting and insightful observation. 🙂
      When I get a chance, I’ll do some digging and see if there’s anything I can add.

      One other thing to factor in: what % of that gross $ number is actually going to the Big Five.
      The AAP, for instance, only measures and reports on that part.

      It’s not just the higher consumer prices that deter ebook purchases, because higher prices could offset that part — it’s also that the Big Five (and their authors) are now getting a significantly smaller share of each consumer dollar spent on Big Five ebooks.

      Back in May, the Big Five were taking home close to 100% of every dollar spent on Big Five ebooks. Today, they are only getting 70% of those dollars.

      That’s where agency has had the most profound effect on publisher and author incomes, and it’s one that can’t be measured from the gross consumer dollar spending numbers — only in the Big Five’s publisher ebook net dollars (and Big Five author earnings).

      So from a publisher earnings perspective, the important questions are:

      – To what extent has lost trad-pub ebook income been offset by higher print income?
      – How much of that trad-pub print income is now coming from aggressive Amazon print discounting?

      We’ve just started to pick apart print sales, and as you point out have a lot more to learn there. There’s a list of unanswered questions about online print sales that AE and traditional-industry analysts are comparing notes on, as we both try to figure them out.

      It’ll be interesting to see what we all collectively learn, as we track these Amazon print numbers over the coming quarters. 🙂

      • Gordon Horne says:

        How are you planning on handling author earnings for indie print? Are you going to have to calculate production cost for each title as if it were a CreateSpace title by using page count and trim size?

        • Data Guy says:

          Hi, Gordon,

          As a matter of fact, that’s exactly what I did. 🙂

          Off the top of my head, the calculation ended up being something like:
          60% of List Price – $2.15 – $0.012 x (page-length – 108)

          (But I might be remembering the exact numbers wrong right now, so when I get a chance I’ll double check the SQL.)

          • Gordon Horne says:

            Thanks, DG.

            As a side note, I wonder how much more transparent certain people want you to be than answering questions from the peanut gallery as to your methods and approximations.

          • Data Guy says:

            The writer’s maxim applies equally well to industry data analysis:

            Show. Don’t Tell.

            😉

  26. Roz Marshall says:

    “This time we based it on raw, Amazon-reported sales data on the precise daily sales figures for hundreds of individual books from many different authors, spanning a period of many months.”

    Data Guy – this was the thing in the report above that made me scratch my head: how/where did you get this data? Did Hugh and some other authors give you access to their KDP Sales Dashboard? Or some other method?

    Thanks.

    • Data Guy says:

      Hi, Roz,

      Take a look at the new rank-to-sales graph above. See all those little gray and green circles? Each of them represents the true sales and true midnight ranking of a particular Kindle title on a particular day in the past couple months — the green ones land within a few days of our January 10 sample.

      You can judge for yourself how well the new AE rank-to-sales curves fit that data.

      Obviously, for author privacy reasons I’m not going to name any names, and have to be a little circumspect about our collection process as well. But here’s what I can say:

      * An approach like you describe has the advantage of eliminating any possibility of bias, accidental or otherwise, in what numbers are being shared with us.

      * All authors’ privacy is held sacrosanct — this particular data isn’t even being shared with Hugh.

      * I can confirm with mathematical certainty now that rank-to-sales data from one author on a given day matches the data from any other author on that same day precisely enough that it doesn’t matter which particular authors share data, as long as we have a large enough sample spanning the full range of sales rankings. 🙂

      * The list of authors participating is growing quickly.

      Think of it as an indie version of the AAP… 🙂

  27. Fvck You says:

    So Howey,

    You know a publisher Dr. Sol Adoni is calling you a CLOWN and he has a pic of you on his site with a clown nose on you.

    http://www.soladoni.com/ebooks-amazon-sell-day/

    He says your data is all wrong for several reasons.

    Oh the guy is a math genius, so he is saying your data is BAD. He basically says you are a tool for Amazon as are a few parade pony authors they parade around that make the 99.9% of authors Amazon is stealing royalties from think Amazon is actually paying authors for all the 100 Billion in new sales they have since Kindle launched.

    Dr. Adoni points to almost a 100 Billion a year increase in sales at Amazon since Kindle eBook files were sold and he adds that almost none of that 100 Billion is going to authors or publishers as royalties, it’s being stolen by Amazon and they are experts at stealing money since they have paid almost no taxes in over 20 years of being a public company.

    He points to a 99% drop in royalties on over 100 titles he publishes after he publicly criticized Amazon as PROOF they are a SCAM COMPANY

    Not one figure Amazon gives the public is REAL so all your numbers are based on FAKE NUMBERS from Amazon.

    AMAZON IS A SCAM COMPANY

    Amazon publicly admitted to signing up over 3 Million Prime members in 1 week in a press release and yet their BS pool for authors is only 12 million a month.

    If Amazon has only 1.2 million KU members how about all those mega million prime members all allowed to get a free eBook from KU now.

    AMAZON IS RIPPING OFF AUTHORS

    They have mega millions of KU and Prime members and to offer only 12 Million a month to authors is a JOKE.

    They had an increase of 100 Billion since Kindle launched and almost none of it goes to authors or publishers.

    To PROVE your earnings reports are BOGUS Howey, where is the KENP in your figures?

    So lots of authors are getting KENP and there’s no way for you to say how much KENP any authors get.

    So yeah I agree with Dr. Adoni your data is bad and you need to stop being a tool of Amazon acting like any of the fake info from Amazon is real.

    Amazon is like Donald Trump said A SCAM COMPANY.

    They refuse to allow a 3rd party audit of their sales and they have no solid figures in their financials for how much is really eBooks members, how much is KU subscribers, etc.

    You see the problem Howey, you are a tool for Amazon and they are a CON GAME.

  28. stuart says:

    When working out estimated earnings, how do you factor in KDP borrows? From what I understand, a borrow still counts as a sale for a book’s overall sales ranking, but the borrower might never read a single page of the book, and therefore that “sale” would be worth $0. If the borrower only reads two or three pages will that be affecting your estimates in earnings? In theory, it’s now possible to be the number one book in the kindle store and not make a single cent from it, if thousands of people borrow it and no-one reads it. I think. Is that right?

    • William Ockham says:

      stuart,

      In theory, you are correct. A book receives the benefit of a boost to its sales rank immediately when a paid download or preorder occurs. That’s true for KU borrows, KOLL borrows, Prime freebies, preorders, and traditional sales. In every case, the ebook may be returned (or in the case of preorders, never downloaded) and nothing earned on the “sale”. Even if I buy an ebook on Amazon, I can return it immediately and never be charged. But that ebook has a “sale” for the purposes of the sales rank calculation.

  29. What I’d really like to see is a discussion of the size of each of these groups. How many authors represented in the indie bucket, how many in the big 5 publishers etc.

    Why do I want to see this? Because it’s important to per author earnings. So in most cases indies had the biggest piece of the pie–but it’s also the biggest group in absolute numbers. What portion of the entire publishing market is indie? Is it 90%? 95%? 80%? Less? How big is the group sharing this portion of the pie. What I suspect is the case is that a few indie authors earn large dollars, a more substantial group earn some form of income, and most of them earn very little or nothing. So while the larger share of the pie implies that authors are better off going indie, the per author $ outcome may not suggest that at all.

    Without that data, it’s difficult to say, but the small/medium publisher category looks like it might not be a bad place to be. It has one fifth to one quarter market share in most analyses, and the pool of authors is smaller. Generally, these people are earning more per person than indies. How much is impossible to say on the data presented. The same is true of Big 5 publishers (that’s a pretty small pool of authors) but while Big 5 share is declining, the small/medium publishers share is not, which suggests they are doing something right that Big 5 is not.

    The implication of the data presented is that indie share is growing (true) and therefore it’s the place to be (maybe not true), while I suspect that further analysis based on the number of authors in each category and the way that share of the pie divvies up across the members of each category might show something different.

    • Gordon Horne says:

      Here’s a glimpse at what you’re interested in. Individual author earnings tracked across 7 quarters, Feb. 2014 – Sept. 2015

      Anecdotally we know the majority of indies don’t sell at all, just as the majority who query publishers are not offered contracts. From the report linked above it looks as if among those who do sell the income distribution is more equitable among indies than Big5. Of course the indie side of the industry is very young. Perhaps the indie superstars who will suppress the sales of all others have not yet emerged. I hope Author Earnings revisit this question in future reports.

      • Nirmala says:

        Remember that it is impossible to track all the authors who have tried and failed to get a contract with a traditional publisher including small to medium publishers, so even the data in these reports would not show a clear picture, since it only includes books that are published. You have a choice between submitting to agents and/or publishers and hoping that maybe someday you get published (usually after waiting for years) or self-publishing and guaranteeing that your books will reach at least some readers starting right away. The odds are very long that you will make a lot of money either way, but at least with self-publishing, you are sure you will have a shot.

        Submitting to agents and publishers is like entering a lottery where winning means that you then get to enter another lottery. Most estimates are that over 99% of manuscripts submitted to agents and publishers never get published. Those authors will never show up on one of these reports….perhaps unless they get discouraged with the traditional route and try self-publishing.

      • Gordon Horne says:

        I killed some time by looking at the data provided with the above linked report. This data includes only authors selling over an arbitrary minimum. I looked only at the subsets that were either exclusively Indie or exclusively TradPub. (Apologies in advance if the formatting doesn’t work.)

        Count is how many authors are in each group.
        Min is the minimum reported income in each group. (An artifact of data collection.)
        1st Quartile is the value 25% of the group are below.
        Median is the value 50% of the group are below.
        3rd Quartile is the value 75% of the group are below.
        Max is the maximum reported income in each group.
        Mean is the arithmetic mean of each group. (Commonly called average.)
        Avg of diff from mean is the average of the difference of all values in the group from the mean of the group. For example, the group (2,2,2,2,2) has an Avg of diff from mean of 0. The group (0,2,4,6,8) has an Avg of diff from mean of 2.4.


        Trad Indie
        Count 3212 2097

        Min $ 10,001 $ 10,002
        1st Quartile $ 13,987 $ 15,471
        Median $ 22,128 $ 27,188
        3rd Quartile $ 47,419 $ 60,431
        Max $5,907,330 $3,162,405

        Mean $ 76,313 $ 72,572

        Avg of diff $ 86,811 $ 72,838
        from mean

        Note that the Trad group has a relatively small number of really big selling authors who pull up the mean and increase the average of difference from the mean. The quartiles are a better estimate of how an individual might be expected to fare. The 1st, 2nd, and 3rd quartiles for Indies are all higher than for Trads. 111%, 123%, 127% while the max (4th quartile) for Indies is only 54% of that for Trads.

  30. Jamie says:

    Hey Data Guy –

    I know you struggle to separate small publishers from indies and I am one that has helped cause this confusion. I’d be willing to register my imprint (on a site, or via emai, or something) so you could confidently sift us into the right buckets. I suspect there are many indie publishers like me who would do this in order to support your efforts.

    Love the work you do.

  31. Cordellia says:

    Do you have the raw data from the Amazon print sales?

    • Data Guy says:

      Hi, Cordellia,

      Glad you asked — I was hoping someone would. 🙂

      I put the raw print-sales data into spreadsheet form now, and added a link at the bottom of the report.
      If you dig in and find anything interesting, please feel free to share here. We would all love to hear what you discover!

  32. Palessa says:

    This is GREAT information and pretty much proves what I’ve been thinking: That going indie is really the best way. If you can do both Indie and published, that’s great as there are some really good Small/Medium/Micro publishers out there. I was fortunate to find one before it shut down.
    I do plan on looking at the other reports because I want to see what you’re seeing for the rest of the market.
    I saw something in this report that I didn’t understand
    Your pie chart titled Daily $ Revenue to Authors from ebook bestsellers Jan 10, 2016 shows that 44% of the revenues are from INDIE published authors. However, your statement says: “But less than 45% of those author-earnings dollars — from the largest bookstore in the world — is now going to traditionally-published authors.”
    Are you using the term “traditionally-published” to mean indie published (are the terms interchangeable?) because I could have sworn that they were different subsets?

    • Data Guy says:

      Hi, Palessa,

      Sorry for any confusion.

      We use indie-published to describe books self-published directly by the author, who retains full control over their rights. Indie authors operate as their own publishers when selling through Amazon and other retailers, thus earning 100% of net sales dollars after the retailer takes their cut.

      Traditionally-published describes books where the author has assigned rights and control over to a 3rd-party (such as a Big Five publisher or Small/Medium size publisher) in exchange for a fractional royalty share of future sales of that book. A portion of those future royalties is often paid up front to the author as an advance, and then deducted from later royalties earned before the author receives any additional payments.

      Amazon Publishing Imprints land somewhere in the middle: they usually pay double the royalty rate offered by most traditional publishers, and tend to treat their authors more like business partners than suppliers.

      A summary of how we sorted books into publisher type can be found here:

      http://authorearnings.com/note-on-methodology/

    • F. A. Fisher says:

      Hi Palessa,

      I think the issue here is that “traditionally-published” refers to the conglomeration of the “Big 5” and the “Small and Medium Publishers.” Together, they add up to 43%.

  33. Janice J. Richardson says:

    Not a statistician or a numbers person, but understood some of what I read, and read with great interest. I can’t help but wonder what the Kindle app has done to ebook sales. E-readers are great but with the app (Kobo as well) readers can romp across all their devices. It’s easy to read on a bus or subway on your phone.

    When I self-published it was with one goal, to make my book available to almost everyone and price it comfortably. Budgets are tight for seniors and minimum wage earners and disabled individuals and they were my target market. That’s why I chose to self-publish. Who wouldn’t love to read some of the bestselling author’s ebooks on their wish list but they are so cost-inhibitive it’s probably not going to happen. Amazon would not let me set the price at .99 cents, they put it at 2.99, perhaps to match other books in it’s genre?

    Overdrive, the library ebook service can help one read a bestseller but it take moths to get a book. With free ebooks in all genres one doesn’t have to buy a book very often and if they do purchase, they can buy a book under $5, a real treat. Any reader has to weed out the garbage ebooks but if they take the time they will not lack for reading material.

    Self-publishing has been fun and challenging. The real work begins after publication, promotion and marketing has a significant learning curve to it. If one is motivated and able, self-publishing is a viable option.

    • Norbert says:

      Hi Janice,
      late reply but I have found today.
      The Idea to make ebooks available to everybody at everytime in every situation is very even on smartphones is good. My vision is, the flexibility will grow and as author you can support all formats pretty easy. And you are so right: the real work begins after publication.

      And a big respect for the feb 2016 report

  34. Nice to see that the article got some attention. I once worried, IF i ever will see the day of scoring my second ‘fan’. Recently I worried, IF I will live long enough to see the day which scores the first customer for my ebook. It will never end. While many consider it hurdles, it is more facts one has to learn living with.

    Old-School Books and Quality Standards have their place. Still it was overdue to give ALL people on the planet a chance to indulge creativity and the experience of publishing, self-marketing, and so forth.

    Plus I really believe that, bestseller or not, the mere process allows all of us to perceive the global-interconnection, which we have to live with anyway, as something one can learn to handle, and even milk for money! 😉 ”Let’s have some faith in humanity!”

  35. Anonymous Author says:

    I just don’t get why authors aren’t revolting over the horrendous distribution contract they get from ACX/Audible.

    The contract is for seven years (similar to publishing contracts), despite the fact that it is the author/publisher who:
    1. Pays for production costs (or splits revenue with talent) .
    2. Has no control over pricing.
    3. Cannot ask for exclusion from Whispersync, which, for free eBooks, kills a chance to make a profit somewhere. Promising 40% on $16.99 but paying as little as 80 cents if the book is “Whispersync’d” is unfair.
    4. Must foot the cost on all promotion (and can’t buy into Audible’s own massive email list/blast)

    Because they have a contract with iTunes, they are the gorilla swinging the biggest banana. But seriously: SEVEN YEARS? It’s akin to indentured servitude.

    Time for a true alternative, don’t you think?

  36. Tim says:

    Wonderful stuff, as always. Thank you for all this fabulous data.

    I’m very curious as to the number of unique eBook authors out there. How many of us are there out there? I know that your data scrapes can’t factor in the (presumably huge majority) of authors who aren’t hitting the top 200k, but do you have any guesstimate of the rough size of the author pool?

    • Data Guy says:

      Hi, Tim,

      The size of the total author pool is a tricky one, because the answer depends on who we include and who we leave out. i.e.:

      (1) Do we include in the count all the long-dead, mostly forgotten authors whose back-catalogs were quickly digitized by publishers in the early days of ebooks?
      (2) Do we include the author of every indie-published auto-generated scamphlet whose content was scraped off Wikipedia?
      (3) Do we include all the aspiring authors pursuing the traditional path without success, whose manuscripts are racking up rejection after rejection or languishing in traditional publishing slush piles, unpublished and unread?

      Narrowing the scope a bit to authors with live ebooks right now on Amazon, right now there are 3,177,733* Kindle titles, which — if the average number of books per author matches our 200,000-book sample — means roughly 1.8 million unique author names. So we’ve captured roughly the top-selling 6%-7% in our data sample.

      If we limit the count to authors actively publishing new books in the US right now, I would estimate that pool at somewhere between 500,000 to 750,000 authors, but that’s a pretty soft estimate.

      * An insteresting side question: the currently-live total Kindle ebook count of 3,177,733 seems about half a million books lower than a 3,675,096 number from June 2015. Does anyone have any info or insights into why?

      • Bill Hiatt says:

        #3 is an especially intriguing point. I think a lot of the comparisons between indie publishing and trad publishing are misleading because they include every indie author making no sales but not any of the authors who never get accepted by trad publishers. Unfortunately, I can’t imagine how one could make an accurate estimate of how many rejected authors there are.

  37. Priya says:

    Hi, Great report once again. I’ve been researching the audio book market to consider whether I should invest in audio books as an indie author. While it’s a growing market, i haven’t been able to get my hands on any data that shows ROI or even revenue generated for the average or even best seller indie author. Your data shows indie’s make up less than 10% of the audio books available and earn 20% of the revenue but i’m wondering whether you can share the raw data on audio, just like you have for your kindle and print analysis? Once I have some real numbers, I can make an informed decision on whether it’s a path I will pursue. Thanks!

    • Data Guy says:

      Hi, Priya,

      I’ve been waiting for someone to ask. 🙂
      This week my schedule is pretty hectic, because of GDC (Game Developers Conference)
      But as soon as I get a chance, I’ll anonymize the raw audio spreadsheet and post a link to it.
      It’ll probably be up there, at the bottom of the report, this weekend sometime.

    • Data Guy says:

      You can now download the raw audiobook data using the new link at the end of the report.

      Or from right here. 🙂

  38. Surprisingly, Indies and Big now has shown different ratings i.e only 45% ebook sales..
    I did not expected this report,,,
    I hope that i would certainly avail huge sales by dealing with popular companies…..

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