May 2014 Author Earnings Report

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Three months ago, we released our first full report on Amazon e-book sales and author earnings. Our goal was to look at unit sales and earnings by various publishing paths in order to help authors make informed decisions in this rapidly changing publishing environment. The results were eye-opening, but it was merely our first data point. Our long term goal has been to pull data every quarter to see if we can spot developing trends.

A quick recap on our methodology: Using a custom software spider, we can crawl every Amazon bestseller list and pull info from each book’s product page html. This data goes into a spreadsheet, which gives us the price, ranking, average review, and much more for every ranked e-book on Amazon. Using established ranking-to-sales data from numerous bestselling authors (including our own works), we are able to present author earnings by title and publishing type. As with our past reports, all the data has been anonymized and is available for download at the end of this report. And just like with past reports, any reasonable numbers entered for the power curve of the product rank-to-sales ratio reveals the same overall picture. That is, our conclusions are not dependent on our estimates but are borne out of the freely available data.

The exciting thing about pulling this data is that we have no idea what we’re going to find. Our conclusions since the last report might need rethinking. Our advice on what an author might want to do with a manuscript today could very well change as the publishing industry takes another swerve. My partner and I debated what we expected to see from this second round of data. We both predicted no more than a 2%-3% swing from any one publishing path to the other over such a short period of time. I wagered we’d see a 2% drop in self-publishing titles, offset by an increase in Amazon imprints, as the latter continues to snatch up high performing e-books and put more marketing muscle behind their own authors. My partner thought we’d see a 2% hike in self-publishing at the expense of traditional publishing. We bet a dollar on the outcome.

Over the next four charts, we present our findings from the last report and compare them to our current data set. To see how the breakdown has changed over the past three months, hover your mouse over each image (or tap it). You’ll see the February report jump ahead nearly three months to the April report.

This first graph shows the number of titles on Amazon’s e-book bestseller lists by publishing type:

Number_Titles_Before_and_After

Of note with this chart: The vast number of small and medium publisher e-books reflects their dominance in obscure categories. The overall ranking of most of these books is extremely low, which is why the number of titles on Amazon bestseller charts does not correlate to daily unit sales volume.

Next we have the estimated daily unit sales, based on the overall ranking of each e-book:

Unit_Sales_Before_and_After

This is what my partner (affectionately known as Data Guy) predicted. Yes, I mailed him a dollar. What we see here is that self-published e-books and those from small/medium publishers have captured sales lost by the Big 5 and Amazon’s own imprints.

Using list price, we get the daily gross sales revenue:

Daily_Gross_Before_and_After

Despite the lower number of daily unit sales, Big 5 revenue has gone up 1%. Investigating this, we found the average price of a Big 5 e-book went up nearly 3% between reports, while self-published e-book prices went up 1%.

Finally, the estimated daily author earnings report:

Daily_Revenue_Before_and_After

Here we see self-published authors earning 2% more while Big 5 authors hold steady. Again, with fewer daily sales but a higher price, the Big 5 publishers increased their own revenue while their authors stayed pat. Amazon Imprint authors saw a 3% decline, which might be due to the volatility they have as a small number of titles can see a large number of sales. What we can’t tell with these two data sets is if we are seeing real trends or just random fluctuations, but we can say that our findings from February have now been corroborated by this second data set. Self-published authors are clearly earning as much as traditionally published authors on the largest e-book sales platform in the world. A few months ago, this seemed impossible. It is already beginning to feel like old hat.

Once we have seven or eight of these quarterly reports, we’ll be able to look at yearly trends. But even with two data sets, we can now ask questions that were impossible with our first report. One thing our first report couldn’t show was the volatility of these lists. How long were e-books holding on to their rankings? Was this volatility dependent on how one chose to publish? The first thing we wanted to explore was churn, or the rate at which books fall off the list as new books rise up to take their place. By pulling the publication date of each title, we are able to compare this report to our last report to look for duplicate titles and original titles.

We limited our analysis to books earning at least $10 a day. This is a very low threshold, but it prevents the data from being swamped by those books only selling one copy a day or every other day, which makes up a good number of some obscure product categories. In the graphs below, green represents the number of titles where revenue increased 25% or more. Red shows a decrease of 25% or more. In the middle, you have books that stayed within 25%:

churn-by-pubtype

This graph shows higher volatility for self-published titles, with more books moving up and far more moving down. Traditionally published titles, on average, have more stability. But a deeper look at the data shows something even more interesting:

stoplight-chart-2

Titles by long-established Big-5 authors (those who debuted prior to 2009) are the ones which have all the stability. New releases by tenured authors, as well as backlist titles from those tenured authors, make up the vast majority of the Big-5’s market share and the of Big-5’s stable sellers. Traditionally-published titles by newer authors, with Kindle debuts after 2009, show far less stability, and exhibit very similar volatility characteristics as titles by self-published authors.

The next thing we wanted to look at was the staying power, or link between daily author earnings and yearly author earnings. More data points will make this clearer, but we can already see something very interesting. We took the top 1,000 earning authors for each publishing type and ranked them by combined earnings from both of our data sets. This allows us to look at earnings falloff over the one quarter for which we have data. If a book had dropped substantially, it would drag the average for that publishing type down. This is another way to look at churn, and this time we are using a higher threshold than the $10/day cutoff from above:

Screen Shot 2014-05-13 at 1.35.09 AM

What the data shows is that the top 1,000 self-published and traditionally published authors are equally affected by the churn of the bestseller lists. The falloff toward the long tail normally seen with demand curves is also less than might be expected. While the extreme outliers from both camps earn most of the income–similar to what we see in most entertainment industries–there is health and wealth down the long tail for self-published and Big 5 published authors alike. In fact, they almost perfectly map onto one another.

Next we looked at author revenue by publication date. Self-publishing gurus have long discussed the diminished sales outside of the first month of publication, as e-books fall off the “hot new” lists. For that reason, we broke daily sales down by month of publication, giving us 30-day snapshots. We were also able to capture preorder data for books not yet released.

highres-monthly-breakout

We should start by pointing out how much influence a handful of titles can have on this data. This is due to the blockbuster model that plagues Hollywood and has come to dominate traditional publishing. The big purple bump on September of 2012 is 80% due to George RR Martin’s GAME OF THRONES Box Set. May of 2012 owes 50% of its bump to Veronica Roth’s INSURGENT. The following month sees 60% of its increase due to Gillian Flynn’s GONE GIRL. And a whopping 70% of the leap in January of 2012 is from John Green’s THE FAULT IN OUR STARS. 80% of the huge October 2013 bump comes from Veronica Roth’s ALLEGIANT and the DIVERGENT Box Set, Donna Tartt’s THE GOLDFINCH, and John Grisham’s SYCAMORE ROW.

Major publishers aren’t just reliant on these rare blockbuster bestsellers, they are also heavily reliant on their backlist, which the above chart also captures. Look at that massive bar on the far left of the graph, which shows all books published before 2011. Ignoring pre-orders, the author revenue for Big 5 books published prior to this date is equal to 31% of the earnings on all books published since then. This backlist dates to before the self-publishing revolution gained steam, which suggests that the share of pie earned by self-published authors has a lot of room to grow as these writers establish backlists of their own. It also means that the parity we see in our author earnings charts between self-publishing and Big 5 publishing has a lot to do with the latter’s existing titles and not their new releases. How you decide to publish your manuscript today means looking at the difference in earnings due to recent works. Self-published authors are not just holding their ground with Big 5 authors when it comes to releases after 2011, they are out-earning Big 5 authors by a 27% margin.

In fact, we can see this if we look at author earnings just for books released since January of 2011:

author-revenue-pie-pubbed-2011-and-later

Does this chart indicate where we are heading with author income? As self-published authors build their own backlists, and as more of these authors employ freelance editors and cover artists and pay attention to quality, could there be a future where self-published authors as a cohort are earning a good deal more than traditionally published authors? Our advice to an aspiring author today might be to do one of two things: either build a time machine and travel ten years into the past to query their work — or self-publish today.

And while this analysis is just for e-books, revenue from e-books is already 29% at Simon & Schuster and 34% of overall trade revenue for Hachette (40% in the UK for Hachette). Also, various estimates place 50% of print revenue from online retailers, a market self-published authors have equal access to with their print-on-demand books. As the market for audiobooks continues to increase, the publishing world tilts further and further toward the digital. We have said before in past reports that there has never been a better time to be a writer. It could be that the best of times are yet to come.

Next Monday, we’re releasing a follow-up report that looks at this same data from the perspective of an author getting their start today. We’re going to analyze the difference between tenured authors and newly published authors. The decision on how best to publish will never be an easy one, but our next report might make it a whole lot simpler. Stay tuned. We’re just getting started.

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

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53 Responses to “May 2014 Author Earnings Report”

  1. Bill Peschel says:

    Is there a way to print out the report with both the February and April charts on it?

  2. This is really encouraging. Thank you, Hugh and Data Guy. I love the widget that shows the chart from a few months back. Gotta get one of those.

  3. I like it. What this tells me is that the Big 5 definitely have a winner in their established brands, but us indies have way more of a fighting chance going forward. Thanks again, fellas!

  4. Mark Boss says:

    Thank you. Putting this all together is a lot of work, and I really appreciate it. The publishing world needs more transparency. The best way for authors to make informed decisions (at the career and individual manuscript level) is to work with good data.

    Writing stories is great fun, but the publishing side of writing can be difficult. This data is a tool that will help us make better decisions.

  5. Thanks again, Hugh and data guy. There has never been a better time to be an indie author. 2013 was a fantastic year for me and 2014 is shaping up to be even better.

  6. John Brown says:

    Love this!

    BTW, the second churn chart is truncating the bottom of the image so I can’t read the labels. I downloaded the image and found the same issue, so I don’t think it’s my browser.

  7. Thank you so much! As an aspiring author, I really appreciate all the work you are doing to share this data. I look forward to Monday’s report.

  8. John Weaver says:

    What makes an uncategorized single-author publisher? I know a lot of self published create their own imprint and companies and I was just curious what fields in the Amazon data you are using to compare and determine this?

    Great job as always!

    • Hugh Howey says:

      If the publisher only has a single author in our dataset, we have to do some research to see if it’s a self-published author or just a small press with only one book ranked. We can’t do this for all the tens of thousands of unknown publishers, but we went deep enough into the list that we were looking at books with rankings in the hundreds of thousands.

      • John Weaver says:

        It looks like there may be some books out there with ridiculous prices skewing the data? Did you take a look at the outliers to make sure that there is not some dumping off point that maybe some of these are not worth including? Maybe these titles are well worth the $200-700 they are asking for. I know it is a lot to sort through all of this and get it half normalized but maybe sticking to the works where the prices are within 3 STDs?.

  9. Don Iksé says:

    Thanks for your great work, Hugh and Data Guy.
    Those figures are inspiring for a french indie writer :)
    It’s very interesting to see how the ebook market works in the US, as we don’t have such inputs in France, and especially because I guess (and hope) that we are moving toward a situation similar to that of the US. However the road might be long here…

  10. Love the heavy lifting that you’re doing for all of us authors. Will be sharing this report with my community. Thanks so much!

  11. Very inspiring indeed, guys! Thanks for all this hard work… Can’t wait for next Monday! :-D

  12. Thanks, Hugh and Data Guy!

  13. Heather says:

    How do you differentiate between Amazon published, Indie Published and Uncategorised Single-Author Publisher? In today’s world, there isn’t a clear definitive line between all of those, so knowing your definition would really help me better understand this report.

    • Hugh Howey says:

      Amazon published is their own imprints, which are more like Big5 imprints than self-published works.

      Indie published is anything self-published.

      Uncategorized are those publishing entities that may be self-published authors, but it’s hard to tell. They could also be small presses with only one author in our data sets.

  14. Not considered? says:

    Comparing earnings makes no sense when you completely disregard advances. Traditionally published authors get nice chunks of cash upfront (in addition to their royalties) — and a majority of authors never make enough to earn out, meaning that the big publishing house eats the loss. Pretending that advances don’t exist, or that all/most/many authors earn out their advances, makes the financial comparison meaningless.

    • Paul Draker says:

      You’re misinformed.

      An advance is not “in addition to royalties” — it is an advance payment of a portion of the royalties the author would earn… and then wait 6-12 more months until they actually were paid.

      Saying publishers lose money on advances that don’t earn out is equally misinformed. At typical royalty splits, a publisher will recoup their “investment” back many times over in profit before most advances earn out.

      • Exactly, Hugh.

        I refused twice a contract from an Indie publisher with a $2000 advance and 10% royalties. Best decision of my life. I sell 10x more than last year and made for those $2000 advance in 4 months (at 70% royalties). Crossed the 6000+ book sold (never done free promos) months ago.

        As you well said in your article “Our advice to an aspiring author today might be to do one of two things: either build a time machine and travel ten years into the past to query their work — or self-publish today.”

    • Passive Guy says:

      I’ll second Paul’s comment – advances are advances against royalties, not payments in addition to periodic royalty payments.

      Also, few traditionally-published authors are receiving very good advances these days. Typical royalties have gone down over the last five years. As one author said, “$10,000 is the new $50,000″ where advances are concerned.

      If a new traditionally published author doesn’t earn out their first advance, their chances of receiving another book deal are very low.

  15. GS Jennsen says:

    Excellent data, and on the whole very heartening news when compared with the February report.

    Thank you for doing this, gentlemen.

  16. Susannah Scott says:

    THANK YOU!

  17. Ann Christy says:

    Thanks, Hugh and Data Guy!

    The updated report is certainly encouraging. No flash in the pan there, though like you pointed out, it will take a couple of yearly trend lines to make that clear to everyone.

    Looks like we didn’t miss the heyday of self-publishing after all. Thicker on the ground and harder to get noticed, but not a done game by a long shot.

    I’m interested in the title churn and not entirely sure I know what it means exactly. Is that indicative of the large number of books that get published, shoot up to the break into a list or two when family and friends by them, but then don’t catch hold? Or is it that they are more niche marketed, snagged up quickly and then done more quickly?

  18. W. Swenson says:

    “travel ten years into the past to query their work — or self-publish today” I thought this would be your conclusion. I’ll see how my latest traditionally published book does and then decide whether or not to jump into the swamp with the rest.

  19. W. Swenson says:

    Really a well-executed survey. Thanks.

  20. Passive Guy says:

    Another great job, Hugh and Data Guy. Thanks.

  21. Sue says:

    As someone who used to (used to — now I’m making my living as an indie author) crank out reports with lots of stats for a not-to-be-mentioned government agency, it would be a great service if you or Data Guy Extraordinaire could write up a brief executive summary of your report for news bites and blog posts and for those among us whose eyes glaze over when we see tables and charts and statistics. :)

  22. Sue says:

    Oh and thank you thank you thank you for this report!

  23. Nina Levine says:

    Thank you so much for putting the time into this. Very interesting information.

  24. Mike Bradleyu says:

    Your advice at the end of the report is that authors should self-publish online. It would be prudent for them, as well, to arrange to keep their work available online throughout the term of copyright, which for most works is life of the author plus 50 years. If your work is not easily found online, it is vulnerable to being republished by someone else as an orphan work, which undercuts your sales and puts your money in their pockets.

    For information on orphan works, you can go to nwu.org/index.php?q=nwu-book-division. Also, search for “orphan works” at http://www.sfwa.org, http://www.authorsguild.org, and copyrightalliance.org/

  25. Amar says:

    Hugh and Dataguy,

    Thanks for putting this information together. This is very useful for a “new” writer like me. Looking forward to next week’s report.

  26. Alana Woods says:

    Thank you for this information — really appreciate the trouble you’re going to. I’ve just shared it on my FB page. Regards, Alana Woods

  27. Joe Konrath says:

    Another great job, Hugh and DG.

    The more data authors have, the more informed their decisions can be. If a writer has aspirations to find readers and make money, you analysis helps them by comparing different ways to do so.

    It’s great that you remain impartial, but I wonder how you’re able to do that. At one point, when confronted with the problems that legacy publishing causes, does it become more than just how many books are sold and how much money is earned by the writer?

    What about having control over titles, cover art, pricing, and distribution?

    What about having to suffer because your publisher screws up, like not printing or shipping enough copies, delaying your launch date, lying about promotion, refusing to discount or buy coop, not fulfilling orders, letting a book go out of print but keeping the rights, not exploiting foreign rights they own, windowing, the agency model (which cost writers money), price fixing, lockstep royalty rates, non compete clauses, first refusal clauses, poor distribution, 18 month publication schedules, six months to reprint, cheap paper, reserves against returns, paying twice a year, dwindling advances, ebook-only releases, orphaning, and the many, many other things they do, both intentionally and unintentionally, to hurt book sales and authors?

    With all of the greed and mistakes in legacy publishing, the numbers only tell part of the story.

    • Hugh Howey says:

      I think these issues are all part of the story as well. I think that story is being told more and more. Our goal is to show the parity in earnings that we have witnessed in the trenches, not just among the extreme outliers but the hundreds of people we’ve met who are earning a living despite not being a household name. Writers dream of doing this as a profession, and it’s my firm belief that self-publishing provides a higher likelihood of this happening. The myth that self-published authors make nothing in the way of a living and traditionally published authors all quit their day jobs is the one we believe this data will bust.

  28. Emily Hill says:

    What a bonanza day!

    This morning on Twitter I happen across the Judith Briles interview of Mark Coker (March 2014); my hometown newspaper The Seattle Times runs John Schmid’s “Small-scale publishers hold own in digital age” http://seattletimes.com/html/businesstechnology/2023636933_smallpublisherxml.html ; and Hugh and DG publish their trends and data reports which convincingly confirm the wisdom of following Alan Rinzler’s foresight four years ago when he designated this The Golden Age of Publishing.

    CHA-ching never sounded so sweet! ~*~ Thank you Hugh and DG for this trend report.

  29. Jonathan says:

    What is considered an “uncategorized single-author publisher?”

  30. As an author who specializes in political fiction-novels about political issues of the day in the form of thrillers-I find it fascinating to see how the world of independant publishing is taking shape, and, more importantly, how authors are finally taking their careers into their own hands. The New York publishing world, always insular and based on who-you-know is not crumbling beneath the weight of their own entrenched methodologies. Thanks to authors like Hugh Howey, so much of the fog that has surrounded publishing is giving way to a much brighter future. It is due to the encouragement of writers like Howey and his great reports, that I can say, quite excitedly, that I am planning to put up my life’s work-fourteen books!-on Amazon at the start of July. I spent most of my life as a professional journalist (I write politcal pieces for the Washingtonspectacle blog) , always writing fiction when I could find the time, and now, thanks again to these pioneers of our business, I will finally be able to share my work with readers all over the world. Congrulations to Hugh for another amazine insight into the numbers we all care so much about.

  31. Data Guy says:

    A frequent question in the comments is:

    How were books classified as “Indie-Published” or “Small/Medium Publisher” or “Uncategorized Single-Author Publisher” in the report?

    Here’s how:
    http://authorearnings.com/note-on-methodology/

  32. Martin Lake says:

    This is fascinating and marvellous. It will go a long way to wiping the sneers off the faces of those who consider indie writers to be third rate also-rans. It shows how rapidly things are changing and also suggests how we all need information like this in order to keep abreast of the changes. Good on you.

  33. Thanks for the data mining. Within a few years, a proper forecasting model can be built. This will aid authors just the way it does in advertising for reach/impression. The main key is to make sure it is unbiased. Each platform will “sell” the point that their platform is the best.

    Great job!!

  34. Jillian Kent says:

    Thanks so much for all your efforts Hugh and DG. It took me 21 years to get a traditional publishing contract. This information is mind blowing to say the least and gives me tremendous hope for the future. I love this comment of yours, “Our advice to an aspiring author today might be to do one of two things: either build a time machine and travel ten years into the past to query their work — or self-publish today.”

  35. Rob RodenParker says:

    Awesome stuff! I love looking at the Excel file and filtering it to look at my niche and see how well it’s doing, plus looking for other good potential niches to publish in.

    Is there a way to find out what the actual book is through this data? It doesn’t look like it. Just curious. Would be nice to pick one and see how the ranking changes (like what it is ranked right now vs. when the report was run).

    Thanks!

  36. Yogesh says:

    Good report thanks very much for sharing..

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