May 2015 Author Earnings Report

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Welcome to the May 2015 Author Earnings Report. This is our sixth quarterly look at Amazon’s ebook sales, with data taken on over 200,000 bestselling ebooks. With each report over the past year and a half, we have come to see great consistency in our results, but there is always something new that surprises us. Often, it’s something we weren’t expecting, like the massive shadow industry of ISBN-less ebooks being sold, or the effect Kindle Unlimited has on title visibility. This time, we went into our report curious about one thing in particular. But we were still not prepared for what we found.

If you’ve been shopping for ebooks on Amazon lately, you may have seen this new addition to many ebook product pages:

Nelson Book

This announcement can be found on ebooks from several of the largest publishers, and it appears to serve as both an apology from Amazon and also a shifting of the blame for high ebook prices. Amazon has stated in the past that they believe ebooks should not cost more than $9.99. Self-published authors are no doubt familiar with this price constraint, as their royalties are cut in half if they price higher than this amount. But after a contentious and drawn-out negotiation with Hachette Book Group last year, Amazon relinquished the ability to discount ebooks with several publishers. Prices with these publishers are now set firmly by them.

Soon after these agreements went into place, industry observers noted an upward move in average ebook prices. Freed from Amazon’s discounting, and with complete control over pricing, the publishers made a decision to push the price of many of their books above $9.99.

With six quarterly snapshots, each snapshot consisting of 50,000+ of the top-selling ebook titles, we plotted the average price by publisher type to see just how much prices have gone up. The blue bars show the price of self-published ebooks for each of our reports. The purple bars show the average price of Big 5 published ebooks.

Screen Shot 2015-05-03 at 3.49.53 PM Screen Shot 2015-05-03 at 3.50.03 PM Screen Shot 2015-05-03 at 3.50.17 PM Screen Shot 2015-05-03 at 3.50.28 PM

Since we started pulling this data, the average price of an ebook from a Big 5 publisher has gone up 17%. Compare this to a difference of 5% for self-published titles, or the increase of 7.5% across Amazon imprints. The prices for Big 5 published ebooks have risen quite steadily, rather than a sudden surge since the return to agency.

What will the effect of these pricing decisions have on unit sales, revenues, and author earnings? We were eager to find out.

 

    The May 2015 Author Earnings Report

We start with a simple counting of the number of titles on Amazon’s ebook bestseller lists. No math involved, just a detailed look at whose works are showing up as top-selling titles. For comparison, we included the same graph from our January 2015 report.

Number of Titles in Amazon’s Ebook Best Seller Lists

may-2015-combined-titlecount

In the last three months, the Big 5 publishers have seen a 26% reduction in the number of titles on Amazon’s Best Seller lists. This means fewer titles are selling well enough to make these lists, and it also means fewer titles are receiving that added visibility.

Ebook Unit Sales

may-2015-combined-unitsales

Over the same period, daily unit sales from the Big 5 have fallen 17%. This is a measure of the average rank of each ebook. Just as publishers study the New York Times bestseller lists to gauge the strength of their competition, we are looking at the same thing. But with a sample size of 200,000, rather than 20.

Ebook Gross $ Dollar Sales ($ Readers Spent)

may-2015-combined-grossdollarsales

Next up, we factor in the price of those ebooks to see how much money is being spent. Here, we see that daily consumer spending on books by Big Five publishers took less of a hit, with market share of daily revenue down 7.8%. Remember that prices on these titles have gone up. Publishers are trading lower volume sales for more dollars per title. But this might not be as clear a trade-off as it seems, as we’ll explain later.

Ebook Dollar Revenue To Authors

may-2015-combined-authorearnings

Most importantly for authors, we can see here a huge loss in daily earnings from Big 5 publishers of 20%. Their higher prices aren’t just hurting readers; they haven’t been good for their authors either. And authors seem to understand this, as many implored Amazon to continue discounting their works during negotiations with publishers last year. Now it is impossible for Amazon to discount these books, and publishers and their authors are losing revenue as a result.

     Six Quarterly Reports

Let’s now turn to longer trends by graphing our last six Author Earnings reports over time. Here, we see the gradual downward trend for Big 5 ebooks and the upward trend for self-published works has become much more pronounced over the past quarter.

201505-marketshare-trend-unitsales-datefix

Sometime in the last quarter, indie daily unit sales overtook Big 5 publishers, combined.

201505-marketshare-trend-grossdollarsales-datefix

The above chart reveals the effect higher prices and lower market share have had on daily consumer spending, with self-published authors gradually chipping away at market share lost by major publishers.

201505-marketshare-trend-authorearnings-datefix

Here is the chart that means the most to us as authors, and we see that self-published authors now command more daily income from digital royalties than all Big 5 published authors, combined. And in each of these graphs, we can see that long term trends have become much more pronounced.

     January 2014 to January 2015 Drop in Publishing Revenue

This sharp downturn should not be a surprise. As was recently reported by the American Association of Publishers, the Big 5 publishing group and roughly 1200 other reporting traditional publishers collectively saw an 8% drop in ebook dollar sales revenue in late January 2015 compared to early February 2014. This is actually a little steeper than shown by the data we’ve collected for our Author Earnings reports. Looking at our own data from early February 2014 and late January 2015, we measure a 4.7% drop in Big 5 publisher dollar revenue from ebooks at Amazon, not 8%. But the AAP data — while the bulk of it is the Big Five — also includes data from other traditional publishers as well as from other ebook retailers. Undoubtedly, the near-halving of Barnes & Noble Nook ebook sales during that same period is also a factor in the AAP’s larger reported drop in Big 5 sales.2

What we see from the graphs above is that all the reporting lately on the plateauing or decline in ebook adoption is certainly true for major publishers, whose numbers are being used as if they represent the broader market, but their daily unit sales are less than a third of the total market. Ebooks may be on the downward slope for them, but not for everyone else.

   The Bigger News is What Happened Since January

What the AAP hasn’t reported yet, because the data has yet to be collected on their side, is the impact of the market shifts since late January, which we see below. Late January unit sales are on the left. Our latest report on early-May daily unit sales is on the right.

Screen Shot 2015-05-03 at 3.46.25 PMScreen Shot 2015-05-03 at 3.28.19 PM

In just the last three months, Big Five publisher ebook unit sales have fallen another 18%. Higher prices and a return to agency pricing seems to be seriously impacting sales. And self-published authors are moving into that lost market share, with an increase in daily revenue of 12.4% since January 2015.

    The Effects of Agency Pricing

We noted above that daily revenue for the Big 5 publishers has gone down significantly, but not nearly as steeply as their plummeting share of daily unit sales. The fact that revenue has not fallen quite as severely as market share is explained by the higher prices of the titles being sold. But there is more at play with the return to agency pricing, and it isn’t good news for those publishers or their authors.

In the past, publishers set high prices on their ebooks knowing that Amazon would discount those titles, which would increase sales by not driving away price-conscious consumers. In fact, one of the complaints from publishers in their negotiations with Amazon is that Amazon was no longer discounting as per usual. Those discounts had been assumed and were factored into publishers’ pricing strategies. Widely misunderstood under this scenario is the fact that the discount came out of Amazon’s pocket, not the publishers’ nor the authors’.

When Amazon discounts a non-agency ebook, the publisher still gets their share of the original digital list price, which is set by the publisher. The author also still gets their usual 25% of that share — or 17.5% of the original digital list price — regardless of any Amazon discounting. The only party that loses out in profits with the discounting is Amazon — something they were apparently willing to do in order to help grow the ebook market, encourage adoption, and to win market share from competitors who could less afford to discount so steeply. (In fact, the degree to which Amazon was discounting those Big Five titles surprised us when we ran a 120,000-book comparison in late January against the publisher’s original digital list prices for those books. Prior to agency, Amazon was giving up almost the entirety of their margin on Big Five ebooks, and selling them on average at cost.)

The move to agency pricing changes this relationship. Amazon now gets a fixed 30% of every sale, which means publisher profit is no longer the entirety of daily sales revenue. In fact, let’s look at the difference by graphing publishing revenue prior to the return to agency pricing for most of the Big Five. This is how the world looked just 3 months ago, at the end of January 2015:

jan-2015-stackedbar

The green block is Amazon’s take. As you can see, there is no take from the Big 5 publishers. Amazon’s deep discounts came at their own expense, so major publishers were getting 100% of what consumers spent on their books. The blue portion is what goes to their authors.

And this is what the world looks like when publishers operate under agency pricing:

may-2015-stackedbar

Notice the brand new block of green atop the Big Five bar? Agency publishers are now giving up 30% of the revenue from their higher-price ebooks, and they are selling fewer numbers at those prices. Also: Their authors are earning less, as royalties are calculated as a percentage of net revenue.

    Summary

Publishers fought hard to take back control of ebook pricing from Amazon. This was a stated intent by Hachette to its investors in 2014, and it was touted as the end result of their lengthy negotiations. What has that control brought?

By our data, which matches industry reports, this control has brought higher prices to consumers, lower sales for publishers, and less earnings for their authors. It has also brought greater market share for self-published authors, which is why many were pulling for publishers to get their way during negotiations with Amazon.

If it seems unlikely that publishers would have fought so hard for such disastrous results, it might help to be reminded that it isn’t the first time. In the lawsuit against publishers for conspiring to raise ebook prices in 2009, it was shown that the agreement they fought to win with Apple resulted in a reduction of profits per ebook sold (pg 53). Lawyers were also successful in showing at trial that a move to agency pricing resulted in a sudden and drastic shift upward in ebook prices, harming consumers, but also harming publishers (pg 94).

One does not need to theorize on why publishers would make these decisions. One CEO of a Big 5 publisher wrote in a note to herself that higher prices would slow ebook adoption and casual purchasers, protecting retailers (pg 47). So speculation is not required. This was the same conclusion reached by the judge in the collusion case, whose reading of Big 5 CEO emails showed a willingness to erode Amazon’s market share at any cost, even to themselves. The court decision in United States vs. Apple et. al. is not only gripping reading, it provides our clearest window into the intentions of major publishers, as it includes their private thoughts and emails.

Studying the market and all available data is critical for writers today. It is equally critical to understand the decisions being made by retailers such as Amazon and Apple, and publishers such as the Big 5. Without this understanding, authors may place their trust in partnerships that do not have their best interests in mind. Not all publishers are alike, of course. Some have not yet returned to agency pricing. This may be worth considering when entertaining offers from various publishers. It may be useful to know that some price their ebooks much higher than others, which hinders sales. It might also be a good time for agents to begin including price ceilings in their negotiations with publishers. Their revenue goes down as author earnings go down. Literary agents are in a position to protect consumers, assist authors, and prevent publishers from driving up prices any further. Their careers are in the balance as well.

One final point that bears mentioning: Protecting the paper book trade will not help publishers. We know from their own accounting that ebooks are far more profitable. Any report showing a decline in ebooks and an increase in print means a net loss for the Big 5 and their authors. Every dollar of consumer ebook spending that is replaced with a dollar of consumer paperback or hardcover spending means:

  •  Reduced publisher profits (only 20 cents of profit on each dollar versus 52.5 cents on ebooks).
  •  Reduced author earnings (only 8-15 cents of each dollar goes to the author versus 17.5 cents on ebooks).
  •  Fewer of an author’s books get sold and read.
  •  Less discoverability (in the last quarter, the number of titles on bestseller lists plummeted 26%).
  •  Fewer new fans eagerly awaiting the author’s next book.

Authors need to understand that ebook dollars and even the celebrated hardcover dollars aren’t equivalent. In addition to the lower royalty share authors get, a big chunk of those dollars are lost on printing, shipping, and returns.

Through all of this, we can see that control over pricing is enormously powerful. The largest retailers and the largest publishers are willing to do great harm to one another in a fight for this power. For authors who want control over their pricing, so they can avoid becoming casualties in wars between retailers and publishers, the choice of publication method is clear. And it’s becoming more clear every quarter, as self-published authors continue to win market share, and continue to take control of their careers.

 

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

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

 


  Notes

1) For consistency across the six reports, we revised the payment to Big 5 publishers up across the board in the previous five reports. In the past, we had calculated payments to publishers at being 80%. This was to account for the 70% they were owed, and to then factor in any discounting Amazon was eating on their end. Following our January 2015 report, we ran a comprehensive comparison of Amazon sales prices for the entire 120,000-title dataset against the publisher-set digital list prices on B&N.com, and determined that Amazon was on average discounting Big-5 and other traditionally-published books far more steeply than our 80% modeled, and that Amazon’s profit was very close to 0%, rather than 20%. In other words, publishers were getting on average very close to 100% of the actual sale price for every ebook sold. To look at trend lines, we applied this consistently to each report, for an apples-to-apples comparison of payouts for the last year and a half. But for the May 2015 report itself, we computed all publisher shares (and author royalties) for non-agency Big-5 and other traditionally-published books using the digital list price our spider software found that same day on B&N.com.

2) Barnes & Noble’s Nook store’s well-covered collapse appears to be accelerating. It is now possible to hit the overall Top 50 Best Seller list on Nook.com with fewer than 100 sales per day from a standing start. It takes around 1,500 sales per day to hit the same benchmark on Amazon.com. We currently calculate B&N’s ebook market to be in the single digits, perhaps even the low single digits. No author should be happy with this development, as the more healthy markets that exist for our works, the better.

For more on the history of the fight for and return to agency pricing, an excellent and fascinating read is the decision in United States vs. Apple et. al.. Information on windowing can be found on page 34. On page 35, you can see the price advocated by one major publisher for ebooks to be in the $18 – $20 range. Throughout, you can hear about each publishers’ anger over the $9.99 price ceiling encouraged by Amazon, a desire for much higher ebook prices, and a desire to win back control of pricing and to drive those prices as high as possible. This Author Earnings report provides the clearest look at the disastrous consequences of this pricing philosophy.

 

131 Responses to “May 2015 Author Earnings Report”

  1. Alan Spade says:

    It seems to me that because they don’t want to strengthen their fiercest opponent, the Big Publishers are willing to get hurt in the process (or at least, accept getting hurt).

  2. Ann Christy says:

    Thank you, Hugh and Data Guy! What an eye-opener. It’s the logical conclusion to demanding higher prices (often higher than the paperback for the same overpriced ebook) but seeing the numbers is sobering. I’m glad I remained indie and didn’t sign on the dotted line. Doubly so now.

    I feel very bad for the trad authors who, at this point, may be really looking for a way out. At the same time, I’m quite hopeful for those who haven’t signed yet. And it makes the pain of edits on my latest work less painful, knowing the market isn’t quite as stacked and sure as before.

    At this point…anything can happen! And probably will. It’s a good time to be an indie.

  3. Roman says:

    Good work on the report but to be honest
    why won’t they price ebook for 18$? It’s a free market you can decide to buy it or not and a loss of 18$ to the publisher means its 18$ spent on around 4 books in the indie market

    • Hugh Howey says:

      It’s absolutely a free market. And authors need to know prior to signing that contract which publishers are interested in selling titles, and which ones are willing to submarine sales in order to hamper the growth of digital. Or at least know from the publisher ahead of time what their digital pricing strategy might be.

      Publishing is a weird business. Many authors are so eager to get published that they don’t negotiate things like price. You wouldn’t do this in any other business. You supply a product to a wholesaler, you want to discuss cost, manufacturing, MSRP, and the like.

      Authors tend to assume that publishers are going to A) Know what they’re doing and B) Do what’s best for the author.

      We have it from publishing CEOs themselves that they are willing to tank sales of a particular format in order to protect relationships with other retailers. And now we’re seeing the results of that philosophy. Our goal here is to educate authors, not give business advice to publishers. Though we do tend to slip into that latter role when our foreheads get sore from the slapping.

      • Roman says:

        Thank you for the reply
        I did noticed that you couldn’t help but to throw some bussines advice on the report It’s funny because as you said “slapping our foreheads”
        the data is just there black on white and yet still we see 18$ ebooks and Trad published authors making so little out of it

        One think i didn’t understand is the last paragrapgh
        “willing to tank sales of a particular format in order to protect relationships with other retailers.”
        I’m not sure I understood it the way it is needed to be.
        Is it saying that they are willing to lose on thier income from Ebooks and specifically amazon for them to be able selling the more expensive paper copies in other stores around the world?

        • TheSFReader says:

          Roman, can’t talk much about world data, but here in France (where ebooks are only a fraction of whole books sales, due to — but not limited to — pricing), I’ve heard from some publishers that they can’t cut prices on ebooks under some level, because bookstores would reduce orders of the corresponding paper versions.

          And since they make a much higher percentage of their revenues on paper books, they can’t afford to do that.

          Additionally (and it may be a French specificity), the publisher which has rights for the “trade paperback version” (and the ebook), resells the rights for the MMPB to a secondary publisher (sometimes in the same publishing group, but not always). And the secondary publisher negociates “non-competitive” pricing for the trade and ebook versions –> it is usual that the ebook price is higher than the mmpb.

          (In case you’re wondering why I don’t talk about hardcovers in the above paragraph, it’s because its a rare format, only used for limited/deluxe editions).

      • AnnWrites says:

        Dear Hugh Howey,

        Many thanks for the May 2015 author earnings report. You are doing a great service to Indie authors and we cannot thank you enough.

        In one of the reports you observed that 1.8% of self-published authors make 6 figures?

        I have a few questions about that:

        What is the total number of self-published authors, as per your estimate?

        What constitutes 1.8% of that? If 1.8% makes 6 figures, what percentage makes 5 figures? What % makes 4 figures?

        I’ve spoken to an author who made it to the top 1.8% for a good 2 months (if I remember right) and he didn’t make anything close to 4 figures.

        Shouldn’t he make at least $16,666 in that year?
        [100,000/12 x2 should give me the earnings estimate for 2 months, right?]

        I don’t know if you’re mistaken or he’s mistaken or I’m unable to understand how it works.

        I would appreciate it very much if you could point me in the right direction, because I’m sure there’s some issue with my calculations.

        Warm regards,
        Ann

        • Data Guy says:

          Hi Ann,

          I’m not sure where that 1.8% number comes from — which report do you mean?

          There are no reliable statistics that capture how many authors in total are self-publishing — or for that matter, how many authors in total are submitting manuscripts to agents and publishers while seeking traditional publication. So I’m not sure how your friend was able to conclude that he was in the “top 1.8%” for two months — what did he base that idea on?

          Even if he were, there is absolutely no way that 1.8% of all authors, whether self-published or traditionally published, could be earning six figures. It’s impossible.

          There are currently 3,475,873 kindle ebooks for sale on Amazon, of which between a quarter and a third are probably self-published, and all of the rest traditionally published. So for a given book’s sales to be in the top 1.8% of all Amazon ebooks, that would correspond to an overall sales rank of roughly 62,560… or a book selling at most 1-2 copies per day. A self-published ebook priced at $3.99 and selling at that level would be earning its author roughly $1,400 a year. A traditionally-published ebook priced at $9.99 and selling at that level would be earning roughly $875 a year. Both are a far cry from six figures a year — to reach that level, a self-published book at $3.99 would have to be selling over 100 copies a day. A traditionally-published book at $9.99 would have to sell over 150 books a day. Either would have to sustain an average ranking up in Amazon’s Overall Top 1,000 — the top 0.02% of all books — to do so.

          And by the same math, the other 98% of both traditionally-published and self-published books are selling fewer than two copies a day. And those submitted to agents and publishers but never published are selling exactly zero copies a day.

          The reality is that only an infinitesimal fraction of writers have ever been able to earn a living from their art alone. But today, with the advent of online bookstores and electronic self-publishing, a writer’s chances of earning a living are now better by an order of magnitude than they were at any previous time in history.

          • AnnWrites says:

            @DataGuy
            Thank you so much for the detailed reply. Your numbers make a lot of sense. This is the page I was citing:

            http://www.wattpad.com/52032205-for-writers-by-hugh-howey-you%27re-looking-at-it
            It’s from a book that Hugh Howey posted on Wattpad. But it seems he wasn’t quoting from AuthorEarnings, he was talking about this article:

            http://www.forbes.com/sites/jeremygreenfield/2013/12/09/how-much-money-do-self-published-authors-make/

          • AnnWrites says:

            @DataGuy
            So according to your stats, 1 in 5,000 authors go on to make six figures off their books. Now that’s putting things in the right perspective *shudders*.

          • Data Guy says:

            Well, I don’t think the odds are quite that bad, for self-published authors anyway (although I have no way of quantifying the number of writers stuck in traditional publishing’s “slush pile” so don’t know on that side).

            Keep in mind:

            1) These numbers are for single books only. Most authors have multiple books that are contributing to their incomes — sometimes dozens. We’ve heard from authors who are earning six figures without any single one of their books selling well enough to appear on any Amazon Best Seller list (and thus in our data sets).

            2) The data includes books that were published decades ago, as well as more recent ones. Most of these books are older than a year or two. And some of the older books might have sold quite well in their heyday, while some of the newer ones just may not have taken off yet.

            3) The numbers above don’t include revenue from other ebook retailers (Apple, Google, B&N, Kobo, etc.)

            4) The numbers above don’t include revenue from audiobook editions, print editions (either POD or offset-run)

            5) The numbers above include noncommercial writing, hobbyist books, one-off publications written simply to be shared with family members or small communities, and other projects by those not attempting to make a career out of writing.

            While I would hesitate to guess without solid data (and the DBW Writer’s Digest surveys you mentioned are scientifically worthless), the proportion of self-published authors earning six figures will lie somewhere between that 1 in 5,000 and the original 1 in 50 — perhaps it’s something like 1 in 500…

            But for serious, motivated, prolific writers who are approaching their craft as a profession and self-publishing their work to a professional standard, the odds of a six-figure income will be far higher than that. Especially for those who have built up a substantial backlist, and those who are able to market their work to readers effectively.

      • Len Sherman says:

        Hugh, in one of your responses to a reader, you note:

        “Publishing is a weird business. Many authors are so eager to get published that they don’t negotiate things like price. You wouldn’t do this in any other business.”

        Ironically, the Big 5 publishers didn’t negotiate selling price in their original negotiations with Amazon prior to the Kindle launch, and we’re totally blindsided by Amazon’s $9.99 price point for new releases.

        The New York Times reporting on Amazon and the publishing industry has been disgracefully misinformed and biased. You’ve done a valuable service in reporting and analyzing the facts.

      • J R Douglas says:

        You are my shining star. When I read your books, I realized that I need to stop desperately pushing toward publishing houses to get published (and failing) and start learning more about getting my books on Amazon as ebook indies. Thanks for your continuing support for authors.

  4. TheSFReader says:

    Thanks again Author Earnings for the great Data (and analysis) !

  5. Aaron says:

    The next market disruption is here. I believe Kindle Unlimited has a lot more to do with these staggering results as the return to agency pricing.

    Either way–the next year could spell a world of hurt for big publishing and drastic upheaval in the market as a whole.

    Get ready, it’s going to be very interesting in 2015!

    • Hugh Howey says:

      I don’t think KU grew that much in the last quarter. Many of the top authors in KU pulled out in January. We could compare average ranking distribution among KU books for the last quarter to see if those titles have moved up, showing a surge in KU use. But when we looked at the last quarterly reports, that was after the first 3 months of KU, and Big 5 earnings had a slight uptick.

      Either way, the Big 5 are free to participate in KU. They choose not to, apparently because they fear giving more business and market share to Amazon. It’s a crazy policy, since they get the full tilt for any borrow, and they don’t have to go exclusive. They’re nuts not to join in. They’d kill in KU.

      • FWIW, I’ve seen a drop in KU downloads since January. I’m wondering now if the top authors, the ones who would draw potential readers to KU, has caused a number of readers to drop KU themselves.

  6. Dazrin says:

    Looks like there is an error in the E-Book Unit Sales section: “Over the same period, daily unit sales from the Big 5 have fallen 17%.”

    Looking at the graph it should be 6%? The 17% is the change in average price from above?

    • Dazrin says:

      Nevermind, I see now what you were doing. They fell 6% overall (35% of the total to 29% of the total), but that 6% of the total pie represents 17% of their own total (1-.29/.35). Just coincidence that it is the same number as the average price increase.

  7. Thanks so much for that great report ! Really interested to know how you get so much data to analyze. I did a quick translation on french for french people following the A-NC-SA license, kinda. Available here http://www.edition-ebooks.com/traduction-rapide-du-rapport-authors-earning-de-mai-2015/

  8. Ronel says:

    Fascinating! Thank you so much for gathering all these figures and putting it into a format that even maths-challenged authors like myself can understand.

    I was initially quite keen on getting traditionally published, but after reading this: screw ’em!

    I’ll stay indie and be proud of it, knowing I’m (but one small) thorn in the side of the Big 5.

    Thanks again,
    Ronel van Tonder.

    • Hugh Howey says:

      Hey, sign with a publisher if the offer makes sense. My biggest takeaway from this report is that agents need to be fighting for price caps on ebook editions. Why isn’t this negotiated? My agent and I certainly negotiated this with publishers three years ago. It should be standard.

  9. iGO eBooks says:

    The philosophy of not putting all your eggs in one basket springs to mind so whilst Authors have predominately relied on certain outlet streams and stayed there in the main as the comfort zone, so as to not spend more time exploring new markets than focusing on writing the next book, there is a plethora of options and alternative ways of promoting, marketing, and selling out there that we have yet to comprehensively explore that opens up new opportunities.

    As I have said before it is not easy task and I am still in the midst of this exercise several months in and still not caught up – it is hard work and many hours of exploring a researching but long term it is worthwhile.Meanwhile my prime focused has changed in order of priority with reader, reader, not being the first.

    For me it is content > reader > delivery – get the first right and to no small extent Authors will attract not only returning loyal readers, but new comers.

  10. Great work! It’s seems that the big five have shot themselves in the foot. It would be nice to get some insight into how KU affects these numbers.

  11. Alan Spade says:

    @Gerald: someone asked me the same kind of question.

    Here is what I noticed: the daily revenue to indie authors was around $500,000 in January. That daily revenue didn’t increase so much for indies: around $600,000 in May, maybe a little more.

    But in the same time, the number of indie titles in the bestseller lists (200,000 books) went from 18% in January to 26% for first of May.

    In my opinion, if Kindle Unlimited hadn’t made the indie authors massively lose money, the daily revenue of us indie authors should have increased much farther than just to $600,000.

    It’s the proof that KU is not so good for indie authors.

    We sell more, yes, but what is the average price of the indie ebook sold, if you include the KU “sales”? That would be worth looking at.

    • Data Guy says:

      Alan, one needs to be cautious when comparing the total # of titles on all Amazon Best Seller Lists against unit sales or revenue without taking the Overall sales rankings of those books into account.

      That approach can be very misleading.

      There are many thousands of sub-category and sub-sub-category best seller lists in nonfiction — the “tree” is five layers deep in places, and the “best sellers” at the top of those lists aren’t moving many copies as their audiences are small.

      The numbers in my comment below, to Jeremy, are more relevant to your question.

      • Alan Spade says:

        Data Guy, based on the numbers you provided to Jeremy below, I’ve made some calculations. It is all based on average numbers, so of course, it’s doesn’t reflect the reality of the market, and the discrepancies between the sales of the bestselling authors and the other authors.

        Still, for the indies + Amazon in the top 200,000, one ebook brings them an average of $66,33 a day. For the big 5 publishers + the trad pub authors, it is $209,71 a day.

        Now, if you suppress the Amazon share, making the calculation on $600K and not $900K a day as I have done to obtain $66,33, you obtain $44,22 a day just for the self-published author.

        Of course, the trad published authors of the Big 5 get less than $44,22 a day on average (because the Big 5 take a huge part), but for me, it is proof that Kindle Unlimited makes it harder for an author to make a living.

        As I said, I’m conscious that taking averages is not accurate (though I think it’s helpful to gain perspective), because an author in the top 100 will get many advantages to be in Kindle Select, and for her, it will be profitable to be there. But not for the others.

        • TheSFReader says:

          Alan, I don’t understand what process you use to get to those numbers. Could you please explain the formulas ? What value are you talking about ? Gross ? Net ?

          Additionally, as far a I understand, you don’t take the KU “state” of the ebooks in your compputations (probably because DG didn’t give a more detailed cut), so I fail to see how the results you give prove anything.

          • Alan Spade says:

            You’re right, SF Reader, the results I give alone don’t prove anything, but they give a perspective that can be useful.

            Is the average indie author gaining more or less since KU has started, that’s what at stake here. It’s a difficult question to answer, because to prove a difference, we should compare data before KU had started with today’s data, and for the comparison to be accurate, we would have to know how much indie authors have chosen Kindle Select for the books involved at the two given points.

            My formula to obtain those numbers is: number of indie published authors multiplied by the numbers of books, so, 7,030 x 1.93 makes 13568 books (rounded).

            Now, $600,000 of daily revenue for indie published author divided by 13568 makes $44,22 daily revenue by indie book in the top 200,000.

            I used the same formula to obtain the other numbers.

            If we could establish, for example, that prior to KU, the average daily revenue by indie book ranked in the top 200K was $50, it would be a clue that KU played a role.

            If on the contrary, we could establish that the average daily revenue by indie book was lower than $44,22 prior to KU, than we could be sure that the fact that KU has lowered the indie revenue is a myth.

            I’m open to both results. I think KU has lowered indie revenue, but I’m willing to change my mind if we can make talk the numbers.

  12. Jeremy says:

    Are these numbers of all books, or are they taking a sample of authors from each group? If this was 1000 self published authors, 1000 traditional published authors, 1000 amazon published authors, etc… then these numbers are amazing. If it’s the 3000 amazon published authors next to the 100,000 traditionally published authors, next to the 1,000,000,000,000,000 self published authors then the numbers are more than a bit skewed.

    • Data Guy says:

      Looking at the books ranked in the top 100,000 and thus selling 1 or more copies per day, we see:

      7,030 Indie published authors with an average of 1.93 books each
      9,114 Small/Medium published authors with an average of 1.62 books each
      417 Amazon-Imprint published authors with an average of 1.92 books each
      5,350 Big Five published authors with an average of 2.05 books each

      • Remember says:

        7030 * 1.93 + 9114 * 1.62 + 417 * 1.92 + 5350 * 2.05 = 40,100.72 books.
        What about the other 59,900 books? And the authors that wrote them?

        • Data Guy says:

          Our sample contained 45,756 of the Top 100,000 books… it didn’t have all of them.
          Still, 45% is a rather statistically significant sample size. 🙂

          • Remember says:

            Fair enough. That is a good sample size. I just freaked because the numbers didn’t add up.

    • Hugh Howey says:

      The sample we’re using is the Amazon bestseller lists. Rather than create a false comparison (this is usually done by ignoring the vast number of traditionally aspirant authors who never get published and never sell a single book, and instead comparing the top 1% from one pool to the 100% from another), we’re just looking at results. Is the market open to authors of all stripes? Does it discriminate?

      It seems to. Against high-priced ebooks. But it seems not to care how you got published.

      In earlier reports, we looked at the numbers of authors in each earnings bracket, and we looked at how many titles per author we saw in each of those brackets. We don’t tease out the details in every report, or they would just keep growing and growing.

    • TheSFReader says:

      Jeremy, I collected Hugh and Data Guys explanations on he methodology into a “primer” last february to answer that kind of questions : http://readingandraytracing.blogspot.fr/2015/02/an-author-earnings-methodology-primer.html Hope it helps in addition to their current answers.

  13. TheSFReader says:

    Could you please Data Guy tell where the additional 80 000 samples come from? Additional categories crawling (and which new branches?) ? Less inter-category duplication ? Or something else?

    • TheSFReader says:

      Oops, seems I’ve not read correctly the number of books. Wishful thinking? Please diregard/erase previous message

      • TheSFReader says:

        ??? No, looks like there is an error somewhere on the post. Could you please confirm the number of books in the data? 200k or 120k?

        • Data Guy says:

          Good eye — it’s 200K. 🙂 I corrected the error above.

          The extra 80K books don’t change any of the charts other than the titles-on-bestseller-lists count. The main effect they have is to bloat the apparent share from Small/Medium publishers, as the expanded lists are mostly ultra-specific (mixed-format) nonfiction categories.

          • TheSFReader says:

            Thanks !

          • Data Guy says:

            I mostly did 200K just because I could, and I wanted to test-drive the spider software at higher scale.

            (For this data set, I launched the spider simultaneously on 120 servers, each with 8 CPUs and 16 GB of RAM. This Author Earnings data run took roughly an hour and a half, while running over a thousand separate webcrawler threads on those 120 servers. During that time, it read and extracted data from nearly a million Amazon.com product pages — print and audio books as well as ebooks — over a terabyte of data in all.)

            Anyway, sorry for the tech-geek attack.

            But the anonymized spreadsheet we publish is just the tip of the iceberg. Even so, it’s an unwieldy 60MB or so in size — we may trim it back down to 120K in future reports, just to keep things manageable.

          • TheSFReader says:

            So, happy with the scaling factor ? (tecchie here too, but on far less parallel intensive workloads and technologies)

          • Data Guy says:

            Short answer… yep. 🙂

  14. Data Guy says:

    It’s also worth noting that it requires at least $2.62 in additional retail hardcover and paperback sales to make up for the reduction in net publisher profit when that publisher gives up $1 in retail ebook sales.

    So unless top-line paper sales dollars are up more than 2.5 X as much as top-line ebook sales dollars are down, trading ebook sales for paper sales is still a losing financial proposition for publishers.

    But our focus is always authors, rather than publishers, so let’s look at what it means for authors.

    Assuming those paper sales are 34% Hardcover and 66% paperback (the usual ratio Bookscan shows), then 17.5%-of-list ebook royalties (25% of the publisher’s 70%) are being replaced with 10.3%-of-list print royalties (weighted average of paperback 8% and hardcover 15%).

    So from a traditionally-published author’s standpoint, when he or she is looking at royalty statements, each lost $1 of consumer ebook purchases needs to be replaced by at least $1.70 in consumer print book purchases, or that author’s total royalties will still shrink.

  15. Erin Valentine says:

    Thank you for your detailed research and well-written analysis of the results. It’s nice to have a professional way to expound on why I’ve refused to buy most of the Big 5 books for several years now … “It’s the price, dummy.”

    Add to that the authors I know who are seriously cheated out of what they should be earning from those people? I’ll try to buy indie authors nearly every single time, and I still spend a lot of money every year.

  16. Mgon ♥ says:

    Very exciting news!

    Such invaluable data and info to have.

    Thank you so much for this wonderful report and for providing such an awesome service to the indie community.

    You and Data Guy deserve some kind of medal of recognition! 😀

    God bless :o)

  17. Thank you for this extremely useful snapshot of the industry… Since 1984, I’ve had hard, soft cover and e-books.

    It is fascinating to see the spreadsheet analysis of the top five vs the Indie books. I’ve noticed that my Indie books do well, but my full color, printed design books do really well too, especially when I sell them at lectures, booksignings, by retail ventures etc.

    It still takes the author to sell their book.

    Since June 2014, I’ve seen a disastrous downturn in audience booksales at large conferences which hurts my dinner and travel budget. I’ll never be able to sell an e-book from the stage and pay my gas bill!

    Great and eye-opening report fellows.

    Cheers.

    • Epobirs says:

      What’s stopping you from selling e-books from the stage? A spindle of 50 CD-Rs can be had for around $5. That’s 800 MB to apply, with the typical novel coming in well under a megabyte. Include versions for Kindle, EPUB, and PDF and you’ve covered most venues worth mentioning. Labeling works out to a few pennies per disc with packages including design software to be found at most big business supply chains. Cases are also pennies per in volume.

      So you have a lot of room to get creative in a very inexpensive package you can produce yourself at home. Have kids? Cheap labor! Do you have a good recording of an interview or a chapter reading you’ve performed? Bonus material! Throw it on the disc. The cost is exactly the same whether you use 1% of the capacity or all of it.

      These also serve as fine bonus items for your loyal fans or very high profit editions to peddle on your site. This is your trade. Work it.

  18. Aussie Mary says:

    Okay, so I know publishers may have less costs like warehousing, distributors, postage, etc, but I woud suggest that most indie authors now have far more costs now to produce excellent quality books. This includes extra promotion time factors, professional editing and book covers, formatting and so on. Could these costs be taken into consideration with any data about how much the indie’s total earnings are?

  19. A genre question. In the early reports, you provided graphs of revenue broken down by genre/category. The last several times, you have not. I dropped you guys an email a couple weeks ago (at least I wrote and thought I did – can’t find it in my sent items now) after I had a chance to download the Feb spreadsheet and gather the numbers. There had been anecdotal evidence that KU had caused a major drop in romance sales on Amazon.

    What I found was that romance had dropped by 90% and thrillers had dropped by something like 40% (measured in revenue to authors). I eyeballed the spreadsheet data and found only 4 or 5 romance titles in the top 100 on the 1/21/15 report. But a couple weeks ago when I checked Amazon, I found at least 30 romance titles in the top 100 paid.

    Th January numbers seemed improbable to me so I downloaded the spreadsheet from last July and ran my formulas against that to see if I was missing something – the numbers came out almost exactly matching your genre bar chart from that report – http://authorearnings.com/wp-content/uploads/2014/07/author-earnings-by-genre-and-publisher-type-5.png. So the raw data from the January spreadsheet seemed off as far as genres go.

    I won’t have time to download the latest spreadsheet and try to run the genre numbers again in the next week or so, so if you guys have an easy way to just do a quick and dirty check on that, I’d be curious to hear what you find. As I mentioned, according to the raw data, daily author earnings from romance dropped from over $400K to under $50K from last July to the February 2015 report. As of now, romance titles are still close to half of the books in the top 100 on Amazon.

    • Data Guy says:

      Thanks for catching that! I dug in and found the issue.

      For Romance books, the data on rank, price, etc. is all in there and correct, but they aren’t properly tagged as “Romance” in the Categories column. Whenever a book was listed under Books > Romance as well as Kindle eBooks > Romance, the spider truncated the list of categories it tagged the book with; that’s why there are so many entries where the Categories column just says: “Books”. A quick scan of those titles shows most, if not all, are actually Romance.

      I’ll dig deeper, but I suspect the same was true in our January data set as well.

      Before we do another genre analysis, I’ll have the category column fixed and recording Romance correctly again.

      • Thanks, Data Guy! I figured it was something like that. The rest of the data did all seem like the correct pattern. I wonder if sometime after the July report, Amazon changed their HTML slightly and the spider got tangled in the web 😉

        • Data Guy says:

          Spot-on, Edward. I see you’re familiar with web-scraping’s inherent nitpicky fragility.

          In every quarterly run, I always find a few minor HTML tweaks that Amazon has made to their pages and I have to modify the spider’s custom parser code to accomodate. This particular change slipped through because it didn’t affect any of the numbers, only the concatenated-text column of “also-listed-under” categories which I haven’t looked at since July.

          • Yep – I’m a data guy myself, just not THE Data Guy 😉 I actually spent a couple hours writing a screen scraper for Amazon in 2011 that grabbed the top 100 overall but concluded that with only my own personal machines top run on, I couldn’t take it much further. Seeing that you’re using 120 explains a lot!

  20. Nirmala says:

    Here’s a question: Since Random/Penguin is not yet back into agency pricing as far as I know, would it be possible to split their results out from the other 4 BPH? Are the drops in sales even greater for the BPH that have moved back into agency compared to publishers whose ebooks are still being sold with Amazon discounting? In other words, iIs Random/Penguin holding their own better than the others since Amazon is still presumably free to discount their ebooks?

    If so, the picture presented in this report might be even more dire for the publishers who are back using agency pricing if their results were not being buoyed up somewhat by Random/Penguin’s ebook sales. If it is easy to separate out the five big houses, it would be interesting to see separately how each of their data compares from a year ago to today, and see even more clearly if the switch to agency pricing is likely the biggest factor.

    • Data Guy says:

      “Since Random/Penguin is not yet back into agency pricing… is Random/Penguin holding their own better than the others since Amazon is still presumably free to discount their ebooks?”

      At first glance, oddly, no, Nirmala — the average Penguin Random House sales prices land right in the middle of the Big Five pack… and so does the Jan 2014 to May 2014 shrinkage of their market share. But PRH is also choosing to list-price their books far higher (in both sales-weighted and non-weighted terms) than most of the Agency 4 are now (other than Simon & Schuster, who is pricing nearly as high as PRH on average but getting pretty much no Amazon discount at all.)

      The data shows PRH averaging a 13% Amazon discount on a non-sales-weighted basis, and a 24% Amazon discount on a sales-weighted basis. In other words, if Amazon is paying PRH 70% of list, they are basically giving PRH ebooks away at close to cost and earning at most 6% on them.

      • Nirmala says:

        Thanks for that info. I guess PRH is also not taking full advantage of their current opportunity to maximize ebook sales, especially while Amazon is still discounting their titles.

  21. John Brown says:

    You guys are awesome for doing this. Thanks so much!

  22. John Brown says:

    BTW, I’m on of those who were cheering Big Publishing on in their fights with Amazon just for the reasons shown.

  23. Nate says:

    ” Undoubtedly, the near-halving of Barnes & Noble Nook ebook sales during that same period is also a factor in the AAP’s larger reported drop in Big 5 sales.”

    Probably not. The decline in ebook sales at the Nook Store reflects consumers shifting their purchases elsewhere, not pulling out of the market entirely. You have no evidence to show otherwise.

    • Data Guy says:

      “Undoubtedly” was probably too strong a word. But it’s a factor. A lot of folks who bought Nooks (Yeah, I know, right? 🙂 ) might not have the tech savvy to buy epubs elsewhere and side-load, and — feeling burned by higher Nook ebook prices — might also not want to sink $ into yet another ereader. 🙂

      • Nate says:

        And what would stop them from buying a different ereader tied to another store, or simply reading on their mobile device?

        • Data Guy says:

          Once-burned, twice-shy disenchantment with ereader vendor lock-in (either perceived, or, in the case of DRM-bearing traditionally-published books, real).
          And most non-tech-enabled folks aren’t aware that you can read on a smartphone or iPad.

          • Nirmala says:

            Let alone a computer. I have had many people tell me, “I can’t buy an ebook because I do not have a Kindle”. When I explain that they can read Kindle ebooks on their computer, they are pleasantly surprised.

          • kamas716 says:

            I haven’t looked around much yet, but just wondering if anyone has tied in B&N NookBook sales decline with their recent moves on DRM and elimination of direct downloads from the website?

  24. Thanks for the #’s.
    It makes me glad I passed on a small publisher book contract I was offered to continue to go indie. As a reader, I will NOT pay $6, $7, $8+ on an ebook. Even if it’s one I desperately want to read. There is zero cost to the publisher to reproduce that item, therefore, it’s pure greed driving that price. Unfortunately, it’s my trad. published colleagues who will suffer.
    I predict that the big 5 will continue to lose market share as larger authors continue to bail and self publish. Those authors’ struggle will then be to wrestle their rights back from those publishing houses.
    My books were on that best seller list on Amazon, B&N, and iTunes. It’s tough, but not impossible. Just a lot of hard work, trial by error, and hours and hours of sweat and tears.

    • Erianaiel says:

      Keep in mind that the only the printing and warehousing costs are being cut from ebook production, and those are not the largest share of the price by any stretch of imagination. Unless you are talking small print runs the cost of physically producing a book is less than a dollar (assuming a paperback best seller quantity of course).

      The reseller would be cut out as well, but Amazon and Kobo just claim that portion. And instead of the publisher (in theory) paying for editing, cover design and marketing those cost are now shifted to the author. Which leaves the question why you actually would need a publisher nowadays. It also means that to make a profit on books you still have to sell it in the $6+ range (of which the author gets to keep some $4).

      Editing and cover design set you back several thousand dollars after all, if done professionally and at high quality, and that has be earned back in book sales, and in reasonably short term (not the 25+ years long tail that Amazon likes to brag about).

  25. Statistics Guy says:

    Dear Hugh / Data Guy,

    I am reading for a Master’s degree and working on my dissertation (Traditional Publisher in the Digital Era). Can I help you out with future research?

    Send me an email if you like to discuss more details 🙂

  26. Kay Franklin says:

    Another great report and interesting data for the big 5 following the decision to allow their own pricing. I’ll be interested to see if their pricing comes down a little and then plateau out.

    Thank you again Data Guy.

  27. Daniel Knight says:

    One member over on Kboards has been questioning your conclusions based on the holes in the data. I have been trying to figure out if there is any validity to her claim.

    She says that trade-published is being under represented because of those holes. Her assertion is that trade-published would make up a greater percentage of those missing ranks because trades don’t make use of the sub-categories as much as indies.

    It seems to me she is making an assumption based on zero data, but is there any way to know for sure if the distribution of books between indie and trade would be the same in the missing ranks as it is in the ranks for which you have data?

    • TheSFReader says:

      I understand where she comes from, I had that same discussion with Data Guy in February. However, I made my own check on that to get an Idea of the “coverage” of the data set. (Will send a copy of the xls file to Data Guy)

      The graphs presented here (except for the”Number of titles”) are based on the subset that selles more than 1 book a day (rank 100 000 or better), and on that subset, there are more than 45 000 samples (or 45% has been “polled”). 75% of the first 10 000 have been polled, 87% of the first 5000, 96% of the first 2000 …

      I think 45% is plenty representativeness for a statistical sampling… under these conditions, if Big5 publishers provide better visibility to their books, the “best” 100 000 books should be enough to make their point.

      • Daniel Knight says:

        Thanks SFReader, I actually had seen the information you had over on your blog about what percentages were covered. I also saw you had a quote from a comment I made a couple of reports ago. I was like “Wow, that’s me – I went viral.” LOL

        It certainly makes sense to me that we would expect the missing ranks to follow the same type of distributions as the ones represented. It seemed like a big leap to say the missing data would follow completely different trends based entirely on her feeling that trades don’t use sub-categories as effectively.

        That being said, if trades don’t use sub-categories effectively, that is just one more reason to favor the indie route. Obviously making it onto a category bestseller list is a major way to gain visibility, and if the trades can’t handle this simple task, why would you trust them to give you the exposure you need to have success.

          • Daniel Knight says:

            Thanks Data Guy. I think you pretty effectively debunked her critique, but I guess she remains unconvinced even though the data shows the opposite of her hypothesis.

        • TheSFReader says:

          Yeah, absolutely, would make sense if they made good use of the category/subcategory lists…

          As for the coverage, the file I sent to Data Guy (and the values I gave in the previous comment) are based on the 200K report, and better than the ones you can find on the blog post.

          For information :
          rank % “local”%
          100 100 100
          200 98.5 97
          500 98.4 98.3
          1000 98.7 99
          2000 96.5 94.3
          5000 87.18 80.9
          10000 75.82 64.46
          20000 64.36 52.91
          50000 52.05 43.85
          100000 45.75 39.45
          200000 38.43 31.11
          500000 25.78 17.35

          the “local” is the % of coverage not from the first rank but from the classe’s first (eg between 200 000 and 500 000 for the last one). So at WORST in the 0 -100 000, coverage is better than 39%.

          Not bad at all…

  28. You know, all during that Hachette vs. Amazon deal, I was pretty much unsympathetic to Hachette or its authors, because they were creating their own mess. I was on the side of smart pricing strategies for aggressive growth of sales and fan base.

    I am still squarely in that mindset.

    But I gotta say, the Big 5 price hikes have been good for me. The more expensive they are, the easier it is to compete. Kindle Unlimited is mucking up the waters right now, but I have learned to adapt to that and make it work for me.

    Overall, I am happy the Big 5 are in control of their own prices and being idiots about it. I watch the Indie market steal market share from the Big 5 on a daily basis, and it puts a huge smile on my face.

    I actually feel sorry for traditionally pubbed authors who haven’t been brave enough to jump out and learn what it means to go Indie. I think they are on the losing end of the publishing business right now.

    Its the Hybrids who are ruling the world. Kindle Unlimited might have bitten into their paychecks, but that its an adjustment phase. Successful hybrids who adapt to KU and keep publishing quality novels on a regular basis (with some short fiction or serials in KU), stand to make a killing.

    This is a game of attrition right now.

    Keep putting out the best quality fiction you can, and keep pushing forward to perfect the art of Indie publishing, and by attrition, you will gradually rise to the top of the long tail, earn some real money, and build a retirement in the process.

    🙂

  29. Apologies if this was already covered, I couldn’t find it and I can’t poke around with the spreadsheet at the moment. How are you factoring in the reduced income from Kindle Unlimited when working out the revenue to authors?

    • TheSFReader says:

      The October report http://authorearnings.com/report/october-2014-author-earnings-report-2/ expores the KU and explained the hypotheses used for the KU revenues :

      In it, different versions were made between a “best case” scenario, where all sales are effective sales, a “middle case “scenario, where half of the sales are borrows, and a “worst case” scenario, where every “sale” is a borrow. (additional 70/30 too)

      (quote) As you can see, the difference in the total share of earnings by publishing type is only affected by a few percent even with wildly impossible assumptions about the borrow rate. In order to determine which of these charts to go with, we collected data from hundreds of authors and their individual titles, and these averages showed an average borrow/sales rate close to 1:1. The 50% borrow/50% sales data will be used for the rest of the report, and it will provide a baseline for our future reports.(end of quote)

      I looked into the May 2015 spreadsheet this afternoon and found at (as expected) that the repartition is computed with a 50:50% hypothesis, and a $1.33 per borrow.

  30. Phyllis Humphrey says:

    Hugh Howey and Data Guy: thanks for doing this. The information is so valuable and, IMHO shows an inevitable rise in self-publishing success. I’m glad I lived through the old (agency-trad publishing) era and can now be part of the modern process. Lucky me, and also the other authors who take advantage of this epic change.

  31. Phoenix says:

    Reposting from KBoards regarding Note 2 about BN: “Barnes & Noble’s Nook store’s well-covered collapse appears to be accelerating. It is now possible to hit the overall Top 50 Best Seller list on Nook.com with fewer than 100 sales per day from a standing start. It takes around 1,500 sales per day to hit the same benchmark on Amazon.com. We currently calculate B&N’s ebook market to be in the single digits, perhaps even the low single digits.”

    Where are you getting your data to support this claim? Granted, my dataset is small but it is consistent in capture methodology. We generally have 1-3 different titles hit in the Top 100 at BN each month. I don’t always document rank but I do observe it each time, so I’m watching it pretty carefully. Here are the 21 runs I *have* documented that are all from standing starts. 20 I’ve captured myself. The one for May 2015 I worked directly with the author to ensure she was using the same methodology for capturing as me. That methodology being: Taking the BN report’s count for the day and applying it to best rank, which usually displays around 10-11am CT the morning after. This methodology, in fact, likely means it takes MORE sales to hit a rank than what I’ve documented. The key, of course, is in the consistency of the way sales and rank are captured here:

    http://3.bp.blogspot.com/-mTjm9pykLNc/VUvMeKtUSdI/AAAAAAAAEm4/z1M2TqD9hXc/s1600/BN-ranks.JPG

    My rule of thumb with BN is that a #100 rank equals roughly 100 sales. At no time have I EVER seen close to 100 sales equaling a rank of #50. I’m curious where this claim is coming from since I can’t seem to replicate it. From what I’m seeing, the Top 100 rank/sales ratio has been holding fairly steady for the past 15 months.

    • Data Guy says:

      The data comes from a recent BookBub promo, which generated 94 sales the first day, and reached overall Nook sales rank #48 the next morning (my notes say around 7 am (PST)), despite generating only another 55 sales before the end of the second day.

      But I like your answer better. We all want to see the Nook store stay healthy. I’ve had 1,000-selling Nook days back in 2014 (which put me in the overall Top 5 on barnesandnoble.com even then). So I hope they recover.

      • Phoenix says:

        What day was that? I can probably dredge up info close to that timeframe to see if that was maybe an overall glitch – we know Nook is notorious for dropping sales and sales disappearing for days only to be reinstated before the official reports come out. Because from my observations, under normal working circumstances, that’s been pretty impossible to achieve.

        • Data Guy says:

          What day was that?

          A week ago.

          • Phoenix says:

            Hmmm. Nothing odd jumping out that I can find around the first of May. Our last two BookBub runs were April 26 and 28 (we had 4 BB ads in April). The 258 sales and #29 rank in the chart at the link above were for Apr. 28.

            I did run across more results in an email to the author for the Apr 26 run that aren’t on the chart. She hit #26 with 292 sales.

          • Data Guy says:

            Back in March 2014, a BookBub for the same book I referenced had generated 298 first-day Nook sales which drove it to #31 overall (as of the next morning, with another 140 trickling by the end of the second day.)

            That looks roughly in line with your numbers, even though it was a year earlier. Weird. But back in late 2013, it took me 665 sales to briefly crack the Nook Top-10. And yet by mid-2014, 1108 sales were enough to keep me in Nook’s overall Top 3 for quite a while. (Incidentally, the #1 overall Nook bestseller at that time happened to be another indie).

            And while I like your numbers better, I don’t think that Nook’s ongoing decline is exactly news to anyone:

            http://www.marketwatch.com/story/barnes-noble-q3-profit-falls-as-nook-sales-decline-2015-03-10

            http://www.wsj.com/articles/barnes-noble-nook-sales-slump-55-in-holiday-season-1420727285

            I really do hope they can manage to turn things around. Because having lots of viable retailers competing for our business is good for all writers.

      • Phoenix says:

        I also believe looking at relative store volume and comparing to Amazon is a pretty slippery slope. The KU effect makes comparisons almost worthless. Anecdotally, I can say that it looks to take 50% more sales now to hit the #1000 rank on Amazon than it did a year or so ago. Rule of thumb there used to be 100 sales = #1000. Now it’s more like 150 sales = #1000. But at the #100 rank and below, it doesn’t seem to take 50% more sales now to hit rank. Maybe 10-20% more.

        But that speaks to competitiveness more in KU, I think, if we look at behavior. Box sets, for instance, that used to hang in the sub-#1000 ranks have pretty much all been pushed into the #1000-#5000 tier. They aren’t selling fewer copies, and the titles in the Top #1000 aren’t *selling* more necessarily, but they are being *borrowed* more. And with rank being determined by borrows that have yet to be paid, those sub-#1000 can’t be said conclusively to be earning more than the titles hanging in the sub-#5000 range. Which means terminology gets tricky. There’s more volume moving, but that increased volume isn’t ALL translating into earnings.

        So trying to compare market health based on unit sales in a small rank range – especially when working with stores that have been known to suppress sales of racy titles (even if they weren’t erotica) and exclude them from the Top 100 mix – is a pretty tough challenge. I mean, how do you even come up with a market health figure for Amazon when you can look at Amazon’s Top 100 and determine unit volume is up 10-15% or look at the Top #1000 instead and make the argument that, no, it’s up 50% if the only thing you’re going by is rank? And if you can’t pin down Amazon’s volume and market growth (ignoring the even greater challenge of placing a dollar figure on it, which is what the industry is most interested in), comparing other stores’ perceived volumes to Amazon is a pretty useless exercise. IMO.

        KU and the ghost borrow effect on rank is huge. Unless that can be parsed out properly, then using rank to base your analyses on is going to skew results across the board.

  32. Donald Campbell says:

    I am a reader not an author. I got here from a MGC link in Peter Grant’s post of today. As a purchaser of books, I thought I would give all y’all my $0.02 worth.

    I saw the recent “price set by publisher” on Amazon and knew at least 1/2 the story. I, the customer am being scr*w*d. I get little satisfaction from this post showing that Authors are in the same boat. What will I do about it?

    My first book purchase from Amazon was 1999. For the last decade, all my book purchases are from Amazon. I was a late adopter to the ebook reader, but I first dabbled with the android kindle app, and then purchased a paperwhite, to be replaced by a voyager paperwhite in less than a year. I guess that means I like it. For an anecdote of how much I like it: Recently, Cherryh’s Foreigner series had volume 16 published. I have volumes 1-15 in first edition hardcover. I wanted 16 in first edition hardcover. I read no more than 5 pages, went to my PC, and purchased the ebook version, for a frankly outrageous price, so I could read it on my Kindle.

    After Pratchett’s final Long Earth book, she will be the sole living author of a series I will purchase hardcover. All the rest will be ebooks. Many of my favorite authors are already indie publishers. “This price was set by publisher” is a red flag, kind of like waving it in front of a bull. Whenever I see it, I will compare ebook price to paperback and hardcover, and if I don’t see a sufficient price spread, sorry. What I know of the publishing industry I know from a friend that worked at Walden Books, about how they rip the cover off an unsold paperback and throw the rest away. Don’t insult me by implying that there is anything like that overhead in publishing electronically.

    When I am happy with an author, I am happy that they are making a good profit on their work. I don’t know any publishers personally. I don’t care if they are making a good profit for their work. In fact, I’m not totally sure exactly what they are doing for me in the first place. What I now know, is that the publishers are punishing authors I like with less income so as to prolong the suffering of their dinosaur business model. I am unhappy. Since I have limited resources to spend on book purchases, (in a relative sense; I already have over 100 ebooks I have purchased) I will optimize *my* happiness by making the authors I read happy as well.

  33. Thad McIlroy says:

    You note that “One CEO of a Big 5 publisher wrote in a note to herself that higher prices would slow ebook adoption and casual purchasers, protecting retailers,” and that “Protecting the paper book trade will not help publishers. We know from their own accounting that ebooks are far more profitable.”

    Your thesis is that the big 5 publishers are acting irrationally by supporting print sales. I see the truth of your argument in the here and now. But what about long-term? Let’s go with the most-often stated print/ebook sales spilt at 70/30. You note that print returns “20 cents of profit on each dollar” versus 52.5 cents for ebooks, more than 2-1/2 as much. Moving from 70/30 to 0/100 would bring enormous profits to book publishers.

    My thesis is that publishers should, in fact, support the retail channel for as long as possible. A chart from Bowker’s 2013 U.S. Book Consumer Demographics & Buying Behaviors Annual Review, republished on a Random House blog (http://authornews.penguinrandomhouse.com/trends-in-consumer-book-buying-infographic/), shows online accounting for 42% of unit sales with retail handling 38%. (Where the other 20% are purchased is not illustrated for some reason.) So, for argument’s sake, let’s run a 50/50 split, online vs. bricks and mortar.

    Bricks and mortar, delivering 20 cents of profit for each publisher dollar, is a hugely less profitable sector for publisher than ebook sales, taking place only online. Using this data, publishers should allow bricks and mortar to sink, and support online instead.

    What happens when Barnes & Noble goes bust? In its last full year financial statement it reported $4.3 billion in retail sales $500 million for Nook). Bestsellers account for between 4% and 6% of those sales. I can’t find a number for what percentage of sales are books, vs. toys and games and other merchandise. The 70/30 breakdown may be generous, but if so, B&N book sales totaled $3 billion, almost all of that trade books. If we accept the AAP’s 2014 trade sale number of $6.5 billion (http://the-digital-reader.com/2015/02/04/aap-reports-trade-revenues-3-7/), Barnes & Noble commanded the largest percentage of those sales.

    We all know that the stats are misleading, and the numbers above are approximate at best. But we also know that Barnes & Noble remains a vital part of the printed book selling ecosystem. The 2013 U.S. Book Consumer Demographics & Buying Behaviors Annual Review, noted above, includes a chart showing that the #1 factor influencing the purchase decision for print books is in-store displays. What happens to overall book sales if the in-store displays disappear? Then ebooks become the primary format for all book sales, with print in #2. A tipping point, as they say. Adopting Clay Shirky’s fast/slow/fast thesis for the decline of the newspaper industry (http://publiceditor.blogs.nytimes.com/2015/04/10/a-darker-narrative-of-prints-future-from-clay-shirky/), this could mark the fast acceleration of digital to print sales, moving towards a recording industry model with physical sales dropping to 10-15% of the total.

    The question in all of this is whether ebooks unit sales would substitute for a sharp drop in print book unit sales. Would ebooks substitute or would some other form of digital entertainment? In my study of the impact of mobile on book publishing (http://thefutureofpublishing.com/2015/02/mobile-strategies-for-digital-publishing/) I argue that reading is far more threatened when encountered on mobile devices than it was in print. This is because mobile devices provide alternate choices with the flick of a finger. The equivalent in the analog would is going to a movie or a music concert instead of reading a book. The decision-making and the logistics for that decision are worlds apart from the same choice in digital.

    Perhaps book publishers should stop interfering with a trend that may be inevitable. Or perhaps their tactics will, in the long term, support a more robust publishing industry. Time will tell.

    • William Ockham says:

      You are both wrong. You are assuming that ebooks and print books are bought for the same reasons. That isn’t true. About 25% of print books are purchased as gifts and about 0% of ebooks are. About 25% of print books are read by the buyer and then shared/resold to another reader. Again, this is rare for ebooks. More important is the fact that both the gift books and shared books are concentrated in the best sellers. The collapse of print would mean that the Big 5 would lose their hold over the consistently best selling authors. That would mean that they could no longer fulfill their real purpose which is to provide consistent 10% returns to their corporate parents. That is why they protect print.

  34. Remember says:

    The claim that the “Big 5 publishers have seen a 26% reduction in the number of titles on Amazon’s Best Seller lists” is false. The previous author earnings report covered only 120,000 bestselling titles, approximately 19% (22,800) were Big 5 titles. This report increased the number of Bestsellers looked at to 200,000. Approximately 14% of those (28,000) are Big 5 published. So the number of Big 5 titles increased by about 22.8%. Basically, if you guys do reports that capture vastly different numbers of titles, comparisons about how many are indie, Big 5, etc. are not going to work. The statement about the Big 5 having 26% fewer titles should be corrected so as to not mislead authors who haven’t looked at the previous reports.
    Looking back at all Author Earnings reports:
    When 50,000 titles were examined, 20% (10,000) were big 5 published. (Feb. 2014)
    When 85,000 titles were examined, 18% (15,300) were big 5 published. (April 2014)
    When 120,000 titles were examined, 16% (19,200) were big 5 published. (July 2014)
    When 120,000 titles were examined, 18% (21,600) were big 5 published. (Oct. 2014)
    When 120,000 titles were examined, 19% (22,800) were big 5 published. (Jan 2015)
    When 200,000 titles were examined, 14% (28,000) were big 5 published. (May 2015)
    The number of big 5 titles in the bestseller lists has gone up every time, and on the three earnings reports where the number of titles was kept the same, the percentage of big 5 titles increased.
    Big 5 titles have only shown a percentage loss when the number of titles examined increased, suggesting that big five titles are more prevalent (percentage-wise) in the top 50,000 than from 120,000-200,000.
    Author Earnings own data suggests that an increasing number of ebook bestsellers are Big 5 published.

    • Data Guy says:

      Weak try. Not even close.

      • Remember says:

        What do you mean? I used your data. Where is my math wrong?

        • Data Guy says:

          Look at the actual data, instead of making up hypotheses about how it is distributed. The ranks included in each set are sampled, not sequential.

          • Remember says:

            “Big 5 titles have only shown a percentage loss when the number of titles examined increased, suggesting that big five titles are more prevalent (percentage-wise) in the top 50,000 than from 120,000-200,000.”
            It’s true that I am speculating there. I used the word “suggests” to show that.
            But the statement that the number of Big 5 ebook bestsellers decreased by 26% is wrong. Will that be corrected?

          • Data Guy says:

            If it were wrong, I would.

            But it isn’t.

  35. Remember says:

    I am so confused.
    If you take data from 120,000 bestselling titles, and 19% of them are big 5 published, you have 22,800 big 5 titles on Amazon bestseller lists (approximately).
    If you take data from 200,000 bestselling titles, and 14% of them are big 5 published, you have 28,000 big 5 titles on bestseller lists.
    28,000 is greater number of titles than 22,800, even though it is a smaller percentage of the number of titles measured.
    Am I going crazy?

    • Data Guy says:

      You are assuming (I think) that each quarterly sample (120K, 200K, etc.) represents 100% of the titles on the Best Seller lists at that time. That might be the source of the confusion. In reality, we’re just collecting a larger sample each time — that’s why comparing absolute counts of Big Five books between different-sized samples is meaningless.

      • Remember says:

        Okay. So when the pie chart says “Number of titles in Amazon’s book bestseller list”, and then immediately below that says “200,000 books comprising 55% of Amazon’s ebook revenue”, not all of those 200,000 are on a Amazon bestseller list, and the pie chart represents only those on bestseller lists (not all of the 200,000).
        So how many books are actually on Amazon bestseller lists, and why isn’t that the number given with pie charts, rather than the number of books looked at in total (not including bestsellers)? The pie charts from different reports seem very misleading, since they all cite different numbers of titles below.
        And if comparing absolute number of Big 5 titles from report to report is meaningless, why did this report say that “the Big 5 publishers have seen a 26% reduction in the number of titles on Amazon’s Best Seller lists”?
        How many titles are actually on Amazon bestseller lists, and why isn’t that number listed anywhere (like on the pie charts referring to those percentages, for example)?

        • Data Guy says:

          More incorrect assumptions.

          All 200,000 books in our sample came from Amazon Best Seller lists.

          There were 7,416 different Amazon Best Seller Lists at most recent check. If it’s for some reason important to you to know exactly how many books are on all of them, you can always go count them, but be sure to eliminate duplicates.

  36. David says:

    Don’t know if its possible, but for those of us who are a little color-challenged, could you put some link lines on the graphs to the legends, or numbers/names in the chart itself or even presenting the summary data as tabular would be fine. The charts are undecipherable to me since I can’t tell which pie section or line goes with which legend. Even making the little bitty color square on the legend much bigger would be nice. As a test, print one of the pie charts out grey-scale and give it to someone who’s not familiar with the numbers to see if they can figure it out. 🙂

  37. Harry P says:

    This is one more data article that was made to support a pre-made assumption and of course favor Amazon. It looks like you tried to gather only the data and make those assumptions that would support your conclusion.

    First of all, why don’t you show the total number of Indy titles among the total sample? Then we can conclude how many they are and how many copies they sell in order to assume if their authors get paid more or not. What an author gets per copy is not adequate to conclude that they make more money in total.
    Amazon’s bestseller list is comprised mostly by low priced or almost free titles, so it is not fair to conclude that Indy authors make more money by using this sample.
    You take a very small sample of 6 snapshots (months) and focus on one point in time (May ’15) which happens to be the lowest of sales for BIG5 publishers.
    How do you explain the fact that even though from Feb 2014 to Oct 2014 Indy average prices were up 16% (according to your first bar chart), the “Market Share of Ebook Unit Sales” for Indy titles went up from ~27% to ~33%, while at the same time BIG 5 av. prices were up 10% but their “Market Share of Ebook Unit Sales” went down from ~39% to ~29%?
    I don’t see any correlation in the different direction of market share based on price increases. On the other hand, if we factor in other variables, e.g the fact that since last year more and more of the Big5 publishers have been re-designing their websites to sell ebooks and printed books it could be a reason for the effect into the decreased market share that they have on Amazon. Indy authors most of the times (as far as I know) do not sell elsewhere with significant traffic.
    Finally, in this article there is no mention to the fact that the BIG5 have a wider distribution network than an Indy author, so an author published by the BIG5 may be actually getting a much higher revenue at the end of the day.

    • Data Guy says:

      “…why don’t you show the total number of Indy titles among the total sample?”

      The raw data is published in the accompanying spreadsheet:

      Indie Titles: 50,719
      Small/Medium Publisher Titles: 94,229
      Amazon Publishing Imprint Titles: 1,092
      Big Five Titles: 28,420
      Uncategorized Single-Author Publisher Titles: 22,736

      “…in this article there is no mention to the fact that the BIG5 have a wider [print] distribution network than an Indy author, so an author published by the BIG5 may be actually getting a much higher revenue at the end of the day.”

      Covered in previous reports.
      Big Five author earnings from print were covered here.
      The relative earnings of debut authors publishing each way were covered here.

      “What an author gets per copy is not adequate to conclude that they make more money in total… I don’t see any correlation in the different direction of market share based on price increases… Amazon’s bestseller list is comprised mostly by low priced or almost free titles, so it is not fair to conclude that Indy authors make more money by using this sample… more and more of the Big5 publishers have been re-designing their websites to sell ebooks and printed books it could be a reason for the effect into the decreased market share that they have on Amazon.”

      Your theories and suppositions are much more convincing than hard data and actual numbers. I stand corrected. 🙂

      • Harry P says:

        I see… you changed my words to make a point. Got it, but please keep in mind that I never implied a [print] network.

        Your hard data about the number of titles by Indie authors vs. BIG5 publishers actually supports my theory.

        Thank you.

        • Data Guy says:

          I changed your words by adding “[print]” as a clarification, because that’s what I thought you meant. But if you meant that the Big Five have wider digital distribution networks than indies, you’re mistaken. They don’t.

          Indies can sell their books through every distribution channel of any real sales significance (i.e. Amazon, Apple, Google, Barnes & Noble, Kobo, Kindle Unlimited, Scribd, Oyster, EbooksAreForever, Overdrive, Baker & Taylor, Flipkart, txtr, Tolino, Inktera/PageFoundry, etc… ).

          If anything, Big Five authors actually have a narrower digital distribution network than indies; there are sizeable distribution channels (such as Kindle Unlimited) that indies sell through, which Big Five published-authors currently cannot, due to the policies of their publishers.

          And nowadays, especially for fiction, digital accounts for the bulk of all sales and dollars.

          Today, digital formats (i.e. ebooks and audio) make up the majority of all US fiction sales of any format — more than 50% of traditionally-published fiction unit sales are already digital. And when you include digital sales by indies and Amazon imprints, to get a true count of books sold, then print books comprise less than 35% of all fiction book purchases in the US.

  38. Ben says:

    I appreciate the information you present here but can you please modify the color choices to make the graphs easier to interpret for colorblind people? Or could you add more visual cues that make it obvious which portions of the graph correspond to the various items in the key? I’m really struggling with 3/5 of the colors.

  39. Success Hunter says:

    Hi Hugh and Data Guy,

    We often hear that more books = more success. I wondered what number of fiction books an author would have to publish to Amazon.com per year to have a reasonable chance of success (say $200 or $300 per day). So I ran some analysis on your gathered data. If I’m correct, I’m motivated by the results.

    1306 indie fiction authors published 2 books in the last 12 months. 81 of these made over $200 on your sample day. A ‘success’ rate of 6.2%

    Say you are an indie author who publishes 5 fiction books per year. There are 198 of those in your data set. 27% of them make over $200 (22% over $300)

    If you can crank out 7 books per year (83 in your data set did so) you have a 40% chance of making over $200 and a 30% chance of making $300. With reasonable assumptions, if you can write 7 books per year there is a 1 in 3 chance of achieving a 6 figure annual income.

    Granted if you are to produce at that level you are probably the sort of person that has a good grasp of craft, marketing and professionalism. But still, I had no idea! Thanks for publishing the raw data.

  40. Kathleen says:

    Today Amazon made a big announcement that KDP Select will start paying by the page versus borrow. Could you run a scan ASAP what the average page count of a Kindle Unlimited title is currently. I think it makes sense to have that data set now before Amazon changes their reporting next month. I see many 10-15 page books high on KU’s bestseller lists. I am curious to see what affect this has on borrows as well as sales when you run future Author Earnings Reports, especially for us independent authors who rely on this to make a living. Thanks so much for your help.

    • Data Guy says:

      Yeah, that’s an interesting change. Luckily, we had already captured page counts for all books, so I took a look:

      This is the page count distribution of 54,000 Amazon Kindle Best Sellers that were in KU, graphed by the % of Best Selling KU Titles with that page count and also by the % of Sales they comprise.

      I wouldn’t be surprised if the picture doesn’t change much, as Amazon’s announcement won’t affect reader choices, only author compensation.

      As it is, the graph shows readers generally preferring to download and read works in the 200 – 400 page range.

  41. I was trying to break down some data for SF/F/PNR, then realized one glaring omission on the 197,000-line spreadsheet: there is NO DATA for paranormal romance.

    While I’m aware that Amazon’s browse category pages aren’t 100% in sync with the reality on the sales pages, this page lists subcategory keywords for Romance:

    https://kdp.amazon.com/help?topicId=A19G4ONBAU6NO3

    I’ve verified several titles that indeed do have categories like:

    Books > Romance > Paranormal
    Kindle Store > Kindle eBooks > Romance > Paranormal

    But the only paranormal stuff I can find on the spreadsheet isn’t in the Romance category.

    I find it difficult to believe that there are no relevant sales in those categories.

    Since I’m trying to find out relevant data for SF/F/PNR together, that’s a super important subcategory.

    • Data Guy says:

      Your instincts are solid, Deirdre.

      The PNR books are actually there in the data, but unfortunately the “Categories” tags for them — and for nearly all Romance books — were missing, stripped away due to an HTML parsing bug in the spider that I didn’t catch until after the May run. A lot of the books that show up categorized as just “Books” or “Books ; Books” or similar were actually in Romance subcategories.

      Edward Talbot pointed the issue out in a comment upthread, but original spotter credit goes to Alexis Radcliff.

      Sorry about the glitch. The issue is fixed now for future spider runs.

  42. Terry Palmer says:

    Thanks for these great stats. As a new indie author, it is encouraging that so many have found this path to be profitable. What a good reward for placing your passion on the page to both get your message out there and also to succeed as a business. Any graphs on ROI for indies?
    I shared a few of the stats on a podcast show on Friday, June 26th. It fit to help encourage those who are just getting started or may be discouraged. Check the program after Saturday, June 27th afternoon on http://facebook.com/neversayimpossibleradio, or on iTunes and several other podcast sites. Keep up the good data.
    Terry of Chronicles of Orm.

  43. Nirmala says:

    Hi Hugh and Data Guy,

    Just wondered if you might sometime take a look at another potentially huge “shadow industry” in ebook downloads, and that is the tremendous number of free ebooks downloaded every day on Amazon. The free downloads have no direct effect on author earnings except when they take the place of a sale, an yet the free downloads must be having an effect on the overall purchasing habits of ebook users. The equivalent in paper book sales are library books borrowed, but Amazon has made the acquisition of a free ebook even easier than a trip to the local library.

    Recently, my wife, Gina Lake, and I did Bookbub promotions of free ebooks (one was permafree and the other was free under a Select promotion) and in both cases our books had over 30,000 downloads in a short amount of time. Yesterday, my wife’s free ebook was downloaded 21,000 times and yet only made it to a top rank that day of 5 among free ebooks in the overall Kindle store. That suggests that a whole heck of a lot of ebooks are being downloaded for free every day on Amazon which probably cuts into the sales of both indie books and traditional books.

    I do not want to start an argument about whether it is a good idea to give away free ebooks as everyone has their own reasons for doing so or not, and it can still be a powerful tool for promotion. But I am curious when that many free ebooks are going out the door every day on Amazon, what effect that has on the overall market. Is the ease with which ebooks can be given away for free changing readers behavior and perhaps resulting in a bigger shift to digital reading than is recognized by simply measuring sales of ebooks? Again, maybe it is another form of shadow industry, albeit a very non-lucrative one 🙂

    The switch to digital reading is also transforming public libraries ( http://libraries.pewinternet.org/2012/06/22/libraries-patrons-and-e-books/ ), but it seems that the ease with which authors can not give away their ebooks on Amazon and other ebookstores is also likely accelerating the prevalence of ereading.

    I could see how this may be way beyond the scope of your reports, but it is still interesting to ponder in the context of the whole ebook revolution.

    • Data Guy says:

      Hi, Nirmala,

      Those are amazing numbers of downloads — congratulations. There’s no question that the daily unit volumes corresponding to the top ranks of the free charts do dwarf the top ranks of the paid charts — most likely, free downloads exceed paid downloads “all the way down”. It is mind boggling that so many free units are downloaded daily, isn’t it? 🙂 I wonder how much of that represents a separate market from ebook purchases, and how much of it is actually competing with paid units.

      So far, however, we’ve focused our analysis exclusively on the paid side — and thus upon Author Earnings, which is after all our raison d’être.

      • Nirmala says:

        Yes, it was a lot of free downloads. And the example where my wife’s book only made it to #5 with 21,000 downloads was also a case where the book had some momentum. We promoted on some other sites the day before and so her book was already in the top 100 at the start of the day when it made it up to #5. so it is even more remarkable that it only made it to #5.

        And, I agree that it is hard to know how much free ebooks “compete” with paid books, but it seems that overall it might get more people in the habit of reading ebooks instead of print.

        I also understand why you focus on paid sales. Thanks for all you do report on.

  44. Nirmala says:

    Typo: I meant to say “authors can NOW give away their ebooks on Amazon”

    This phenomenon of truly free books is seemingly new. Library books, including library ebooks, are still paid for when the library first purchases them.

    For readers, this is more like the little “free” table outside my local library where they give away a handful of books, but on Amazon, the “free table” is now huge!

  45. I am new to this entire writing ,
    NY Scene and I just love having the opportunity, to story tell ,as best as possible , I would find great joy to share my life event’s ,in NY City during the early 90’s is a time of much excitement ,and life altering changes .
    As ,not all true stories are the same in quality, 6 billion souls, have a story to tell !
    And Water and Time is important for me ,
    Wishing to have abundance time ,and inspiration ,to read them all ,as an artist, and human being ,I have freedom today to thank all the good and new ,beutiful people that have helped me . Sharing is caring ,I want to show everyone that doesnt know how to share ,as It feels like no one cares ,
    about the importantce of humanity ,
    any longer ,institutions can not fix this ,people need to reflect from within.

  46. David says:

    Thank you for this useful information!
    You can try also this one to promote ebooks for Free:
    http://www.ebookstage.com/welcome/MTEwMA==/

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