October 2014 Author Earnings Report

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Welcome to our quarterly look at Amazon ebook sales and author earnings.

As with our previous reports, we are looking at projected sales and author earnings by pulling data for over 120,000 ebooks off Amazon’s product pages. Using known rank-to-sales rates, we are able to estimate the daily share of earnings by publishing path. The goal is to provide a deeper understanding of the ebook market than is afforded by reporting from major publishers or by tracking ISBNs, which many self-published authors do not use. Amazon is our focus by dint of controlling an estimated 60%+ of the ebook market.

One of the great advantages of these reports is the historical snapshots they provide. Soon after releasing our July 2014 Author Earnings Report, Amazon launched a subscription ebook service called Kindle Unlimited (KU). The method of payout for this service has been controversial among self-published authors, and requires an explanation: Traditionally published ebooks downloaded from Kindle Unlimited earn the same amount as a sale, but for self-published authors, a “borrow” pays out differently than a purchase.

The amount paid per borrow is independent of price and depends instead on how much Amazon funds a shared pool. The rate per borrow has averaged $1.62 over the three months since KU launched. Each borrow appears to affect ebook ranking just as a sale does, so we have to take the borrow-to-sales rate into account for our earnings projection. As you will soon see, our data is robust enough that even wildly varying estimates for this rate do not appreciably affect our results. Before we get to our new baseline earnings report, let’s look at what our final graph would look like with five different assumptions for the borrow rate.

We start with the extreme assumption that KU books are being borrowed 100% of the time while generating zero sales. This is clearly not the case, but it goes to show a “worst-case-scenario” for self-published earnings. The reason we call this a “worst-case-scenario” is that the latest KU payout for a borrow ($1.52 this month) is below the average sales payout from our October report ($2.06).

WORST-CASE SCENARIO: If KU books were 100% borrows and 0% sales…

authorearnings-2014oct-100pct-borrows

 

Next we have our HIGHLY-CONSERVATIVE SCENARIO: If KU books were 70% borrows and 30% sales…

authorearnings-2014oct-70pct-borrows

 

BASELINE SCENARIO: If KU books were 50% borrows and 50% sales…

authorearnings-2014oct

 

OPTIMISTIC SCENARIO: If KU books were 30% borrows and 70% sales…

authorearnings-2014oct-30pct-borrows

 

“BEST CASE” SCENARIO: If KU books were 0% borrows and 100% sales…

authorearnings-2014oct-0pct-borrows

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.

Now let’s see how this quarterly report compares to the last three reports. We start with a simple count of the number of titles on every Amazon bestseller list, separated by publisher type. For more on these publisher types, click here.

titlecount-2014oct-3up

And now the daily sales rate by publisher type, taking into account the rate of sale by overall Amazon rank. Think of this chart as being able to glance at the distribution of Amazon rank by publishing type:

unitsales-2014oct-3up

Since we know the price of each title, we’re able to calculate gross dollar sales by publisher type. This chart reveals the price disparity between various publishing paths:

grosssales-2014oct-3up

And with known royalty rates for each publisher type, we get the graph that most impacts the decision on how to publish, and that’s the daily share of author earnings. This chart highlights the roughly 5 times difference in earning rates between Big Five and indie ebooks:

authorearnings-2014oct-3up

Despite what appears to be a dwindling share of ebook earnings for traditionally published authors, it’s too soon to discount seasonal variations and other effects. The next time we do a quarterly report, we’ll be able to compare year-to-year differences for the first time and might be able to say more.

It’s also too early to suggest trends for indie authors, but one might note that the share of earnings was on the rise until this last report, and that the big jump this time around has been for Amazon Imprint authors. It could be that KU is having an effect or that promotional and merchandising efforts are being reallocated. It could also simply be that Amazon’s publishing efforts were in their infancy when we began taking these snapshots and the number of titles are on the rise. Again, these are four snapshots taken roughly three months apart, and much more will be evident with annual comparisons.

We do think the consistency of these results over a nine-month period is worth noting. For all the attention Amazon receives from authors and publishers — and Amazon’s unwillingness to divulge sales data — this peek behind the curtains has proven invaluable, even for those of us putting it together. You’ll see why as we dive deeper into our data.

The Kindle Unlimited (KU) Effect

With past reports, we tried to look at some new feature of our data in addition to providing the four charts above. This time around, the subject of our analysis was obvious: Kindle Unlimited seems to have been a major shake-up to the rankings, to visibility, and possibly to author earnings. We decided to compare titles that appear in both our July and October reports to see what happened to the titles that entered KU and what happened to the titles that stayed out of the program. But first, how significant is KU when looking at Kindle bestseller lists, unit downloads, and author earnings today?

KU Titles Punch Above Their Weight

The first thing we noticed about KU Titles is that they are well-represented on the bestseller lists.

There are 2,908,475 Kindle eBooks in the Amazon store as we write this, of which 744,181 were KU-eligible. This means that 25.6% of the Kindle eBooks available in the Amazon store can be borrowed as part of a Kindle Unlimited subscription program. This is obviously great for readers; it remains to be seen if it’s great for writers.

More stats:

*   KU Titles make up 20.0% of the titles on Amazon’s Kindle Best Seller Lists and sublists.

*   KU Titles make up 32.4% of all daily unit downloads. (These are a mix of sales and borrows. From our baseline 50/50 borrows/sales split, we estimate that KU borrows alone make up 16.2% of all non-free downloads on Amazon).

*   KU Titles generate 30.5% of all daily author earnings on Amazon’s Kindle store, using our baseline 50/50 borrows-vs-sales split.

Thus we can estimate that KU borrows alone are generating 14.0% of all daily author earnings on Amazon. Keep in mind, however, that authors in this program are giving up income from other outlets, which must be taken into account and may mean a decrease in earning potential for some or even many authors.

Now let’s look at how KU Titles divide between publishing types:

Screen Shot 2014-10-17 at 8.48.10 PM

In the chart above, we see the number of KU titles in Amazon ebook bestseller lists by publisher type. Unsurprisingly, indies are very well represented. In fact, almost half (49%) of the KU titles on the Amazon Best Seller lists are indie-published titles. Amazon Publishing imprints make up 2% of KU Best Sellers (but only 1% of all Amazon Best Sellers). The Big Five Publishers have 0% — they have no ebooks in KU.

Next, the daily KU downloads (KU borrows and regular sales combined):

Screen Shot 2014-10-17 at 8.48.37 PM

Indies hold their own when it comes to units moved, making up nearly half (47%) of the KU titles downloaded (borrowed or sold) each day. But this is where Amazon Publishing imprints really show their power, outperforming other publishing types in KU on a per-title basis by a factor of 13, as A-Pub’s 2% of Best Selling KU Titles accounts for 26% of downloads. This is a little misleading, however, as A-pub represents far fewer titles, and thus their per-title averages are not brought down by a low-performing long tail. Again, the Big Five Publishers represent 0% of the downloads of KU Titles — they have no books in KU.

And now, a look at Author Earnings from KU Titles (Note that this includes both KU borrows and regular sales of those titles):

Screen Shot 2014-10-17 at 8.49.12 PM

Author Earnings is naturally the most interesting aspect of KU for us, as authors. And we see that indie KU titles appear to simultaneously benefit from the higher visibility earned through KU downloads and the higher revenue share earned on regular sales of those titles. 56% of the Author Earnings on all KU Titles goes to indie authors. Amazon Publishing authors are getting 28%, with 13% going to authors published by Small and Medium Publishers. Again, authors published by the Big Five Publishers are getting 0% of the Author Earnings on KU Titles — the Big Five have no books in KU.

To KU or not to KU: That is the Question — Comparing KU vs non-KU performance

If you are an indie author, the question of whether or not to put (or keep) titles in Amazon Select, and thus qualify for KU inclusion, is a tough one. Many authors are grappling with it now. And there will be no easy “right answer” that applies equally for everyone. It may depend on whether you are just starting out and want the extra visibility, or perhaps you are now being sought out by readers on other platforms and need to diversify.

In our July 14 report, we captured comprehensive data on 120,000 Amazon bestselling titles. Through fortuitous timing, this was a few days prior to Amazon’s launch of the Kindle Unlimited program. This provides us a rare opportunity: We can divide our bestsellers from July 14 into two cohorts: those that were placed into the KU program prior to October 4, and those that were not. And then we can compare their performance trends.

From our July 14 dataset, there were approximately 120,000 titles on various Kindle Best Sellers lists and sublists. When we compared that July data set against our October 4 data set, we see that:

8,784 of those July bestsellers appear in our latest October dataset as KU titles, while 31,681 appear in our latest October dataset as non-KU titles.

79,627 of those July bestsellers do not appear in our October dataset at all (they have fallen off the bestseller lists).

So how has KU affected the July bestsellers that we can track across both snapshots? Are the July titles that are now part of KU doing significantly better or worse than their non-KU counterparts? Below is a “traffic light” chart showing percentages of KU and non-KU titles whose downloads increased 25% or more, remained roughly the same, or decreased 25% or more between our July and October snapshots:

Screen Shot 2014-10-17 at 2.32.47 PM

41% of the KU titles had increased significantly in daily downloads between July and October, versus only 22% of the non-KU titles.

28% of the KU titles had decreased significantly in daily downloads between July and October, versus 46% of the non-KU titles.

In terms of overall averages across titles, we see the same effect:

*   Daily unit sales of the 31,681 non-KU titles in both data sets declined, on average, 21.0%

*   Daily unit downloads (sales + borrows) of the 8,784 KU titles in both data sets declined, on average, 11.4%

Clearly, being in KU has had a significant mitigating effect on the average three-month decline in daily downloads. The decision to put those titles in KU is, on average, now generating 12% more downloads (borrows + sales) on Amazon.com than their counterparts that are not in KU.

However, indie titles receive on average less compensation per borrow than per sale. So once again, the more interesting question for those of us here at Author Earnings is this: Are indie authors who choose to stay with KU giving up author earnings for broader readership and longer bestseller list visibility? The answer below:

Screen Shot 2014-10-17 at 3.23.38 PM

Two bars of non-indie titles on the left. Two bars of indie titles on the right. Each is separated by KU and non-KU.

It turns out that 33% of the KU indie titles increased significantly in author earnings between July and October, versus only 19% of the non-KU titles.

At the same time, 37% of the KU indie titles had decreased significantly in author earnings between July and October, versus 47% of the non-KU indie titles.

In terms of overall averages across indie titles, we see the same effect:

*   Daily author earnings of the 4,234 KU indie titles on average dropped 26.0%

*   Daily author earnings of the 3,073 non-KU indie titles on average dropped 34.7%

Once again, we see that being in KU has had a significant mitigating effect on the average three-month decline in author earnings experienced by titles that were on the bestseller lists in July. The decision to put a title in KU is, on average, now earning indie authors 13% more money on Amazon.com for that title than their counterparts who chose not to participate in KU.

The big caveat here is that if we assume Amazon has even as high as 70% of the market for indie ebook sales, authors may be giving up 30% of their potential earnings in order to reap 13% more from a single outlet. And Amazon’s market share for indie ebook sales might be lower than 70%, which means giving up an even higher percentage sales. And so…

 

Conclusions on KU (Or Inconclusions)

For indie authors as a whole, Kindle Unlimited likely means a lower overall share of daily author earnings going to artists’ pockets. (Similar to the effect music subscription services have had for those artists.) The boost in sales do not seem to make up for the lost market share of other sales outlets. If exclusivity was not required to participate in KU (or if indie authors were paid the same as traditionally published ebooks), this would not be the case.

Does this make the decision to join or stay in KU any easier? Perhaps not. It depends on each author’s circumstances. There’s the argument to be made for the extra visibility and marketing tools gained from KDP Select, especially for authors just starting out or for those launching a new series. KDP Select was useful for authors back when it allowed ebooks to be given away for free. If free was useful then, earning roughly $1.50 per reader impression is arguably a lot more useful now.

Then we have the All-Star bonuses to consider, which amount to more than half a million dollars a month given to the most-read KDP Select titles (borrows + sales). It may be that those just starting out and those at the very top are most rewarded by participating in KU. The former get more visibility. The latter get more money. Those in the middle benefit less. This is all informed speculation for now; a deeper dive into the data (which is freely available below) may perhaps shed more light on these pros and cons.

 

Final Thoughts

We started this website to assist authors in deciding what to do with their unpublished manuscripts. There simply wasn’t any data on how authors performed based on their chosen publication path. But how to publish has been compounded with a second decision on where to publish. Exclusive with Amazon or not? With both of these questions, the decision will be a personal one with individual goals taken into account. Our attitude is that having more data can’t hurt in making these decisions.

The beauty of self-publishing is that none of these decisions are permanent. Authors are free to opt in and out of agreements with retailers as conditions and terms change. That may be the single greatest advantage of this publication path. We hope our ongoing efforts here aid in that decision making process.

We’d also like to remind those who read our reports that our results are not an indication that everyone in publishing is getting rich. As we warned in our very first report, self-publishing is not a gold rush. Publishing in general will disappoint most anyone who enters into the endeavor in order to make piles of money. There are many other reasons to write and publish, some arguably more noble than increasing wealth. And however you publish, the chances of earning a full-time living are not great. Our contention, however, is that the chances have never been better. Because every day, the writer and the reader assume control of an industry that used to rely almost entirely upon middlemen to bring these two parties together. More money is now flowing to artists than ever before, and that art is costing consumers less than ever before.

So what does it mean to see that, on average, more daily ebook revenue is flowing to self-published authors than traditionally published authors? This isn’t a game or a competition. It’s merely a glance at a massive sector of the industry that remains in the shadows due to an incredible dearth of data. Amazon won’t share this information. Publishers don’t have their hands on this information. Publishing experts have no clue about the size of this hidden sector of their trade. And Bowker can’t track it, because many of these titles don’t employ ISBNs.

What the data tells us, then, is that self-publishing is just as viable as any other form of publishing. Perhaps more so. No one can halt your career because an early title underperforms expectations. You get to hire the editors and cover artists you want to work with. You get to write whatever you want and publish whenever and however often you like. And you can publish every which way. Self-publishing used to close you off to other avenues, now it simply opens them up. Many authors publish in several ways simultaneously.

Every author will need to find their own path. There is no one right answer. If there’s anything the data tells us, it’s that readers are starving for great stories at fair prices, and whoever can deliver that consistently has a chance at earning income doing something they love. Maybe not a great chance at earning a full-time living, but a better chance than at any other time in human history. And that must be celebrated, however you crunch the numbers.

 

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.

 

62 Responses to “October 2014 Author Earnings Report”

  1. On a whim at the end of January, I started polling the people on my website who sign up to be notified when new books are published. I asked what reader they were using.

    Out of 191 who answered, this is how it breaks down: Kindle – 117, iPad – 31,Nook – 13, Kobo – 9, Combination of readers – 10, Others such phone or Samsun – 9.

    Therefore, the 72 readers who do not have (or use only) Kindles, convinces me to keep my books available in as many bookstores as possible. The question now is..will I change the way I promote if my Amazon sales keep dropping?

    • Veronica says:

      That’s a great study, but I wonder if the question should be: What bookstore do you use most often?

      Amazon has apps for nearly everything with a plug and it’s likely that some of those using devices other than a Kindle are actually doing most of their shopping on Amazon.

  2. Alan Tucker says:

    Let me begin by saying your efforts to date to shed light in these dark, mysterious areas of publishing are tremendously appreciated and I wholly support what you’ve accomplished thus far and eagerly look forward to future reports.

    I have two concerns with this data set and hope you can address them:

    1) KU downloads vs. KU borrows: A borrow isn’t triggered (meaning the author gets paid) in KU until the reader has progressed at least 10% into the book. In at least the first month of the KU program, book rankings were affected by the download of a title, rather than the borrow. What that meant was when a KU reader picked a book, that book’s ranking improved as if it had a sale/borrow, even if the book was never read past that 10% trigger. I don’t know if Amazon has changed this condition in the past few weeks, but it has the possibility to skew your earnings numbers by quite a bit depending on how often a book gets downloaded, but never read by a KU consumer.

    2) Inconsistencies between the Sales Dashboard, Monthly Sales, and Book Ranking: My sales have been quite low over the summer months. Because of this, I’ve noticed some peculiar behavior in these three aspects of Amazon’s system. Sales and borrows seem to show up on the Sales Dashboard (the line graphs) as long as two days before they appear in the Monthly Sales listing. Book rankings have also been inconsistent and difficult to track, so much so I believe Amazon may be giving slightly more weight to titles in Select than those which are non-exclusive. No, I’m not currently wearing a tin foil hat 😉 I do have some books in Select and KU and others that are not, and when I get a sale or borrow for those in Select, the ranking seems to jump significantly higher than the other titles when they sell. These impressions have been nearly impossible to verify because of the inconsistency in reporting I mentioned earlier, so I’m more than willing to be shown incorrect in any of my assertions. Rankings used to correlate within 2 or 3 hours of a sale/borrow showing up in the monthly report. That is no longer the case in my observations.

    These issues probably have no bearing on the top sellers. They could, however, greatly affect the midlisters and below. Thoughts on any of this?

    • Data Guy says:

      Hi, Alan,

      1) KU downloads vs. KU borrows: In KU’s earliest days, unread downloads appeared to have an effect on rankings. Edward W. Robertson referred to these as the “ghost borrows.” I think it was a temporary glitch until Amazon adjusted their ranking algorithms to only measure 10% reads. Because within a few days or weeks, the correlation between ranking and sales+borrows was back to predictable. “Ghost borrows” may also have been mostly an optics issue, due to the verifiable synchronization delays I describe below.

      2) Inconsistencies between the Sales Dashboard, Monthly Sales, and Book Ranking: Another thing that muddies the waters when trying to verify the correlation of rank to sales/borrows is that the KDP dashboard’s cutoff times for a day’s sales and borrows are based in different time zones: effectively 5 PM PST versus midnight PST. So a good chunk of each day’s borrows — those between 5 PM PST and midnight PST — appears all at once on the dashboard in a single lump update at 12:00 AM PST. But borrows affect rankings more immediately: just the same as a sale does. So there can be a several hour discrepancy between ranking and dashboard update. Two days, OTOH, seems longer than I’d expect. Keep watching and sharing your impressions, though.

      We’re all scrutinizing this together, and trying to suss it all out… 🙂

      • Alan Tucker says:

        Thanks for the response. Some of these things make me wonder if Amazon is obfuscating a bit to make collecting data like you’re doing more difficult. We all know how secretive they like to be about sales figures.

      • Alan Tucker says:

        RE: “Ghost Borrows” – Three days ago, the ranking for one of my books in Select shot up as if there had been a sale or borrow, however, no activity has been recorded on that particular title in the intervening time. If it had been a sale and a return, that still should have shown up. My dashboard has shown no borrows on any titles for that period as well. So, I’m thinking those unread borrows may still be an issue.

  3. James N. Cook says:

    “KDP Select was useful for authors back when it allowed ebooks to be given away for free.”

    Not quite sure what this means. KDP Select still gives authors five free-promotion days per 90 day enrollment period (or you can elect to do a countdown deal, but not both).

  4. KU works really well for short fiction (where the payout of a borrow is much higher than you’d make as a royalty… at price points of $0.99 and $1.99) and non-fiction (where if they like one they might go and read all of your non-fiction on similar topics). I don’t think it works well for novels or anything priced $2.99 and up. All of my non-fiction and short fiction is getting way more sales / borrows than it did but I’m pulling my novels in mid-November when their term is up.

  5. Like so many others, I’m deeply grateful for these reports, as they’ve been a huge help to me in deciding which publishing path to take. I’m curious, though, about your thoughts on giveaways, such as the Free Book Promotion offered to authors participating in KDP Select. I’ve heard a number of authors worry (in various forums, such as the Author Feedback Group on Goodreads) over this lost income. The report’s findings certainly show that KU (and by extension KDP Select) can boost sales and income. I wonder, though, are these authors with increased income also participating in the giveaway periods? Is there any way to tell?

    Thanks so much for all your hard work and for your dedication to helping authors make informed decisions.

  6. Mark Boss says:

    Thank you for publishing this data! Decision making is always difficult, but it helps when we, as authors, can make better informed decisions. For authors (like me) with smaller sales numbers, it’s difficult to draw conclusions from a small data set. So being able to look at the big picture can be eye opening.

    When you consider future editions of Author Earnings, it might be interesting to look at Google Play. I am very curious how much of a force they are in the book market, as compared to Amazon, Barnes & Noble, etc.

    Thank you for your work — it really does help your fellow authors.

    Sincerely,
    Mark Boss

  7. Abby Weeks says:

    Thanks so much for going to the trouble of preparing this data. I’m pretty much all in with KDP Select right now and your findings pretty much mirror my experiences. In short, ranks are up because of all the borrows, but earnings are (at best) the same, because I’m only getting $1.50 instead of the regular 70% commission.

  8. Hugh & Co,

    This is really insightful. I’ve got 8 books in KDP Select for no other reason than I need eyes on the page and KU delivers that. My sales and borrows are neck & neck. Sales have stayed pretty static, while borrows have caught up with the introduction of KU. Although I’m aware I earn less from borrows, it is heartening to see people leveraging KU to read my works. Given sales have stayed largely flat, KU is bringing in new readers that wouldn’t have otherwise given my work a chance.

    Cheers,
    Peter

  9. Thank you so much. Both Hugh and Data Guy are performing an invaluable service for all us authors, both Indie and trad-published, by helping pierce somewhat the mystery surrounding the state of publishing today. If only Amazon would share its data…

  10. Alexis Grant says:

    Brilliant! Just stumbled upon you for the first time, and I’ll now keep an eye out for your reports. I run a site called The Write Life — http://thewritelife.com — and this is something we want to write more about.

    Thanks!
    @alexisgrant

  11. C.S.Lakin says:

    Terrific report, again. Thanks so much for reminding us of all these points. I make a great living from my books on Amazon but bottom line is 1) I also earn from many other online sites and 2) do not want to give Amazon exclusivity, like so many others. It is terrific that authors have so many options and can control their pricing and promotions. And your report is invaluable! Keep them coming!

  12. Wonderer says:

    Looking at total dollars/size of the indie published Amazon market for a minute:

    – If “KU Titles generate 30.5% of all daily author earnings on Amazon’s Kindle store

    – And Amazon has been paying about $5 million a month

    – Doesn’t that mean total author earnings from the Kindle store are roughly $16.7 million, inclusive of all authors? (And therefore pointing to $200 million annually?)

    • Wonderer says:

      Sorry; just redid my own math and found a different way at this. You conclude indie authors get 39 percent of daily $ revs from top the 120k titles. Of that 39 percent, at 50% borrows/50% sales, 18% is “sales” so 21% is KU “borrows”….

      If KU indie borrows equal $5 million a month (across all 3 million titles), then indie sales are another 18/21, or $4.3 million, equalling $9.3 million a month for the top indie authors — or more like $112 million at annual rate, plus whatever we allocate for direct sales of titles ranked lower 120k. If those titles make 20% of what the popular titles do in sales, that’s another $1 million+ a month.

  13. Arie Farnam says:

    Thank you for these reports. Data is interesting, even when there is a lot of guesswork and variation involved. The one thing I do wish we had data on is whether or not the usefulness of KDP Select carries over to those titles that are not bestsellers. It simply isn’t possible to extrapolate that because the “visibility” of KU helped those that remained bestsellers for a time, that this means that non-best sellers benefit from the same “visibility”. Perhaps the little guys actually benefit more from KU, perhaps less. The differences could be dramatic and I can’t even guess at which direction it would be. I know it may not be possible to study the numbers on all titles, but wouldn’t it be possible to run the numbers on a random sample of lower-ranking titles just once to see if there are dramatic differences? What is happening to the bestsellers is mildly interesting, of course. But what is happening to the lower-ranking titles is much more interesting to most of us. 🙂 Thank you again for your work.

  14. Scott Chapman says:

    Another great report. I admire your stats skills as I tend to drift away and lose track of what I am reading and skip the conclusions at the end.

    Having self published three books,I can say that I found the free KDP giveaways productive to get the name out, but not effective in terms of promoting books once they had already been published for a while. Lots of downloads, but no real increase in sales when the promo ended.

    KDP Countdown deals seem to be very good at revenue maximising, but I do suspect that I am just pulling demand forward as there is a slump in sales post promotion.

    If I had one dream question to ask you and your Data Guy it would be along the lines of the effectiveness of marketing. Apart from KDP promos, I have never done any marketing and I am loath to throw myself into it without some good evidence that there is a payback. Any thoughts?

  15. Alan Spade says:

    Thank you for this great new report, which helped me to inform my opinion about the value of Kindle Unlimited (and Select).

  16. When sales/borrows/dashboard/rank indicators fall out of synch, many authors immediately see nefarious or deceptive actions on the part of Amazon. I have seen self-published authors ranting on forum threads about Amazon cheating them out of royalties. As if Amazon cared about any vendor selling only a handful of low revenue items a day.

    As someone involved in software and hardware for a half century with some knowledge relating to Amazon’s IT systems, I can tell you that it is just short of a miracle that most things function more or less correctly in the vast, dispersed and diverse behemoth that is Amazon’s IT. It takes time for data, corrections, and transactions to propagate over the network from system to system – systems that were built at different times by varied teams and not always updated in lockstep. It is highly unlikely that irregularities in reports represent any attempt by Amazon to obfuscate its operations.

    On the KU “borrows” issue, I have matched dashboard reports of KU/KOLL units reported in a given month to earnings reported for that month during following months. On the spread sheet for sales and royalties (generated by the “GenerateReport” button at bottom of dashboard), you will find that although there is no column for KU/KOLL, the Net Units Sold column reflects sales-returns+KU/KOLL and the Royalty column will reflect payments on that total. Counts of the excess of Net Units over sales-returns match the KU/KOLL units as plotted on the dashboard. In other words, the dashboard plot appears to be reporting EARNED KU/KOLL units (10% read) not mere downloads. If it’s plotted, you have already earned on those KU/KOLL units.

    FWIW, since KU was launched, KU/KOLL units have accounted for about 25% of my sales, up from 5%. I am taking one Kindle edition, The Homeland Connection (a “boxed set” of four novels priced at $8.99) out of Select because KU units pay about a third less than royalties on purchased units. As might be expected, on that title, KU units have exceeded purchased units since KU started.

    –Larry Constantine (pen name, Lor Samson)

  17. R.J. says:

    “79,627 of those July bestsellers do not appear in our October dataset at all (they have fallen off the bestseller lists).”

    I think that is the most interesting stat.

    66% of the titles that were on the bestseller list in July are no longer there… Talk about turnover!

    I would love to see that stat in every report!

  18. Dave says:

    I would love a plain english explanation of how much the borrowed units are paying for each unit for October 2014 and “when” the author gets paid. KDP is so easy as far as publishing is concerned, but getting paid is so slow and the information is so vague that I’m dumber now than before I started researching it.

  19. I am staying with KDP Select for now because of Coutndown Deals, which you don’t mention. I self-published in July (religious non-fiction) and held my first Countdown Deal Sept. 29-Oct. 1. It was highly successful. Even my paperback sales increased. I did no paid advertising, only promoting on social media and my blog. I saw no downturn in sales after the deal. In fact, the sales stayed slightly elevated for the next 7-10 days. This alone helped me make the decision to stay exclusive for the next quarter. But I will revisit my decision after each time I run a sale.

  20. Thanks Hugh and Data Guy for your continuing efforts in this area. One thing I noticed (from the one title I had in Kindle Unlimited). The “Ranking” seemed to change as soon as a download was made…even though no income will come from that sale if the reader doesn’t read to 10%. So this will make determining income to ranking will be more difficult…not to mention there is no way of knowing for a book that is in KU whether the author got 70% of list, or the KU borrow fee.

    Seems like it is going to make your jobs a lot more difficult. But…if we look at your data from a “discoverability” standpoint rather than an “income standpoint” it remains clear that indies are still doing very well when compared to the traditionally published counterparts. And it remains a great time to be a writer.

  21. Cathy says:

    I am an indie author that has been publishing on Amazon for a little over 2 year. Not quite sure why this article was even published. It’s talking about questions that will never be answered because Amazon loves leaving authors in the dark. Please tell one single company in the whole friggin world that will sell a product without knowing their profit? Or at least have some sort of baseline in writing. With KDP select authors are hogtied by Amazon. They make the rules and have nobody to answer to.

    Something to think about. 🙂

    And I see you talk a lot about “best sellers” when it comes to number crunch time. THE TRUTH – VERY few self-published authors will ever made that list. It’s like winning the lottery. Even when you have a fabulous book that’s selling – don’t be surprised if your sales suddenly drop and make room for these bigger publishing companies to sell – Amazon openly makes deals with them that come before any other author works. Trust me – I’ve got oodles of books published and the patterns couldn’t be more clear – sad but true – your best bet is to write a lot of quality books and spread yourself across the map – a few in KDP select to make Amazon happy – and take advantage of other platforms too. Hope this helps and just don’t stop!:)

  22. It is my understanding that all the major houses get paid for a KU borrow at the same rate that they get paid for a sale, despite the fact that KDP authors and small press authors get paid shares from the pool.

    Do your calculations of relative ebook revenue take that difference into account?

    In future reports, will you ever include estimations of print revenue, and of the brick and mortar sales that are such a large part of the revenue for traditionally published authors? It would be illuminating to get a comparison of total revenues to total revenues. Amazon is, as I’m sure you know, a much bigger part of the picture for indie, or even small press, authors.

    • Data Guy says:

      [Traditionally published books] get paid for a KU borrow at the same rate that they get paid for a sale. Do your calculations of relative ebook revenue take that difference into account?

      Yep. Traditionally-published KU borrows were treated as sales in the calculations.

      In future reports, will you ever include estimations of print revenue…

      Stay tuned. 🙂

      …and of the brick and mortar sales that are such a large part of the revenue for traditionally published authors?

      For the vast majority of traditionally published fiction writers, whose books don’t appear in airports and Walmart, brick and mortar sales make up a much smaller part of their revenue than you’d think… less than 20%. And yes, we’ll tackle those numbers in 2015 as well.

  23. Jim Toombs says:

    I am amazed by the work you are doing. Where do you get all this wonderful data?! I’m still trying to sort out what it means for me, a sometimes best-selling-sometime-abysmally-selling author. Self publishing has given me more money than I ever made working with a traditional publisher but their marketing was much more efficient, ie. they sold a lot more copies.

    Please keep up the good work. I hope my comment helps you monetize your efforts.

  24. Rick says:

    What’s the difference between Indie Published, Amazon Published and Uncategorized-Single Author Publisher? Aren’t they one in the same?

    • Data Guy says:

      Indie Published books = Self-Published books.

      Amazon Published books are the ones acquired and published by one of Amazon’s semi-traditional publishing imprints: Thomas & Mercer, Skyscape, Montlake, Lake Union, Amazon Crossing, Grand Harbor, etc.

      See: http://apub.com/

      Most Uncategorized Single-Author Publishers probably are Indies, but there are also a few books mixed in there from really small publishers who only had a single one of their authors on any of Amazon’s bestseller lists at the time we collected the data. There were too many of them — and not enough time — to check ’em all one by one.

      See http://authorearnings.com/note-on-methodology/ for more details.

  25. The method of payout for this service has been controversial among self-published authors, and requires an explanation. We start with the extreme assumption that KU books are being borrowed 100% of the time while generating zero sales.

    Thanks !!

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