The Tenured vs. Debut Author Report

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In our most recent earnings report, one chart jumped out at us and begged for deeper analysis: It was a look at daily author earnings according to publication date, and it revealed the heavy reliance Big 5 publishers have on the sale of their backlist titles. The same chart showed, less surprisingly, that self-published authors are making the vast majority of their earnings on recently published works. In a single chart we were witness to the economic effects of new participants entering an industry in which they were formerly uncompetitive. The same chart made it apparent that the effects self-publishing will have on the trade book industry have only just begun.

Because of this chart, we began looking more deeply at authors from two different camps: those who debuted prior to the explosion of self-publishing and those who debuted after. Authors getting their start today will of course be joining the latter camp. And we believe those authors will want to know the following:

• Big-5 publishers are massively reliant on their most established authors to the tune of 63% of their e-book revenue.

 

• Roughly 46% of traditional publishing’s fiction dollars are coming from e-books.

 

• Very few authors who debut with major publishers make enough money to earn a living—and modern advances don’t cover the difference.

 

• In absolute numbers, more self-published authors are earning a living wage today than Big-5 authors.

 

• When comparing debut authors who have equal time on the market, the difference between self-published and Big-5 authors is even greater.

In this report, we will also reveal how e-book earnings represent roughly 64% of a traditionally published fiction author’s income, and therefore why authors should focus less on statistics geared toward publisher earnings and trade bookstore sales and consider their own incomes instead. Finally, we will tackle the difficult question of just how many authors are earning a living wage today. The results are sobering. I’ll spoil it for you and say that there aren’t many. But there are reasons to celebrate. Read on to see why.

First, to see how we arrived at these startling conclusions, let’s look again at the chart that started it all:

Screen Shot 2014-05-12 at 5.27.29 PM

This chart, as well as the churn chart, got us wondering how much of traditionally-published author revenue was coming from new releases by long-tenured authors, and how much of it was coming from debut authors. This is a crucial question for a new artist hoping to break into an entertainment sector. What we were hoping to discover is how many seats are left on the traditionally published bus. So we divided authors and books into “New” and “Old” using January 1, 2010 as a cutoff date, and checked. Below you’ll see four charts, one for each of the four main categories of publishing type (explanation of each type here). Each chart shows the percentage of revenue from long tenured authors or debut authors. Note the differences between the first three charts and the last:

indie-old-vs-new-pie

amazonpub-old-vs-new-pie

smallpub-old-vs-new-pie

bigfive-old-vs-new-pie

This final chart reveals a startling insight: If the Big 5 hadn’t signed a new author since 2009, and simply released new works from their long-established authors, they would still be making 63% of the e-book revenue that they are making today. Ownership of backlist and long-tenured authors is quite clearly big publishing’s most powerful commodity. This goes a long way toward explaining ever more restrictive reversion and non-compete clauses in publishing contracts. It also lends credence to rumors that some top-name authors are already receiving ebook royalties higher than 25% of net. Publishers rely heavily on these established authors and may be willing to violate their own most favored nation clauses in an attempt to retain them.

What does this mean for aspiring authors hoping to join the “New” authors group? After seeing the above charts, we were curious to find out how many of today’s living-wage-earning authors were considered “New,” and how many were the same long-established “Old” authors who were simply releasing their latest books. In one of our charts from the last report, we took a combined look at author earnings by combining our February data with our April data to gauge sales churn over time. Here it is again:

top-1000-authors-log

Along the horizontal axis, we have–for each publishing type–the 1,000 top-earning authors. They are ranked by their Kindle author earnings from adding up our two snapshot days, taken three months apart. The curves for each publishing type start at the far left with their highest-earning authors, and then slope down with diminishing author income until we reach the 1,000th-highest-earning author for each publishing type on the far right. The vertical axis shows their two-day author earnings in dollars as we move from the highest-earning on down to the 100th-highest-earning, 200th-highest-earning, 300th-highest-earning, etc..

The blue and purple lines reveal a neat overlapping of self-published and traditionally published best-selling authors. Both of these groups are riding out the rise and fall on the bestseller lists equally well over a 3-month period. But as we’ve seen, 63% of the Big-5 revenue comes from “Old” authors with Kindle debuts 2009 or before. We’ve also seen from the data that titles by more recent Big-5 authors experience the same churn characteristics that indie authors do. We were curious how those “New” Big-5 authors were faring relative to “New” Indie authors. So we ran the same report again, but this time, we only looked at “New” authors (with Kindle debuts 2010 or later), and we went deeper into the lists, comparing the Top 3,000-earning authors from each publishing type:

top-3000-authors-log

Note: Amazon’s publishing imprints (Montlake, Thomas & Mercer, etc.) only publish a few hundred authors each, likely fewer than than a thousand authors in total, so it’s not surprising or troubling to see the green curve drop away so steeply after the first hundred or so. That’s as deep as their pool currently runs.

This time, when comparing only the earnings of “New” authors who debuted after 2010, we see that below a tiny handful of mega-selling Big-5 debuts (like Veronica Roth), far more “New” indie authors are making a good living from their Kindle e-books than their “New” Big-5 peers. This is a logarithmic scale, which means a little separation signifies quite a difference in outcomes.

Some might argue that this comparison does not reveal the entire picture, because best-selling traditionally-published authors have a healthier complement of print sales than their indie counterparts. However, non-ebook revenue for traditional-published authors makes up a smaller percentage of their author earnings than you might think, and this is especially true for authors of fiction. To see this requires a digression, one that may be just as important for the aspiring author as our larger analysis in this report.

How Much of a Traditionally-Published Author’s Earnings Comes from e-Books?

Total revenue from e-books is already 29% at Simon & Schuster and 34% of overall trade revenue for Hachette (40% in the UK for Hachette), making 32% a fair industry-wide estimate for the portion of trade-publishing revenue from e-books. But what does that 32% really mean for the author with a manuscript in-hand and a decision to make? It’s important for authors to understand that publisher earnings should not factor into their decision on how to publish. What we should consider foremost is how much of our earnings have gone digital. This is a difficult question to answer, but we believe we’re in a position to give a rough estimate.

We know from our own author-earnings data pulled from the largest e-book distributor in the world that gross revenue for e-books splits roughly 30% nonfiction / 70% fiction:

split-by-genre

And we also know how trade publishing’s total revenue divides between fiction and non-fiction:

trade-publishing

We can see from above two charts that more than two thirds of e-book revenue must be coming from the smaller orange fiction half of the trade publishing pie. Which simply means that fiction sells far more titles in e-book form than does non-fiction. Given that 32% of trade publishing’s total revenue is from e-books, we can now calculate what percentage of fiction trade-publishing revenue, and what percentage of non-fiction trade-publishing revenue, is coming from e-books. We broke both halves of the above trade publishing pie out to show total percentage of each publishing format:

trade-pub-gross-rev-split

Roughly 46% of traditional publishing’s fiction dollars are coming from e-books, while the other 54% comes from print sales, audiobooks, and other formats. On the non-fiction side, e-books make up a far smaller fraction of gross dollar revenues: only 20%.

But traditionally-published print books carry higher average list prices than traditionally-published e-books. In our 4/24/2014 dataset, the average price of a Big-5-published e-book was $8.80. According to Nielson BookScan, the average price of a print book (hardcover & paperback) around the same time was $14.79. We can incorporate those average prices into our calculation to arrive at the ratio of traditionally-published e-book to print book unit sales for fiction and non-fiction:

trade-pub-unit-sales-split

For the average traditionally-published fiction author, this means 59% of unit sales are now e-books. But what percentage of their earnings come from e-books? Remember that industry numbers are usually focused on how the corporations are doing. Since authors earn a different rate for print vs. e-book sales, we need to look instead at a breakdown of their earnings. Incorporating average traditionally-published royalty rates for e-books (25% of net) and print (8% on paperbacks, 15% on hardcovers) into our calculation, we arrive at the average percentage of author earnings coming from e-books for traditionally-published fiction and non-fiction authors:

trade-pub-author-earnings-split

While only 32% of the publishing industry’s gross revenue currently comes from e-books, nearly 64% of the average traditionally-published fiction author’s earnings is coming from their e-books. Earnings for the average genre-fiction author will skew even further toward their e-book sales. Perhaps an e-book-based comparison between publishing types is not so unfair a comparison after all. Especially when considering that the gain of 8% – 15% royalties on print sales means taking a massive cut in e-book royalties—from 70% of gross to 25% of net. (We demonstrated this tradeoff graphically in an earlier supplemental report.)

So if you’re a new author trying to decide which publishing path to pursue, it’s worth looking at the following graph one more time while keeping in mind that even for traditionally-published authors, 64% of earnings now comes from e-books. Again, this graph shows comparative earnings of the top-earning 3,000 debut authors by publishing path:

top-3000-authors-log

Now consider the 3 – 6 months your print work will sit spine-out on a dwindling brick & mortar bookshelf. Compare this narrow window with the rise of print-on-demand physical book sales, and the surge in the audiobook market, which is open to all authors. These factors and the above graphs highlight the difference in long-term viability of each publishing path. And now that we’ve seen what share of total author earnings have gone digital, let’s return once more to the question of churn.

Title Churn, Revisited

Churn is a measure of how e-books rise and fall through the bestseller lists. As we’ve seen, almost two thirds of the Big-5’s earnings currently comes from their “Old” authors, those who debuted more than 5 years ago and whose frontlist and backlist titles now comprise 63% of Big-5 earnings. The more modest financial prospects facing “New” Big-5 authors become starkly apparent when we break down the count of today’s decent-selling e-books by author tenure (the year the author was first published).

As before, the green portion of the bar shows at least a 25% increase in revenue. The red portion represents titles that dropped by more than 25% in revenue. And the yellow is for titles that remained within that range. The height of each bar represents number of titles on the bestseller lists that exhibited this behavior:

Screen Shot 2014-05-19 at 12.42.25 AM

This is one of those charts that data geeks can stare at for ages. It neatly captures so much of what is going on in the e-book market today, mainly that there are far more indie debut authors from 2010, 2011, 2012, and 2013 who are now holding spots on the Amazon bestseller charts than Big-5 debut authors. Even more striking, the number of today’s bestsellers from these “New” indie debut authors increases steeply year-over-year, while the number of today’s bestsellers from “New” Big-5 debut authors stays flat. The number of today’s bestsellers from small to medium publisher debut authors is also growing year over year, although not at the same explosive rate with which indie debuts are grabbing and holding slots on the charts.

We can also see that most of the stability from the Big-5 publishers is from books published by the very longest established authors—those whose first book was published prior to 2007. For self-published authors, most of the volatility on the bestseller lists is from recent works, both positive and negative. For self-published and traditionally-published authors alike, the red portion for recent works shows how new releases often debut high and then take a slide. Interesting for self-published books is the tendency for older works to rise in earnings, something that’s flat for Big-5 publishers.

So What Does This All Mean To a New Author?

Taking all of the above into account, let us now pose two frequently asked questions facing new authors today: What are my chances of being able to earn a living from my writing? And which publishing path gives me the best shot at eventually being able to do so?

For the first time, we can look at a large enough cross-section of author earnings data that, despite its acknowledged limitations (Amazon-only, e-books only), can help light the way to some answers. We know that Penguin Random House (PRH), the largest of the Big-5 publishers, currently publishes 15,000 authors and adds another 200-250 debut authors each year. PRH makes up roughly half of the Big-5’s gross sales, so doubling those numbers to 30,000 authors and 500 new annual debuts yields a reasonable estimate for the total number of signed Big-5 authors today. With these numbers in mind, take a look at the following charts (and please note that the scale on the Y axis roughly halves for each subsequent chart as the earnings threshold roughly doubles):

 10k-earners 25k-earners 50k-earners 100k-earners

Of the 500 or so Big-5 debut authors in 2013, only 245 (fewer than half) are today earning $10,000 or more from their Kindle e-books. Surprisingly, despite having more books published and on the market, even fewer of the roughly 1,500 Big-5 authors who debuted in 2012, 2011, and 2010 are earning $10,000 or more. Referring to the earlier blue-and-orange pie chart showing what portion of the average traditionally-published author’s earnings is from e-books, we might convince ourselves that print and audio (as well as other e-book retail channels) could on average double this author-earnings number. But few folks would consider $20,000 per annum a living wage, and only 637 (fewer than a third) of the Big-5 debut authors from the last 4 years are earning that much today.

After years and years of querying and jumping through gatekeeper hoops, it appears that even the less-than-1% who are lucky enough to land an agent and a Big-5 publishing contract can’t manage to quit their day jobs. (This is an observation in the data that matches what we have seen anecdotally in the publishing and bookselling trenches).

By contrast, we see over 700 Indie-published authors who debuted in 2010, 2011, 2012, and 2013 who are today earning more than $25,000/year from their Kindle e-books alone. For these authors, e-book sales on other platforms and POD print sales will add another 20%-30% on average to this total. It’s easy to see that, for the past 4 years, and even taking lost print sales into consideration, far more Indie authors than Big-5 authors are earning a living wage from their writing.

Again, this is something many of us have seen evidence of in the trenches for several years. Very few aspiring authors who query agents end up with publishing deals and their works displayed in bookstores. Having worked in bookstores for years, we have personally seen how seldom a debut author breaks out and sells enough to make a living. Advances are no longer high enough to support debut authors. And yet, at the same time, we have met and heard from hundreds of self-published authors who are not household names but are making a full-time wage from their works. All we and others have had to go on thus far has been anecdote when making the decision on whether or not to self-publish. But now we are seeing the same answer in the data that anyone can see in the trenches: The number of seats on the full-time writer bus have greatly expanded.

Does this mean that earning a living as an author is likely? Absolutely not. Here is where optimism for self-publishing is often mistaken for naïveté. It’s where excitement leads erroneously to a gold rush mentality. Let’s take an example from sports: Aspiring basketball players know precisely how many roster slots exist in the NBA. (30 teams with 15 roster spots each). Aspiring writers are not so lucky. We have no idea how many slots are open for us as we begin to dream of writing for a living. Many of us hopeful writers grew up browsing bookstores with the misguided impression that all of those tens of thousands of authors we see on the shelves were writing for a living. The vast majority are not.

Back to basketball: When the sport caught on overseas, the number of paying jobs for professional basketball players exploded. Your favorite college player might not make it into the NBA, or even want to play NBA ball, but they could still earn a living wage doing what they loved in Canada, Italy, or elsewhere. The number of open seats for professional basketball players expanded by a factor of ten or more. However, the odds of grabbing one of those seats only slightly improved, as so many millions of people dream of a career playing professional basketball.

This distinction between the absolute rise in the number of seats compared to the chances of grabbing one is crucial, because the same thing is happening for fiction writers today. And while this is a story that no one in the media is covering, it is without a doubt the most critical and interesting development in the modern publishing landscape: More people are earning a living with their writing than at any other time in human history. And it’s because of the adoption of e-books and the ability to self-publish.

Yes, millions of people dream of writing for a living. Yes, becoming one of those people is difficult. But it’s never been more likely for those willing to put in the effort. You don’t have to be in the top 200 to 300 of fiction writers to earn a living these days. You can be in the top 2,000 to 3,000. That’s an enormous improvement. And yet it goes largely uncommented on and unnoticed. We hope to highlight this trend for all those with manuscripts in-hand and a decision to make.

Final Thoughts

The picture that is emerging from our data collection and our look at bestseller churn is that the number of Big-5 debuts at each earning level is relatively flat, year over year, while the number of living-wage-earning indie author debuts is growing exponentially year over year. Even ignoring the hurdles and roadblocks that are a built-in part of traditional publishing’s drawn-out querying process, it’s easy to see which method of publishing represents the greater and faster-growing opportunity to earn a living wage as a writer. Again, the data matches everything we are seeing in the publishing community trenches. And these observations help to explain many of the restrictions we see in modern publishing contracts.

To combat these trends, we believe that major publishers are going to have to pay higher royalties on e-book sales in the very near future. We have heard from some authors and industry insiders that this is already taking place. Unfortunately, the sweetest deals are going to existing bestsellers, which means the rich get richer while debuting authors are left behind. This must change. Higher royalties will have to become the new standard across the board. Otherwise, the word will keep spreading—both anecdotally and through hard data—that the choice on how to publish keeps tilting toward retaining ownership of one’s art. We’re not saying this decision will ever be simple. But it sure seems to be getting easier and easier.

91 Responses to “The Tenured vs. Debut Author Report”

  1. Joe Konrath says:

    Thanks for continuing to put out this information, Hugh and Data Guy.

    Writers have to set their goals appropriately, using as much info as possible in order to make smart decisions.

    Choosing to pursue a traditional publisher, or choosing to self-publish, depends on what info is available and explainable.

    By showing that indie publishing is not just a viable alternative to legacy publishing, but perhaps a preferable one as well, you’re helping inform an entire generation of writers who will use this date to help them make difficult, personal decisions.

    You’re also breaking down preconceptions and biases, and showing data that proves the whole story is yet to be told on how to make a living, become successful, or simply earn a few extra bucks and/or reach readers as a fiction writer.

    Thank you.

  2. Rocky Cole says:

    This is an eye opener. Took me a while to sift through the data but the explanations are clear. The bottom line for me is that traditional publishing is a very narrow path to walk and it’s tough to find success there. Even if you are a legacy writer for the Big 5 very few are earning well.

    A genre writer putting out good material and building a fan base can do much better independently. I’m happy with being independent and writing what I want.

  3. Matt Perkins says:

    Excellent work as always. Perhaps I missed this when reading, but does the “earning” metric refer to the revenue from the book, or the income actually earned by the author?

    In other words, if an author’s earnings are $10,000, is that $10,000 in book sales, or $10,000 in royalties from those books? If it’s the latter, how is that calculated when royalty rates aren’t constant between publishers, or even authors?

    • Data Guy says:

      “Author earnings” means money actually received by authors.

      The standardized, lockstep low royalty rates (25% of net on e-books, 15% of list on hardcovers, 8% of list on paperbacks) that traditional publishers offer the vast majority of authors choosing to go that publishing route make calculating author earnings straightforward.

      They are also a huge part of the reason so few traditionally-published authors can earn a living from their writing, even while publishers are reporting record profits.

  4. This is fantastic, Hugh & Data Guy. I greatly appreciate all the numbers you’re putting out there. There’s a lot to digest here, and believe me, I’ll be reading and rereading this.

    Btw, I don’t know how you want to calculate this into future profits, but I’ve noticed that my traditional publishers are now discounting my e-books, and called those sales “deep discount” which means I get no royalty on them. So…there’s a hidden profit side to traditional publishing’s e-book revenue. In addition to whatever percentage they get from Amazon, at certain sale prices, they are keeping all of the revenue and passing none of it to the authors.

    Thanks again for all the work on this.

    • Data Guy says:

      We’re only following in the trailblazing footsteps you and Dean have left — we appreciate your tireless efforts to inform authors and bring transparency to publishing.

      The “deep discount,” no-royalty-to-author practice you describe, if widespread among traditional publishers, would mean our graphs are overstating the earnings of traditionally-published authors.

      In our calculations, we’ve tried to be extremely conservative and to give traditional publishing the maximum benefit of any model uncertainty or doubt. But this “deep discounting” practice where authors get no royalties is a sobering cautionary footnote for authors considering the traditional publishing path — thanks for highlighting it.

    • Hugh Howey says:

      KKR: This has become an ENORMOUS issue of late. An increasing percentage of traditionally published books are being sold through discount outlets like Costco, Walmart, grocery stores, and the like. Publishers offer what seem to be reasonable royalty rates for print books, but the deep discount rates are where a huge portion of the sales will head, and buried in the contract are horrid royalties for these sales.

      My agent has fought for higher deep discount rates in some of the deals we’ve inked, but I imagine many authors are getting hosed here. The fact that e-books are becoming part of the deep discount for trad. authors is a serious mess. Publishers keep concocting new ways to take advantage of their stable of talent. I’m beginning to see why they call it a “stable.”

      • Steven Zacharius says:

        This claim about deep discount sales happening more and more is not the case at Kensington and I can’t imagine it is at any other sizable publisher. Furthermore deep discounts do not occur on any sale at any traditional book account including those mentioned in the article. Also, ebook sales are not included in deep discounting royalty rates.

        • Marc Cabot says:

          Mr. Z, reality is not required to conform to the limits of your imagination. Multiple sources have reported on this phenomenon. Let those who cannot imagine, debate. Let those who know, move on to other things.

    • Passive Guy says:

      Thanks for mentioning this, Kris. I’ve written about this before and it sounds like it’s time to do so again.

    • Steven Zacharius says:

      What you’re reporting Kristine certainly is not the norm for any of the major publishing companies. I’ve never heard of including ebooks in deep discounting before.

  5. Fantastic stuff, Hugh and Data Guy.

    At some point you might want to break down that small and medium publisher category. There are numbers of indie publishers/writers who are building their own small and medium-sized publishing business, and thus are kicked out of the indie charts and over into that category. Here at WMG Publishing, except for our Fiction River project, we publish only Kris and my work. We have over 400 titles under eight names now on Kindle. I assume we fit over in the medium publisher slot, but we should be counted as indie and old timers. (grin)

    In other words, might be worth a shot to take a look at that slice of the pie a little closer to see just how many are older medium-sized publishing imprints such as University Presses and how many are indie publishers growing. Kevin J. Anderson’s Wordfire Press is another example of indie growing into medium-sized press.

    A side note: Far less than half our total sales are Amazon U.S. We make good money Amazon overseas markets, we make about a third of our money now on paper and that’s growing like crazy. The rest is spread pretty evenly over Kobo, B&N and iBooks.

    And one more crazy thing to toss in since you were talking about making a living. WMG Publishing now has six employees, not counting me or Kris, making a living from indie publishing. Just saying.

    • Data Guy says:

      Agreed we should start breaking down Small/Medium Publishers in future reports.

      Right now, it’s a catch-all that includes everything from sizeable-but-not-Big-5 traditional publishers such as Kensington to newer digital publishers like Open Road Media to authors who also publish a couple friends under an LLC first created for their own books.

      We’ve now got WMG Publishing identified as an Indie, but as you point out, there are many similar multi-author Indies out there, so a portion of the Small/Medium Publisher red in our charts is actually more “Indies in disguise.”

      You and Kris have tackled print distribution and foreign distribution far more effectively than most Indies have to date — hopefully, as more Indies follow your lead, they will see the percentage of their sales outside Amazon US expand.

    • Hugh Howey says:

      Believe it or not, we make a conscious decision with every report to overstate traditionally published earnings while understating self-published earnings. That is — we want to create every disadvantage possible for the conclusions we are drawing. We err toward that side however we can.

      Which means lumping a lot of self-published works in with small-press works. It also means largely ignoring foreign rights, POD sales, and audiobooks, all of which can be incredibly lucrative for a self-published author. I realize that I’m an outlier, but I could live like a king from my self-pubbed print sales OR my audiobook sales. And I know I’m not alone.

      It would be fun to do one report that took a best-case scenario where we really stacked our argument the way legacy pundits stack their argument. You know — how they ignore self-publishing altogether when they release industry numbers. For instance, imagine if we lumped in all books that BEGAN as self-published success stories. After all, aren’t we trying to determine the best way to publish that manuscript? If your self-pubbed book gets picked up by a publisher, those sales should count FOR self-publishing initially. That was the decision that author made.

      So put all of 50 SHADES OF GRAY (self-published as fan fiction before picked up by a small press and then RH) in with self-published work. And all the rest. Lump in all the uncategorized small publishers. Factor for POD, audio, and foreign sales. For all other e-book distributors.

      We are SEVERELY understating the benefits of self-publishing.

      • Data Guy says:

        “It would be fun to do one report that took a best-case scenario where we really stacked our argument the way legacy pundits stack their argument… For instance, imagine if we lumped in[to the indie numbers] all books that BEGAN as self-published success stories.”

        I chuckled when I read this.

        According to our data, 2 of the top 7 highest-earning Big-Five debut authors from the last 5 years were E. L. James and Colleen Hoover, both of whom were self-published breakouts before a traditional publisher jumped aboard.

        • Arial Burnz says:

          Interesting note about E.L. James…

          According to her website, she was not self-published. “Fifty Shades of Grey, Fifty Shades Darker, and Fifty Shades Freed were never self-published as these novels. An earlier version of this story began as Twilight fan fiction which was posted on the internet. The trilogy was picked up by an Australian publisher, The Writer’s Coffee Shop, who released them as e-books and print-on-demand paperbacks.” (Last FAQ on this page – http://www.eljamesauthor.com/faq/)

          So, I guess she would fall under the “small/medium press” category. Just FYI.

  6. Hold up. This sounds a bit like EQAO (Standardized Testing) results. This is reading a bit like you’re comparing oranges and apples here. You claim less than 1% of authors landing a contract through a Big 5 publishers can actually afford to ‘quit their day jobs’. But then you go on to compare that so-called stat, to 700 Indie published (during the same time frame) who are making $25k/yr (implying they are able to quit their day jobs.)

    This is not a fair, nor accurate comparison. You can’t draw proper conclusions comparing percentages to dollar amounts? The variables must be the same in order to draw proper conclusions from data. With that said, what is the % of Indie Pub authors that are making $25K/yr, (during that time frame) taking in consideration all who Indie Pubbed (in that time frame)? Would it be less than 1%, too? Or more? Or even less, maybe?

    I’d love to see the true comparison, be it in% or $ figures or in human stats. Please take this data one step further and provide a true comparative comparison. :)

    • Okay, I just re-read this, and it sounds a bit snarky…I don’t mean to be snarky…(please forgive me…) I’m TRUELY interested…I really wanna know. :)

    • Data Guy says:

      The comparison was between the 637 Big-5 debut authors from 2010-2013 who are making $10,000+/year in Kindle revenue versus the 700+ indie debut authors from 2010-2013 who are making $25,000+/year in Kindle revenue.

      Edited to make that clearer — thanks.

      • That is clearer! And hopeful! Thanks! J

      • Steven Zacharius says:

        Where did the data for those 637 debut authors come from? Is 637 books the total of all debut authors during those years from big 5 publishers? How would you possibly get their sales revenue from Kindle? How would you know the total revenue when the price of the book may have changed over a period of time?

        Just out of curiosity how many self-published books were there in total during this period of time?

        • Marc Cabot says:

          How the numbers are computed is discussed at length in prior posts and in the “Methodology” link supplied. The raw data is also available freely. If you disagree, you’re going to need more support than, “I don’t think that can be right, so you need to explain it to me again and again and again” for anybody to take your disagreement seriously.

  7. Sarah Wynde says:

    I love the basketball analogy. I got a review on one of my books today that said, “I’d got out of the habit of reading and this has brought me right back to it.” The rise of inexpensive, easy-to-access books turns people onto reading in a way that $15 paperbacks could never do and makes the market bigger for all of us.

  8. Gentlemen, beautiful work, as always!

    Your income vs. rank curves appear to be power-law curves of the form: Income = Constant/Rank**Exponent.

    You are plotting Income vs. Rank, which means that you have two unknown values: the Constant in the numerator and the Exponent. You can easily estimate these two values by plotting the data on a log-log plot and doing a linear fit. The Constant will be the y-intercept and the Exponent will be the slope.

    I’m guessing the value of the Exponent will be close to log(4)/log(5) which is the Exponent associated with the 80-20 rule. This works out to .8613.

    But the only way to know for sure is to measure the Exponent. You’ve got the data. Can you measure that Exponent? The Constant will be different for each of the curves, of course. Once you fit the data, you can estimate total revenue for all authors (if you know how many authors there are.)

  9. Suzan Harden says:

    I just want to say thank you, Hugh and DG. This is a lot of work and I appreciate your efforts.

  10. ML says:

    Thank you for a fantastic article. One point is that this reflects trade print publishing; does that mean that both hardcover and mass-market paperbacks are not included in this analysis? For certain authors, hardbacks may be a sizable portion of sales, and for genre fiction, mass market could also be a large part of their sales. This certainly doesn’t affect the ebook sales data you share (although it would be interesting to see data from some of the non-Amazon platforms), but it could paint a different picture for the print sales. Again, thank you for this!

    • Data Guy says:

      “Trade Publishing” is an industry sector that includes all books regardless of format–whether hardcover, paperback, e-book, or audiobook–that are categorized as adult fiction, adult nonfiction, children’s books, and religious books. (Academic publishing and textbooks are not considered part of Trade Publishing).

      “Trade Paperbacks” are a specific paperback format–usually 6″ x 9″ or thereabouts in size, and they are included–along with hardcovers, mass market paperbacks, and audiobooks–in the non-e-book slices of the (orange) fiction and (cyan) non-fiction pie charts.

  11. Cathryn Cade says:

    Hugh and Data Guy,

    Thank so much for all the work you’ve put into this. Vindicates my decision to go indie in 2013. Oh, wait–so do the $$.

    I am glad I got my start in digital first publishing, as I was shepherded through the early days of epublishing with stellar editors and other staff, and built somewhat of a name in my sub-genre of romance. So I think for unpubbed authors, there is that to consider.

    With all the choices we have, there has ever been a better time to be a writer!

  12. Thanks for all the WORK on developing a report like this. The information is definitely interesting and important to authors.

    I would like a little bit more of a cautionary warning in extrapolating data from two days into a yearly amount.

    You mention being conservative, which is good when you’re trying for a factual, instead of one-sided report. think the actual yearly numbers are probably higher. I’m sure more than 700 people make $25,000 a year indie publishing. :)

    As someone with a Masters Degree and a Ph.D, I’m had more than my share of statistics classes (pure torture) and I still struggled with understanding some of the graphs resented here. A little more explanation of each side of the graph would be helpful.

    Kristine Kathryn Rusch, thank you for the warning on deeply discounted books. I hadn’t heard that one before. Scary.

    • Data Guy says:

      Like you, I’m sure that way more than 700 folks make $25,000+ a year indie publishing. In this analysis, as you said, we’ve been extremely conservative in our assumptions, and the $25,000 threshold only included their Kindle US earnings. Also, most of the “Uncategorized Single/Author Publishers” and many of the “Small/Medium Publishers,” too, are really “Indies in disguise.” In the voluntary AuthorEarnings survey on this site alone, more than 240 respondents had self-published earnings last year of $25,000+.

      But we’d rather understate the strength of Indie publishing then overstate it.

      We’ll try to do a better job of explaining the graphs in the future :)

  13. Aubrey Rose says:

    Thank you so much for publishing this. I just gathered up my courage and quit my day job to go writing full-time this year, and I hope to hit that high data point in 2014 :) I know quite a few other indie authors who are doing much better, so I’m only surprised at how low these numbers are (granted, they’re conservative assumptions, but still). It’s very exciting to see so many authors being able to support their families and make a good living with their art. I keep wanting to pinch myself, it feels like such an awesome dream!

  14. Susan Illene says:

    Thanks to Hugh and Data Guy for putting this together. I’ve been keeping track of your reports since you started putting them out and have found them very helpful. When you both mentioned the many areas where you’ve skewed figures toward trad books favor I wanted to point out one other factor. Non-Amazon US sales. Not all trad published books are available everywhere like they are for indies.

    For instance, this month I’ve made about $16k on Amazon US, but I’ve also made almost $2600 in the UK and $830 for Germany (based on current exchange rates), plus somewhat lower numbers for a few other Amazon country sites such as Canada and Australia. Those royalties can really add up. It’s another thing that hurts authors if they can’t publish their books worldwide. Just thought I’d add that in there for additional consideration.

  15. John Brown says:

    Now that you have two snapshots I’m wondering if you found any meaningful data about pricing, units, and revenue for debut vs established authors.

  16. Thanks again for compiling such an informative and interesting post.

    I do wonder about indie authors making 2% of their income from backlist though. I certainly see far more than that, probably closer to the 63% posted for traditional publishers. Like many genre fiction authors, I had a lot of backlist rights revert to me between 200 and 2010. Like many authors, I learned my way in indie by making new editions of those books available. The publication dates for these new editions of older titles, though, will be after January 2010. Does that mean they’re appearing as frontlist in your results?

    • Great question, Deborah. All of our backlist books reverted from traditional and brought back through WMG Publishing have new copyright and publishing dates on them.

      Again, Hugh and Data Guy, stunningly great work. Thanks.

    • Data Guy says:

      In the Old/New charts, any book with a Publication Date in the product description that was after January 2010 was considered a “New” book.

  17. Just felt I had to say thanks to you guys for the great work and insight into the previously murky, to say the least, world of author earnings. All Indie & traditionally published writers owe you a debt.

  18. At what point in the numerical rankings of Indie-published authors would you consider them to be A-list earners versus Mid-list (or some other status you consider relevant)?

    Top 1000 authors
    Top 3000 debut authors

    Simply for the benefit of setting one’s cap on a goal…. ;)

  19. The information you continue to cull (ha! cull) from the data, analyze, and share with us is indispensable. I want to add my voice to the chorus of Thank You’s to Hugh and Data Guy.

    I’m making a living as a writer after a career practicing law. I used to tell people that in my new life I was poorer but happier. Now I’m just happier.

    The revolution is upon us, and the world of books has changed forever. Carry on! We await your next message from the front.

  20. Mark Young says:

    This article again reinforces my choice to continue as an indie author. I would not like to be in the shoes of traditional publishers trying to stay solvent in the coming years. Thanks for putting this together.

  21. Nathan Roten says:

    I have been following the last few reports, and they could not have come at a better time. I wrote a non-fiction book that was traditionally published back in 2011. With all the excitement of being published and ‘vetted’ by a traditional publishing house (small to medium size), my sales numbers were hardly worth bragging about. I was able to take my family out for a few nice dinners and that was about it.

    I am now finishing up my debut YA Fiction novel, and these reports are invaluable. I struggled for a while whether or not I should submit my work to an agent and hope for the best, but as I have been studying up on the Indie side of publishing, I see no need to do that. Not yet at least. As a businessman who has owned 2 companies, I see the value in being able to take the reins. With the current tools available and authors like you all who are willing to provide this kind of info, I am looking forward to seeing what the differences are.

    You guys rock. Thank you for putting all this together to help inform the rest of us.

  22. This was an excellent post. Excellent! Thanks for putting it together. I’ve shared it with my entire network and am personally finding it very useful. Cheers!

  23. Picking a nit here: when you say 63% of the earnings would be retained (combination of old author’s old & new books) it misses a big point, specifically that sales beget sales. So if an old author releases a new book, the ‘back catalog’ will sell. It seems to me that there would be erosion in both categories, and neither would be retained.

  24. Anna Burke says:

    This is, hands down, the best article I have seen on this issue. Kudos! Daunting, though it is, what an exciting time to be ‘playing ball’ in the rapidly changing arena of publishing. Thanks for writing & posting this thoughtful, well-researched article!

  25. Hey, Author Earnings. Riddle me this:

    What percentage of books from each of the categories (state that they) are sold without DRM?

    Does the presence of DRM have any obvious impact on price, sales rate, etc.?

    How about doing up a report on as many effects of DRM as you can tease out?

    • Data Guy says:

      What a great question, Chris.

      We’ll see if we can include some DRM-related info in the next report.

      I can modify the spider to also grab whatever DRM info is visible for each title.
      (“Simultaneous Device Usage: Unlimited” in the Product Details seems like a giveaway that a book is not DRM-locked, but need to double check).

      • I checked books from both Baen and Tor, and they had a thing in the book’s description to the effect of

        “At the publisher’s request, this title is sold without DRM”

        Though the wording varied from title to title, and it didn’t appear at all in the self-published book I checked, so I think that’s probably at the whim of the publisher.

        Another thing that might be worth considering: what the effect of having “Lending: Enabled” on a book title is. That could help authors figure out whether they should go ahead and stay exclusive to Amazon so they can get in the Kindle Owners Lending Library, or cast their bread more widely on the waters.

  26. Koko the Talking Ape says:

    So, to what extent does Amazon = e-publishing? If Amazon decides to slash author share, could that change this picture? (Sorry if everybody knows this already; I am merely a talking ape.)

  27. Excellent, excellent article. Thanks so much for providing this in-depth report on author earnings in the digital age. I especially love the reality check you provide. The report is encouraging, but brutally honest for those who dream of self-publishing their first novel and resigning from their day job two weeks later.

  28. Great info, and encouraging. Thanks Hugh and Data Guy.
    It would be interesting to know what those decent-income-earning debut indies were charging for their books. Are the $25,000+ per annum earners selling enough books at .99 or 1.99 , or are only those who hit the 70% royalty rate at $2.99+ able to earn $25,000+? Converesely, are the debut indies who sell their books at $2.99 able to sell enough to make any real income?

  29. JR says:

    Love the reports and data provided and appreciate what you guys are doing.

    Some thoughts on the future of self publishing and the thought/assumption that it will continue to grow and grow…

    looking through the Amazon market, I couldn’t help but see that the majority of self publishing sales and success is the product of one market: teen/NA romance. Even though your last report suggested (i think) that Sci Fi/Fantasy genres had a high % of self publishing sales, if you look at the top 100 charts, a big chunk of the titles fall into the aforementioned market (think paranormal romance, vampires, werewolves and the like).

    The inefficiency of the big 5 to dominate this market lies in its size and its readers’ extremely high consumption rate. The traditional publishing process simply cannot keep up with demand. Indie writers have taken advantage of this with speed and volume and filled the market. This market is also far less likely to care about “quality”.

    I fear the numbers away from this market would make self publishing look like a pretty grim option. Ex. – Incumbents have a stranglehold on mystery/thriller/suspense. Not as prolific of readers = no edge for the indie. Obviously there are exceptions.

    On the other hand, maybe there just hasn’t been this sort of goldrush of indie author output towards other genres /readerships and they remain untapped. No secret that people have shifted to binging on TV shows and buying full series of books. They don’t want to wait.

    • Data Guy says:

      You used Mystery/Thriller/Suspense as an example of a genre where Big-5 incumbents dominate and self-publishing looks grim… but that’s not what the data shows.

      Indie-published books make up 27% of unit sales (and 28% of author revenue) in Mystery/Thriller/Suspense.

      Incidentally, those are the genres in which I write and self-publish.

      Anecdotally, as an indie newbie, I haven’t had any trouble competing with Big-5 Mystery/Thriller/Suspense incumbents. Both of my books have been in the overall Kindle Top-100 several times over the past few months — in fact, one of them was (briefly) the #1 Mystery, Thriller & Suspense bestseller on Amazon.

      From what I can see, nobody has a stranglehold on any genre. It’s a wide-open field.

  30. Great analysis of the market!

    One angle I would be interested in looking at is the global availability of the ebook market for indie authors versus those who go the traditional method. For instance, an indie author can use a service like Narcissus.me to distribute their ebook in many different stores at a local, national, or international level. How does that change their sales? Many traditional publishing houses offer their ebooks at such high prices, and the author still does not receive a large cut of it. How much do the sales increase for traditional published authors when their ebook is available globally, but at a higher cost?

  31. Richard (old fart) says:

    I’m sorry, two days of Kindle sales over a two month period – as brilliantly crunched as the data is – doesn’t demonstrate that an indie-published author will make as much money as traditionally published author. It’s two days – sixty days apart. Making money from writing is a marathon and not a sprint. If you checked the lead pack in the New York marathon at one mile and five miles, you’d find as many amateurs as professional athletes in the lead pack. This doesn’t predict who wins the race. A traditonally-published author pre-2007 doesn’t have to lift a finger to get backlist ebook sales – it’s found money. It helps to have a new title every year or so to keep readers interested enough to seek out your backlist but that’s it – one book a year.
    I accept that there are far more indie-published ebook writers currently making a living from Kindle sales than traditionally-published authors if only because they are vigorously promoting and marketing their books. Good for them. You still have to convince me that – five years from now – that the 2019 top one thousand ebook indie writers will be the same as the 2014 “making a living” writers today. I’d bet that ninety-five percent of them won’t be. Why? Because there are five thousand aspiring writers willing to outsell you and outmarket you – unless you have that talent and stamina to be a serious “long-term” author. Indie-published authors may take an increasingly large share of the kindle earnings but it doesn’t predict which of these individuals benefit.

  32. jwalk says:

    So I am just getting into these reports and playing catch up. They seem like great reports and as an aspiring author I appreciate your work. The two problems I am having though, and they are foundational pieces of your reports, is 1st what is the difference between a small press and an indie press? (The words are often used synonymously. Can you give examples of each?) And 2nd can we really assume that Indie authors are making the full 70% for amazon sales? It seems, from my very very small sampling, that small independent presses (whether they would be indie or small in your report, I don’t know) are taking half of the 70% from amazon sales. When I look at the data for those designated as indie publishers (5K report), and calculate out percentages, you have both 35% and 70%. Have you been able to differentiate between which indie publishers take half the 70% and others that don’t?

    I like what you are doing here. I appreciate that we can make a more educated decision on publishing. I hope that I am just confused and you guys can clear this up for me and that these concerns aren’t a flaw in the analysis.

    Thanks for all your work.

    • Data Guy says:

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

      Terminology varies.

      We use the term “indie-published books” to describe books self-published by authors who retain ownership of their digital rights.

      Our report categorizes the type of third-party publishers you refer to as “indie publishers” under the broad heading of “Small/Medium Publishers,” which they share with all non-Big-Five traditional publishers.

  33. Chris Hollis says:

    The best report yet. Great work. Those last four graphs really chart the development of the ebook market as a whole. If the total number of high-earning authors (regardless of how they’re published) keeps almost doubling year-on-year, it really paints a rosy picture for the future of writing as a whole.

    And since reports on other sites will tell you print sales are holding strong, it suggests more and more people are reading books, which is great news for mankind as a whole.

  34. Annelie says:

    Hey Data Guy & Hugh,
    beautiful analyses – as always! Thank you!
    I find the churn plots most interesting. Would it be possible to look into series vs stand alones? I can imagine the churn to be significantly different, also in respect to “new” author (2-3 books in a series) in comparison with “old” author (more than 3 or 4 books in a series).
    Because that’s what one always hears “write a mystery series” or “write a romance series” – but what the real impact is of this would be quite interesting.
    Cheers
    Annelie

    • Richard (old fart) says:

      Good question – as my spouse has written a mystery series with over thirty books published so far, I can vouch that each new book published creates a distinct bump in the sales of every other book in the series. A new book finds new readers – and – if they like what they read – their first instinct are to find more written by the same author.
      As the series grows with each book, the peak sales of a new title becomes more pronounced and compressed into a few days or weeks as readers pre-order the latest book. This “compression of sales” effect resulted in the author finally making the NYT bestseller lists. If you make millions of sales with your first few titles, then you’re probably so busy spending/investing the money that writing more books in the series becomes a significant chore. And writers hate chores..

  35. Rachel T. says:

    I know I’m late to the conversation, but I followed this link from your article:
    http://www.theguardian.com/books/2014/apr/06/london-book-fair-penguin-random-house-tom-weldon. It concerns the London editor of Penguin Random House and his views on how the publishing industry is changing. He insists that publishers are doing better than ever, and mentions in detail how PRH are using their backlist to expand into different markets in ways never-before dreamed possible – cross-branding with everything from cartoons to car companies. “Already, a quarter of profits in the children’s division come from such licensing deals,” the article claims.

    And all of this sounds dandy, until I clicked on another link connected to the first,
    and, from it, got another article:
    http://www.theguardian.com/books/2014/mar/02/bestseller-novel-to-bust-author-life. In this one, authors, especially midlist authors, are bemoaning how near-impossible it is to make a living by their writing anymore. They view the digital revolution with fear, have no idea at all how to expand or market their own brand, and are struggling to make ends meet on near non-existent royalties. One laments that he would happily give up rights to two of his backlist in order to get two new books published. Another moans that an editor at Faber & Faber told him “and not for the first time, how much Faber would like to publish my work. And then he said, ‘But I can’t afford you.’ ”

    These articles were written one month apart.

    It’s clear that not only is the book industry as a whole robust, with room for even more growth, but that there is considerable money to be made through licensing agreements and cross-merchandising. But it’s also clear that the publishing industry is heavily invested in a trickle-down system, in which as little as possible trickles down to authors. “The publisher has struck licensing deals to put the mischievous [Peter Rabbit]’s image on pottery, chocolate bars, as well as a line of toys,” the first article chuckles. One can’t help feeling that, were she alive today, Beatrix Potter wouldn’t be making a cent.

    • Richard (old fart) says:

      I worked at bookstores for a decade and children’s books are an unusual category. The older a children’s book is and well-known, the easier it sells. Why? Because most children’s books are bought by parents or grandparents and they buy what they enjoyed as children. Nostalgia is key. Beatrix Potter is a valuable franchise and her descendants are making a mint. As are the decendants of the Rev Awdry who wrote the Thomas the Tank engine books. Really – books about steam engines that talk! It’s far harder to get a new children’s book launched than put a new cover on an old masterpiece. This is the opposite of adult fiction or genre fiction. The only exception are books that are linked to large media companies that are pushing a movie or TV show based on the same characters that will sell the books for them.
      Your point about mid-list authors is well-taken. It’s hard to make a living as a mid-list author without any marketing behind you. I suspect that most publishers are buying less new authors and paying smaller royalties because it’s far harder to launch a new author when the bookstores are declining in numbers. Why is this important? Because publishers used to encourage bookstores to “hand-sell” new, exciting authors to the public. Who does that now? Not Borders Books and Music because they went out of business. So enjoy the ease of selling via Amazon and realize that the ebook business is a boon for established authors and a far harder hill to climb for new authors.

      • Rachel T. says:

        I understand your points, about children’s authors especially, but the most of the midlisters mentioned in the second article were well-established authors with extensive back-lists and respected reputations. They just weren’t household names. The point of the article wasn’t that the publishers couldn’t sign new authors, it was that they weren’t paying the ones they already had. There was a huge disconnect between the reality of the publisher – “there’s lots of money!” – and the midlist author – “there’s not enough money.” As Hugh and Data Guy pointed out in this report, and as others have noted throughout the comments section, clearly the money IS there, and just as clearly it’s not traveling from publisher to author.

        I refuse to believe that, in an era when Facebook tracks one’s web-browsing habits, traditional publishers can’t figure out a way to market their mid-list authors and still make a profit.

        And starting a career on Amazon doesn’t faze me in the slightest.

  36. [I apologize if I’m repeating what’s been said; I didn’t have time to go through all the comments.]

    With these numbers, how can anyone logically argue that Amazon has not served authors better overall than trade publishing? And thus, the Big 5, especially Hachette at the moment, are only attempting to paint Amazon as the bad guy because they fear losing their author pipeline — which in turn will render them extinct.

    It’s sad that so many aspiring authors (in comments on blogs, media, etc.) are falling for the propaganda that Amazon is out to stick it to them. Will Amazon stick it to authors at some point in the future? I don’t think so, but no one can say for sure. But what we can say right now is that Amazon has single-handedly opened the door for authors to (a) get published, (b) make more money, and (c) have a much better shot at earning a living.

    And impressively, Amazon has done this all while bringing down the cost of books for the consumer.

  37. Thanks to my father who informed me on the topic of
    this web site, this weblog is genuinely amazing.

  38. Hugh and company: Again, thanks for doing all the work to provide such great data and dissect it! I’m not a math or stats person, so can’t speak to the methodology. I’ll be watching the discussion closely. But as a new author trying to pick a path, this is incredibly helpful.

    A few things (I tweeted you one of them):

    Please drop the animated charts. I do some usability work (and marketing/social media). These charts switch too quickly and people can’t retain enough info in their short term memory for this to work. And, people probably want to compare them. It would be best to just put them side by side.

    Can you add the date to the top of each post? As time goes by and people search, these pages will come up and people will want to know that this one is 2 years old and/or find the latest one.

    Where’s your hashtag?! This should have a short hashtag, preset in your tweet, so we can more easily discuss it on Twitter, etc.

    Thanks, again!!!

  39. That ‘s all-right for each author that can track his own written works ,including:novel writing,prose ,novela,poetry,essays,
    or documentary writing, reports on his own writen work. Once the author sets up his book ,whatever it ‘s a physical book, e-book when that is well fit into the Market place ,it ‘s at once taking the shape ,the background , the suitable form ,main writing themes and axes of projects that are leading and targeting the readers through an atmosphere of his taste for his own culture and collective use . I think that e-book is playing a major role into today ‘society and media platforms,spreading out rapidly to the market place whereat each new and exciting story teller and writer can with his words reach up out giving out to each reader and writer the chance to win ,the sucessful planning in adding a price to his title ,to the books of his genre ,nature for social applications such as school and university libraries ,to learn even by heart the universal language of the human mind for all ever-growing world space and times of all civilized creation and to its most treasured generation out through all the way out for each productive and creative life ‘centuries in the Arts :a letter, a number ,a science of thinking in the books of all achieving humanities and performances by the visions ,by the reason of each original season in the historical reminders in all times remainders..

    RAMY GEORGE MORCOS

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