First published Friday, March 7, 2014 on TracyCooperPosey.com, and still relevant, as AuthorEarnings.com has continued to release reports.
This was going to be a simple Mash post, but it ended up I had so much to say about AuthorEarnings.com, I turned it into a dedicated post just on the tornado that is ripping through the publishing world.
A few weeks ago, super-sonically successful indie author Hugh Howey (author of Wool, amongst others) launched a new blog, AuthorEarnings.com. The very first post on the blog knocked over the site’s servers through spiking traffic, for over a day!
The initial post, “The 7K Report,” has been described as “the shot heard around the publishing world” — it created a massive backlash, and a perfect storm of linked posts by other bloggers, including Barry Eisler and Joe Konrath, Mark Coker(on Publisher’s Weekly) and Mike Shatzkin. There are more out there, all linking into this iconic research, and either trying to tear it down, or each other. It’s all very interesting, although at times, the reading is thick and heavy. I’ll keep all but the simplest figures out of this discussion.
The reason for all the hoo-ha is that this is the first statistics research that has shed any light on the indie publishing phenomenon. All research until now has focused on legacy (and mostly, arranged by legacy publishers).
In order to research indie authors, you would have to have access to every single indie author’s sales and revenue, etc — which most people have seen as impossible, until now. Indie Publishing is called by some the “shadow industry” because nothing is known about the real figures involved. Aggregators like Amazon have not been sharing their data on the indie phenomenon.
An anonymous (to date) writer, IT geek and former research analyst for children’s entertainment corporations, built a “spider” that crawls through all the data publicly available on every book’s page on Amazon, and compiled it. The very first report tapped the top 7,000 genre books (hence, “The 7K Report”) in the top three most popular genres. There have been other, more inclusive reports since.
What shocked everyone silly about this first report is:
1) that no one had ever thought to do this before,
2) that someone actually did it successfully, and
3) The biggie: the actual market share indie publishers hold, amongst other astonishing and down-right staggering facts the numbers present.
Legacy have been saying for a couple of years now that indie publishing is a passing fad and that ebooks are only 25% of their overall gross. (Or sales — depends on who you listen to). Regardless of how the data was presented, indie publishing was dismissed as not relevant. Because it was impossible to plumb the true depth of indie market share and earnings, no one could dispute them.
However, many indie authors have for a while now been scratching their heads and saying along the lines of: “But I’m making so much money! I know a dozen other authors making just as much. It doesn’t make sense that we’re only 25% of all sales.”
I can agree with that sentiment. It was hard to equate my own rising fortunes with only a 25% share of the market, especially when I compare what I’m making as an indie author to what I made in total as a legacy author.
The 7K Report dispelled a lot of this confusion. It confirmed that in the three top genres (Mystery/Thriller, Science Fiction/Fantasy, and Romance, indie authors are publishing 53% of all titles in the top rankings! (A report released about ten days later, that crawled through 54,000 titles in the best seller lists confirmed that this ratio holds true, right down the line).
When it comes to unit sales (number of books sold), indie authors are out-selling the Big 5 publishers — in total! The combined unit sales of the big 5 come in at 34% of all sales, while indies at grabbing 39%. If you include single-author publishers, that’s another 4%, making indie authors in total selling 43% of all books.
Hold your hat, it gets even more jaw-dropping: 86% of the top 2,500 genre fiction bestsellers in the overall Amazon store are e-books. Kindle books! If Legacy is only seeing 25% of their sales in ebook, then who is selling the rest of them? Indies.
When it comes to revenue, it gets very interesting.
Out of the whole pie (the sum of every book’s price), indie + single authors gets 27% of the revenue, while legacy gets 52%. But this is total dollars earned. There are two caveats that come with this figure:
1) In general, legacy ebooks are more expensive, by a factor of two or three.
2) Legacy authors only get 12.5% of that money. The rest, the publisher pockets.
3) Because indie author books are cheaper, they don’t add up to as much gross revenue.
4) But indie authors take home 70% of that revenue.
When you adjust for these facts and do the math to figure out what each type of author is actually earning, it shows that indie authors, in total, take home slightly more than legacy authors do (a matter of 4% difference.)
There is a lot, lot more to these reports, and if you’re curious, I encourage you to read them yourself. Take your time and really let the figures sink in.
But even if you don’t follow up yourself, you now know why there has been an uproar around here lately, and even why everyone is talking about Hugh Howey.
Interesting, isn’t it?