This has been a busy week. I was reading a post by Chris McMullen on Kindle Unlimited and the effect it has on rank. The next day, I came across Hugh Howey’s latest Author Earnings Report (October 2014), and a couple of interesting posts by Publishing Perspectives and Savvy Writers. As always, the publishing industry is in a state of flux, making self publishing a bit like trying to score a goal on an uneven field. Filled with shifting sand. And moving goal posts. Oh, did I mention we’re using a Rubic’s cube for a ball?
So, what have I learned from all that?
First, Some Numbers
The total number of books in print hit 28 million worldwide in 2013 , as calculated by all the titles that acquired ISBNs. In the United States, some 390,000 ISBNs were taken by the self-published authors, while approximately 300,000 were solicited by the traditional trade publishers.
The numbers above do not include ebook-only titles, which are preferred by many Indie authors.
By looking at the survey results on Howey’s website, I found out that some 25% of respondents make a full-time living out of writing. Of these, some 75% were Indie authors. How well do these sell? The following graph answers the question.
Indeed, over at Publishing Perpectives, agent Andrew Lownie made the bold prediction that in five to ten years from now, 75% of the books would be self-published, 20% would be publishing assisted by agents, and only 5% traditionally published.
As for some other conclusions:
• Big-5 publishers are massively reliant on their most established authors – for 63% of their e-book revenue.
• Roughly 46% of traditional publishing’s fiction book earnings are coming from e-books.
• In absolute numbers, more self-published authors are earning a living wage today than Big-5 authors.
• Readers are interested in both: the quality of a book and the price. Trying to focus on just one of the two seldom works.
• Very few authors who debut with major publishers make enough money to earn a living—and modern advances don’t help.
How Kindle Unlimited Impacts Sales and Income
I assume you all know by now what Kindle Unlimited is, but I’m repeating it here anyway: Amazon launched a subscription ebook service in the summer, 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 depends on how much Amazon funds a shared pool. The rate per borrow has averaged $1.62 over the three months since KU launched. However, each borrow affects ebook ranking just as a sale does, so there is a side benefit to actual sales, too.
Kindle Unlimited seems to have been a major shake-up to the rankings, to visibility, and possibly to author earnings. The first thing Howey and Data guy noticed about KU Titles is that they are well-represented on the bestseller lists.
There are currently 2,908,475 Kindle eBooks in the Amazon store, of which 744,181 were KU-eligible, or 25%.
However, KU Titles make up 20% of the titles on Amazon’s Kindle Best Seller Lists and sublists. Also, KU Titles make up 32% of all daily unit downloads of paid ebooks on Amazon.
According to their estimate, KU borrows alone are generating 14% 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.
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.
How are these earning shared among authors? 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.
As for rank, 41% of the KU titles had increased significantly in daily downloads since Amazon launched KU, versus only 22% of the non-KU titles. Respectively, 28% of the KU titles had decreased significantly in daily downloads during the same period, 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 declined, on average, by 21.0%
- Daily unit downloads (sales + borrows) of the 8,784 KU titles declined, on average, by 11.4%
Clearly, being in KU has had a significant mitigating effect on the 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.
But indie titles, which make up roughly half of KU downloads, receive on average less compensation per borrow than per sale. So once again, the more interesting question for those of us is this: Are indie authors who choose to stay with KU giving up author earnings for broader readership and longer bestseller list visibility?
It turns out that 33% of the KU indie titles increased significantly in author earnings since Amazon launched KU, versus only 19% of the non-KU titles. At the same time, 37% of the KU indie titles had decreased significantly in author earnings, 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 by 26%
- Daily author earnings of the 3,073 non-KU indie titles on average dropped 35%
Once again, we see that being in KU has had a significant mitigating effect on decline in author earnings. 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.
What the data tells us, then, is that in most cases joining KU is a valid strategy for most authors, especially Indie ones.
A secondary conclusion 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 are now publishing in several ways simultaneously. Myself included – but more on that at a later post. 🙂
The Power of Six will be on sale for another five days. Read seven short sci-fi stories for only 99c!