AuthorEarnings Feb 2016 market share graphAuthorEarnings is out there again with their latest report, which they claim – on good evidence – to be the most accurate ever. And just one of the many, many juicy data points is that, “as of mid-January 2016, Amazon’s US ebook sales were running at a rate of 1,064,000 paid downloads a day,” netting $5,755,000, or over $2.1 billion a year. And if you’re an author who wants a piece of that action, you should avoid the Big Five publishers like the plague.

AuthorEarnings reports are always full of juicy findings, but also very dense, so for the whole story, I recommend you go to the link at the beginning of this article. They’re also controversial, though, with many pundits criticizing their methodology. So, I’m happy to report first off that AuthorEarnings has apparently overhauled its number crunching and used its revised models to backcheck its original conclusions. “For this report, Author Earnings threw out all of our previous assumptions. We built a brand new rank-to-sales conversion curve from the ground up. This time we based it on raw, Amazon-reported sales data on the precise daily sales figures for hundreds of individual books from many different authors, spanning a period of many months,” they state. “We ended up with nearly a million distinct data points in total.” Comparing their old crowdsourced data to the new methodology, AuthorEarnings found a pretty close match, with perhaps an 18 percent overestimate of ebook sales in the old data. AuthorEarnings now claims that its data crunching matches Amazon’s own reported total daily sales to within 2 percent or less. Maybe that’ll help quieten some of the trad-pub knockers.

And the findings from all this shiny new data? For one, the Big Five publishers’ declining ebook sales share has steepened into a nosedive. On a unit sales basis, “the Big 5 now account for less than a quarter of ebook purchases on Amazon, while indies are closing in on 45 percent.” Plus, “overall US ebook sales have actually gone up in dollar terms,” and “today, a quarter of all consumer dollars spent on ebooks in the US is spent purchasing indie-published ebooks,” and for income actually going to authors, “indies are taking close to half.”

This is an established trend, but for the Big Five, it’s getting worse. “Major publishers simply are finding it difficult to compete with indie authors on diversity, price, quality, and frequency of publication, as this divergence has been increasing for the last two years — well before the Big Five’s return to no-discount agency pricing,” AuthorEarnings asserts. However, “the market share of indie self-published titles has grown substantially since our September 2015 report, while traditional publishing’s collective market share has shrunk. Indie books now account for more than 42 percent of all ebook purchases each day on Amazon.com.”

AuthorEarnings also make some significant claims for their own figures which deserve remembering when comparing them to other data. ” Only 29 percent of the ebook purchases each day on Amazon.com get officially ,counted, in the monthly StatShot reports from the Association of American Publishers (AAP), [while] 43 percent of the ebooks purchased each day on Amazon – nearly half of them – remain uncounted in any traditional industry statistics, such as those published by Bowker, Nielsen, et. al., because 43 percent of the ebooks purchased each day on Amazon do not have associated ISBNs.” As AuthorEarnings adds, that 43 percent accounts annually for “over $1 billion in consumer spending on ebooks not included in industry sales figures from the AAP.”

AuthorEarnings also broadened its focus this time round to print books as well, because the same spiders work just as well for Amazon print sales, and “after all, Amazon also sells at least a quarter of all new trade print books purchased in the US each year – and roughly two thirds of all online trade print sales.” And even in print, “the Big Five holds less than a quarter of print bestseller slots, and their unit sales, dollars, and author royalties are less than half of Amazon’s print business.” This highlights nicely one possible unintended consequences of the Big Five’s push back to agency pricing: not only has their Amazon ebook market share “plunged precipitously in both dollar terms, and even more precipitously in unit terms,” but their promotion of print has rewarded Amazon. “Our data points toward Amazon seeing even greater growth in their 2015 print sales than in their 2015 ebook sales. As of mid-January 2016, Amazon.com’s print sales were running at a rate of 969,000 print books a day … it’s extremely likely that most if not all of print’s reported 2015 ‘resurgence’ took the form of increased online print sales… at Amazon.com.”

As said, there’s a lot more you can glean from the report. But for authors, the conclusion should be clear. Boycott the Big Five. They’re cutting their own throats – and yours into the bargain – while enriching Amazon anyway.

3 COMMENTS

  1. Paul, if someone asks you to teach a Basic Logic course, turn them down. You love for Amazon and your envy of the Big Five, clearly override your reasoning powers.

    An illustration: “And if you’re an author who wants a piece of that action, you should avoid the Big Five publishers like the plague.”

    Really? If one of the largest five publishers on the planet wanted to publish one of my independently published books, I’d jump at the chance. With them behind me, advising, promoting and advertising, I’d make far more money than I am now. They didn’t become the Big Five by being stupid.

    ——

    There’s an old saying: “A fool and his money are soon parted.” In the case of some authors, it should read, “A fool and the money he should earn are never united.” Note this:

    * At many retail price levels, Amazon only pays 35% and does nothing to promote a book, burying in among millions of others in their system and resulting in typically mediocre sales. That means Amazon is raking in 65% of the retail price of that ebook for doing nothing but process a financial transaction and doing a file download that cost it a few pennies. That’s roughly the equivalent of a mugger who, while he takes most of your money, leaves you with enough to take the bus home.

    * In contrast, the Big Five will often pay that same 35% for ebooks, but they will also use their expertise and spend many thousands of dollars promoting the sales of that book. That can easily increase the sales ten-fold, making an author far more than they’re earn anywhere else.

    In short, savvy authors don’t have unrequited love affairs with an indifferent (or worse) Amazon. They know the value that an experienced publisher can bring to their work and they take advantage of that.

    Getting their attention is another matter.

  2. I’m not an author, but I read books. Non-fiction, literary fiction, and genre fiction. I’ve been an avid reader for more than three decades. I read about 40,000 pages per year when I include audiobooks with the paper and ebooks. But I don’t read self-published books. The odds of finding something “good” are too low.

    I wonder how many of those self-published books are bought by other self-published authors? On social sites like Goodreads there seems to a lot of self-published authors giving other self-published authors glowing five star reviews. Nothing I can prove in a court of law, but the smoke seems kind of thick.

    I guess “good” is a fungible term and tastes in books do vary but I don’t see how there are enough good books being self-published to truly reflect 43% of ebook sales as an indication of reading preferces. Unless it’s artificial sales like the artificial five star reviews.