indie-old-vs-new-pieHugh Howey’s Author Earnings has come out with that report I mentioned yesterday, on the implications of the data they’ve gathered for new and tenured authors, and boy is it a doozy. It’s overloaded with charts and statistics, and I’m sure I missed the full import of what they’re saying, but there were a few interesting facts to come out of the way they massaged the numbers.

If the figures can be believed, Big Five publishers are earning most of their money out of established authors, either in long-tail backlist or new books by well-known writers. Only 37% of their income comes from new authors. But on the other hand, indie-publishers, small and medium publishers, and Amazon-published books show a much, much larger percentage of gross revenue from new authors. (For indie-books, which is to say self-pub, fully 89% of February through May 2014 gross revenue came from new authors. 9% was from established authors with new books, and only 2% from established authors’ backlist titles.) So, apparently it’s a great time to be a new self-publishing writer.

In comparing the figures for the top 3,000 “new” authors for each publishing type, AE found that far more of those “new” indie authors were making a good living than “new” Big Five authors. The top three or four Big Five authors were making more than the equivalent three or four indie authors, but after that the curves crossed and the Big Five authors after that were making less.

But perhaps the most interesting thing was when they massaged the numbers to work out exactly what percentage of revenues and sales fiction e-books accounted for. According to their math, fiction e-books make up 46% of trade publisher fiction gross revenue. (Print and audiobooks make up the other 54%.) But taking price differences into account, fiction e-books account for 59% of trade publisher fiction unit sales. And when royalties are taken into account, fiction authors earn 64% of their revenue from e-books, and only 36% from print or audiobooks.

There’s also a section of charts on “churn,” depicting the number of books where revenue remained stable, climbed or fell more than 25%, as a function of when each author’s first book was published. For indie, small/medium, and Amazon publishers, the best year to debut was 2013. For the Big Five, it was before 2007 by a considerable margin. What this means is that it’s the newer non-Big Five books that are taking over the Amazon bestseller charts.

The last series of charts compares the numbers of debut authors for each year from each of the publishing categories who are earning more than $10,000, $25,000, $50,000, and $100,000 per year from their books. In the past few years, it’s always self-publishing by a considerable margin. AE cautions that we shouldn’t assume this means earning a living as a writer is likely. Just because more people are earning a living writing now than at any other time in history doesn’t mean that everybody who writes can earn a living at it. It just means the chances are a little better.

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.

In the end, Author Earnings concludes, if you’re a debuting writer, it’s a lot better to debut in self-publishing than in the Big Five. While the Big Five’s numbers are flat, the number of indie authors who can earn a living at it increases year over year. Even setting aside all the hurdles you’ll have to leap for the Big Five even to consider your manuscript, your chances are better as a self-publisher, in no small part because you keep considerably more of the purchase price in royalties than a Big Five publisher would give you.

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.

Look for these new revelations to draw a lot of flak from entrenched publishing interests who are grumpy over the numbers. Watch for people try to cast doubt on the veracity of the figures or the methods used in obtaining and calculating them. These aren’t the kind of results Big Five publishing is going to like very much.

But they could be just the kind of results that independent authors, and would-be independent authors, need to hear about.

(I need to get around to writing a self-publishable book myself, one of these days…)


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