Self-Published Writers Make (Lots) More Money, New Data Suggests

HoweyData released earlier this week provides stunning evidence that self-published authors in several popular genres are selling many more books and making a good deal more money than most of us had previously suspected. Their success in comparison to traditionally published authors may be a wake-up call for everyone in the publishing business, from first-time writers to the biggest of the Big Five publishers. (It certainly has been a wake-up call for me: I’m dropping prices on my e-books as we speak).

Until now, the only evidence for strong sales of indie vs traditionally published books has been anecdotal reports from individual authors, many of whom seemed to be making a disproportionately large amount of money compared to the rest of us. These authors were considered to be “outliers.”

Now Hugh Howey, one of those disproportionately successful authors — well known among avid readers and the publishing cognoscenti for his best-selling self-published fiction series, Wool — has made data available (and will continue to collect and update it, he says, at his own expense) that indicates that he may not be alone when it comes to successfully selling books online, particularly e-books. His report on author earnings (cleverly entitled Author Earnings: The Report) suggests that indie-published books are getting higher scores on reviews and selling more copies than those of small- to medium-sized presses, and that the gaps between positive review scores and sales are even greater when you compare self-published books with those from the “Big Five” publishers. The primary reason? Indie authors tend to publish e-books rather than paperbacks and other formats, and they tend to charge much less for them than traditional publishers do. And e-books are selling like hotcakes.

Howey’s figures are derived from an analysis of data collected by an unnamed writer “with advanced coding skills” who has created a program that can gather and break down data from bestseller lists at a speed that was previously impossible. The initial data collection and analysis looks at book sales on Amazon and includes three genres: Mystery/Thriller, Science Fiction/Fantasy, and Romance. These genres were examined first because they account for nearly three quarters of the top 100 bestsellers on Amazon, and more than half of the top 1000. Howey and his “data snoop” will look at the entire range of fiction titles in future reports, he says.

Among their findings so far:

  • In these three genres, indie authors are outselling the Big Five publishers. “That’s the entire Big Five. Combined.” [Words and italics Howie’s]
  • E-books make up 86% of the top 2,500 genre fiction bestsellers in the Amazon store, and 92% of the top 100 best-selling books in the listed genres are e-books
  • Although books from the Big Five account for just over a quarter of unit sales in these genres, they take half of the gross dollar sales — and the authors of those books typically receive only 25% of that profit
  • Indie authors, on the other hand, who keep about 70% of the purchase price of their e-books on Amazon, are earning nearly half of the total author revenue from genre fiction sales on Amazon
  • Self-published authors are, on average, earning more money on fewer books than are those with traditionally published books being sold through the same (i.e., amazon.com) outlet.

A Few Conclusions

The Report is long and complex (but not complicated). I encourage all serious writer entrepreneurs to read it carefully — and to stay updated with future installments.

One of the many inspiring and beautiful charts from Author Earnings: A Report by Hugh Howie

One of the many inspiring and beautiful charts from Author Earnings: A Report by Hugh Howie

(It is also very pretty. I am including an image here from The Report, with proper attribution and an embedded link but used without permission, so if it disappears, you’ll know why. Whether it does disappear or not, I suggest you go and have a look at all the other pretty charts in Howie’s report. They are impressive and illuminating as well as colourful.)

For those who don’t have time to read The Report straight through right now, I’ll extract some conclusions that became clear to Howie, as they must to anyone who examines the data he’s presented:

  • E-books from indie authors tend to be priced much lower than those of mainstream publishers
  • Readers are more likely to buy and review books with lower prices than higher ones
  • “Most readers don’t know and don’t care how the books they read are published. They just know if they liked the story and how much they paid. If they’re paying twice as much for traditionally published books, which experience will they rate higher? The one with better bang for the buck.” — Hugh Howey, Author Earnings: The Report
  • Most traditional publishers are paying authors only 25% of e-book sales, despite the almost insignificant overhead associated with creating e-books
  • Readers are buying many more e-books than they are paperbacks and other book formats, at least from amazon (which is the biggest bookseller in the world, by a huge measure — like it or not).
  • Readers are not buying traditionally published e-books as frequently as they are indie published e-books, because indie-published books cost less. Therefore, traditionally published authors are getting read less often, and are making less money per book sold than indie authors are.

This is important news for traditionally published authors.

It is also important news for major publishers, who are going to lose their authors if they don’t smarten up.

We won’t go into the impact all this is having on good literature, but Howie believes that the data suggests that “even stellar manuscripts are better off self-published.”

A call to Action

In addition to publishing The Report, Howie’s new website, authorearnings.com, invites authors from all sectors to work together to help one another “make better decisions” when it comes to publishing their books.

Howie says that the site’s “purpose is to gather and share information so that writers can make informed decisions. Our secondary mission is to call for change within the publishing community for better pay and fairer terms in all contracts. This is a website by authors and for authors.”

When you go to the site you will be invited to subscribe for updates, contribute to a survey and/or to sign a petition.

I for one will be closely following the activity on that site — right after I lower the prices on my e-books.

Book Promotion Tip of the Week #4: December 26, 2012

Gold starCheck out the competition

Go to amazon.com, Indigo Books or Barnes and Noble (or all three) and track down the top ten books in your literary category (or categories). Analyze what their authors or publishers are doing to promote their books — e.g., do they have websites, giveaways, videos?  Are they on GoodReads? LibraryThing? Shelfari? Which of their techniques are ones that you have not yet put to use, that you might consider?

Don’t be a snob or a know-it-all, as I was when I started on this exercise – which I found online in a couple of places in slightly different versions (one said, “Check out the top 100 books in your category.” Who has time for that?)

The Whole Clove Diet is listed under “domestic fiction,” “humorous fiction,” and “literary fiction,” among other topics. When I checked out the leading ten sellers in the first category, first I came across a series of books for which I have no explanation for the unbelievable sales figures (that would be Fifty Shades of Grey and its progeny and their boxed sets. I tried to read the first one in the series, but found it too badly written to hold my interest — even in the allegedly “erotic” parts. People should check out some actual erotic literature, by Anaïs Nin and others). I thought I could learn nothing from E.L. James as she obviously knows something I do not know about the universe.

Another of my top competitors is Alice Munro, who could write even a very bad book (which I am sure she hasn’t) at this point in her career and still be in the top-ten list: how could I learn anything about book promotion from her?

Yet another was an author named Garth Stein who has apparently written a book from the point of view of a dog. Hmm. Maybe not him, either.

Besides having written books nothing like mine, all of these authors had been published by traditional presses (granted after self-publishing first, in the case of James). I was sure part of their rise to the top of the bestseller lists had to do with promotions departments and reviews in major media.

But when I bit the bullet and investigated more closely, I found that each of these authors did have something that I don’t have — that I could get quite easily — and that is a listing on Wikipedia. In addition, Stein has a video on amazon, and on his website and on YouTube. I guess I could create one of those. The more I looked, the more ideas I found.

One promotional idea I just loved came from another top seller in the “humour” category — Rachel Joyce, author of The Unlikely Pilgrimage of Harold Fry. She has a map on her website where readers can “pin” their locations in order to be part of the map of readers who have “seen” Harold. Very clever. And adaptable, no doubt, to many other books.

So with an open mind, and keeping my envy in check, I have come up with three promotional activities that I could pursue with little effort, simply by checking out what the competition is doing to promote their books and themselves.

The New Slush Pile: How Readers Are Choosing The Next Bestsellers

… or “Whoops! My book has started selling – I’d better get it edited.”

While the old guard in the books industry is still busy struggling to figure out how to give traditional publishers, agents and bookstores some relevance in the new order, a far more significant change is taking place just beyond their (albeit limited and utterly self-focused) lines of vision. Due to the availability of thousands upon thousands of free books by beginning authors in electronic format, and the proliferation of e-book reading devices with fodder-hungry owners, it is no longer editors or agents who are now combing through the slush pile looking for the gold: it is the readers.

A note to the non-writers: the “slush pile” is a term that has been used for centuries to describe the manuscripts that writers have sent to publishers uninvited, in the hope that they would be “discovered” and made famous. The term “slush pile” distinguished these unsolicited manuscripts from those that were sent to publishers by agents, established writers, or a senior editor’s aunt in Rapid City, Iowa. Interns generally read the slush piles, which were mostly full of dross, but (tradition has it) occasionally the readers found a Rowling or a Hemingway in there, and a career was launched.

The transition from editorial-office slush piles to online ones has happened so quickly that the mainstream books industry is largely unaware of it, as are most writers and most readers. The evolution has taken place in a climate where, over the past couple of years, new and inexperienced writers have proudly put their first books out in e-book format – usually created at little-to-no cost to them – only to discover that attempts to sell their novels or memoirs at $2.99 or $1.99 or even $.99 are fruitless. No one wants them.

That has led these writers to discover that if they put the same books out there at zero cost, e-book-reader owners will snap them up by the dozens—as if they were free marbles. Suddenly the writer’s “sales” figures shoot through the roof – from zero sales to 4,000 in a weekend is not uncommon among my social media “writer” contacts. Their books also start climbing up the bestseller-in-their-genre lists (romance, western, etc.) on Amazon.

Of course, their sales are illusions – nobody is actually “buying” their books and the writers are not making any money, and usually after a few days of skyrocketing numbers of downloads, when the writers put a price back on the book – having a new but deluded appreciation for their own worth— it drops off the bestseller lists and sales are once more insignificant.

Building An Audience of Readers

But what happens next? That is the question that all of us who are watching this phenomenon have been asking, and on a recent Monday I began to learn the answer. On that morning, I read a posting by an acquaintance on FaceBook that said, “Oh, whoops! My book has started selling. I’d better edit it.” Someone replied, “If it’s selling, why edit it?” to which the original poster responded, “Oh, nothing major. Just spelling, typos and formatting. Things like that.”

Coming from a background in the books industry—I have published four books with traditional presses, been editor-in-chief at a publishing company, and freelance-edited almost every kind of writing under the sun for thirty years—I was flabbergasted that anyone would put a book out there— in electronic or any other format—without editing it. I expressed my outrage on Reddit and a writers’ forum and attracted great interest from other writers and readers – most of whom were in my corner when it came to the importance of doing as good a job on editing as you can (and can afford) before you offer a book for “sale” – even at no cost.

What amazed me were the responses from people who have been downloading all these books for free. This was the first time I had heard them speaking – the first inkling I had gained into what was happening to cause all of those free books – good, bad, indifferent – to be downloaded onto all those Kindles, Nooks and Kobos. To my surprise, these readers (many of them quite literate) seemed far less perturbed than the writers were about the condition of the editing and formatting – what they wanted to see was good writing and good stories. They had downloaded dozens or even hundreds of free books by people they had never heard of, just because the books were free. They sampled them like new food: if they liked what they read, they kept going. If they didn’t they stopped reading after the first page, or the first few pages or the first hundred pages. They had no commitment to finishing the book: they had paid nothing for it. The only books they finished were the ones that kept them reading: which was, I realized, just the way readers of the slush piles in the publishing houses treated manuscripts.

More importantly, they said they would remember the names of the writers whose books they had liked, and they would follow up and read what these writers published next time. It sounded to me as though they might even be willing to pay for those next books.

It is in ways like this that a new books industry is being born, and the old one being swept away forever. The Publishers of the Future will not dictate what readers want to read, they will learn what readers want to read – from the readers. Then they will publish the NEXT books the readers have found in the new slush pile – which is what the mountain after mountain of free ebooks has obviously become – and they might even offer to clean up the editing on the first ones.

(And if the publishers are lucky, the writers might actually deign to give them their second books. However, after having tested their mettle on real readers without the interference of the books industry, and enjoyed the power and freedom of creating and marketing their own books, they may decide to self-publish the second ones as well. We’ll see what happens there.)

In the meantime, it is nothing but great news for writers that books in the slush pile are no longer being read by those who THINK they know what readers want (publishers and agents), they are now being read by those who DO know what they want: the readers.

I love this brave new world.