A lot of traditional publishing and its authors have had fainting spells over negotiations between Amazon and Hachette concerning a new ebook contract now that Hachette is out of the court-ordered lockdown on its price-fixing conspiracy. (Or maybe, as David Gaughran and others have suggested, it’s just a Hachette negotiating tactic in the form of a PR campaign.)
The anguished cries have torn at everyone’s hearts:
– Amazon has been selling Hachette ebooks at Hachette’s list price!
– Amazon has stopped allowing preorders on Hachette books! (Something indie authors don’t have.)
– Hachette good, Amazon bad!
On the other hand, Hugh Howey and Data Guy have released a new analysis showing that indie authors are making more than tradpub authors selling ebooks on Amazon (a PG simplification of the analysis). And that an author who writes well enough to receive a contract offer from traditional publishing will probably make much, much more money if he/she goes indie than than traditional.
If PG were an author who had just signed a traditional contract instead of self-publishing, the Author Earnings report might elicit some anguished cries from him.
So, here’s PG’s rhetorical question: Which is more dangerous to Big Publishing – pricing negotiations with Amazon or the direction the dollars are blowing for indie authors on Amazon?
PG says it’s the indie author and the dollars they’re earning on Amazon. While this kind of information has been passed from author to author for some time, the Author Earnings reports demonstrate that it’s not anecdotal data – it’s happening to a large number of authors on Amazon.
The simple fact is that Big Publishing relies on big authors for its profits and its survival. Imagine traditional publishing as an inverted pyramid balanced on a small percentage of its authors and their books. A handful of authors make the difference between a good year and a bad year, between people keeping their jobs or losing their jobs.
Look what E.L. James did for Random House in 2012. With E.L. James, record profits. Without E.L. James, a decline in revenues and maybe a loss on the year. RH will probably receive another great sales bump when the movie comes out. All from one author.
The E.L. James experience isn’t a one-off. It’s pretty much what passes for business strategy in New York. “Find me the next E.L. James!” “Find me the next James Patterson!”
But what happens if the next E.L. James doesn’t answer the email? Or the phone call? What happens if the next E.L. James believes she has a better life and is making more money as an indie author?
In another month or two, Hachette will be old news because it will make a deal with Amazon. It has to. While the agreement will be confidential, PG predicts that Hachette will win Publishers Weekly and Amazon will win the contract negotiation.
The Author Earnings reports, on the other hand, are each another tick of a financial time bomb that Big Publishing really, really, really wants to ignore.
Big Publishing is already missing some big authors and, as time passes, it will miss more and more big authors. A missed author is a missed backlist. As the latest Author Earnings report demonstrates, Big Publishing makes a whole lot of money from the backlist sales of a relative handful of bestselling authors.
When those authors signed contracts for those big books, self-publishing was not a realistic option, so there wasn’t really a choice. Now it is an option. A good one.
Author Earnings is not only pointing out that there is a choice today, they’re saying, to quote a comment from Hugh Howey:
1) For the 1% who can choose [to take a traditional contract because they are offered one], the majority of them should be choosing to self-publish. From everything and everyone we know, these authors would be happier, more productive, and far wealthier if they struck out on their own. They are paying middlemen a fortune to perform a service that is no longer needed. Instead of being saddled with cover art they don’t really like and an editor they didn’t choose, they could have complete control over both for a fraction of the price. (I know I’m singing to the choir here. It’s the agnostics in the pews we’re running these numbers for).
2) Earnings show market potential. If we discovered that only 5 indie authors are earning a decent living, the legacy publishing pundits would be screaming our findings from the mountaintops. Remember when the dialog was all about how 95% of self-published authors don’t sell more than 100 books in their lifetimes? That’s the sort of thing we set out to check. What we are finding instead is that the chances of making a living from writing fiction is likely greater for self-published authors than traditionally published authors. Those findings include enough of a variety of books on both sides to be a meaningful conclusion. If you are weighing how to publish, the numbers from Amazon’s bestseller lists should tempt you into self-publishing.
PG says this is much, much, much bigger news than Hachette/Amazon.