Hugh Howey and some associates have been busy doing some really cool things.
It’s no great secret that the world of publishing is changing. What is a secret is how much. Is it changing a lot? Has most of the change already happened? What does the future look like?
The problem with these questions is that we don’t have the data that might give us reliable answers. Distributors like Amazon and Barnes & Noble don’t share their e-book sales figures. At most, they comment on the extreme outliers, which is about as useful as sharing yesterday’s lottery numbers [link]. A few individual authors have made their sales data public, but not enough to paint an accurate picture. We’re left with a game of connect-the-dots where only the prime numbers are revealed. What data we do have often comes in the form of surveys, many of which rely on extremely limited sampling methodologies and also questionable analyses [link].
This lack of data has been frustrating. If writing your first novel is the hardest part of becoming an author, figuring out what to do next runs a close second. Manuscripts in hand, some writers today are deciding to forgo six-figure advances in order to self-publish [link]. Are they crazy? Or is signing away lifetime rights to a work in the digital age crazy? It’s hard to know.
. . . .
When I faced these decisions, I had to rely on my own sales data and nothing more. Luckily, I had charted my daily sales reports as my works marched from outside the top one million right up to #1 on Amazon. Using these snapshots, I could plot the correlation between rankings and sales. It wasn’t long before dozens of self-published authors were sharing their sales rates at various positions along the lists in order to make author earnings more transparent to others [link] [link]. Gradually, it became possible to closely estimate how much an author was earning simply by looking at where their works ranked on public lists [link].
This data provided one piece of a complex puzzle. The rest of the puzzle hit my inbox with a mighty thud last week. I received an email from an author with advanced coding skills who had created a software program that can crawl online bestseller lists and grab mountains of data. All of this data is public—it’s online for anyone to see—but until now it’s been extremely difficult to gather, aggregate, and organize. This program, however, is able to do in a day what would take hundreds of volunteers with web browsers and pencils a week to accomplish. The first run grabbed data on nearly 7,000 e-books from several bestselling genre categories on Amazon. Subsequent runs have looked at data for 50,000 titles across all genres. You can ask this data some pretty amazing questions, questions I’ve been asking for well over a year [link]. And now we finally have some answers.
. . . .
The first thing that jumped out at me when I opened my email was these next two charts, which our data guru had placed side-by-side. What caught my eye was how they seem to be inversely correlated:
On the left, we have a chart showing the average rating of 7,000 bestselling e-books.1 On the right, we have a chart showing the average list price of the same 7,000 e-books. Both charts break the books up into the same five categories. From the left, they are: Indie Published, Small/Medium Publisher, Amazon Published (from imprints like 47North), Big Five published, and Uncategorized Single-Author.2
It’s interesting to me that the self-published works in this sample have a higher average rating than the e-books from major publishers. There are several reasons why this might be, ranging from the conspiratorial (self-published authors purchase their reviews) to the communal (self-published authors read and favorably rate each others works) to the familial (it’s friends and family who write these reviews). But the staggering number of reviews involved for most of these books (over a hundred on average across our entire sample) makes each of these highly unlikely. As I’ve seen with my own works—and as I’ve observed when watching other books spread organically—the sales come before the reviews, not after. There are a number of more plausible explanations for the nearly half a star difference in ratings, and one in particular jumped out at me, again from seeing these two charts next to one another.
Note the shortest bar in one graph correlates to the tallest in the other. Is it possible that price impacts a book’s rating? Think about two meals you might have: one is a steak dinner for $10; the other is a steak dinner that costs four times as much. An average experience from both meals could result in a 4-star for the $10 steak but a 1-star for the $40 steak. That’s because overall customer satisfaction is a ratio between value received and amount spent. As someone who reads both self-published and traditionally published works, I can tell you that it’s getting harder and harder to tell the difference between the two. 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.
This raises an interesting question: Are publishers losing money in the long run by charging higher prices? Are they decreasing the value/cost ratio and thereby creating lower average ratings for their authors and their products? If so, this might have some influence on long-term sales, and keep in mind that e-books do not go out of print. What if in exchange for immediate profits, publishers are creating poorer ratings for their goods and a poorer experience for their readers? Both effects will hurt a work’s prospects down the road (a road with no end in sight). And since ratings on e-books also apply to the physical edition on Amazon’s product pages, this pricing scheme ends up adversely affecting the very print edition that higher e-book prices are meant to protect [link].
. . . .
It turns out that 86% of the top 2,500 genre fiction bestsellers in the overall Amazon store are e-books. At the top of the charts, the dominance of e-books is even more extreme. 92% of the Top-100 best-selling books in these genres are e-books!
PG says everybody needs to read this. You can show your appreciation to Hugh by buying one of Hugh’s books.