A while back, I promised I would look at the new report from Author Earnings. I needed time to assess the data for the purposes of this blog.
. . . .
I also write this blog primarily for career writers, those who are either in the writing business for the long term or hope to be in it for the long term.
That automatically makes me an outlier among bloggers. I have 30+ year professional career in publishing, in all aspects of publishing except agenting (which is something I never, ever, ever wanted to do), so I have a long term approach to all that I look at, including a historical approach. What is old is often what is new.
And what looks obvious sometimes isn’t.
That said, I have three problems with Author Earnings. Hugh and Data Guy do not work magic. They’re trying to find out information here, and they are limited by the way they have set up their company. They’re aware of the problems I am going to list below, and address them in their report, mostly by saying they don’t have access to that particular data.
My problems with the data? First, Author Earnings measures one day on one bookstore. Yes, it’s the largest bookstore in the United States, but not in the world.
Second, Author Earnings only measures ebook sales on that one bookstore. Not print sales, not audio sales, not outside earnings.
Finally, Author Earnings tries to separate their data into “traditionally published writers,” “self-published writers,” “writers published by Amazon” (which is, by the way, a traditional publisher), and “hybrid writers.” Their categories leaves out the most business-minded writers, those who understand how to set up corporations, how to establish their own small traditional publishing companies, and those who publish a multitude of books in a variety of ways.
That makes Author Earnings data small and specific, not really a snapshot of the industry at all, but a snapshot of the ebook sales on one bookstore in the United States, a snapshot that shoves some of that information into categories where it doesn’t belong.
In other words, like any statistical analysis, it has flaws.
Once you recognize the flaws, however, as Hugh and Data Guy do, you can work with the numbers to make some conclusions. Especially given the last report they released at the end of September.
. . . .
They created a study that did the things they wanted. They wanted to know, specifically, what route a new writer of 2015, with manuscript in hand, should take to have success. Success, as Hugh and Data Guy define it in the study, is hitting Amazon bestseller lists and making a “midlist” income of at least $10,000 per year.
Let’s ignore the fact that most one-book midlist authors in traditional publishing do not hit bestseller lists nor do they make $10,000 per year even if that was the advance.
. . . .
Hugh and Data Guy found that long-established writers, who were publishing before the year 2000and still consistently hit bestseller lists out earned every other writer on the list. But, according to Hugh and Data Guy:
13 out of the 20 authors who debuted in the last five years, and 8 of the 10 authors who debuted in the last 3 years, and who are now consistently earning $1,000,000+/year from just their Kindle ebook best sellers are indie authors.
So the thrust of the study is this: If you want to earn the most money as a writer in 2015, publish indie. Which to me is a well-duh, because indie writers earn at least 65% of their retail prices (which the indie writers set themselves), and traditionally published writers—ebook only—earn 25% of net price paid, minus 15% for an agent.
However, ebooks on Amazon make 70% of retail, and Amazon is what Hugh and Data Guy measure.
So for an ebook priced at $10 (because $10 math is easier for Ole Kris here), the indie writer would earn a minimum of $7.00 for each sale.
The traditional writer earning number is dicey from the beginning. What is “net” after all?
“Net” varies from contract to contract, writer to writer. But let’s assume that “net” is 75% of the retail price (assuming, perhaps falsely, that a traditional publisher will get a better deal from Amazon). That means the publisher gets paid $7.50, and the writer gets 25% of that number, which is $1.875. The agent then gets 15% of that $1.875, and the writer is left with roughly $1.59 per book.
The indie writer earns $5.41 more per ebook sold than the traditional writer.
. . . .
Most traditionally published midlist ebooks sell the same number of copies as an indie published ebook by the same writer, if the books are priced the same. The indie writer will make more money. Significantly more money.
. . . .
When I look strictly at ebook sales, I have to wonder why anyone would go with a traditional publisher any more. (When you factor in paper books sold over three years [as opposed to six months of release], the sales numbers are similar, and the indie writer earns more as well. But that’s a blog for another day.)
. . . .
There are fewer than half as many traditionally published authors as indie authors who debuted in the last 3 years and are now earning consistently at the $25K/year level or $50K/year level from Kindle ebooks.
Numerically, Hugh and Data Guy are correct, but the situation is worse than they allow. They make it seem like they’re doing an apples-to-apples comparison for writers whose work released in the past three years, but the comparison isn’t apples-to-apples.
What’s the difference? Traditional publishing does not (yet) allow for a writer to release more than four books a year under the same name and in the same series. Yeah, there are a handful of exceptions, writers who release more than four books per year traditionally, all in romance. There are also exceptions who are forced to publish only one book per year traditionally, mostly in mystery or literary mainstream. So it balances out. That four books per year is me being generous.
Assume, though, that the debut traditional writer is “fast” and working in a genre other than romance. He’ll publish one book per year, no matter what his genre. So at the end of three years, he has at bestthree books. In many cases, because of the vagaries of a publishing schedule, he’ll publish two at the end of three years, with a third coming “real soon now.”
A debut indie author can publish as many books as he wants in that period of time. If he’s really fast, he can publish a book per month. But let’s give him two books per year. Not really a huge advantage, but still, he’ll have six books out (or five with a sixth coming out) in three years.
Readers like it when an author has a lot of books to choose from. That indie author will double his e-book money simply by doubling the books published.
. . . .
But if you add in what I just mentioned above, that the indie writer who debuted in 2012 will already have a career while the traditional writer is still finding her sea legs, you can extrapolate forward. For writers who debuted in 2010 or 2012 or 2015, indie is the way to go.
Indie writers earn significantly more money. They’ll publish more books. They’ll have a career much faster, and one that is sustainable. A traditional publishing career requires the writer to be flexible and write under many names–if the writer signs the proper contract. Most don’t.
. . . .
But if you want a career as a writer, if you don’t want to have a day job, if you only want to write, then it seems to me the safest path to take is the indie path. You’ll have more opportunity. You can work hard and publish a lot and make money doing so.
Will every indie writer make six-figures per year? Hell, no. Nor will every traditionally published writer. But what this particular Author Earnings report shows is that if you want the chance of making six-figures or more per year with your writing, the best publishing path is indie.
PG says Kris has, as usual, focused on the key point for most authors – Do you want to make a career as an author? If so, the rational choice is to go indie.
Yes, it is still possible to make a career as an author by being traditionally-published, but it’s much less likely you will succeed. It’s not the safest route. It’s the riskiest route. In the first place, you have to run the find-an-agent then find-a-publisher gamut and most people get shut out there.
Then, you’re in the slow lane for getting your books to readers – one per year. Five books in five years (if everything goes perfectly because you’re not in control of the publishing process).
You have to hope the readers who bought your first book remember you one year later. Most won’t, particularly enthusiastic readers who read lots of books. If I read one book per week, I don’t remember the names of all 52 authors I’ve read in a year. Absent huge, huge sales (which very few traditionally-published first novels or second, third, etc., generate), promoting a traditionally-published author’s second book is almost as much work as promoting their first.
Plus the large majority of the sales revenue generated by tradpub books goes to support the publishing/distribution/retail sales structure. You have to sell many, many more books as a tradpubbed author to make the same money an indie author does.
PG did some math (always a dangerous thing) to compare indie vs. tradpub earnings based upon the concepts Kris discussed.
This isn’t perfect because the indie author won’t release three books at the beginning of each year, but as you move forward and the number of books in the backlist for the indie author grows so much more quickly than a tradpub author’s backlist, PG thinks those differences will be smoothed over.
An essential fact that Kris points out is that, so long as each author keeps writing at the assumed pace, the indie author is going to have many, many more titles in print than the traditionally-published author.
Additionally, it’s well-known that publishers ignore the large majority of their backlists and put no promotional effort at all into them while indie authors can and do promote their backlist books in a variety of ways.
This comparison is based on ebook sales only at Amazon royalty rates. It does not include any estimate of bookstore sales. PG will note that, for most fiction titles, bookstores are focused on new releases and a great many (most?) tradpubbed authors won’t find many of their backlist titles in most bookstores. If you’re a tradpub author, check your royalty statements for the number of hardcopy books sold for your titles that are three, four or five years old.