- AuthorEarnings reports analyze detailed title-level data on 33% of all daily ebook sales in the U.S.
- 30% of the ebooks being purchased in the U.S. do not use ISBN numbers and are invisible to the industry’s official market surveys and reports; all the ISBN-based estimates of market share reported by Bowker, AAP, BISG, and Nielsen are wildly wrong.
- 33% of all paid ebook unit sales on Amazon.com are indie self-published ebooks.
- 20% of all consumer dollars spent on ebooks on Amazon.com are being spent on indie self-published ebooks.
- 40% of all dollars earned by authors from ebooks on Amazon.com are earned by indie self-published ebooks.
- In mid-year 2014, indie-published authors as a cohort began taking home the lion’s share (40%) of all ebook author earnings generated on Amazon.com while authors published by all of the Big Five publishers combined slipped into second place at 35%.
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U.S. ebook sales have plateaued — or are even declining, relative to print — declare some widely-cited industry statistics. Publishing pundits opine that readers’ Kindles are all “full” now, and talk about the “glut” of ebooks. News articles imply that consumers are abandoning ebooks and are returning to print books, and then those articles speculate about whether ebooks were “just a fad.” Other pundits assert that indie authors will no longer be able to compete with the Big Five traditional publishers, now that those publishers have begun to price some of their ebooks lower.
Lots of speculation. Lots of flawed studies based on 2008 methodologies. Lots of inaccurate statistics. And very few facts.
As always, we turn to the data for real answers.
This is our fifth quarterly Author Earnings report. It is based on a data snapshot of 120,000 of the best selling ebooks on Amazon, giving us a deep cross-sectional data sample comprising roughly 50% of Amazon’s daily ebook sales. According to the publishing industry’s most oft-cited estimate, Amazon controls 67% of the U.S. ebook market. Thus the title-level data used in our analysis includes roughly 33% of all daily ebook sales in the U.S. No other industry survey or ebook market-size estimate comes close to this level of accuracy or detail.
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The increasing prevalence of lower-priced Big Five titles has had no measurable effect on the Big Five’s share of titles on Amazon’s daily-sales-based ebook bestseller lists.
Similarly, the agency-pricing control afforded by the new contracts Big-Five publishers Macmillan and Simon & Schuster have signed with Amazon.com now allows them set their own final retail prices for many ebooks. Both of them have done so for the majority of titles we captured:
- 81.6% of Simon & Schuster titles in our dataset were tagged with “This price was set by publisher”on their Amazon.com product page.
- 94.4% of Macmillan titles in our dataset were tagged with “This price was set by publisher” on theirAmazon.com product page.
But what effect has Macmillan and Simon & Schuster’s return to agency pricing had on the overall ebook market? Apparently not much.
The return to agency pricing by two of the Big Five has had no measurable effect on the Big Five’s share of titles on Amazon’s daily-sales-based ebook bestseller lists.
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At least a third of all paid ebook unit sales on Amazon.com are Indie self-published ebooks.
But the 33% shown is an extremely conservative lower bound on the true indie market share. The real number is almost certainly several percent higher, because the vast majority of the Uncategorized Single-Author Publisher ebooks are also self-published titles — we simply didn’t have the time (or energy) to check all ten thousand of them, one by one. And what we’ve labeled as Small or Medium Publishers — a designation we use for all publishers that are not the Big Five and not Amazon Publishing Imprints — includes a significant chunk of multi-author collectives and tiny indie micropresses publishing through KDP. Many in the industry would classify that fraction under self-published ebooks as well.
In our past reports on Barnes & Noble’s ebook sales, we found the ratio of ebook sales by publisher type to be roughly the same on Barnes & Noble as on Amazon, and together Amazon and Barnes & Noble command at least 75% of the U.S. ebook market. The large indie ebook market share is not an Amazon-only phenomenon. It’s safe to conclude that at least a third of all paid ebook unit sales in the U.S. are Indie self-published ebooks.
But publishing industry pundits usually prefer to talk about dollar market share instead of unit market share. They point to the higher average price of traditionally-published books and say that publishers bank dollars, not numbers of books sold. So what about gross consumer dollars spent on ebooks?
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The Big Five publishers as a cohort still command just over half of consumer dollars spent on ebooks. But this website is titled Author Earnings, not Publisher Earnings. Our focus is always on authors and how much they take home in earnings, rather than how much money is spent on corporate publisher overhead. We are primarily interested in the portion of that gross consumer spend that goes to authors in the form of traditionally-published ebook royalties or self-published ebook revenue share.
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40% of all dollars earned by authors from ebooks on Amazon.com are earned by Indie self-published ebooks.
A quick aside on Kindle Unlimited (KU). The indie share of author earnings includes 8% from KU borrows of indie books. In our last report, KU was a brand new part of the author-earnings landscape. To account for it accurately, we crowdsourced borrow-versus-buy ratios from hundreds of indie authors participating in KU, and found that they averaged 1:1 (half KU borrows, half full-price purchases). We used that 50% borrow ratio as a baseline in our author earnings calculations, although we found that plugging in any other ratio instead, even 0% borrows or 100% borrows, made little difference in the overall numbers and pie charts. In November, when Amazon.com announced the size of the October KU “pot” at $5.5 million and the indie per-borrow payout at $1.33, we could now double-check our crowdsourced KU-borrow ratio of 50%. So we did:
$5.5 million / $1.33 = 4,135,338 indie KU borrows in October
Which is exactly 48% of the 8,561,293 paid monthly downloads (purchases + borrows) of Indie & Uncategorized books in KU shown by our data — quite close to the 50% we originally crowdsourced. Perhaps the wisdom of crowds is a thing, after all.
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Only seven months ago, the idea that indie self-published authors and their ebooks were outearning all authors published by the Big Five publishers combined was jaw-dropping heresy. Today, it’s boring — a widely-acknowledged fact among knowledgeable authors, if not industry pundits. Many authors who publish both ways point out their earnings disparity in favor of their self-published titles, and so this data is no longer surprising.
But what is surprising is how consistent each of our quarterly snapshots has been. And because of that quarter to quarter consistency, we can discern a few broader trends…
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The most notable change over the last few quarters is the continued progressive growth of indie market share at the expense of traditionally published ebooks. Here, we can see it in unit sales terms, in gross consumer dollar terms, and in the all-important metric of author earnings.
Somewhere between May and July of 2014, Indie Published authors as a cohort began taking home the lion’s share of all ebook author earnings generated on Amazon.com, while authors published by all of the Big Five publishers combined slipped into second place.
Link to the rest at Author Earnings