From Observer.com:

Over the last year, we’ve been talking to writers like A.G. Riddle who have been making a more than comfortable living selling e-books directly to readers on Amazon. That’s why it’s always seemed a bit strange to see media accounts reporting on the shrinking market for e-books.

News outlets like The New York Times report that e-book sales continue to slip, which is true if the data only covers part of the market. Reports from the Association of American Publishers has data from 1,200 publishers. They are the largest publishers, but they are also losing market share.

E-book sales never declined, according to a presentation yesterday at Digital Book World in New York City. In fact, if anything, we don’t yet have an adequate way to estimate how much the market segment has grown.

In back-to-back presentations from from the data site Author Earnings and publishing tech firm Overdrive, it became clear that “unit sales” may not be the best way to measure the size of the book market. In more and more ways it’s becoming clear that there are additional ways for writers to earn money than by readers buying whole books or even buying books at all.

 

. . . .

E-books, Data Guy told the crowd, “Never stopped growing.”

It looks as though sales stuttered because traditional publishers have been losing market share to indie authors who publish directly through online platforms. Amazon is by far the largest of these platforms.

. . . .

Reports on the e-book market tend to ignore Kindle Unlimited, Amazon’s Netflix for ebooks. Amazon splits up each month’s Kindle Unlimited revenue among participating authors based on how many pages members read.

Science-fiction author Hugh Howey said that being part of the program increased his revenue so much that it was worth pulling his books from all other platforms, such as Kobo and iBooks.

Data Guy acknowledged that some industry watchers might argue that a Kindle Unlimited download isn’t really a sale, but Author Earnings takes the position that any money in a writer’s pocket counts.

. . . .

 

Local book stores saw a 5 percent growth in sales last year, but every other channel (such as big stores, Walmart and etc) saw a 5 percent decline. Those channels were so much larger that local stores’ growth was more than made up for by the declines everywhere else. “Perhaps 10 fold,” Data Guy said.

Let’s hear it for your favorite local shop, but the truth is that Amazon has been the one closing those new print sales.

 

Link to the rest at Observer.com and thanks to Nirmala for the tip.

From Hugh Howey:

There’s a dangerous meme in the publishing world that says self-publishing was easier in 2009 and is much harder today. But nothing could be further from the truth. The exact opposite is the case. Self-publishing was nearly impossible then, and it’s incredibly simple now. In fact, it’s never been easier.

The hardest part of self-publishing, you see, is the decision to do it. You have a manuscript in your metaphorical hands, and you can go one of two ways: You can send that work off to agents, or you can send it off to readers. Either path is open to you. Whether or not the book sells in vast quantities will have very little to do with how you choose to publish the book. There are challenges both ways. But back in 2009, if you wrote a story you believed in, and that friends and family delighted in, and you took very seriously your dream of making it as a writer, it was pretty damn impossible to self-publish that book. Because everyone was telling you not to.

I remember getting on a forum for aspiring authors back when I was wrestling with my decision to self-publish or go traditional. The advice I received was that dangerous mix of dead wrong and overly confident. I was told that I was an idiot for considering self-publishing. I was told that I was an idiot to think agents would ever look at online bestseller lists and offer representation to an author for an already-published book. These were what passed for experts in the day, and it was hard to fault them for being wrong, because all of their advice made sense in the decades prior. The fact that it no longer made sense to query agents was hard to see. And even harder to believe.

I heard from everyone that the best way to get my work in front of readers was through querying and traditional presses, and so that’s the route I took. But I harbored doubts. I blogged about those doubts. I posted on forums to express those doubts. And what seemed logical to me was shouted down over and over with: “You’ll never make it. You’ll destroy your career. Readers will never give you a chance.”

Who was I to doubt these experts with many more years of experience?

. . . .

JK Rowling and Stephen King were held up to me as the likely outcomes of querying my manuscript. Books on store shelves were pointed to, not the piles of rejected manuscripts or the vast delays in getting the work to market. Writers for generations have been given the gloss, have been shown the lottery winners, not the reality in the trenches.

Working in a bookstore and being in charge of setting up author events, I met NYT bestseller after NYT bestseller who had a day job. Writers were largely broke and toiling in their passion as a side hobby or a second career, not as something they did to earn a living.

. . . .

My job in a bookstore gave me more perspective beyond the gloss: I watched new books sit on our shelves, only to be returned to the publisher. And I met readers wandering the aisles, clamoring for more great stories than were being published. I knew I had these stories in me. And I finally summoned the courage to do the nearly impossible: I put that second contract in a drawer, decided to go on my own, and even bought back the rights to my first novel. I did everything all the experts told me not to do. Anyone who thinks that’s easy is out of their minds. It was so hard that almost no one at the time was doing it.

Times have changed. Back in 2009, we were told our books would be horribly edited, rather than sharing among us the names of our favorite freelance editors. We were told the cover art would suck, rather than knowing about the Jason Gurleys, Ben Adams, and MS Corleys of the world. And we were told success along this route only happened once in a lifetime, like with Amanda Hocking, rather than seeing it happen at least once a month like we do today. We didn’t have Author Earnings and Data Guy. We had forums full of outdated advice and bullies shouting down anyone who disagreed. We didn’t have an open sharing of information and experiences like you get on KBoards. We had the rise of the new form of vanity publishing, where all that mattered was what imprint you were assigned to.

Self-publishing was not easier back then. Competition may have been less, but that’s because the decision to self-publish was nearly impossible to make. And the more positive the feedback on your manuscript, the less likely you were to make that decision. Which means the best works were likely the ones sitting in drawers and slush piles. And the decision to self-publish was only made as a last resort.

In 2016, self-publishing is often the first and most preferred route.

Link to the rest at The Wayfinder

Here’s a link to Hugh’s books. If you like an author’s post, you can show your appreciation by checking out their books.

PG says do the math.

In traditional publishing, unless you figure out a way to work with more than one publisher (virtually all current Big Publishing contracts will prohibit this if you don’t strike or substantially rewrite a couple of paragraphs), you’re lucky if your publisher releases one of your books each year.

A twenty-year career means twenty books, at most. In year five, you’ll be earning money from five books.

A great many indie authors have discovered they can write far more than one book per year and their readers are overjoyed to have more books. Four books per year is not at all unusual for an indie author.

A twenty-year indie career means 80 books, maybe more. In year five, you’ll be earning money from twenty books.

A thirty-year career: tradpub – 30 books, indie – 120 books. Forty years: tradpub – 40 books, indie – 160 books.

Can a writer of a given quality – great, good, workmanlike – earn four times as much from each book sold to a publisher as he/she earns from self-publishing?

PG knows a lot about how much a great many writers – indie and traditional – earn from their writing. He can’t, of course, divulge any names or numbers from his clients. He can say, speaking generally, that the indie authors he hears from are making much more money than the trad-pubbed authors he hears from.

He can also say that an increasing number of trad-pubbed authors are trying to figure out a way to get out of their contracts with traditional publishers and, hopefully, regain rights to their books.

The main reason is always the same – these authors have learned they can make more money as indies. They can take the books they traditionally publish and make more money from those same books on their own than they receive from their publisher. The publisher is not making them money, the publisher is costing them money.

How much more money varies from author to author, but by their own calculations, experienced authors will add at least one zero to their annual book income when they stop tradpubbing and go indie. YMMV.

This is certainly not a scientific sample, but it is a good-sized sample.

UPDATE: Don sent PG an email, pointing out that PG was more likely to hear from successful indies in his professional capacity or as a bloglord looking for interesting stories.

Don is, of course, correct. Financially successful indies are more likely to share their income stories than indies who don’t sell many books.

PG apologizes if he gave the impression that all or the majority of indies make a lot of money from their writing.

From veteran publishing consultant Mike Shatzkin:

[Hugh] Howey’s observations are not particularly welcomed by publishers, but he has a deep interest in indie authors and, by his lights, is always trying to help them by encouraging them to indie-publish through Amazon rather than seeking a traditional deal through an agent. He has organized the AuthorEarnings website and data repository along with Data Guy, the games-business data analyst who has turned his analytical skills to the book business whom we featured at the most recent Digital Book World this past March.

Howey and I have had numerous private conversations over the years. He’s intelligent and sincere in his beliefs and truly devotes his energy to “industry education” motivated by his desire to help other authors. Yet there are holes in his analysis of the industry and where it is going that he doesn’t fill. Given his substantial following and obvious comfort level doing the marketing (such as it is, and it appears Howey’s success as an author hasn’t required much) for his own books as well as his commercial performance, it is easy to understand why he would never consider publishing any other way but as he has, as an indie author who is “all in” with Amazon. But he seems to think what worked well for him would work best for anybody.

In this interview, Howey says that any author would be better off self-publishing his or her first book than going the route of selling it to a publisher. And he actually dismisses the marketing effort required to do that. Howey says the best marketing is publishing your next book. He thinks the best strategy is for authors to write several books a year to gain success. In fact, he says taking time away from writing to do marketing is a bad choice. Expecting most writers, or even many writers, to do several books a year strikes me as a highly dubious proposition.

. . . .

Howey also has an unrealistically limited view of the output of big publishing. If you read this interview (and I would encourage anybody interested in the book business to do so), you see that he thinks almost exclusively about fiction or, as he puts it, “storytelling”. Books come, like his did, out of an author’s imagination and all the author needs is the time to write. Exposure through Amazon does the rest.

. . . .

The other is that Howey’s analysis totally leaves out one of the biggest categories of publishing: big non-fiction like history or biographies or industry analyses that take years of research and dedication to complete. Unlike a lot of fiction, those books not only take time, they require serious help and expense to research. In a imagined future world where all books are self-published, aspiring fiction writers give up very little (small advances) and successful fiction authors have the money to eat while they write the next book they can make even more money on doing it the Howey way (even though none have). But big non-fiction books like Jane Mayer’s “Dark Money” (or anything by David McCullough) took years of research to put together. “Dark Money” was undoubtedly financed at a very high level by the Doubleday imprint at Penguin Random House. How books like that will be funded in the future is not covered by Howey’s analysis.

Now, that’s not to say they must be. Economic realities do rule. Howey’s thesis that things are shifting in Amazon’s direction and away from the ecosystem that has sustained big book publishers is correct.

Link to the rest at The Shatzkin Files and thanks to Jan for the tip.

PG says that, because a successful fiction author like Hugh says fiction publishing is best done by indie authors and doesn’t say anything about non-fiction, Big Publishing must be the only way for big non-fiction to be published.

The fundamental economics of traditional publishing vs. self-publishing include an inherent financial bias for the author towards self-publishing. Amazon is just as willing to pay 70% royalties to an indie non-fiction author as it is to an indie fiction author.

Mike cites nonfiction unicorns (the nonfic equivalent of James Patterson and Lee Child) and says they need big publishing to finance their research expenses. Ergo, nonfiction authors need big publishing.

PG is happy to be corrected, but he bets that midlist nonfiction authors don’t get treated any better than midlist fiction authors. PG doubts that any publisher plans to fund years of research for anyone but a nonfiction superstar.

As far as attractive alternatives to tradpub funding, what about Kickstarter and GoFundMe? A far greater portion of the financial benefits of indiefunded and indiepublished nonfiction will go to the author than will the benefits of publisher-funded nonfiction.

PG bets that David McCullough could get millions for research through Kickstarter. PG would certainly contribute. Come to think of it, James Patterson could as well.

From Digital Book World:

What do you view as the role of traditional publishers today? And do you see that role changing at all going forward? Put another way, do you believe that the big publishers will slowly go away, or will there always be a place for them, however diminished or different it might be?

The major publishers will always have a role in delivering books to readers, even as that role dwindles. Bookstores and paper books will be around forever in some capacity, and the major publishers have great relationships here. One thing we don’t acknowledge enough in this industry is that there are more reasons for buying books than simply reading them. There’s gift-giving; decorating a home library; as a promise to our hopeful future selves (like gym equipment); for social status (young readers prefer physical books partly because they are a signal to their biblio-tribe); and to own the must-read item that no one actually reads, like Kapital and Goldfinch.

But the market share of the Big Five will continue to shrink. It has already shrunk enormously. What ground has been held has almost entirely come through acquisitions, which is why I expect we’ll get down to three major publishers eventually—much as the music industry winnowed itself from six to three major labels. Profitability has held steady and even increased in areas due to Amazon, which has reduced costly print book returns from over 30 percent to less than 5 percent. And by the digital tools Amazon has unleashed—ebooks, POD—that are more profitable and less wasteful than offset print runs.

The problem is, major publishers are going to have to eventually compete with the 70 percent earnings offered by KDP, so their margins are going to get squeezed on the royalty side. And they are going to have to compete with indies on price, which means getting squeezed on the price side. As middlemen, their role is not only going to get smaller as self-published authors bypass them—their profit margins are going to shrink as readers and authors demand better prices and pay.

There are solutions, but I don’t think any of the major publishers will adopt them. I’ve been saying for years that the smart move would be for a major publisher to get out of New York, stop competing on advance size, invest in original IP, and grow writers’ careers by sticking with them for half a dozen novels before cutting them loose. They should focus on genre works, move to shorter work lengths, and break up non-fiction into salable chapters that readers can “complete” as they might a full music album. They need to pay monthly via direct deposit. And they need to connect authors to readers a lot better than they currently do. Instead, it’s been west coast companies doing the innovating. The center of the publishing world is already along the Pacific coast with the likes of Amazon, Facebook, Google and Twitter.

Link to the rest at Digital Book World and thanks to Patrice for the tip.

From The Huffington Post:

There was a time when bestselling author, Hugh Howey never thought he’d finish writing a novel, let alone get one published. There was a time when he lived in a tiny home in the mountains and dreamed of one day being published.

Now, everything has changed. Millions of copies of his books, including his runaway hit Wool have been sold, film rights have been bought and he has become a beacon of hope not only to other indie authors but anyone who has a dream and has had naysayers tell them they would never make it.

. . . .

 What was life like for you before your book series WOOL took off?
The worst part of my writing life was the twenty years where I dreamed of writing a book but never completed one. That’s been half my life. And it drove me nuts. Writing a book is such a reachable dream; anyone can do it. Most of us write a novel of words every month, in emails and Facebook posts and Tweets. So there was a lot of self-inflicted guilt and criticism all the years I dreamed of writing a book and simply refused to.

Once I wrote my first novel, MOLLY FYDE AND THE PARSONA RESCUE, the feeling of accomplishment and release really carried me for a while. I was so excited to have gotten this bucket list item out of the way, and so impatient to start the next book, that I didn’t really worry about sales. It wasn’t until HALF WAY HOME came out that I felt like a real novelist, and that I knew I was writing stories at least as good as the books we sold at my bookstore. That’s the first time I wondered if I could make it as a writer, and I felt the frustration of not being able to reach the audience that I knew would love my books. At this time, I was getting invited to speak at a nearby middle school, and the class was full of fans, and I tried to imagine my books really getting out there.

Within a year of feeling that, WOOL started taking off. Now, I don’t want to make it sound like it all came so easy. The years I spent writing with a day job were brutal. I lived in the mountains, and the mornings were cold in our tiny home, but I forced myself up before dawn, trudged to campus in the snow, sat in a chair up in the whisper section of the university library, and wrote until I went to work. Then I wrote on my lunch break, eating the same meal of half of a PB & J and water, and wrote until I had to check back in. And then I wrote at night and on the weekends. I managed 2-3 novels a year for those three years, and it was brutal. But I loved what I was writing. It was 20 years of frustration pouring out of me.

Do you still have moments of insecurity before you write or release a new novel? How do you overcome it?

It gets worse with every passing day and every release. Everything I write just sucks. And then I revise it until it’s just horrible. Then revise until I almost don’t hate it. Ten or more passes, and I can publish without feeling like I’m harming people with my words. It really is that brutal. And it is only getting worse. I think I remember my greatest passages, and I hold every single sentence up to that standard. I also feel like I shouldn’t be doing this if I’m not pushing boundaries with my stories and crafting prose that readers will really fall into. So I put a lot of pressure on myself, but I wouldn’t have it any other way.

. . . .

Do you read your reviews? When people are especially nasty on social media or in reviews, how do keep it from affecting you?

I used to read every single one. I still glance at them when I can. I think it’s important to know what readers think about your work. I love the interactions and the feedback. I’ve really enjoyed commenting back and forth with readers on some Amazon reviews. I’ve made some great friends that way. Even dedicated a novel to a reviewer’s wife because of an interaction like that.

The negative reviews sting at first, but you get used to it. I just concentrate on the people who love my work, and I look for any constructive criticism among the negative reviews. I don’t want to “toughen up,” as J.A. Konrath always implores me to do. I want to still feel all the good stuff, so I worry about becoming calloused or ignoring the feedback. I’ve just come to accept that not every reader will like what I present them. That’s cool. I’m a reader as well, so I know how it works.

Link to the rest at The Huffington Post and thanks to Randall for the tip.

From Hugh Howey:

When Data Guy and I put the first Author Earnings reports together, transparency was our primary goal. I think it’s because we’re both scientists at heart, but also because we are both children of the open-source, crowd-sourced, wiki generation. In addition to our complete transparency on methodology, and our sharing of the source data so others could duplicate or challenge our work, we also included complete transparency on our bias.

It’s true: We think individual entrepreneurs are cooler than mega corporations. We also think: 70% going into the pockets of artists is more awesome than 12.5%. And finally: We think a full breadth of titles being available online is superior to the draconian curation efforts of major publishers and physical retailers.

The data we gathered aligned with our biases, which we suspected ahead of time. You see, the market forces of 70% > 12.5% have made the digital disruption inevitable from the creation side. And instant access to affordable titles made the disruption inevitable from the consumption side. Down in the trenches, we heard from dozens and then hundreds of authors who were making a full-time living without being a household name. This shocked me, personally, because I worked in bookstores for years and hosted NYT bestselling authors who were making peanuts and working full-time jobs to support their craft. Something was going on. Something that aligned with my love of democracy and disdain for totalitarianism and censure.

. . . .

We didn’t manufacture what we wanted to see; we knew something was happening and we attempted to measure it. When the results came in, we were STUNNED. I nearly fell out of my chair when I saw the first pie charts. When we had to make a decision to favor the numbers one direction or the other (like where to lump the small presses that were likely self-published but it was unclear), we tilted the field toward traditional publishing. We did this to account for our bias, but also because indies didn’t need any help. They were trouncing any other method of publication.

When we released this information, we wanted our bias right up front. And we expected others to take our data and show us where we were wrong. To date, no one has been able to show our daily earnings percentages to be off. Self-publishing is simply a more viable path to earning a living and reaching readers than sending query letters to agents, and it isn’t even close.

. . . .

To say that I’m anti-traditional publishing is also a bit of a stretch. I want major publishers to stick around and thrive. I want them to improve their business practices. I’ve devoted a lot of my time and energy into these efforts. I’ve worked with three of the top publishers in the world, and 40 publishers overseas. I have books launching this week with a traditional publisher. Many of my closest friends publish with the Big 5. I’m busy working on all sides of publishing, and fighting my ass off to win better terms and conditions for all authors.

But make no mistake: I’m still pro-author and pro-reader above everything. If Amazon and the Big 5 all go out of business tomorrow, all I’ll care about is whether and how writers and readers can commune. The middlemen are only useful in how they serve these two parties.

What I don’t get is the obvious and crazy bias the publishing rags have for publishers and physical book retailers, and their complete disregard for the only parties in publishing who matter. They don’t seem to care about books, how they are written, how they are read. They only care about how both of these parties can be squeezed in the middle and profited from. How can publishers make the most off the efforts of artists? And how can retailers take advantage of readers? There’s no other way to understand their biases than this. I doubt it’s even something most of these pundits have asked themselves. It’s telling enough that their blathering rarely mentions either the author or the reader. Mostly, they spend their time angry at Amazon for catering so well to readers and writers.

Link to the rest at The Wayfinder and thanks to David for the tip.

Here’s a link to Hugh Howey’s books. If you like an author’s post, you can show your appreciation by checking out their books.

From Hugh Howey:

Over the last ten to fifteen years, the publishing industry has undergone a massive shift from print to digital and from the east coast to the west coast. Understanding this shift is critical for anyone working in the field or who wishes to. Taking stock can be difficult. All manner of publishing has been greatly disrupted, but it’s often hard to see because what has changed is what’s now missing from our lives. And these missing things have not disappeared all at once. Rather, it’s been a gradual vanishing.

Your glovebox is no longer crowded with maps. The lowest bookshelf in the living room no longer sags under a full set of encyclopedia. There is no phone book in the top kitchen drawer. Manuals no longer come with every device. How-to books have gone away. Cookbooks as well. Driveways are no longer dotted with newspapers. And the daily commute sees far more people staring at screens rather than anything printed on paper.

There are exceptions in every household, of course. But for most consumers, the GPS-enabled smartphone has obviated the need for maps. Wikipedia and Google replaced the encyclopedia. We connect via social media, not phonebooks. Manuals are now online PDFs. The newspaper is our Facebook and Twitter feeds. To learn how to do practically anything, we turn to YouTube. Recipes are searched for online. And well over half of fiction reading has gone digital.

Publishing is all of these things. Publishing was even the little booklets that lined our CD and DVD cases, which have largely gone away. We don’t think of all of these printed artifacts as publishing, but they were. They not only required printing, they required copywriters, editors, and layout designers. Those who used to do these jobs now work in digital spaces. And this has been the great shift in publishing, from physical to digital. And the center of publishing — New York and the east coast — is now the west coast. The Big 5 of publishing is now better thought of as: Google, Amazon, Apple, Facebook, and Twitter.

. . . .

Digital is easier to spread, which increases information equality. It’s also better for the environment, not just in paper consumption but in the polluting delivery costs. Ideas are easier to generate, which has increased the diversity of voices. News has become crowdsourced, which reduces the corrupting power of those who formerly had monopoly control of information. With a camera and a broadcast booth in every pocket, the fears of Big Brother have turned into the mediating effect of billions of Little Brothers. We report on abuses of power, taking to Twitterverse to pressure corporations, and sharing videos to police the police. And we are far more accurate and informative taken as a whole than we are on relying on lone experts.

It’s difficult to find anything to complain about with this transition, unless you are a middleman who no longer provides a service commensurable with your cost.

. . . .

Let’s start with a list of those who are being disintermediated in the modern publishing landscape: Major book publishers, their historic retail partners, their former marketing muscle, the printers, and previously bestselling authors. We should feel empathy with those who are disrupted, as pivoting can be painful. But when the overall benefit to the general public is weighed, we understand that these disruptions are to be applauded. Again, we’re talking about greater access to information, a wider variety of voices, a boon to the environment, and a more equitable share of profits to creatives. This doesn’t make the pain of the formerly entrenched any less, but it should prevent us from making policy and purchasing decisions based on their appeals.

. . . .

In 2015, the only thing that saved print from serious decline was the adult coloring book fad. That craft books are counted alongside novels is revealing, both for the widget and profit-minded nature of the legacy publishing industry, and also the greater concern for sales over the culture of actual reading. 2016 will need another 50 SHADES OF GREY or coloring book phenomenon to stem the bleeding. This is a precarious situation in which publishers find themselves, especially with fewer medium sized presses to acquire. It would surprise me to see all of the Big 5 publishers standing two years from now. It would not surprise me to see a Big 3 five years hence.

. . . .

Controlling this message (or attempting to) has been another outlet made irrelevant by the west coast shift. Newspapers used to matter for book sales. Bestseller lists were checked weekly, as were the arts sections and the special Sunday book review inserts. No longer. Now, the only bestseller lists that move titles are the online sales lists, primarily Amazon’s. I saw this clearly as a bookseller. Even the front page of the New York Times Book Review couldn’t budge sales. But a mention on a late night LA talkshow, or a Tweet from a celebrity, or a recommendation from Zuckerberg, would shoot a title straight to the top. And nothing is more powerful than one of Amazon’s daily promotions. The marketing muscle, the inside access, the exclusive reviews, the feeling of mattering in this grand cultural tradition — all of this has been taken away from legacy reporters. And keep in mind that these same reporters were often aspiring novelists and non-fiction authors. They have done a miserable job of covering the disruption to publishers, because they are too emotionally invested to cover these trends like they cover the rise and disruptive forces of Uber, Lyft, AirBnB, Google, Facebook, et al.

The authors who benefitted most from the censuring of ideas have also been hurt. When 99.99% of books were not allowed to come to market, and the diversity of voices was culled to obviate risk to publishers, these .01%ers made hay. Mostly white males, there are many of them complaining today because their power, prestige, and incomes have all declined. The new power authors are predominately female, and to cope with the reality of this transition, the media and legacy authors have had to resort to lumping them into a single genre (erotica) in order to stigmatize them. Despite the fact that these authors write romance, thrillers, science fiction, literary fiction, non-fiction and other genres.

. . . .

Lately, these authors have had to team up with their advocacy groups in a PR battle against digital and self publishing. Writing letters to the DOJ, the argument here is that free speech was better served when only .01% of authors could publish their works. The share of income earned by these authors has plummeted, replaced with income heading to self-published authors. Last year, Amazon paid out over $140,000,000 to authors in its Kindle Unlimited program. That doesn’t count the dollars paid for book sales. This would be like publishers announcing a 7-figure advance every two and a half days for an entire year. The overall expenditure by consumers has only gone up a little, while the payout to independent authors has soared. That money came from somewhere. Those authors being hurt are now railing against a system that, once again, is good for consumers, for diversity, for the environment, and for creatives.

Link to the rest at Hugh Howey and thanks to Karen and others for the tip.

From Hugh Howey:

The revolution in the publishing industry has barely begun. That’s the takeaway this week, as a print-on-demand book becomes a #1 bestseller and the Big 5 move into Kindle Unlimited.

First, the children’s book that should be waking up major publishers in a major way. It’s called The Rabbit Who Wants to Fall Asleep, and it was written and self-published by Carl-Johan Ehrlin. If you have kids, you should stop reading this and shoot over to Amazon right now to buy a copy. Using the psychology of suggestion and sleep-inducing language patterns, parents all over the world are discovering the book’s seemingly magical ability to zonk their kids out. No wonder the book has taken off.

It’s been a #1 overall bestseller on Amazon and B&N. And Publishers Weekly is now reporting on this story as the book has been snatched up in a 7-figure deal. The New York Times even had to change the rules of their children’s book bestseller list to exclude paperbacks, in order to make sure an indie book doesn’t do this again. So what exactly happened? Why is the publishing world freaking out over this? Well, it’s because this was thought impossible just a few weeks ago. But the nature of digital disruption is that the impossible becomes possible seemingly overnight.

When I toured the CreateSpace printing facility in 2011, I knew something crazy was happening. It wasn’t just the print process, which had been around a while. It was the way this printing facility was integrated into the Amazon retail machine, and the way CreateSpace maintained the startup vibe, able to pivot on a dime. Things were changing at the facility every day, even as freshly printed books zipped by on steel rollers. The paper stock was improving; the trim size options expanding; matte covers were being introduced; the ink used for the covers was improving; and even the way the books were packaged and handled was being tweaked. In the year it might take for a Big 5 print book to get to market, the POD industry will have revolutionized a dozen important techniques.

. . . .

The major publishers and the New York Times do not like this one bit. The Big 5 have shunned POD as a backup solution, refusing to give Amazon and Ingram PDFs so that these two companies can handle supply when that supply is outstripped by demand. This has been shameful when books attempt to go viral but can’t because of how slowly the Big 5 print and ship their wares.

. . . .

Make no mistake: Carl-Johan’s breakout success is a game-changer. Because the “digital” in digital disruption isn’t relegated to ebooks. When PDF files can be emailed, and books can be printed in minutes anywhere and then sold instantly everywhere, and then shipped same-day most places, the old chain of print-in-China and sell-in-B&N has been radically upturned. Not only is the publishing revolution moving into the print space, the indie revolution has as well. When we see authors, agents, and publishers warning writers of all the money they are leaving on the table by ignoring print, they are clinging to what they thought was their last redoubt. No longer.

. . . .

Speaking of the Big 5 selling stuff through Amazon, look who’s playing around in Kindle Unlimited right now. I love me some Vince Flynn. Imagine my surprise this shows up while I’m browsing KU. My first thought was that his estate must’ve gotten the rights back and self-pubbed the ebook edition, because the Big 5 do not participate in Kindle Unlimited. Guess they do now.

Link to the rest at The Wayfinder

Here’s a link to Hugh Howey’s books. If you like an author’s post, you can show your appreciation by checking out their books.

From Hugh Howey:

After 40 days in the Kindle Unlimited program, and after going through my first royalty statement that includes KU pagereads, I have a few observations.

First, a little background for the uninitiated: Over a year ago, Amazon launched an ebook subscription service known as Kindle Unlimited. For $9.95 a month, readers could enjoy unlimited access to over a million ebooks. For authors, the program was contentious, because it required making those titles exclusive with Amazon. You couldn’t sell them elsewhere. This was the price of admission.

To entice their bestselling authors to try the program, Amazon allowed several dozen indies to keep their titles in KU for a limited time without the exclusivity requirement. I was invited into the trial, and I could see the benefit of being in the program immediately, but it wasn’t clear whether my readership was best served by being in KU or not. When the time trial expired, I pulled my ebooks out of KU. Looking back, I can see that this was a huge mistake.

A month and a half ago, Amazon changed the way they pay authors in KU, moving to a per-page-read method rather than a flat fee (once 10% of an ebook was read). The idea was to reward reader engagement with longer works, rather than pay short story authors the same amount as novelists. As a data geek, I was dying to test this program out and see what difference it made for earnings, reader engagement, and sales rank. Entry to KU would require me being exclusive with Amazon for at least 90 days. With several of their competitors in disarray, and with KU free of competition from books by major publishers, I thought now was a good time to give it a go.

Even though the new KU seemed to reward novels over short stories, I immediately began publishing shorter works and making them available in KU. I wanted to see if short fiction — an area I’m fond of and have made a career exploring — was still viable in KU. After joining the program, I released several titles in the 7,000 – 12,000 word range.

. . . .

I knew within a week that I’d made the right decision to join KU. My KU ebooks saw an immediate boost in ranking. Not only were the page-reads mounting, but the sales of those ebooks were also on the rise! This was like advertising that I got paid for, and advertising that led to more paid sales. The only cost was exclusivity.

I’ve written at length about exclusivity, but I’ll sum up here what might seem paradoxical at first: You can sometimes reach more readers by making your products available with fewervendors. By concentrating sales in one location, sales rank gets a boost and more reader reviews are compiled in a single place. This means more visibility and more word-of-mouth sales. It can also mean more readers.

. . . .

What is the collapse of Nook doing for the adoption of ebooks? Barnes and Noble goes back and forth on whether or not they’re going to support their own device. That causes those who bought a Nook to become wary of committing to buying more digital books. And what about Apple’s refusal to make iTunes a web-based store rather than an application? This makes sharing links and buying ebooks more difficult across devices. And let’s not even start on B&N’s storefront. Or Google’s hubris when it comes to dealing with authors.

Indiscriminate business partnerships does not move the industry forward, and making my ebooks available at places that don’t provide the best reader experience does not help my career. When I saw that KU was going to help me reach more readers —and more than make up lost income from all other outlets combined — I was swayed. But it was when I blogged about unlimited access to ebooks with readers, and heard what kind of experience those readers were having with KU, that I saw why it was important for me to only make my works available at top-notch retailers.

The reason is this: I want greater and greater ebook adoption. I want more and more readers to move to ebooks. It is the artistic medium, the environmental medium, the democratic medium, the literary medium, and the indie medium.

Link to the rest at Hugh Howey and thanks to Stephen for the tip.

Here’s a link to Hugh Howey’s books books. If you like an author’s post, you can show your appreciation by checking out their books.