Hugh Howey

Hugh Howey and Author Earnings

10 November 2015

Change Keeps Happening

27 August 2015

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.

Kindle Unlimited Scores a Knockout

16 August 2015

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.

The Myth of The Lazy Writer

3 August 2015

From Hugh Howey via Publishers Weekly:

The hardest part of getting a book published is the actual writing. All it takes to see this is the number of people who dream of publishing a book but never manage to hammer out a rough draft. I spent 20 years trying to write my first novel before I finally pulled it off. It’s not unusual for an aspiring writer to struggle for years and never produce a finished product to submit to agents or editors.

Once the hard part is done and a draft is written, there are two basic routes a writer can take. Much ink has been spilled over the past few years about the rise of self-publishing—even though the route predates Mark Twain and Benjamin Franklin. To self-publish requires hiring cover artists, editors, and typesetters or learning to do these things on one’s own. The difficult task of emailing a cover artist to hire her services is often used to frighten authors away from self-publishing. That’s because there’s a myth that authors are lazy, and a myth that some authors merely write for a living. No such creature has ever existed.

The alternative to self-publishing is to sign over your work to a traditional press. It sources the cover artist, editor, and typesetter for you. In exchange, it takes most of the income. This is sold as a fair deal, especially since it is said that publishers support authors while they write their novels by providing a livable advance. This is yet another myth: authors produce their first works while working another job; they are not given a year’s salary because they have an idea.

What is being sold with these myths is the notion that the self-published author works extra hard beyond the writing, while all other writers simply craft their drafts and FedEx the results to agents in New York. Having published along both routes, I can attest that the amount of work either way is roughly equal. Learning to query agents took me longer than learning how to self-publish.

Successful authors work their butts off either way. There is no such thing as a lazy successful author.

Link to the rest at Publishers Weekly and thanks to Stephen 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.

New KU Payout Structure

16 June 2015

From Hugh Howey:

Has it been a full year since KU debuted? It feels like longer. And yet, the year seems to have flown right by. Weird how that works.

With another June coming and going, we enter KU 2.0. Starting in July, payouts for Kindle Unlimited authors will be based on pages read, not whether or not a reader gets through the first 10% of a work.

I love this change. It’s one many of us have been clamoring for and even expecting. If anything, I’m surprised it took this long.

What this means for authors is debatable. Those who write shorter works designed for KU may see a drop in income, while those who provide full-length novels may see a rise in income (depending on how many pages readers enjoy). My guess is that the vast majority of authors will earn about the same amount as before. That doesn’t mean their income won’t fluctuate, only that this change won’t be the reason for most fluctuations.

. . . .

I have a feeling we’ll see some knee-jerk reactions from authors without considering these pros and cons. Shorter works still make a lot of sense in KU. It’s hard to justify selling short stories for more than a dollar, and you only make 35 cents on that dollar under KDP terms. In KU, a 20 page story might earn just as much as a sale. What we should celebrate is that short stories will no longer earn the same amount as a novel, especially since the 10% threshold was much easier to reach on a short story. That system just wasn’t fair. The new system is a vast improvement.

To those who write works with a mind of maximizing their earnings according to Amazon’s algorithms, take note: It’s not a good idea. Not in the long term. Write the stories you enjoy and that you think readers’ will love. This remains the best way to game the system: Write great works.

. . . .

I think this modification highlights one of the big reasons Amazon dominates its competitors: They simply don’t rest. They aren’t afraid to change course. They aren’t afraid to fail, and to learn from their mistakes.

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

False Summits

3 June 2015

From Hugh Howey:

It’s the bane of hikers, the false summit. You’re staggering up the trail, or a rocky ridgeline, and you’ve been eyeing the peak for hours, only to reach that spot and see that the trail keeps rising, that the rest of the mountain was simply occluded from view.

So you march toward the next peak, believing this one, only to discover yet another false summit.

This can go on so long that when you arrive at the true top, the feeling is one of both immense relief and disbelief. You march the last agonizing steps expecting to be fooled again. And then you want to collapse and kiss the rock that leads upward no more.

For the longest time, turning 40 was my personal summit, the end of my road. My plan was to be dead by June 23rd, 2015. And not in some vague, “If I keep this up, I’ll probably never to live to see 40″ kinda way, but more in the tradition of some Inuit tribes, where the elders paddled off in their canoes to make room for a new generation.

. . . .

I’ve always been fascinated with the perception of the passing of time. My earliest powerful memories are of being in the back of our red and white Ford van on the way to the beach. We made the trek every summer, and my brother and sister and I would create a playroom on the folded-flat rear seat, which turned into a bed. The three and a half hour drive was interminable. Time slowed to a crawl. Anticipation, striving, forgoing immediate self-gratification, and the racing mind of youth conspired to turn what I could otherwise idle away with a book on any given afternoon into a savage form of torture for which there was no end.

In high school, years later, I would do the exact same drive, and time would fly right by. Same length of time, two very different experiences.

Being curious about the cause of this, I began paying attention to how different time seemed to flow depending on circumstances. What I noticed was that the first time I drove anywhere with my new four-wheeled freedom, the drive felt much longer than the subsequent trips. Each drive along a route seemed to take less and less time. I realized that the first time I drove to a new place, I was hyper alert for the directions, and I was seeing new things. There was so much to take in, and so my brain would rev up, effectively slowing time down by processing a lot more. As I became familiar with the journey, my brain would shut off and coast. I could zone out, later “come to,” and marvel at the curves I navigated without being aware of them.

. . . .

Comparing life to a road we travel is so obvious that it’s become cliche. So my revelation from a car crash as a youth and all those road trips was this: The way to make a life feel long was a combination of newness and danger. Seeking danger seemed like a bad idea — more a recipe for a shortened life than a perceived longer one. But what about newness? I decided to explore this further.

And what I noticed right off the bat is that for most people, life is not so much a journey as it is a commute. We like to pretend that life is some open road we explore, but it’s really a path we carve into the pavement, worn there by habit, or the back and forth of routine. I wrote about this in I, Zombie, a horror book primarily concerned with the horrors of a habituated life.

A life of commute scared me. It meant traveling the same road back and forth every day. Wouldn’t my brain then shut off and allow me to coast, managing curves without even thinking about them? Wouldn’t my life speed right by like the drive between my house and my best friend Nathan’s?

I wanted a life that would feel longer, a path that stimulated my mind by constantly feeding it new scenery, new experiences, and new information. This realization hit me like a lightning bolt one day. I was 19 years old, sitting at a lunch table with my Tandy computer repair coworkers, all of us in our white shirts and garish ties, a few pocket protectors scattered here and there. My colleagues were a lot older than me. And I saw, in an instant, that I would be them with the snap of a finger. I would repeat the same actions over and over, and my life would disappear just as surely as those curves that I’m able to unconsciously navigate along familiar roads. I would startle in my seat, glance in the rearview, and wonder where the path went.

. . . .

When people tell me, “Oh, but 40 is young,” what I hear is: “Why try to live a full life today? You’ve got time!”

Without a deadline, it would be so much easier to put off bold plans until I was no longer bold enough to tackle them. Or to put off my dreams until the forever-sleep robbed me of the chance at them.

. . . .

When I lived on boats the first time, I met the most interesting families I would ever come across. Parents with teenage kids. Parents with newborns. Many of them stayed on the move, homeschooling as they went. I just spent a week on my friend Terry’s boat, and it’s littered with all the books and supplies for schooling his teenage kids. These kids growing up on boats are the brightest, most mature young adults I’ve ever met, hands-down. They aren’t on a commute; they are on a journey.

Our brains evolved to live a life of constant trouble and danger. Amber and I discussed this a while back, when she had a very restful night of sleep, but said she kept waking up all throughout the night. I’ve always noticed this with nights spent camping or on a boat at sea. You don’t get the eight hours of uninterrupted sleep, instead getting little naps punctuated by semi-alertness.

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

Here’s a link to Hugh Howey’s books

Renting vs. Owning

22 May 2015

From Hugh Howey:

I couldn’t wait to own my first house. I mean, I literally couldn’t wait.

The closing date was still a week away, but I was already over at my future home on Taft St. in Hollywood, leveling a plot of soil in the back yard, spreading sand, and installing pavers. There was a covered arbor back there, and I wanted to create a patio where before there was just a patchwork of grass, soil, and loose rock. In the middle of the yard there was also a huge tangle of vines covering an old fish pond. Soon, I would have this up and running as well.

The owner of the house didn’t mind my enthusiasm. In fact, he very much didn’t mind. A lovely gay man, he spent the week sipping lemonade on the new patio and offering suggestions and advice as I worked on what would soon be my yard. I was learning not only how much I would love my first home, but how much I would love improving it and working on it.

I’d had the same experience with my first sailboat, Xerxes. I would stay up past midnight at times with a miner’s light on my forehead doing odd projects around the deck. Owning something is to want to care for it. Especially if you worked hard for the money used to acquire that thing. When something is given to you, or when you’re just renting, it’s hard to put the same effort in for its upkeep and improvement. Not to say it doesn’t happen, just that there’s something primal about sweeping out our caves and putting up some bison art.

There’s a myth out there about self-publishing related to this. Because of the big publishing houses’ eroding market share and growing irrelevance, there’s a concerted effort going on to promote traditional publishing as at least a viable alternative to going it on one’s own. The industry has moved quickly from besmirching self-publishing to attempting to sell the middleman-enriching route. Which is understandable; they want to lure in clients and continue making most of the profits off our art. But there is something abysmally wrong with many of their arguments, and we owe it to aspiring authors to point those fallacies out.

The particular myth I’m talking about here is that self-publishing requires a lot of hard work, while traditional publishing means all you have to do is write the manuscript. This is plain nonsense, of course. Publishers expect authors to promote their works, to engage on social media, to answer emails, to do signings and interviews, and much more. And this ignores the massive amount of work it takes to even get published (researching agents, writing queries, tracking responses, doing rewrites).

But let’s set aside the fact that authors of all stripes have to work their butts off to make a living at this. What pundits and publishers miss, because they have no experience with it themselves, is that self-published authors don’t work harder because they have to. They work harder because they want to.

Authors who have only traditionally published also fall prey to this myth. They’ve only ever rented. They sign ownership of their art away, and now they are punching a clock, toiling for peanuts, and that’s not a motivator to toil more. It’s a disincentive. Which is why most authors work a day job teaching creative writing, procrastinate, phone in manuscripts at the last minute, and waste their prodigious talents.

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

May 2015 Author Earnings Report

6 May 2015

From Author Earnings:

Welcome to the May 2015 Author Earnings Report. This is our sixth quarterly look at Amazon’s ebook sales, with data taken on over 120,000 bestselling ebooks. With each report over the past year and a half, we have come to see great consistency in our results, but there is always something new that surprises us.

. . . .

[The announcement that Amazon places in a book listing that the price was set by the publisher]  can be found on ebooks from several of the largest publishers, and it appears to serve as both an apology from Amazon and also a shifting of the blame for high ebook prices. Amazon has stated in the past that they believe ebooks should not cost more than $9.99. Self-published authors are no doubt familiar with this price constraint, as their royalties are cut in half if they price higher than this amount. But after a contentious and drawn-out negotiation with Hachette Book Group last year, Amazon relinquished the ability to discount ebooks with several publishers. Prices with these publishers are now set firmly by them.

Soon after these agreements went into place, industry observers noted an upward move in average ebook prices. Freed from Amazon’s discounting, and with complete control over pricing, the publishers made a decision to push the price of many of their books above $9.99.

With six quarterly snapshots, each snapshot consisting of 50,000+ of the top-selling ebook titles, we plotted the average price by publisher type to see just how much prices have gone up.

. . . .

Since we started pulling this data, the average price of an ebook from a Big 5 publisher has gone up 17%. Compare this to a difference of 5% for self-published titles, or the increase of 7.5% across Amazon imprints. The prices for Big 5 published ebooks have risen quite steadily, rather than a sudden surge since the return to agency.

What will the effect of these pricing decisions have on unit sales, revenues, and author earnings?

. . . .

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In the last three months, the Big 5 publishers have seen a 26% reduction in the number of titles on Amazon’s Best Seller lists. This means fewer titles are selling well enough to make these lists, and it also means fewer titles are receiving that added visibility.

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Over the same period, daily unit sales from the Big 5 have fallen 17%. This is a measure of the average rank of each ebook. Just as publishers study the New York Times bestseller lists to gauge the strength of their competition, we are looking at the same thing. But with a sample size of 200,000, rather than 20.

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Next up, we factor in the price of those ebooks to see how much money is being spent. Here, we see that daily consumer spending on books by Big Five publishers took less of a hit, with market share of daily revenue down 7.8%. Remember that prices on these titles have gone up. Publishers are trading lower volume sales for more dollars per title. But this might not be as clear a trade-off as it seems, as we’ll explain later.

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Most importantly for authors, we can see here a huge loss in daily earnings from Big 5 publishers of 20%. Their higher prices aren’t just hurting readers; they haven’t been good for their authors either. And authors seem to understand this, as many implored Amazon to continue discounting their works during negotiations with publishers last year. Now it is impossible for Amazon to discount these books, and publishers and their authors are losing revenue as a result.

. . . .

What the AAP hasn’t reported yet, because the data has yet to be collected on their side, is what we see below. January unit sales are on the [top]. Our latest report on daily unit sales is on the [bottom].

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In just the last three months, Big Five publisher ebook unit sales have fallen another 18%. Higher prices and a return to agency pricing seems to be seriously impacting sales. And self-published authors are moving into that lost market share, with an increase in daily revenue of 12.4% since January 2015.

. . . .

We noted above that daily revenue for the Big 5 publishers has gone down significantly, but not nearly as steeply as their plummeting share of daily unit sales. The fact that revenue has not fallen quite as severely as market share is explained by the higher prices of the titles being sold. But there is more at play with the return to agency pricing, and it isn’t good news for those publishers or their authors.

In the past, publishers set high prices on their ebooks knowing that Amazon would discount those titles, which would increase sales by not driving away price-conscious consumers. In fact, one of the complaints from publishers in their negotiations with Amazon is that Amazon was no longer discounting as per usual. Those discounts had been assumed and were factored into publishers’ pricing strategies. Widely misunderstood under this scenario is the fact that the discount came out of Amazon’s pocket, not the publishers’ nor the authors’.

. . . .

The move to agency pricing changes this relationship. Amazon now gets a fixed 30% of every sale, which means publisher profit is no longer the entirety of daily sales revenue.

Link to the rest at Author Earnings and thanks to Stephen for the tip.

PG says taking ebook pricing decisions away from Amazon and placing pricing in the hands of Big Publishing is like giving a razor blade to a toddler.

As Hugh and Data Guy point out in the OP, publishers have the idea that it’s a good strategy to “protect” physical bookstores with high ebook prices. Slack Consumer Economy + High Prices — What could be a better recipe for success?

One of the side-effects of the consolidation of what were formerly many more independent publishers into a handful of large international media conglomerates is a vast expansion of groupthink. Combine groupthink with typical big company quarter-to-quarter short sightedness and you have a recipe for an industry that hasn’t a chance of responding properly to a technology disruption of their world.

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