From Author Earnings:
Data in the publishing biz is hard to come by. Without widespread sharing of data by retailers, publishers, agents, and authors, we are all left like the blind to describe different parts of the same but seemingly disjointed elephant. Two years ago, AuthorEarnings released its first report on a new part of this elephant: E-book sales on Amazon.com. Our report stirred controversy, as it described a formerly unseen world of publishing data.
Over the past two years, we have worked with industry insiders and data-savvy authors to refine our approach. This year, our up-to-date methodology and conclusions were presented in a Digital Book World 2016 keynote to an audience of prominent traditional publishers, agents, and retailers — many of whom deemed the AuthorEarnings keynote and hour-long Q&A with Publishers Lunch to be a highlight of the show. (The complete DBW slides can be found here).
Nowadays, even those who still fundamentally disagree with our conclusions generally acknowledge the accuracy of AuthorEarnings’ numbers. Their objections, these days, focus on what our reports *don’t* cover, rather than what they do. There is much more of the elephant to describe, and we relish that opportunity. Slowly but surely, the overall picture is being filled in. With each report, we uncover something new. This report is no different. In fact, it may be our most shocking.
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Instead of just looking at Amazon’s bestseller lists, we had our spider follow links to also-bought recommendations and also through each authors’ full catalog. This resulted in a million-title dataset, our most comprehensive and definitive look yet at author earnings. We were able to tally up precisely how many indie authors, Big Five authors, small/medium press authors, and Amazon-imprint authors are currently making enough from Amazon.com sales to land in a number of “tax brackets”.
But first, with our shiny new May data included, a quick look at the prevailing trend-lines. Over the last 27 months, how has the distribution of ebook unit sales, gross consumer $ spending, and author earnings changed among publisher types?
The only noteworthy highlight here is that the Big Five’s year-long plummet in overall ebook unit sales appears to have finally leveled off, leaving them with roughly 23% of Amazon’s ebook unit sales. A factor in this leveling-off *may* be lower Big Five ebook prices (the average price of a Big Five ebook dropped from $10.31 in January 2016 to $8.67 in May 2016, which warranted a closer look.). But on the other hand, the Big Five’s loss of market-share in gross consumer dollar terms — and, more importantly, the ongoing decline in Big Five authors’ ebook earnings — have both continued relatively unabated.
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We ended up with daily sales data on a million of Amazon’s Kindle ebooks — nearly a third of all titles listed in the US Kindle store. We captured practically all of the titles selling with any frequency whatsoever, the vast majority of the infrequently-selling titles, and many, many of the non-selling. Our dataset includes:
- Nearly every single Kindle book selling 1 or more copy per day. (98.5% of them)
- 90% of all Kindle titles selling at least 2-3 copies a week
- 81% of all Kindle titles selling 1 or more copy a week
- 64% of all Kindle titles selling 2 or more copies a month
- 32% of all Kindle titles listed in the Amazon US Kindle store.
With this report, Author Earnings is now capturing and breaking down a full 82% of daily Amazon Kindle ebook sales. Even better, we’ve been able to capture the majority of the previously unmeasured “dark matter” sales — whose composition we had before only speculated about. Well, now we know.
Only 18% of Amazon’s daily ebook sales remain unaccounted for in our data — and every last bit of that remainder is coming from titles selling less than a copy a day, the overwhelming majority of it from titles selling less than a copy a week, and most of *that* coming from titles selling less than a copy a month. Even more notably, all of the remainder comes from the very lowest-selling authors on Amazon, who have no other titles making any significant sales either.
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While we were at it, we pulled accompanying Amazon sales data on 900,000 top-selling print titles and 67,000 top-selling audiobook titles, too — including every format of every single title by any author who had even one title of any format on any Amazon bestseller list.
The significance of that — of capturing each author’s entire sales catalog: all books they have for sale, in every format — cannot be overstated. It means that this is not just our deepest and most comprehensive cross-sectional look at author earnings ever. It is…
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[T]he hard numerical reality of US bookselling today — the rarely-mentioned elephant in the room — is this:
More than 50% of all traditionally-published book sales of any format in the US now happen on Amazon.com.
That’s just the traditionally published books, though.
In addition, roughly 85% of all non-traditionally published book sales of any format in the US also happen on Amazon.com.
In other words, a comprehensive cross-sectional snapshot of Amazon.com’s sales, like the one we are describing here in our May report, is a definitive look at more than half of all daily US author earnings, period.
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This time around, our census of author earnings includes author income from Amazon hardcover and paperback sales, too, as well as audiobook sales. And it includes revenue from every single title each author has for sale: best-selling and barely-selling alike. Unlike our September 2015 census, this is a cross-sectional study rather than a longitudinal one — it’s based on a single-day snapshot of Amazon author earnings. But having done the longer-term study back in September, we can now say with confidence that a million-title, 200,000-author cross-sectional snapshot such as this one will give us a statistically reliable proxy for the average distribution of author incomes throughout the quarter, i.e. for Q2 2016.
Let’s start with those authors currently earning at a run rate $10,000 a year or more from all of their Amazon.com sales combined:
The 4 leftmost bars include every author who debuted anytime in the last century and is currently accumulating income at a rate of $10,000 a year or more from their Amazon US sales alone. The good news here is that we can see almost 9,900 such authors, although a small fraction of that represents multiple appearances by the same authors under different pen names, and another small fraction ascribes revenue to a single author that in reality gets shared with one or more co-authors: as in James Patterson’s case, for instance.
Comparing this 9,900 number to the roughly 5,600 authors earning 10K+/year that we found in our September 2015 7-quarter longitudinal study is a bit of an apples-to-oranges proposition. This is a cross-sectional study, after all, rather than a longitudinal one, so we have to take any like-for-like comparison with a slight grain of salt. But even so, that September study only considered each author’s best-seller-listed Kindle titles. The inclusion here of each author’s non-best seller listed titles, too, and all of their Amazon print sales and audio sales as well, appears to have nearly doubled the count of authors currently earning in this $10K/year “tax bracket”.
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While $10,000/year is hardly a living wage in the US, it’s a nontrivial supplementary income. Especially for doing something you love.
And don’t forget this is a tally of 9,900 authors who are making that much or more on Amazon. Almost half of those 9,900 authors also appear in the $25000-or-better bracket above, and some of them in the brackets beyond that. So, onward.
Let’s take a look at publishing’s much-decried mid-listers next, to see how they are actually faring on Amazon.com.
Once again, when we look at the leftmost set of bars, it’s encouraging to see a sizeable, healthy midlist represented there — more than 4,600 authors earning $25,000 or above from their sales on Amazon.com. 40% of these are indie authors deriving at least half of their income from self-published titles, while 35% are Big Five authors deriving the majority of their income from Big Five-published titles, and 22% are authors who derive most of their income from titles published by small- or medium-sized traditional publishers.
But this includes traditional publishing’s longest-tenured and most recognizable names, including thousands of authors who have been actively publishing for the last several decades. When we consider only those authors who debuted sometime in the past ten years — who appear in the secondset of bars in each graph — a sharp dichotomy starts to become apparent.
The vast majority of traditional publishing’s midlist-or-better earners started their careers more than a decade ago. Their more-recently debuted peers are not doing anywhere near as well. Fewer than 700 Big Five authors and fewer than 500 small-or-medium publisher authors who debuted in the last 10 years are now earning $25,000 a year or more on Amazon — from all of their hardcover, paperback, audio and ebook editions combined. By contrast, over 1,600 indie authors are currently earning that much or more.
The gap becomes even more pronounced when we look at those authors who first debuted in the last five years, or during the “ebook era.” And when we look at just the most recent debuts from each publishing path, only 250 Big Five authors and 200 recent small or medium publisher authors who debuted in the last three years are earning a midlist-or-better income from their Amazon sales.
By contrast, there are over 1,000 indie authors who debuted in the last 3 years who are doing so.
We see the same dichotomy play out in the $50,000/year “tax bracket”, which tallies up authors earning what would be a living wage in most parts of the US:
On the one hand, it’s fantastic to be able to count over 2,500 authors who are currently earning at a living-wage run rate — $50,000/year or more — from just their Amazon sales. But once again, among the traditionally-published contingent we see predominantly authors whose careers began decades ago, including all of traditional publishing’s longest tenured best sellers and most recognizable names.
Out of more than 10,000 Big Five author debuts in the last five years, fewer than 220 are currently earning $50K/year or more on Amazon. Despite all the countless small and medium publisher debuts over the past five years, the tally of those authors earning a living wage is even more discouraging: barely 100 non-Big Five traditionally published authors launched in the past 5 years now earn $50K/year or more from all of their books on Amazon.
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When we look at authors who debuted anytime in the past decade, and apply that handicap, we still find more indies now earning at a $25K and $50K run rate on Amazon than either Big Five authors or Small/Medium Publisher authors.
When we look at just debut authors from the past five years, we find more indie authors now earning a$50K-or-better living wage than all of their Big Five and Small/Medium publisher peers put together… even after we throw in that overgenerous 2x multiple for traditionally-published non-Amazon revenue.
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In the past year, we’ve seen a rash of media articles decrying the shrinking prospects and worsening incomes of authors. Most of those articles are based on self-selected surveys, which solicit data exclusively from society-dues-paying traditionally published authors. Those articles are only reporting half of the picture. Here’s what they aren’t saying:
More than 1,080 indie authors, most of them brand new debuts from the last five years, are currently earning at a $50K/year or higher run rate from just their Amazon sales.
It’s not the death of the midlist that these one-sided “author poverty” surveys are measuring, and that the publishing media is lamenting. Rather, it’s a changing of the professional-author guard.
Over 1,000 indie authors are already making a living wage from Amazon sales alone…
And even better, more than half of those thousand are earning six figures or more.
The $100,000+ Club: Authors Earning Six-Figures or More
1,340 authors are earning $100,000/year or more from Amazon sales. But half of them are indies and Amazon-imprint authors. The majority of the remainder? They come from traditional publishing’s longest-tenured “old guard.”
Fewer than 115 Big Five-published authors and 45 small- or medium-publisher authors who debuted in the past five years are currently earning $100K/year from Amazon sales. Among indie authors of the same tenure, more than 425 of them are now at a six-figure run rate.
The author earnings gap between publishing paths is so wide among these six-figure-earning authors that once again brick-and-mortar print sales and the like cannot significantly alter the picture.
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The higher we set the author earnings bar, the starker that contrast between publishing paths becomes.
Here are the tallies of authors earning $250,000/year and $500,000/year on Amazon:
Once again, when we exclude traditional publishing’s longest-tenured household names, there are more recently-debuted indies earning a quarter-million a year on Amazon, or even half a million a year, than Big Five and non-Big Five traditionally-published authors combined.
And finally, let’s take a brief look at:
Authors Earning Seven Figures
Link to the rest at Author Earnings and thanks to Patrice and others for the tip.
PG says this Author Earnings report is devastating for traditional publishers, large and small.
Why would any talented new author who is not entirely innumerate choose to begin a career with a traditional publisher? The odds against catching the attention the gatekeepers are already very long. To that problem, we now add the even longer odds of making any real money as a traditionally-published author.
The unspoken assumption in assessments of the future of traditional publishing is that publishing will continue to capture the lion’s share of future bestselling authors. If that assumption is false, if most or all of the really talented authors avoid traditional publishers, the future of Big Publishing is bleaker than even the most pessimistic of the industry prognosticators’ public forecasts.
PG has commented before that in the future, the contracts of all traditionally-published authors will be owned by hedge funds who undertake no publishing activities other than hiring Ingram to fulfill a diminishing number of hardcopy orders and booking the income from the backlist without the overhead of editors, publishing executives, sales reps, book promotion people, etc.