Breaking out the data
This post is the compiled quotes and graphs from Data Guy in the comments to the May Author Earnings report – tidbits and addendums that he broke out to answer specific questions. If you didn’t read through the comments before, this will explain why you should!
First, for those who wonder about the split between science fiction and fantasy, or want to see how nonfiction is doing:
And for how well books are doing on KU by page length:
Speaking of KU, there’s no straightforward answer on whether it’s the best choice overall. Specifically:
It looks like 57% of the 311,000 indie-published titles in our million-title dataset were in KDP Select (and KU).
Those Select titles accounted for 71% of the total indie sales (roughly half of that 71% were direct retail sales & half were KU full-pagecount-read sale-equivalents).
All my best,
A breakdown on why there aren’t more indie authors making a living:
Americans spend about $15 billion a year on trade books of all formats. After retailers and publishers take their cut, at most $3 billion actually lands in author pockets. Divided up perfectly evenly, that $3 billion could theoretically support 60,000 authors at the $50,000 level…
But instead, it’s getting divided up among at least 1,000,000 authors, if not more… including the estates and heirs of deceased authors. (I can see at least a million author names in our Amazon ebook data and top-selling Amazon print-book data, and that doesn’t even start to include the 32 million(!) lower-selling print book titles listed on Amazon right now, whose sales are too low to be captured in one of our scrapings.).
But lets imagine that there were only a million authors sharing the $3 billion right now. Which is an average of $3,000 each, if it were evenly distributed — but of course, it isn’t evenly distributed. Not even close.
It’s a Pareto distribution. And it’s one where the top 1% of authors — the top 10,000 — take home 50% of that $3 billion, making the average income among those top 10,000 authors around $150,000 a year. Here’s the thing, though: averages are pretty meaningless in a Pareto distribution. Because the top 1% of that top 1%, or just the top 100 authors — folks like James Patterson, Danielle Steel, Stephen King, Janet Evanovich, and the like — take half of the half. (Those 4 names alone account for 10% of it, if you believe Forbes magazine’s estimates.)
So the remaining 9,900 authors in the top 1% have to split what’s left: $750 million. And the next 10% down — or 1,000 of them — take nearly 50% of that, leaving only $375 million to be split among the remaining 8,900 top-1%-ers, bringing their average income to $43,000 or so. Which means that every single author below that top 10,000 — and the majority of those in it — are actually earning less than $50,000 a year from their writing.
All of which is a painfully longwinded way of saying that there just aren’t enough dollars being spent on books in the US to make “tens of thousands” of $50K-earning authors even a remote possibility.
Throw in foreign sales (again, concentrated in the top few thousand traditionally-published authors) and movie rights (which, again, are mostly going to the top 1% of 1% of traditionally-published authors) and we could maybe talk ourselves up to high single-digit thousands of authors earning $50K.
Which, interestingly enough, ends up being not that far from the number of $50K earners the AE graphs show.
Anyone who sets out with an expectation of earning a living from their writing is setting themselves up for almost certain disappointment. At best a low single-digit percentage of writers are ever able to. But that’s actually good news: before indie publishing became viable, the odds of doing so as an traditionally-published author were far worse — and for unpublished-but-querying traditional aspirants, basically infinitesimal.
The breakdowns in Audio:
For ACX sales, we calculated earnings based on 54% AL units (where AudibleListener subscribers spend credits) and 46% ALC/ALOP (A La Carte retail purchases & AudibleListener Off-Plan retail purchases) That’s the average percentage split we measured across a wide swath of titles by different authors. We used $14.95 for the AL retail allocation factor (again, the average we measured across a bunch of titles).
And then to compute AuthorEarnings we applied ACX’s 40% rate to that total.
I can’t recall if we factored in a $50 bounty for every 100 sales, although that was about the average. We might have left it out to be extra conservative. I can check.
If I recall, net author earnings ended up averaging around $5-6 a unit, but that’s off the top of my head.
All my best,
And now, for something completely different:
Publishing insiders seem to go out of their way to avoid mentioning that fact in the media. Publishers Weekly is particularly circumspect about it: they frequently publish Nielsen industry stats on the “Retail & club” sector, which lumps Amazon’s online sales in with bookstore sales at B&N, BAM, and the independents; but they NEVER show how sales in that sector actually break down between brick and mortar & online. 🙂
The only open reference I’ve ever seen was by Mike Shatzkin, in the comments on a recent idealog.com post, where he says:
“Amazon has something more than half the retail trade in books in the United States.”
I’ve privately seen official industry numbers that confirm exactly that, but I can’t share them here publicly without violating trusts and subscription terms-of-service. What I can do, instead, is point you at a few public indicators which you’ll find by googling.
1) “Bookstores are back!” articles typically cite stats from the ABA, whose member indie bookstores grew 10% in 2015, adding $50 million in print sales. Add in non-ABA independent bookstores, and that’s about $100 million total. Great news for the smallest booksellers, which make up 8% of all print sales.
2) But during 2015, Barnes & Noble lost over $300 million in print sales, more than three times what the small independents gained. The second-largest US bookstore chain, Books-A-Million, stayed flat, while book sales at Walmart, Target, and Costco — the core of Nielsen’s “Mass merchandisers” print sector — fell 9%, decreasing somewhere between $120 million – $150 million.
3) Despite all those publicly documented retail brick and mortar print-sales losses, industry stats show overall US print sales up almost 7%. There’s a reason for that…
Our own unpublished AuthorEarnings data on Amazon print sales in mid-2015, compared to what we measured in January and May of 2016, shows Amazon print sales up at least 20% year-on-year for the first five months of 2016, compared to the same period in 2015. As Amazon publicly announced, their ebook sales did grow in both dollar terms and unit terms in 2015. But what they didn’t say publicly is that their online print sales grew even faster.
Bottom line: Mike Shatzkin’s absolutely right. While the media is focused on ebook-vs-print, the really dramatic shift happening now is the migration of print-book sales from physical bookstores to online (especially Amazon).
Isn’t that interesting, now?
Here’s to Data Guy, who provides the most unexpected and awesome insights into the true state of the publishing industry!