New analysis reveals the startling truth about self-publishing

womanwriter2Self-published bestselling author Hugh Howey has data-mined a mass of ebook sales information to come up with some game-changing findings that show self-published titles dominating traditional publishers in sales, author earnings and reader satisfaction.

Ebook distributors such as Amazon and Barnes & Noble’s Nook refuse to make their sales data public so the market details have been opaque until this ground-breaking analysis.

When his science fiction bestsellers, such as Wool, which have sold millions, started to take off, Howey began to plot the correlation between rankings and sales. Other self-published writers shared their sales rates and it became possible to estimate how much an author was earning by looking at where their works ranked on public lists.

The breakthrough came when an author with advanced coding skills got in touch with Howey. He had created software to crawl online bestseller lists and gather, aggregate and organize mountains of data.

The first run grabbed data on nearly 7,000 ebooks from several bestselling genre categories on Amazon and later runs have looked at data for 50,000 titles across all genres. Here are some of the stunning findings.

Indies offer better value

reviewvprice1The analysis shown in the charts above looked at the average review rating of 7,000 bestselling ebooks and the average list price of the same ebooks in five categories covering:

  • Indie Published
  • Small/Medium Publisher
  • Amazon Published
  • Big Five published
  • Uncategorized Single-Author

The self-published works have a higher average rating than the ebooks from major publishers while the major publishers are more than twice as expensive as Indie Published.

The shortest bar in the review rating graph on the left correlates to the tallest bar in the price chart – that is, the lowest average rating correlates to the highest price, with both figures being for the Big Five.

Howey says most readers don’t know and don’t care how the books they read are published. They just know if they liked the story and how much they paid. If they’re paying twice as much for trad published books, which will they rate higher?

He believes pricing ebooks higher than mass market paperbacks used to cost is losing readers rather than protecting print editions or bookstores. High prices also drive customers to less expensive books, so trad publishers are creating a market for self-published works.

Reader demand is not being met by traditional publishers

nooftitlesThe wide-ranging survey considers genre ebooks on several Amazon bestseller lists according to how they were published.

The bestseller lists were Mystery/Thriller, Science Fiction/Fantasy, and Romance, including all their sub-categories, accounting for 70% of the top 100 bestsellers on Amazon and well over half of the top 1,000 bestsellers.

Indie and small-publisher titles dominate the bestselling genres, which shows demand from readers is not being fully met by trad publishing.

Indie authors outsell the Big Five combined

dailyunit2

Daily unit sales are estimated by sales ranking, using publicly shared data from dozens of authors. Amazon comes out very well, with 4% of titles taking an amazing 15% of the sales, nearly four times the average unit sales volume per book.

But the Big Five end up with average per-book sales at just 1.2 times the overall average.

In fact, indie authors are outselling the Big Five combined. Indie and small-press books take half of the ebook sales in the most popular and bestselling genres on Amazon.

Ebook market share is massively underestimated

Many estimates have claimed that ebooks account for about 25% of overall book sales but this is based only on sales from big publishers. Ebook distributors don’t reveal their sales data, which means self-published ebooks are not counted in that 25% and neither are small presses, ebook-only publishers or Amazon’s publishing imprints.

If you consider only the so-called trade publication sector, excluding textbooks, academic titles, cookbooks and children’s books which are considered relatively safe from ebook competition at present, it’s likely that ebooks already account for more than half of current sales.

Analyzing the overall Amazon bestseller lists for several categories, the research found:

  • 86% of the top 2,500 genre fiction bestsellers in the overall Amazon store are ebooks

  • At the top of the charts, 92% of the Top 100 best-selling books in these genres are ebooks.

Self-published authors make more money

The naysayers claim self-published authors don’t make any money but the figures from this analysis tell a very different story, using sales per ranking data and applying it to the top 7,000 bestselling genre works on Amazon.

authorrevenue1

  • The Big Five take half the market on gross dollar sales although they only account for a little over a quarter of the unit sales but they only have to pay 25% of net revenue to the author.
  • Self-published authors on Amazon’s platform can keep 70% of the total purchase price and indie authors are earning nearly half the total author revenue from genre fiction sales on Amazon.
  • The Big Five make more than twice what the author makes for the sale of an ebook despite the fact that ebooks do not require printing, warehousing or shipping.
  • Self-published authors as a group are making 50% more profit than their traditionally published counterparts, even though their books have only half the gross sales revenue.
  • In the top-selling genres, Amazon is making nearly as much profit from indie ebooks as from Big Five ebooks.

The survey goes on to estimate annual ebook earnings for all these authors based on their daily Amazon sales. The results, again, are illuiminating.

authorearnings4

Indie authors outnumber traditionally published authors in every earnings bracket but one and the difference increases as you leave the highest-paid outliers, although even these extreme outliers are doing better with their self-published works. The breakdown of authors earning seven figures is:

  • 10 indie authors

  • 8 Amazon-published authors

  • 9 authors published by the Big Five

Higher royalties and other advantages, such as price, seem to counterbalance the marketing power of trad publishers.

The even more surprising fact is that most self-published authors are, on average, earning more money on fewer books, which suggests the earnings’ gap will grow greater over time as self-published authors develop their backlists.

I’ve only included the major findings of the analysis in this article. There is a lot more detail, commentary by Hugh Howey and charts at Authorearnings.