Self-publishers No 1 on Amazon and breaking out of genre

dailyunit1Indie ebooks as a whole now take the biggest market share on Amazon.com and indies are also making inroads into genres that have not been considered to be suitable for self-publishing.

The latest report from Hugh Howey’s Author Earnings survey looks at four measures –

  • Number of ranked titles
  • Number of unit sales
  • Gross earnings
  • Authors’ earnings

The number of ranked titles has grown with each survey because Amazon keeps adding new categories, sub-categories, and sub-sub-categories. It’s like a bookstore adding more shelves and giving more titles visibility.

Shelf space for books from the Big 5 publishers has dropped by 4% and these firms now account for only 16% of the ebooks on Amazon’s category bestseller lists.

Self-published now has biggest market share

revenue2The findings estimate that self-published authors now account for 31% of total daily ebook sales, regardless of genre, which makes indie authors, as a cohort, the biggest publisher of ebooks on Amazon.com in terms of market share.

Big 5 authors have seen their earnings fall while indies have seen growth. Self-published authors now earn more in royalties than Big 5 authors combined. Self-published authors are now earning nearly 40% of all ebook royalties on the Kindle store.

How DRM hits sales

For the first time, the survey addresses the subject of Digital Rights Management (DRM), which is the so-called encryption lock on some ebooks, games, films, music downloads, etc.

DRM is optional on Amazon but nearly 100% of Big 5 books use DRM while the indie figure is around 50%, As virtually all Big 5 books are “locked”, there isn’t any scope to assess variation with non-DRM Big 5 books.

But the figures show an interesting variation on self-published titles as the 50% of non-DRM ebooks account for 64% of total unit sales, which means indie titles without DRM sell twice as many copies each, on average, as those with DRM.

This finding was checked at various price points and showed that DRM harms ebook sales at any price point.

Genre no longer a mystery

genre3

Howey’s invaluable analysis also looks in depth at genre and he believes the graph shown above is one of the most important graphs they have ever published.

It shows how each publishing path performs in the top genre categories and how those genres compare with one another in total revenue and market share. Howey says this last distinction is crucial, because the old-time advice to “never self-publish” has now faded to the advice that “self-publishing only works in certain genres”.

For Big 5 authors, Mystery, Thriller & Suspense is by far the most lucrative genre.

Non-fiction and literary fiction are often considered to be uncrackable categories for indies but in non-fiction, self-published authors are earning 26% to the Big 5′s 35%.

The analsysis also shows Big 5 publishers have nearly as small a portion of Romance earnings (18%) and Science Fiction & Fantasy earnings (29%) as indies have of Literary Fiction earnings (13%) and Non-fiction earnings (26%).

Indie authors are dominating Romance and SF/F but have also taken significant market share in all genres, including Mystery/Thriller/Suspense and Non-fiction.

Literary Fiction, which is not a lucrative category overall in publishing, makes up only 2% of Amazon ebook unit sales and 3% of Amazon ebook dollar sales.

A full 20% of that 3% belongs to just one heavily promoted title, The Goldfinch by Donna Tartt. Even including that title, literary fiction barely amounts to 2% of total author earnings – and indie authors earn 13% of that.

The survey points out that the percentage of ebook dollars going to indie authors has crept up for two straight quarters and indies are earning nearly 40% of the ebook dollars going to authors, which shows real progress and that the indie ebook movement is here to stay.

I don’t know how a bestselling author and writer as prolific as Hugh Howey manages to find the time to organise such a wide-ranging survey but all indies should be thankful that he does. You can read the full report and a multitude of comments at Author Earnings.