Hugh Howey - Author Earnings Report

[Fishbowl Helmet]

A mighty fine attempt at data collection re: ebooks. Acknowledges the skewed data set and hopes to expend data collection. Really interesting read.

WITH CHARTS!

IN COLOR!

http://authorearnings.com/the-report/

 

[Brian G Turner]

I see too much inference and not enough facts.

More to the point, he's clearly biasing the results. For example, he refuses to accept that self-published books are getting so many 5-star reviews through friends, family, and mutual support groups:

It’s interesting to me that the self-published works in this sample have a higher average rating than the e-books from major publishers. There are several reasons why this might be, ranging from the conspiratorial (self-published authors purchase their reviews) to the communal (self-published authors read and favorably rate each others works) to the familial (it’s friends and family who write these reviews). But the staggering number of reviews involved for most of these books (over a hundred on average across our entire sample) makes each of these highly unlikely.

And because he refuses to accept that, he then makes the claim that self-published books score better because they are seen to have a better value.

This results in him calling for big 5 publishers to lower their prices because they are obviously not providing perceived value - even though he has purposefully biased the data

Later on he also makes the astonishing claim that Amazon barely sells any paperbacks. In fact, he provides two charts that "prove" audiobooks outsell paperbacks by a factor of 2 to 1, and that self published books outsell everything by an even larger factor.

He's also inconsistent with his language - he uses "indie" interchangeable with "self" publishing. An independent publisher can be presumed to have quality controls in place to select competent titles, and have editor and copy editor services applied to those who get through - neither of which can be argued to be true of self-publishing, which has no inherent quality controls.

The whole report, therefore, seems a big fudge of assumptions to support an existing bias, to the detriment of objectivity.

 

[psychotick]

Hi,

Look all surveys and studies in the field of what writers earn are flawed. This one is no exception.

But Brian using indie and self publishing interchangeably is not really an issue here. They are fairly much the same thing. By indie we aren't talking about smaller professional publishers we are talking self publishers. And so no you can't assume an indipendant publisher has quality controls in place. What you can assume here is that in the sample analysed quality controls are in place simply because these are the top 2,500 books in each genre not the bottom.

And I'm not even going to worry about the stars and customer preferences. That's a red herring. If an indie book is well done no one should know it's indie.

I'm only going to look at the incomes of authors - and here he's on to something. But with an obvious proviso.

The study begins by starting with a skewed distribution, only looking at the top 2,500 books in a number of selected genres. That means that you have to assess the findings against the population studied. And the population is moderately successful and above authors not all authors. For that group it holds water.

What this study clearly shows is that if you as an indie can make a decent fist of making a decent book with proper cover, blurb, marketing and a moderately desirable story etc, then you will probably earn more than a comparable trade published author.

That's actually no great surprise. (And I know many trade published authors won't want to accept that.) But in the end it's simple maths really.

If I as an indie can put out six books in a year at say four bucks, and a trade pubbed author can only put out one because of the road blocks inherent in the trade publishing industry, then I'm already on a six to one advantage. Then throw in the fact that 70% of that four bucks is mine and our trade published guy gets say 15% and my financial advantage grows to roughyl twenty five to one.

The trade published author then has to make up his dollars in terms of having a solid publisher behind him allowing him to charge more for his book - say eight bucks, and then by them selling more books. So lets say I sell a thousand of each of my books and earn $2,800. That's $16,800 to me. To equal my income our trade published author with his single book has to sell 14,000 copies. That's not an inconsiderable number. Some will do it and some won't.

Average incomes for indies will of course still plummet further than for the trade published because there are a great number of poorly prepared books out there which never sell anything at all bringing the overall numbers down. (But they aren't a part of this study.) So for those who can't be bothered producing their best work they won't get a lot out of this. They'll fairly much earn nothing self publishing and they won't be able to trade publish either so there's really not a lot in it for them either way.

What each author has to decide for him or herself, is whether they believe that the advantages of trade publishing, i.e. more sale chanels and higher prices, not to mention in house professional cover design and editing outweigh the advantages of indie publishing, i.e. just being able to publish books. If you are able to produce a good book, cover, blurb, market etc, then I would suggest that in most cases you would be financially better off going indie. If on the other hand your skills in some areas like covers and marketing fall short and you don't want to spend the time and effort upskilling but rather just writing more books, than trade is the better option - assuming you can find an agent and publisher.

The one thing that is certain however is that no matter which road you take quality must be your byword.

Cheers, Greg.

 

[AMB]

At the end of the day, this is the first *large scale* attempt to understand the role of indies in the modern publishing industry. Of course it is flawed. But it is only a beginning.

Hugh and his data crunchers are going to be doing a larger sample with more categories, and will keep reviewing the data.

Hugh does include raw data, so people are welcome to go through it and draw their own conclusions. This is the important bit. People are looking at the data, and some who see value in what they are doing are already signing on to help make it more accurate. Hopefully those who disagree are doing the same. The fact that he has even done this much shows there are ways to find this information out, and maybe people will do their own studies.

At the end of the day, a study of this kind is due. It will be interesting to see how the next report differs from this one.

 

[Rolynd]

If nothing else the study shows that ebook publishing by major publishing houses needs an overhaul.

What possible justification is there for a publisher to take so much more profit from an ebook sale and not pass any of that on to the author? You accept your 15% or 20% royalty in a model where the publisher bears all of the costs involved in getting a book onto a shelf. When that cost becomes a tiny percentage of what it was the model has to change to reflect that.

Is there a decent, independently verifiable, rating and reviewing factory for self published ebooks? Some kind of weighting system based on reviews that causes the decent titles to go towards the top? So a score from a reviewer who has rated twenty different titles from different authors holds more weight than someone who has just reviewed one. This would help with the family and friends review bias.

Someone cleverer than me must thave come up with something.

 

[HareBrain]

Is there a decent, independently verifiable, rating and reviewing factory for self published ebooks?

Nope.

Someone cleverer than me must thave come up with something.

Nope.

I agree, though, that this is what's needed, and it's what I've been hoping for for years: a review-aggregating site similar to what rotten-tomatoes does for film. I believe this will eventually appear, but I haven't seen any sign of it yet.

 

[Glitch]

The trade published author then has to make up his dollars in terms of having a solid publisher behind him allowing him to charge more for his book - say eight bucks, and then by them selling more books. So lets say I sell a thousand of each of my books and earn $2,800. That's $16,800 to me. To equal my income our trade published author with his single book has to sell 14,000 copies. That's not an inconsiderable number. Some will do it and some won't.

Are you deducting costs from you earnings figure? I'm referring to copy editing/proof reading and cover design.

 

[Fishbowl Helmet]

Brian, do you argue that much against reports on ebook sales which ignore self-published works entirely? That whole 70% market share for print explicitly excludes all self-published ebooks, which are a significant factor.

Howey knows the report is flawed, he admits it practically from the get go. But that doesn't invalidate that this is a good start for getting at the largely undocumented self-publishing side of the equation.

 

[Brian G Turner]

Brian, do you argue that much against reports on ebook sales which ignore self-published works entirely?

I don't have a bias - I just don't like to see basic flaws in data interpretation. I'm just as critical when reading New Scientist, and see common sense not applied to interpretations there.

Of course, I could always be misreading the presentation itself.

However, my reading of it is that:

- Amazon's sales in books are primarily driven by self published books,
- Amazon barely sells any paper books,
- most Amazon buyers value self-published books over every other format.

I just cannot accept those conclusions as commonsense, and would suggest an issue with the methodology.

However, the conclusions would be easy to prove by referring to Amazon's earnings reports for investors.

But Brian using indie and self publishing interchangeably is not really an issue here. They are fairly much the same thing.

It is an issue IMO, though - it's a minority trying to change the terminology in order to claim an improved status in the eyes of consumers. Independent retailers/publishers sell more than a single product.

 

[psychotick]

Hi Glitch,

No. I'm looking purely at the revenue side. I can't do anything else since I have no idea at all what the average of these authors (and here I include myself since I assume my data was mined as well) spend on services. I only know what I spend and I don't think it's necessarily transferable to others.

Brian, it's not a minority trying to change the terminology. It's the vast majority. Look if you publish your own book then you are a publisher by definition. There's nothing in the definition that says publishers have to publish other people's books. Just as there's nothing in the definition of retailers that says they have to sell other people's wares. So if there are millions of self publishers and as a movement they want to call themselves indies, so be it. Personally I like calling myself an indie, but I prefer to call myself an author.

Cheers, Greg.

 

[Fishbowl Helmet]

I don't have a bias - I just don't like to see basic flaws in data interpretation. I'm just as critical when reading New Scientist, and see common sense not applied to interpretations there.

Everyone has a bias. Hell, multiple biases. It's part of being human. The trick is to air them quickly and accept they skew the data rather than pretend they don't exist.

Considering your yen for science then I'd expect you to refute the faulty data used by Bowker and Books in Print, Amazon and the Big 5 when they claim print accounts for 70% of the market share, when their numbers explicitly do not include ebook-only self-published authors.

It is an issue IMO, though - it's a minority trying to change the terminology in order to claim an improved status in the eyes of consumers. Independent retailers/publishers sell more than a single product.

Or to no longer be incorrectly perceived as a ghetto. Strikingly similar to how science fiction is incorrectly perceived as a ghetto. Hmm. If only we could get them to listen. But the big boys have the public's attention and say the small fry is bad. No way there's any self-service in that. Nope.

 

[Brian G Turner]

Considering your yen for science then I'd expect you to refute the faulty data used by Bowker and Books in Print, Amazon and the Big 5 when they claim print accounts for 70% of the market share, when their numbers explicitly do not include ebook-only self-published authors.

I would expect such figures be taken only in context of that, ie, comparing existing print vs ebook sales for the same product.

Strikingly similar to how science fiction is incorrectly perceived as a ghetto.

Well, it's a small genre, but I seem to recall Iain M Banks saying he's sold about a million culture books - so there's certainly breakout potential.

Just to clarify my position on the subject in case it helps - I'm aiming to be a hybrid author - main works via traditional print, and background and supporting stories via self-publishing. Whether that works out remains to be seen.

So I'm not against self-publishing itself - I just sometimes find the arguments become overly simplified and unnecessarily polarised. Primarily a defensiveness from the self-publishing side.

However, I also think the traditional publishing model is outdated (I mean, seriously - DRM?) and have criticised it here previously, and agreed with some of the statements Hugh Howey and Michael J Sullivan have made with regards to bringing it up to date.

 

[tinkerdan]

It might still be too early to even try to make these kinds of comparisons.

There was a time when self publishing was going out and finding a printer to print a finished book that you then distribute to brick and mortar.

Now there has almost been a leap to electronic for many as the only copy.

There still is some middle ground and there is more opening up to do the middle ground without having to deal with someone who wants to sell thing you don't need.

I for one buy indie books in the electronic form because most are reasonably priced and those that do the TP and HB are fairly expensive.

The Traditional I buy the TP or HB because of two things. One is the price for electronic is usually the same a TP. The other is that the quality of the electronic is often not as good as the TP because of a number of formating issues although somethings seem to be slipping and there are grammar problems creeping into the whole mix.

So for me when I buy it's like apples and oranges.

Amazon occasionally tries to under cut the price of the ebooks and that helps a little but seriously unless the price structure changes a lot I'll stick to what I know best which is the TP and HB for Traditional books. If the quality keeps slipping I'm not sure what I'll do.

 

[Kissmequick]

Someone much better than me at maths has done a proper analysis of this and came to the conclusion that basically this proves the SP books can compete on Amazon

Thing is (for just one point they made) Amazon probably accounts for a (probably very) large portion on a SPer's sales. Not so with traditional publishing -- I think they broke it down that in the US, Amazon only accounts for 25% pf sales. So this study is comparing a big portion of an SPer's income with a small portion of a trade published author's income. There was also the fact that given the break down of SP v trade books on Amazon US, a trade book is actually twice as likely to hit the bestsellers as an SP (but still very unlikely at 0.9% ETA: Oops, missed a zero. Should be 0.09%)

And ofc it only deals with the best sellers in each genre. It doesn't tell anyone what is the best decision for their book, because hey, there's a lot of books that aren't bestsellers and would you make more money trade or SP? Are you sure this book will be a bestseller? Which avenue will make you he most sales?

Steve Mosby on the subject:

The reality is that publishing anything is a unique path. If you have a book, and you’re trying to decide whether to self- or traditionally-publish, there is only the apparition of help for you in these figures. It might be that you traditionally-publish and sell 100 copies, and would financially have been better off self-publishing. It may be that you sell a million copies through traditional publishing. That doesn’t mean that you’ve left money on the table simply because those million sales if self-published would have netted you more. You can’t say what might have happened had you chosen a different route – whether you would have got those 100 or those million sales or something different.

That said, it IS an interesting look at the data. I'd just be wary of using them to come to the conclusion it's always best to SP a book. Sometimes it is and sometimes it isn't (To be clear, there's a possibility I may SP some stuff myself later down the line, because those projects it'll probably work better for, so I'm not anti SPing. I'm anti anyone going any way without researching what is best for them and their book)

 

[AMB]

I believe in the next round there will be analysis of B&N sales as well. And, of course, a larger sample.

Like I said, this is a beginning, and it will be expanded and improved upon.

 

[Fishbowl Helmet]

Here's another analysis: Analyzing the Author Earnings Data Using Basic Analytics | Digital Book World

 

[Nerds_feather]

Here's another analysis: Analyzing the Author Earnings Data Using Basic Analytics | Digital Book World

From that:

It is a non-scientific sample of volunteers, many but not all of whom responded to an invitation from Writer’s Digest to complete the survey.

As far as a statistician would be concerned, that makes it a bogus sample. There's no guarantee of randomness (and plenty of reasons to suspect non-randomness), which in turn means that you can't properly infer anything from the sample about the wider population.

 

[Fishbowl Helmet]

From that: As far as a statistician would be concerned, that makes it a bogus sample. There's no guarantee of randomness (and plenty of reasons to suspect non-randomness), which in turn means that you can't properly infer anything from the sample about the wider population.

Sorry, Nerds, but that quote refers to the author's (Weinberg) own survey of data. Not Howey's. Howey's data is still flawed, but he conducted no surveys. Weinberg's discussion of Howey's data starts a few paragraphs later.

Weinberg has been hammered by self-pubbers for her survey approach, she felt the need to discuss it further in relation to Howey's data collection.

 

[Nerds_feather]

Sorry, Nerds, but that quote refers to the author's (Weinberg) own survey of data. Not Howey's. Howey's data is still flawed, but he conducted no surveys. Weinberg's discussion of Howey's data starts a few paragraphs later.

Weinberg has been hammered by self-pubbers for her survey approach, she felt the need to discuss it further in relation to Howey's data collection.

Gotcha.

Actually there's nothing wrong with surveys--provided they are collected in line with sufficient randomness (either SRS or cluster design), and then properly weighted. But her survey doesn't do that.

So Howey's is just data from Amazon on sales, rather than on earnings?

 

[AMB]

Author Earnings update: What Writers Leave on the Table.