Indie Author Earnings: Should You Be Worried?

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INDIE AUTHOR EARNINGS (3rd Quarter, 2016)

The October, 2016 edition of the Author Earnings Report is out, and the surprising activity has sparked much speculation and debate.

Whereas the indie share of the e-book market has steadily climbed in the past, this last quarter of 2016 has shown a marked drop.

As a physicist, when I look at this data, what I see are several data points of continued growth, and a single point of decline. Thinking statistically, one data point isn’t significant.

These data points are a little different, though, when you consider that each “data point” consists of 3 months of data (it’s a quarterly report, roughly).

So the combined sales for three consecutive months show indie author earnings losing a significant share of the e-book market.

Three months is a long time in the e-book publishing industry.

And we’re heading into the big fourth quarter.

So if we could learn anything from the data, or if we could uncover a reason behind the drop, we might be able to use that information to make smarter publishing and marketing decisions this coming quarter.

Still, it’s a big IF, and the information begins with one data point. It’s not much to go on. But it’s the reason for ample speculation and debate on the topic.

ANY IDEAS?

If you simply read the comments on the Indie Author Report, or read any of the many articles that have been written on the topic, you’ll encounter possible explanations.

When I looked at the first graph of the Author Earnings Report, what instantly caught my eye was significant growth in the earnings of Amazon published e-books. Amazon actually has its own imprints (which are by invitation only, last time I checked). For indie authors, you can publish with Amazon if you land a deal with Kindle Scout.

The Indie Author Earnings Report actually discusses this very point. According to the report, KindleFirst had several bestsellers during the quarter, and there appears to be improvement among most of the Amazon published e-books (on average). (By Amazon published, I don’t mean KDP, I mean Amazon’s imprints, Kindle Scout, etc.)

Personally, I think it’s good for Amazon’s imprints to be doing well. I’ve read some of their e-books myself, and so I know that there are good books in there.

Amazon seems to think long-term, and this why Amazon seems to place a premium on customer satisfaction. If Amazon published e-books take a larger share of the e-book market and if this improves overall customer satisfaction, then it would help Amazon maintain (perhaps even grow) its large customer base. Presently, Amazon published books are in limited supply, so you shouldn’t run for the hills worried that they will suddenly saturate and dominate the marketplace. Amazon published e-books have shown a more up-and-down behavior (compared to previous steady growth of the indie share) in the past, too, so we really need more data to see if this will simply drop back down or if it’s really a new trend.

Another thing I see is Kindle Unlimited. Over the past three months, Amazon paid out $45 million in royalties for pages read of KDP Select books. (That’s in addition to royalties for sales, it’s on top of whatever Amazon pays for Harry Potter and other traditionally published books in Select, and it’s in addition to the All-Star bonuses. The $45 million is for KDP Select books, which Harry Potter is not part of, and Amazon published books might also be separate from it, though this last point I’ve never inquired about or considered until recently.)

That $45 million (it was paid as $15 million per month) over the past quarter is significant, and it’s separate from royalties for sales. There are significant indie royalties in the KDP Select Global Fund.

And guess what: Amazon published e-books are part of Kindle Unlimited. So if Amazon published e-books start pulling in more customers, this is good for Kindle Unlimited (which has shown continued growth, with the Global Fund rising from $10 to $15 million per month over the past year or more, and with the payout holding fairly steady just under half a penny per page read).

BEST SELLERS

One thing to remember is that bestsellers hold a significant share of the marketplace. As bestselling e-books switch from indie to traditional to small publisher to Amazon imprints, each share of the e-book marketplace can show a big swing.

For the millions of e-books that aren’t bestsellers, or aren’t even close to being bestsellers (and I’m talking overall bestsellers, or major category bestsellers, not subcategories), what’s true of the e-book market on average is less likely to be directly related to your own sales.

Another thing I know from interacting with authors regularly over the years is that EVERY SINGLE MONTH there is a large group of indie authors loudly complaining about how sales or borrows have suddenly dropped off in dramatic fashion. No doubt you’ll hear the stories from such a group this month, too, only now it will be natural to try to tie it to the latest author earnings report.

If you happen to be seeing a drop this month, it could be completely unrelated to whatever else is going on in the e-book marketplace. It’s very common for sales to drop off after 30 days, after 90 days, or on one random month where the algorithm throws in one of its change-ups that suddenly affects your books.

The best thing is to keep writing, keep marketing, learn new ways to market, thing long-term, and try your best to stay positive and productive (which will be your advantage over anyone who doesn’t).

AMAZON IS ACTIVELY PROMOTING INDIES. YES, RIGHT NOW.

I can offer some proof of this point.

Visit www.amazon.com/poweredbyindie. This dedicated Amazon page (at least for October, 2016) says Powered By Indies at the top.

Amazon is sponsoring #PoweredByIndie and has invited indie authors to participate this October. (I received an email about this from Amazon, and if you subscribe to KDP announcements, you probably did, too.)

Over the past years, Amazon has regularly highlighted stories of successful indie authors.

It appears to me that Amazon wants many indie authors to succeed, and no doubt many indie books have benefited from Amazon’s internal marketing and Amazon’s algorithm. Amazon tweaks their internal marketing (like customers-also-bought lists) and their algorithm periodically (the latter is usually intended to improve customer satisfaction in various ways, and is sometimes responsive to attempts to manipulate the algorithm). Even if Kindle sales are down for indie authors overall this last quarter, I still see Amazon as being very indie-friendly (compared to the much of the publishing industry, Amazon is rolling out the red carpet to indies).

Again, this is just a single data point. I’ll wait for more data, and I’ll continue to focus on writing and marketing, which will serve me well regardless of the future of the e-book market.

Good luck!

Chris McMullen

Copyright © 2016

Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers

Click here to view my Goodreads author page.

  • Volume 1 on formatting and publishing
  • Volume 2 on marketability and marketing
  • 4-in-1 Boxed set includes both volumes and more
  • Kindle Formatting Magic (coming soon)

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Kindle Unlimited vs. the Naysayers #PoweredByIndie

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KINDLE UNLIMITED: CURRENT STATUS

Back in January, Kindle Unlimited had taken a little dip (which happens every holiday season), and the naysayer propaganda was in full force.

It’s now October. For the year 2016, Kindle Unlimited has beaten the propaganda.

  • Paying $0.00497 per KENP page read for September, Kindle Unlimited has been amazingly stable since February.  That’s 8 months strong.
  • Presently at a relative high of nearly half a penny per Kindle page read, the payout hasn’t suffered the continual drop that had been predicted. There have been some pleasant jumps, and not just with the September payout.
  • Here’s another cool fact: There are now 1.4 million books enrolled in Kindle Unlimited. There were 860,000 books enrolled in February, 2015.  That’s an increase of over half a million books in 1.5 years (a 60% increase). Remember all the stories about indie authors running for the hills? The data shows otherwise.
  • My favorite number is $15.9 million. That’s the KDP Select Global Fund for September, 2016, another of many record highs. Amazon continues to pay more and more money in Kindle Unlimited royalties. Amazon will pay close to $200,000,000 in royalties for Kindle Unlimited and Amazon Prime borrows for the year 2016 (that’s aside from the royalties for the sales of those books; we’re just talking borrows), and that’s in addition to what they pay for All-Star bonuses (that’s right, the All-Star bonus isn’t taken out of the Global Fund, it’s paid in addition to it; I asked KDP about this specific point).

$200 million in royalties for Kindle Unlimited pages read in one year: That’s a significant share of the e-book market, and a rather indie-friendly share, too.

The continued rise in the KDP Select Global Fund and a fairly stable payout of just under a half-penny per page (though it will probably take its usual dip in December and January, and then likely return next February) suggest that the Kindle Unlimited customer base continues to grow. A great sign.

With 1.4 million books to choose from, with nearly 50,000 added just in the last 30 days, there is also growing competition for this customer base. The way to deal with the increased competition is to keep writing, try to write better, and try to improve your marketing skills. Competition is a good sign. It helps to bring in more customers, and it shows that this market is worth competing for. Good writing and marketable ideas help to provide good long-term prospects.

Celebrate Great Indie Writing with the #PoweredByIndie Hashtag in October, 2016

You can find some great indie writing in Kindle Unlimited, for example.

Many of those 1.4 million books were self-published. There are 100,000 or so traditionally published books in the mix, too; it’s not exclusive to self-publishing. But indie authors have really helped to make Kindle Unlimited strong enough to attract and grow a significant customer base.

Kindle Unlimited, in a strong way, really is #PoweredByIndie. But we must also give credit to Harry Potter, Hunger Games, Amazon’s imprints, and other great titles, too, to help attract customers. It’s great writing that attracts customers, regardless of how it is published.

Strive for great writing and good things are bound to happen.

Chris McMullen

Copyright © 2016

Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers

Click here to view my Goodreads author page.

  • Volume 1 on formatting and publishing
  • Volume 2 on marketability and marketing
  • 4-in-1 Boxed set includes both volumes and more
  • Kindle Formatting Magic (coming soon)

Follow me at WordPress, find my author page on Facebook, or connect with me through Twitter.

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Celebrate Great Indie Writing #PoweredByIndie

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CELEBRATE GREAT INDIE BOOKS

Indie authors often support one another.

Wouldn’t it be wonderful if a giant company with huge marketing power took a month to highlight many wonderful indie authors?

We all know that Amazon gave indie authors a chance when they opened the self-publishing door. And Amazon occasionally highlights indie author success stories.

But now Amazon is actually celebrating great indie books for the month of October.

Check out Amazon’s Powered By Indie page:

  • Visit www.amazon.com/poweredbyindie.
  • Note the image text: Celebrating great writing.
  • There are 4905 Kindle e-books listed, including 154 new releases (and 5 coming soon).
  • Only about 1/3 are in Kindle Unlimited.

YOU, too, can celebrate great indie writing:

  • Use the #PoweredByIndie hashtag when you post related tweets (select stories will be shared).
  • This is a great time to post a list of indie books that you’ve enjoyed.
  • Or post what you love about being an indie author.
  • Share Amazon’s Powered By Indie webpage with other authors (and readers).
  • Read, read, read. 🙂

Chris McMullen

Copyright © 2016

Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers

Click here to view my Goodreads author page.

  • Volume 1 on formatting and publishing
  • Volume 2 on marketability and marketing
  • 4-in-1 Boxed set includes both volumes and more
  • Kindle Formatting Magic (coming soon)

Follow me at WordPress, find my author page on Facebook, or connect with me through Twitter.

Comments

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