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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
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chrismcmullen 
Thank you for the interesting info and insights, Chris.
You’re welcome. 🙂
An astute analysis, as always. Thank you, Chris!
Thank you, and you’re welcome. 🙂
Reblogged this on Nicholas C. Rossis and commented:
Chris McMullen offers an astute analysis of the latest Author Earnings report.
Thank you for sharing. 🙂
Reblogged this on Chris The Story Reading Ape's Blog.
Thank you, Chris. 🙂
Thank YOU Chris 😄
Reblogged this on Don Massenzio's Blog.
Thank you. 🙂
Your welcome
I emailed Little A, the newish Amazon literary imprint, and basically got back a form letter suggesting I try self-publishing services on Amazon, which indicated no one there actually read the email I wrote (in which I mentioned already using the print and ebook SP facilities). It was a bit discouraging – a plain response (‘Sorry – we are not accepting submissions’) would have worked better. It would have taken someone no more than a minute to read what I wrote, and I took some care with it.
I have been looking at the Kindle First literary offerings every month for a while now, reading all the available material (description, sample, reviews), and even trying one. The reviews have been VERY mixed for these books.
They obviously have some system, since they are publishing, but darned if I know how to get considered.
I had read a Jane Friedman post about one of the Amazon imprints seeking out one of her books; she was happy with the attention she got. I see the Amazon imprints doing rather well on the Author Earnings reports (for their relatively small output so far).
I wonder if others have had better luck.
I have read books from 47North, and discovered some good books in there. It does seem odd that there is no service from their imprints, as it contrasts KDP, CreateSpace, Amazon itself, Author Central, and just about everything Amazon. I suppose there is a reason…
I was looking only at the things they sent in the monthly Kindle First newsletter, at the time of the newsletter.
It’s fine – and they have their own methods, which suit them.
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This is anecdotal evidence, but since the glory days of 2010-11 each of my new KDP books has done worse than the last. This year my latest, The Trouble with Time, was selected by Kindle Scout. So far it’s sold better than any of my books except the first two.
Amazon algorithms governing the ebook charts are really tough these days – it’s next to impossible to maintain visibility, even with a very good book. But Amazon can sell your book like nothing else can. I think this is the reason for those statistics.
Thank you for sharing your experience with Scout. If I ever publish fiction, I think I will give Scout a shot.
Reblogged this on The Owl Lady.
Thank you. 🙂
Reblogged this on mallie1025.
Thank you for sharing. 🙂
Very helpful info Chris–thank you.
You’re welcome. 🙂
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Chris, you’re doing a horrible disservice by ignoring the glaring issue that has hit this month: Amazon pagesread reporting has gone foul. BIGTIME FOUL.
Its not a rumor. Hundreds of authors experienced drastic declines pagesread reporting over the past month. There are multiple author groups recognizing a problem all across the discussion boards. Its a real problem, not a one-off complaint from one guy. Not an anomaly, but a real problem.
Amazon has admitted the problem exists.
https://teleread.org/2016/10/08/amazon-kdp-select-authors-are-losing-page-reads-apparently-due-to-software-glitches/
https://the-active-voice.com/2016/10/03/authors-report-amazon-is-aware-of-ku-reporting-problem/
This is not a case of one or two authors running around claiming the sky is falling. The sky has already fallen, and authors are trying to get a response out of KDP customer service to fix it. A sketchy endeavor at best.
How did you miss this Chris? How can you discount hundreds of authors with the exact same complaint across all discussion boards?
The real question: How has Amazon’s reporting inaccuracy effected the results from Author Earnings latest report? Author Earnings extrapolations are only as accurate as Amazon, and if Amazon is no longer accurate…
Everyone with their thumb on the biz knows that Amazon pagesread reporting is jacked, and the Zon has not yet fixed it, nor provided a solid explanation. The best guess so far is based on speculation about this new PageFlip mode of kindle reading, and the possibility that PageFlip activity has caused software problems in pagesread reporting for KDP select.
First, I would like to clarify (for anyone who might read the comments) that the above comment is talking about Pages Reads in Kindle Unlimited in October, whereas my article discusses Kindle Sales for the Previous Quarter.
The above comment isn’t pointing out a direct problem with sales during the author earning report data. Rather, the comment is suggesting that, since there appears to be a problem with pages read data in Kindle Unlimited this October, there could potentially be a problem in any data reported by Amazon, including sales during the previous quarter.
====================
I haven’t personally experienced the Pages Flip issue myself. I’ve published dozens of different types of Kindle e-books under multiple pen names, and my own pages read data is actually a bit higher than normal. (The number of pages is significant.)
However, I have heard reports from a few authors who believe they may have been affected.
The page flip issue has me interested, but does not at this point have me alarmed. Having first published in 2008 and having published and sold many books since, I’ve experienced several reporting delays over the years (occasionally the reporting of several hundred sales), and in every case the reporting has eventually caught up to my satisfaction.
The first couple of times this happened, I was far less patient, but I’ve learned to be patient and trust the system (yet as recently as this summer, I put in an inquiry to see what had happened with royalty reporting; as usual, they were able to find and explain the problem, which in that case happened to be a pre-order of books for Prime Day, and eventually the royalties came through).
I have analyzed Amazon sales ranks, author ranks, royalties, sales, and Book Scan data extensively over the years. I have spotted some anomalies, which eventually were resolved, and I have seen changes to the reporting behavior, which eventually stabilized and showed agreement with sales expectations. Amazon does audits, and Amazon is far more transparent than the majority of the publishing industry. It’s cool to see royalties report throughout the day and not have to wait 3 months to see a quarterly total. But it also creates the issue that every time there is a reporting change of any time, it can create a little panic.
Pages flip isn’t the first issue to impact Kindle Unlimited pages read data. There have been a couple of very significant pages read reporting issues in the past. Amazon waits 2 weeks after the month’s end before posting the adjusted Global Fund and per-page rates, which gives Amazon time to deal with possible issues. One month, Amazon actually went back after the Global Fund and per-page figures had been released and made adjustments to affected authors in the previous month.
As I said, I’m interested in the page flip issue, but my experience with reporting issues in the past and my data on the correlation between ranks and royalties have taught me to be patient. I expect Amazon to sort this issue out, and will continue to watch to see how it goes.
Thank you for mentioning the pages flip issue, and good luck with your books.