Data-Dancing on the platforms

Image - iStockphoto: Wollwerth — Image – iStockphoto: Wollwerth

The conga line forms here.

If you’ve been with us in the past few days here at The FutureBook, you’ll know that we’re tripping the estimates fantastic in terms of just how large a market we’re talking about when we say “self-publishing” in the UK and US markets.

As the author Hugh Howey has pointed out, this certainly can be seen as a sign of the sector’s rising significance.

And as anybody within tusks’ length of the issue inevitably reminds us, trying to sort out the scale of self-publishing, either in volume or value, is not unlike those proverbial blind men and their elephant.

In fact, a nod to Howey, who during our #FutureChat on the topic Friday (12th June) probably got off the most scathingly entertaining iteration of the self-publishing faction’s perspective:

@DavidRozansky The problem is some people have been fondling the elephant’s testicles for 30 years and call this experience. #FutureChat

— Hugh Howey (@hughhowey) June 12, 2015

I’d like to point out to you, however, that Howey is leading a difficult and potentially critical new dialog within the non-aligned author corps. Here’s more about his careful presentation of how self-publishing needs gatekeeping(hear that gasp?).

And I’ll catch you up quickly on what we have so far for you on the self-publishing size-up exercise we’re doing, then offer you some new views.

My Bookseller colleague Philip Jones kicked us off in his excellent context-setting essay, How big is the market for self-published titles? I followed this with our #FutureChat walkup, Data-Dancing: How big is self-publishing? (We’ll have a recap.)
Jones then posted agent Toby Mundy’s interesting and extensive workup on the question, How big is self-publishing now? An agent’s view.
And we’re hoping you’ll jump onto our quick and short-lived (by design) survey to give us your own ideas of the size of self-publishing. We’re to have results on Tuesday, so don’t wait.
Today, I’m glad to bring you comments from key representatives of three players in the self-publishing platforms. Like rigs in a vast sea of book production, these companies have become beacons to entrepreneurial authors whose temperaments are right for independently directed careers in a riotously competitive scenario. And when I set out to check in with several industry observers for some viewpoints on “selfpub’s” scale in the States, these were natural go-to folks, generously responsive.

My questions to them all:

What is your estimate for how big the US market for self-published books is (value and volume)?
Can you detail (in brief) how you came to these numbers?
What in your view is the main hindrance to working out the market size, and how would you suggest resolving that?

Draft2Digital’s Dan Wood: About $1 billion of sales worldwide annually

Let’s start with Draft2Digital’s Dan Wood, who also joined us Friday in #FutureChat with some cogent observations. I’m quoting him from here to the next subhead.

Wood: I’m going to answer the questions in reverse since my reasoning for number one builds on the other answers. I apologize if this is much more in depth than you asked for but I think painting a complete picture of our assumptions is important whenever we talk about numbers.

3. As long as Amazon doesn’t reveal their numbers it is next to impossible to determine the market size of eBooks in general. Authors and the industry can appeal to Amazon’s better nature but it is probably in their best interest to keep that information secret for as long as their shareholders will allow.

2. I’m going to start with our numbers since I know them. These numbers are for world sales but I’ll talk more about the US breakdown We opened our beta right around the beginning of 2013.

2013 (Ended with 18,668 books) – $4.9 million in sales
2014 (Ended year with 37,723 books)- $9.3 million
2015 (January to April, ended with 47,855 books)- $5.7 million (I cut off at April since it is the last month we have final numbers for so far this year)

The US has consistently been right at 69% of our sales. The breakdown for 2014 and 2015 are basically the same at this point but we hope to see central Europe grow due to Tolino.

11% Australia
8% Great Britain
7% Canada
New Zealand, Ireland, Germany, Denmark, France, Netherlands (In order, each <1%)

We crossed 50,000 books as of [8th June 2015]. We currently distribute to Apple, Barnes & Noble (B&N), CreateSpace, Kobo, Inkterra (formerly Page Foundry), Scribd, Tolino and we are near the end of our beta for Oyster and will be releasing it shortly.

That means that between us and Smashwords there are approximately 400,000 self-published books using aggregators. They’d have to go into the numbers but there is a chunk of their 350,000 that is only available on their store and not distributed to any of the major retailers. Amazon currently claims to have 800,000 books in Kindle Unlimited (KU) [Seattle’s all-you-can-read service]. While some of these books are parts of Amazon Publishing [Amazon’s traditional publishing house, not self-publishing] and some are indie books that are allowed to be in KU without being exclusive, the majority are books in Kindle Select.

Going back to April, Amazon paid out $9.8 million to the KDP Select Fund. This worked out to $1.35 for every ebook “read” in KU meaning they had 7.14 million loans. Those numbers are fairly reliable at least due to the nature of the program.

From B&N’s year-end report last year they reported $500 million for Nook. I believe that includes some items other than ebooks, however I think it gives us a cap. While Apple has always been our strongest retailer, I think most would say that Nook was the No. 2 digital book retailer for a good period of 2014. I’ve also never seen Apple officially claim to have overtaken Nook, and I believe they would have mentioned it at Digital Book World if they had.

The AAP report for 2014 put trade books somewhere around $1.519 billion.

Then let’s add in that AuthorEarnings’ most recent report makes compelling arguments that indie books account for ~40% market share at Amazon.

Anecdotally most indies I speak to make 60 percent of their revenue from Amazon and 40 percent everywhere else. While this has been getting better, I think it is a reasonable number to go with. I have heard similar numbers from publishers.

So between B&N’s numbers, Apple’s close market share to them and everyone else (Google Play, Kobo, subscriptions, etc), I am going to argue that there is at least a billion-dollar market everywhere beside Amazon internationally, and I believe that this is a very conservative number.

Based on that 60-40 Amazon-to-others split, I am going to guess that the current ebook market is about $2.5 billion at the very least. Based on bestseller charts, I think it is reasonable to assume indies account for around 40 percent market share at the other major retailers too.

1. Based on these numbers, assumptions, guesses and my own biases, I am going to put the self-publishing industry at about $1 billion of sales worldwide annually.

I think it is safe based our numbers to guess that the US market is around $690 million.

We’ve been focusing this year on helping self-published authors be available in international markets and helping them succeed in them. I think just discussing the US market can be misleading since Amazon had such a huge head start here.

I would be incredibly hesitant to remark on volume of downloads since “free” plays such a huge role as a funnel for indie authors to paid works. For the purpose of possible discussion I will offer these numbers. In 2014 we had paid sales for approximately 3.3 million units. We had approximately 12.1 million downloads total including any retailers that reported free sales to us. In 2015 (January to April) we’ve moved approximately 1.9 million paid units and had 10.6 million total downloads.