Coming to DBW: What Does Author Earnings Say to the Industry?

Skepticism about any system of quantifying any part of the publishing industry is important and right. Because full sales data is simply not made available by all retailers, every survey model, especially in ebooks, is a matter of estimates and extrapolation to one degree or another. And in his or her interview with Dan Berkowitz at DBW, Data Guy mentions looking forward to presenting there as “taking a step back from our usual focus on author advocacy.” That’s an agenda. There’s nothing wrong with an agenda. And Data Guy and Hugh Howey have always made it clear that their agenda was to help authors understand self-publishing as a viable financial alternative to trade publishing. Nevertheless, agenda in survey work means bias—perhaps very good bias, but bias—and this intensifies the need for all of us to be willing to question, in a friendly and collegial way, even the welcome presence of Author Earnings in our views of the industry.
Image - iStockphoto: Joruba
Image – iStockphoto: Joruba

By Porter Anderson | @Porter_Anderson

If booking your seat at the Digital Book World conference (March 7-9, Midtown Hilton), you’re welcome to use code PORTERDBW16 to save 5 percent. More on key upcoming conferences.

Alternative Industry Statistics at DBW

This handsome arthropod is the image used in Digital Book World Conference materials for "Data Guy," the person behind
This handsome arthropod is the image used in Digital Book World Conference materials for “Data Guy,” the person behind

The person who calls him- or herself Data Guy—and who is sporting an embroidered image of a spider these days—is surely Arachnida ambitia, a specialist in avid calculation.

In what promises to be one of the more unusual moments at FW’s Digital Book World conference, March 7 to 9 in New York, this mystery analyst will present a keynote oration with easily one of the longest titles of the conference: Outside the Data Box: Taking a Fresh Look at ebook Sales, the Indie-publishing Market, and a Fast-changing Publishing Business.

If there’s any time left after #DBW16 impresario Mike Shatzkin has read out that title to us, the unidentified Mr. or Ms. Guy will then offer his or her “fresh look” at industry sales, based on the Author Earnings project begun two years ago with the author Hugh Howey.

In the new February Author Earnings report, released Monday (February 8), things continue to look rosy for self-publishing authors and dire for the trade. But there are also announcements of changes in the approach—not entirely clear changes, mind you but in some ways promising. We’ll look at a bit of that later in this article.

To grasp the industry-political context here, we must remember that many who are skeptical of the efficacy of the Author Earnings effort point to the fact that it is an agenda-driven exercise.

Frustrated with what they said was a skewed and pro-industry picture presented at the Digital Book World in 2014’s “What Authors Want” survey, Mssrs. Howey and Guy set out to find a way to demonstrate that self-publishing is a viable route to earnings potential for authors. The result is the Author Earnings assessments, which many in the self-publishing community have defended as proof that their pathway to publication can be as good or better, financially, as the standard trade publishing route. Those fans, again, will be chuffed.

Highlights of the New Report

There are many assertions and conclusions drawn in the latest report, as in the earlier ones. It runs to 21 pages in a PDF edition. I urge you to read the entire piece to get the full picture that Data Guy wants to present. Here, I’ll just offer a very few key points before looking at what we’re being told about how all this is now derived.

Here’s the news: Author Earnings asserts that on Amazon’s bestseller lists, indie self-published titles account for more than twice the number of Big Five titles.

“What has changed,” the report tells us, “is the degree to which Amazon’s overall Top 20 bestsellers, and even the overall Top 10, have come to be dominated by self-published titles from indie authors—nearly half of which were not priced at $0.99 but rather ‘full-priced’ sales at prices between $2.99 and $5.99.”

From the February 2016 Author Earnings report
From the February 2016 Author Earnings report

From the date on which “our spider ran,” in Guy-talk:

  • Four of Amazon’s overall Top 10 bestselling ebooks were self-published indie titles
  • Ten of Amazon’s overall Top 20 bestselling ebooks were self-published indie titles
  • Fifty-six of Amazon’s overall Top 100 bestselling ebooks—more than half—were self-published indie titles
  • Twenty  of Amazon’s overall Top 100 bestselling ebooks were indie titles priced between $2.99 and$5.99

The most interesting question for us at this juncture is just what the trade publishing management attending DBW will make of this. Can it be that the “legacy” industry is being outclassed so substantially by “indie published” authors—the self-published sector?

Indeed, of interest to everyone, the report goes on to submit that it can tell us “how many ebooks a day is actually selling.” I quote the report:

As of mid-January 2016, Amazon’s US ebook sales were running at a rate of 1,064,000 paid downloads a day…

Total: 1,064,000

  • Indie Self-Published ebook KU full-read equivalents    155,000
  • Indie Self-Published regular retail ebook sales    293,000
  • Small/Medium Publisher ebook sales     204,000
  • Amazon-Publishing Imprint ebook sales     115,000
  • Big Five Publisher ebook sales     244,000
  • Uncategorized Single-Author Publisher ebook sales   53,000

Where the partisan nature of the Author Earnings effort always surfaces most clearly is, logically, in its claims about indie-author earning power, that original two-year-old agenda, “the pie chart that interests us the most,” as the report puts it. Here it is:

From the February 2016 Author Earnings report
From the February 2016 Author Earnings report

Ebook sales on, Data Guy tells us “are generating $1,756,000 a day in author earnings. But less than 40 percent of those author-earnings dollars—from the largest bookstore in the world—is now going to traditionally-published authors. And less than a quarter is going to authors published with the Big Five.”

What follows immediately is the bone that Author Earnings always wants to pick with the industry, with the Authors Guild, and with standard reporting methods:

“Is it any wonder that the traditional publishing media and historic author advocacy groups are reporting declining ebook sales and shrinking author incomes for their members? We humbly submit that, for author earnings, these organizations are looking in all the wrong places. $140 million a year in Kindle Unlimited payouts is going directly to authors, and yet that enormous sum of income is somehow uncounted by traditional author surveys. And as we are now able to measure, that sum is only the tip of the iceberg. There is also a vast swath of the market not being reported on at all, along with a whole host of authors not paying dues to author advocacy groups and simply going about the business of earning an income with their art.”

This is the language of self-publishing as what some of its champions call the “shadow industry,” a creative corps that cares nothing for the customs and concerns of the industry, and yet seems never to tire of carping at the establishment. It’s always worth noting that even some of the most-honored self-publishing bestsellers have taken contracts when offered.

And as anyone familiar with negotiating basics knows, by framing its results in ways that call out “the other side”—in this case, traditional publishing—Author Earnings repeatedly has hobbled its own efforts to widen the discussion. Rather than simply present an interpretation of the market and let that interpretation speak for itself, the material is served on a bed of right and wrong. Eyes glaze over, chips remain on shoulders, collegial exchange seems hard to come by.

For the first time, Author Earnings expands to print sales, and there, the Big Five are allowed a 47-percent dominance of daily revenue to authors from print bestsellers. The chart:

AE chart 3
From the February 2016 Author Earnings report

The commentary that goes with this one:

“It’s interesting to note here that the Big Five hold less than a quarter of print bestseller slots, and their unit sales, dollars, and author royalties are less than half of Amazon’s print business. This is a greater percentage than any other publishing type, but it again stresses the need for balance and perspective when the top publishers’ numbers are taken to represent the whole of the industry; they don’t even represent half of online sales in the format they are supposed to dominate. And self-published indie authors, who are already taking home 14 percent of online print author earnings, have captured a significant share of the author dollars from online print sales.”

On the way out the door, Data Guy stops to pop publishing with a towel for agency pricing, of course, which gives us those out-sized prices on trade ebooks and Amazon’s “This price set by the publisher” notes on the pertinent sales pages. It may well be true that the publishers are shooting themselves in the feet with agency pricing on ebooks, perhaps contributing to the slowing of growth in digital reading on some level.

The tone with which Data Gay tells us this is typical:

“By reinstituting agency ebook pricing and forcing their own consumer ebook prices high while preventing Amazon from discounting those ebooks, the Big Five publishers…willingly did financial harm to their own bottom lines and in the process also seriously damaged the sales and earnings of their own authors, in an attempt to wrest market share and control away from their largest and most profitable retailer.”

This may not be the kind of language with which Data Guy might endear himself to the industry seated in New York for DBW.

Data Guy goes on to say—and may tell the audience at the Hilton on Sixth Avenue—that:

“Despite the Big Five’s return to agency ebook pricing, Amazon’s overall US ebook sales have continued to grow throughout 2015 in both unit terms and dollar terms. On the other hand, the Big Five’s share of those ebook sales has plunged precipitously in both dollars terms, and even more precipitously in unit terms.”

If that keynote on March 9 from Data Guy includes the new report’s drive-by shot at coloring books—five of the 11 bestselling ones were self-published by indie authors, yea, even the coloring books!—an uninformed audience member may decide that the whole industry is going to hell in a conference tote bag.

That’s why the real context here involves the methodology. The battle of publishing’s statistics is not just over the numbers themselves but over how they’re generated.

Read more

There’s more: Read the full story at Publishing Perspectives

By Porter Ander­son

Publishing Perspectives: ‘Digital Arachnid: What Does Author Earnings Say to the Industry?

Originally published at


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