Business Musings: Author Earnings…Again

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I’m watching numbers for the next four weeks or so, not because I need to boost my sales or anything, but because a number of promotional experiments are all occurring at the same time.

On top of it, the latest Author Earnings report came out, with some information I mentioned was missing from previous reports. Hugh Howey and Data Guy took those suggestions from me and others as a request (which I appreciate!) and so, released a new report the day after I blogged about the old one. Yep, I was the one who was late, not them, so this time, I’m blogging immediately.

I’ll report on a bit of the promotional experiments in two weeks or so, after I return from a trip to Denver where I’m the author guest of honor at MileHiCon. (If you’re there, come to the signing and say hello.)

The reason I keep using the word “experiment” with promotions is this: I believe every promotion that a person does has to have a goal. Many of the promotions that I’m doing, some of which surround the boxed set that I’m doing with eight other authors, mark my first concentrated effort on a few of those things. (For more on the boxed set, see Tuesday’s post.)

For example, the Rafflecopter promotion listed at the bottom of the page is new to me. It’s definitely boosted my Twitter following and my newsletter signups. I expect some of the newsletter folks to drop away over time, but the Twitter folk will probably remain. So, that’s been fascinating, and I expect it will remain fascinating through the end of the year.

I’m sure I’ll have more information to share, particularly as the next two weeks of promotion include some being done by one of my old traditional publishers on Barnes & Noble (!) as well as a few smaller promotions that WMG is trying.

This week, though, I’m focused on Author Earnings, again. The October report examines “the rest of the ebook market.” In the past, Author Earnings only examined Amazon’s numbers and only from a “slice,” usually numbers spread out over an entire day. Hugh and Data Guy would examine the sales figures from all Amazon’s bestseller lists (and no, I’m not going to look up how many lists that is; Hugh and Data Guy know, however).

This time, Hugh and Data Guy looked at Apple, Kobo, Nook, and Google Play in the United States only. The numerical results surprised me as did, I suppose, Hugh and Data Guy’s personal conclusions.

First, the numerical results. In the United States, Hugh and Data Guy found that “when indie books without ISBNs are included in the statistics, Amazon accounts for 74% of all US ebook purchases and 71% of all US consumer dollars spent on ebooks.”

That didn’t surprise me. Right now, Amazon U.S. is huge. The numbers also show that almost all of the remaining 26% of ebook purchases come from Kobo, Apple, Nook, and Google Play, with Google Play being the smallest retailer of the bunch. Apple was the big player here, and I expect that will grow over time.

What did surprise me, in a pleasant way, was this: “At those 4 other stores, self-published indie ebooks make up 22% of all ebooks purchases and take in 32% of all author income generated by ebook sales.”

Thirty-two percent is a nice number. It’s higher than I expected. I had thought those four also-ran bookstores would have smaller figures in the United States.

As I went through the numbers (and I read the report several times), what struck me was this: Apple’s numbers in particular remind me of the numbers I saw from Amazon in 2010. If Apple continues to grow—and I think it will—it will become a larger percentage of the U.S. market in the next five years. I am not going to try to predict the future, but I wouldn’t be surprised if Apple became the second biggest ebook market in the United States in the next five years.

Why do I keep emphasizing “in the United States”? Partly because of the conclusions that Hugh and Data Guy come up with.

They examined United States numbers only. Their data-mining techniques would be much harder to do with bookstores outside of the U.S. Getting the outside of the U.S. information on the other stores from inside the U.S. would require computery thingy-majobbies that I don’t entirely understand.

When looked at the U.S. only, and when examined with Amazon’s Kindle Unlimited in mind, Hugh and Data Guy find that indies earn the majority of their money on Amazon. So, the implied message of the report is that right now, if you want to maximize earnings, there’s nothing wrong with going exclusive with Amazon.

To be fair, they didn’t exactly say that. What they said was this:

For indie authors, there is no easy, one-size-fits-all answer.

In our look at the other US ebook retailers, we found a significant share of indie sales in every single major store outside of Amazon. The myth that indie sales are virtually non-existent everywhere else is just that: a myth. But at the same time, 84% of all paid indie downloads happen on Amazon and 80% of all indie author earnings are generated on Amazon. That is today’s reality.

The implication being that going exclusive with Amazon is a great choice.

If the ebook market were as limited as the print market had been in the 20th century, where territorial rights governed the licensing of books—where, in other words, writers sold North American rights separately from rights in Great Britain; where readers in France might not ever hear of an English-language book they might be interested in, even if they were English readers; where no one outside of a particular country even knew an authors name—

If that world still existed, then, yes, the advice to remain “narrow” and Amazon-only would be good advice.

But Amazon is not the biggest player worldwide. Its stores are only just now cracking the international market. Apple is the biggest player on the international stage, with an Apple store in damn near every major city in the Western World, and many in Africa and Asia as well. The iTunes store, with books prominently displayed, penetrates all of those places and, as some studies have just shown, readers in other countries spend a lot more time reading on their mobile devices than Americans do.

When I tell indie writers to go wide with their book distribution, I’m not telling them that because they can get 26% of the U.S. market. I’m telling them they need to pay attention to the international market. Amazon might always be the biggest player in the United States. But internationally? It’s not even the biggest player now.

Most of the money I earn on Kobo and iBooks comes from countries outside of the United States. The main reason I insist on staying with Smashwords, despite their ridiculous quarterly payment schedule, is because so many of my international readers want to buy directly from them, without having to own an Apple device and some of the fees and penalties that those readers have to pay in Amazon’s store.

The internet has leveled the playing field in more than one way: it has given information an international immediacy. When I announce a new book release, my readers in Japan know about it at the same time as my readers do here in the United States.

So many American writers make the same mistake that the Big 5 publishers do: they think only in terms of the United States, forgetting that the big wide world out there is now purchasing English-language books in record numbers.

So…by all means, take heart from the numbers the latest Author Earnings report shows. I certainly do. But remember, those are numbers for the United States only.

The world market awaits you.

Readers are readers are readers. No matter where they live.

I know the readers of this blog come from all over the world. Some of the main commenters (both here and in my email) are from outside the United States. Same with readers who donate regularly. I appreciate that, and I love the international perspective you all bring to the blog.

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“Business Musings: Author Earnings…Again,” copyright © 2015 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo Inc. / Nmedia

21 thoughts on “Business Musings: Author Earnings…Again

  1. Apple being the second biggest seller after Amazon isn’t hard when they are each in single digits. But Apple has one significant thing hobbling it from being a serious challenge to Amzon, namely the fact that the books sold through iTunes are only available on Apple devices.

    If Apple can get over it’s current megalomania that makes it think it can dictate that the whole wold consists only of their devices and starts making their content available on other devices (which they did largely do with music as I understand it) Then I think they could be real competition. But as long as they rule out anyone who owns (or who is part of a family who’s members own) non-Apple devices, they have a significant cap on their size.

      1. Thanks, David. Plus, I really, really think that Americans have no appreciation for the vaster international market. When the other David says single digits, he’s referring to the U.S. store only, because we don’t have numbers for all the international stores.

  2. Nice take on the report. I agree, there is a whole world out there besides the states. My small sales have all taken over in Europe. The only US sale I had was from Kobo oddly enough. I’m always looking for ways to reach farther. I signed up with Xin Xii. I see they have some European sites that Smashwords doesn’t have. I firmly believe in going wide.
    Bought the boxed set. Looking forward to it enough though I’m not a big fan of boxed sets. I guess I find it too over whelming. I have a few boxed sets sitting in my kindle library and I have not opened them. I entered into the raffle copter. I usually always enter those when one of my favorite authors have one.

  3. Great info, Kris. Thanks for breaking these things down.

    For your next Rafflecopter thing, consider ‘experimenting’ with something specific to your target audience. Maybe search out some signed book or early edition of a really famous author in your genre and offer that as a prize. You might get fewer signups, but the ones who do are already far more likely to buy your books.


  4. Thank you Kris for this very well thought-out post – as usual.

    As a European reader I especially appreciate the emphasis on international readers. Many people outside the US, even in non-English speaking countries, enjoy reading in English. And I remember how difficult it was for us to get access to English books before the ebook revolution: we had to go to specialised bookstores where the choice was really scarce and the prices outrageously expensive. Or travel to the UK/US and come back with our luggage full of heavy books, with the risk of exceeding the allowed weight.

    So I really love this new world where I can basically follow the latest release in real time (even sometimes a few hours before the US 🙂 – when Amazon releases a book at midnight in my time zone). No need to wait for shipping, no shipping fees that cost twice the price of the book. And even the possibility to interact with my favourite authors without having to travel unreasonable distances.

    But now that I have access to all that I do get annoyed when I feel left out by a promotion. I can understand why most promotions for a free physical book mention that it is US-residents only – the writer does not want to pay outrageous shipping fees, I get that. But when I see on a blog/newsletter that a book is free for a limited time, it is quite annoying when I find out that the book is indeed free on, but not on any other amazon sites ( etc.). Which means that while all US-users can get it for free, I must either pay the normal price or not read it. I usually choose the latter and move on to read something else…

    For what it’s worth, in my experience Smashwords is not as territorial. I have often been able to get a free book there when the free version was not available on my amazon site. It might be another good reason to go with this platform as well, if it encourages international readers to read your promoted books instead of getting annoyed with the localisation of the promotion.

    1. In 2009, I came back from a trip to US with 22kilos(45 pounds) of books in my carry-on! The trick is to keep the veins in your neck and forehead from bugling as you lift it into the luggage bin! And to coolly walk past the agents with their carry-on scales as you board. (Though the TSA lady gave me an evil look when she picked it up.) Alas, the ebook put an end to my book smuggling days. 🙂 Thank heavens!

      1. Thanks for sharing, that’s so typical!

        Although by 2009 I had found an easier way of smuggling books: Amazon, that could send pretty much any paper book to my country, quickly, at a reasonable price and without hassle. No wonder I kept them as providers for most of my ebooks now, since they had been my ‘saviours’ for paper books!

        1. For single books, I’ve found that the Book Depository is usually a good bit cheaper. They charge close to full cover price, but give me free shipping. Amazon discounts but then charges about $15 for the first book.

  5. Kris,

    If you want to avoid Smashword’s daft payment schedule, check out Gumroad.

    Same international reach, but much better web site and much better payment schedule. You can upload any type of file you want, avoiding the Meatgrinder. I sell my books there as a bundle of print edition PDF, kindle, and mobi.

    They pay every two weeks, via EFT.

    Discoverability is no worse than Smashwords.

    I’ve been very happy with Gumroad.

  6. Hi Kris! Good point about Smashwords, and a question for you. Many online vendors now offer extended distribution. (ARe) now connects to iBooks directly to make it easier on indie authors. Granted, Smashwords fans will stay with Smashwords. But for ARe, if I authorize uploads to iBooks through everyone, am I competing with myself? Also, I wonder how having one title listed through several other vendors might affect the listing. Thoughts?

    1. Take a look at Author Earnings (I think it was there) about books that come to major stores through other Vendors. It’s best to upload direct. And only click “other vendors” on one aggregator site, if you’re going to do it that way.

  7. One of the reasons – a primary reason, in fact – that I am very glad you insist on staying with Smashwords, is that that that platform is one the easiest I have come across to use as a buyer. I choose the book I want, I enter my payment info, I download; no need to sync my devise with a particular store, no bloody encryption.

    So thank you for that, and I hope enough of us keep using it so that you keep using it!


    P.S. FYI, using Firefox 39.0 on Linux Mint, the copy to the right of the check-boxes below the comment box is illegible, white-on-white; I needed to highlight it to see what the check-boxes were for.

  8. “When I tell indie writers to go wide with their book distribution, I’m not telling them that because they can get 26% of the U.S. market. I’m telling them they need to pay attention to the international market.”

    Hah! Good luck.

    “[…] and some of the fees and penalties that those readers have to pay in Amazon’s store.”

    Not only Amazon, but it’s the more visible: Taxes. Currently, EU law puts e-books under the standard VAT (print is reduced), and taxes have jumped about 4-5 percentile points during the crisis. This means that you have an e-book with a nice 2.99 USD price that suddenly becomes a 3.62 USD book… before the currency exchange. Weird numbers are not good selling points. The current 50 $ kindle fire is just short of 70 USD in Spain, for another example (with a nice 59.99 EUR price –plus S&H–, but…)

    Yes, Amazon does allow writers to customize the price and eat the tax. How many do? And even amazon has some weird prices, something that looks as if someone misapplied VAT (been so since before they allowed writers to eat the tax themselves, so it’s not some sort of compromise; it’s… weird, and inconsistent even in a single series; customer service didn’t answer the couple of times I tried).

    The one saving grace of Smashwords (and others, like OmniLit/AllRomance) is that they don’t charge that tax and have predictable prices (SW site is a bit of a pain in the ass, OL/AR insists on locking your ebook format preference).

    “So many American writers make the same mistake that the Big 5 publishers do: they think only in terms of the United States”

    A lot of people in the States think only in such terms. It’s human. Real life question: “[Oh!] You also have supermarkets in Spain?” [+] Then there’s John Gidduck’s phrase [paraphrasing] “Americans think inside every foreigner there’s a small Yankee trying to rise to the surface” [*]. Felt that myself a couple of times… from _friends_.

    “The world market awaits you.”

    No, it doesn’t. Nowhere near close. It finds you, or it doesn’t. There are LOTS of writers. I’m currently buying more books than I can read. Why should I await a writer? One that’s playing hard to get?

    Take care.

    [+] No, you dumbf..! We’re hunter gatherers, and I crossed the Atlantic in the back of a dolphin. But the guy was good natured an oblivious…
    [*] The sentence is supposed to be in ‘Terror at Breslan’. The book is hard enough to read to dig for a single sentence, frankly.

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