Business Musings: More Splits: Indie Publishing (Year in Review 6)

Business Musings Current News free nonfiction On Writing

For years now, I have expected indie publishing to split into two different parts. In fact, for nearly a decade, indie publishing has split into two different parts. What I didn’t foresee were the other splits that occurred this year.

For the record, what I’m calling indie publishing is what most people call self publishing. Neither term is accurate. Self-publishing is too limiting, because a lot of people who started out publishing their own work now publish other people’s works as well. Indie publishing gets confused with the so-called independent (often literary) presses of traditional publishing. I briefly thought of calling what we indies do digital publishing, but that’s not entirely accurate either, because so many people think digital publishing is ebooks only, not books of all kinds designed and marketed on a computer without going through any of the nightmarish business structure of traditional publishing.

So what the hell do I call it? The New World of Publishing? That’s a bit of a mouthful, even though I’ve used that as well. I’m going to stick with indie publishing for now.

You’ll see, though, why, in this post, I’ve been having trouble with the label.

The part of publishing that is not traditional publishing has split into at least five different groups. You folks might be able to add a few more that I’m unaware of.

What these five groups are is, of course, complicated, and they do overlap. But this year, with deals and mergers and changes and growth, it has become clear that these five groups are comprising a new industry, one that will eventually relegate what we call traditional publishing into a true buggy-whip industry. Yes, it’s useful for the handful of folks who still want and need buggy whips, but it won’t be anything even close to the powerhouse it was in the past.

Before I get into the groups, though, do take a look at the previous blog on Digital Growth. The lockdowns during the first year of the pandemic (a phrase I never wanted to write. Sigh) showed savvy industries that digital truly is the wave of the future. Traditional publishing is still fighting hard against that, however. (Sigh again)

Much of the entertainment industry is changing how it looks at digital and what it is doing with its digital content. I’ve blogged about it in a variety of ways, most recently in a post on decision-making, but also in tangential ways in the previous year-in-review posts, as well as in the IP is the new frontlist posts from the fall.

Because traditional publishing is not moving toward a more digital environment, it’s getting bypassed. I discussed that a bit in the back list post. I imagine that the loss of influence in trad pub will only get worse as time goes on.

Things have changed from the Wild Wild West of indie publishing ten years ago. Now, most readers—most writers—are aware that indie publishing is an alternative to traditional publishing. Fewer writers believe that indie publishing is a backwater to be avoided at all costs. Still, many great storytellers are still stuck in the mire of agent queries and pointless editor rewrites (to delay payment) that is traditional publishing.

Their loss, I’m afraid. As I said in a previous post, I’m moving away from discussing traditional unless I find the news interesting. Right now, it’s same-old, same-old.

What is interesting to me is this five-way split that’s going on in indie publishing. I’m going to start with the writers, because, really that is where this whole thing started anyway. Then I’m going to move onto some of this year’s changes.

Actual Self-Publishing

More and more writers are moving into self publishing. I don’t have real numbers, just what Bowker—the company that releases ISBNs here in the U.S.—gave us in 2019. 1.7 million ebooks were self-published, meaning not connected to an active publishing house. I’ll get to active publishing houses below.

What I think this statistic means are writers who are publishing on their own without some kind of publishing label attached. Using other people’s data is often fraught with problems like that, where the person using the data has to make a few assumptions.

What I’m seeing—and granted, this is anecdotal—is that a lot of traditionally published writers are investigating self publishing. This tells me that these writers are either being offered terrible deals and even worse contracts or, worse in their opinions, no contract at all. So they’re crossing over to the dark side.

They have a bunch of options ahead of them, some of which I will discuss below, but to most of these people, they see self-publishing as something impossible—that they have to spend thousands to design covers and hire a content editor and pay a marketer, not realizing that there’s a better way to do things. Especially now, after 12 years of indie publishing.

Lots of side businesses have grown to make all of those things easier for any writer to do, as long as the writer is willing to learn. The first thing the writer has to learn, of course, is business. But that’s another post. A lot of other posts, which I have written about for years. All of those posts are still available on my website.

Despite what the traditionals who are reluctantly crawling to indie think, hundreds, maybe thousands, of writers are self-publishing. Doing everything in one way or another—or farming out the handful of things they can’t do. Some of them trade with someone who has a skill they don’t have, others do pay (but not thousands), still others learn how to do the work themselves, using all the available tools.

This is what writer Scott William Carter calls having an empire on a laptop (and I’m paraphrasing, because I can’t really remember exactly how he said it). Scott wanted to handle everything himself, and has for years. He went full-time freelance (with a family and a mortgage and everything) two years ago and has not looked back.

I don’t know his methods. I don’t know most writers methods. I do know what some writers say their methods are and their income is, but I also know that writers tend to exaggerate or they talk about that one month where they earned $10,000 as if it happens every month.

This is a business of up and downs, and it has always been such. The writers who learn business and can handle the uneven income are the ones who last a long time in any aspect of this business.

The self published writers are no different. I can list name after name after name who have left self publishing, either for traditional (back in the early days, in particular), or who realized self publishing was just “too hard” or they were “unlucky” and they got angry about not having the success of their peers.

Those who have survived are doing well enough to continue. That means they understand business, they’re flexible enough to figure out that they need to refresh now and then, they’re willing to experiment, and they know how to temper their expectations.

Some of the folks who came into this self publishing industry nine to twelve years ago are truly adventurous spirits. The rest, who’ve come as technology developed, have learned how to make a go of things.

I can guarantee you that none of them are happy with where they’re at. They all want more of something—be it money or fame or time—but they are smart enough to understand that they have a good thing going, and they’re going to continue doing the work.

These people are—and have been since 2009 or so—the backbone of the indie publishing industry. Even though I don’t have real statistics, I do know that most writers who go indie build their empire on a laptop and do the hard work, each and every day.

The Individual Data Managers

Honestly, I don’t have a single pithy word for these folks—at least one that doesn’t have negative connotations. I don’t want to use a word with negative connotations, so I have to use several words.

Over the past decade or so, some writers have learned how to augment their numbers by playing with all kinds of algorithms. Full disclosure here: I am dyslexic, particularly with numbers, and doing that kind of math and those kinds of calculations sounds like work to me. (Whereas spell checkers have alleviated much of my dyslexia with words.)

In the early days, the sales manipulations were crude and they created a false sense of security. Truly terrible books could be forced up the Amazon bestseller lists with certain curated actions.

Amazon fought a war against crude manipulation, and eventually won. Now, the books that climb up the list are generally worthy of being on any bestseller list. Amazon and the other retailers have developed systems for spotting the bad or fraudulent books fairly quickly.

But a lot of writers spend time massaging their numbers to increase them as best as possible. It’s easier for a writer who is exclusive in a particular ecosystem—Kindle Unlimited comes to mind, but it is not the only one. Other companies have algorithms that smart writers can figure out and use to their advantage.

The problems come in when the writer goes wide and tries to massage algorithms on all of the available sites. While that might’ve been possible in 2012, it was not possible in 2021. Some writers don’t go wide for that very reason. Others actually hire someone to massage the numbers for them.

And I have no idea how the economics of that work. I do know that for the past two years or more, writers who were massaging Amazon’s algorithms, particularly in Kindle Unlimited, have seen that massage grow less and less effective.

Tech rises up and works for a while and then it ceases to be beneficial to the writers. Right now, I suspect BookTok will help writers with their discoverability. I have no idea if BookTok can be manipulated. Ten years ago, it was Twitter. Somewhere around eight years ago, it was Facebook ads.

There are writers who keep up on all of this. I am not one of them. I try to keep track of the newest trends to see if I personally am interested, both as a writer and a reader, but I would rather spend my time writing, enhancing my craft, learning business, or reading.

Speaking of Scott William Carter, he developed something Dean and I teach, which is the WIBBOW test: Would I Be Better Off Writing?

Dyslexic Girl (aka me) learned long ago that I would rather write than massage a system to my advantage. I learned that when I was editing, and figured out something that nearly doomed the Hugo Awards two decades later—that system was easy to manipulate. I just didn’t want to do it. So I didn’t.

The difference between the Hugo Awards and the systems that these indie writers massage is a vast one. Not in the algorithms or technology but in money. The Hugo might or might not have had an influence on sales once upon a time. Back in the day, it certainly made selling a novel easier to traditional publishing easier. But did it increase actual book sales? Maybe in the 1960s. Recently? No.

But massaging the algorithms for K.U. or any of these other systems might lead to an actual short-term financial gain. If the writer is truly gifted at the playing with the numbers or understanding the algorithms, that short-term gain might be quite large.

The problem is this: A lot of these writers had no idea that the gains would be short-term, so they planned their spending as if they would earn a boatload of money all of the time.

That doesn’t work in publishing ever. Even traditional bestsellers who’ve been at this a long time aren’t earning the yacht-load of money they earned in the past.

Some writers roll with the short-term nature of algorithm manipulation. These writers are very successful at it. Some of them teach their systems at places like 20BooksTo50K or on the 20Books Facebook page.

There are a couple of problems: Some of these systems cease to work or they only work for the people who got in early—many of whom are still teaching the system. That’s why, this year especially, a lot of writers were complaining that they weren’t earning what they had earned in the past.

The second problem is one that you’ll find throughout any bootstrap industry: some of the people who claim they’re doing well really aren’t. They just like to be instant-experts or gurus or they’re making money solely on selling their systems.

It takes research to figure out who those folks are, as opposed to industry names who have learned how to figure out systems and are teaching those systems as a way of paying forward.

From what I can tell, this category of indie-published writer is pretty stable. It’s not growing but it’s not shrinking. It has always been a category that has swelled with newcomers, many of whom leave in disappointment. A handful stay and become influencers down the road. The bulk try to work the numbers, figure out that—in its own way—the system doesn’t pass their personal WIBBOW test, and drop back to whatever level they’re comfortable with.

Initially, when I started doing these year-end blogs, I thought this category of writer would disappear. Whoops.

I didn’t understand data, which is all important in the modern era of publishing. And who can blame me? I was raised in traditional publishing.

Data-driven writers are here to stay. Those who try to make the algorithms in various eretailers work for them are, in reality, small potatoes in the new ecosystem of indie publishing.

We’ll get to that below.

Small Writer-Owned Publishers

This category is a bit of a catch-all, but what I mean here are publishers who established themselves on the traditional publishing model. Our company, WMG Publishing, is one of these. We developed it eleven years ago for a variety of reasons. Dean and I had owned traditional publishing companies before, and we knew that the changes in publishing made a small traditional publisher economically viable.

We both insisted that we would never publish book-length work by anyone else. The rationale was and is that if someone else’s work takes off, the staff at the company would (rightly) pay attention to the someone else instead of us.

Yes, we have staff. All of these small publishers do. A few have transition to working with contractors only, but we have not. We are also lucky to have Allyson Longueira running the show, which enables me and Dean to write instead of manage a company.

Most small publishers aren’t that lucky.

A lot of the small publishers that started ten or eleven years ago are gone. Many have fallen apart due to poor business set-ups. A lot of others survive, but regret setting up their companies the way that they did.

For a while, I thought we would regret it, and then we got an amazing staff. They put out 208 books in 2021, with a full-time staff of three. (Contractors helped with copy editing and a few other things, but not much.) Our staff are miracle workers, and we’re lucky to have them.

Our vision for the company remains the same, though. It is also set up so that Dean and I could sell WMG Publishing, and not lose our individual copyrights. Other writers did not know how to do that. As I said, we owned publishing companies in the past, and we knew how to set this one up properly.

The problem with many writer-owned publishing companies is that they did not think the systems through, but instead implemented the systems they learned from their traditional publishers.

Which, as we have seen, are bloated and difficult and almost impossible to design well. Or as the old joke goes:

How do you make a small fortune with a publishing company?

Start with a large fortune.

This category is the one that has shrunk the most in the past five years. I expect it to shrink even more as the 2020s progress.

Small Traditional Publishers

I can’t think of anything else to call this category, even though I don’t really mean “traditional publishing” in the 1990s sense of the word.

These publishers started as a writer-owned publishing business. The writer who owned the company transitioned into a full-time publisher, who no longer writes. (Some of these writers farmed the running of the company to a business manager, but very few.)

Most of these small traditional publishers fall into two categories.

There’s the house-of-cards publishers who are always goosing their income with new writers, new product, new ways of making money. That’s what our company Pulphouse was back in the day, and that was the model Dean and I worked to avoid.

These companies are often well intentioned. They started to help the writer-owner, then expanded to include writer-friends, and then had to expand more and more and more to bring in revenue.

Almost all of these companies pay their writers a royalty which requires a lot of bookkeeping. The best companies have a royalty escrow account where all of the money flows into, and the payments flow out of, with the remainder being what the company earns.

But most were not set up that way, and by the time the former writer realizes that they did not manage the money well, it’s too late to implement new systems.

That’s why so many of these companies collapse. Many of them are e-book only. They develop to help other writers put up their ebooks, and then when it comes time to pay those writers, the money just isn’t there.

Every year, we hear of example after example of companies like this that go under. The most recent is the one I pointed out a few weeks ago. Blushing Books, an erotica publisher, started out with the best of intentions. The company ended up as a nightmare, all because (if you read between the lines) cash flow went south. I’m not going to reprint the sorry saga. Just read it here.

This one was bad enough to hit the New York Times. But if you follow writer-driven news and lists, you see smaller versions of this nightmare all the time. I used to blog about these companies, analyze them, and warn writers away from them.

Now there are too many to do so. Besides, it’s often not clear that the publisher is mismanaged from the outside.

A friend had Dean and I analyze the business model of a “successful” publisher that another writer wanted to purchase (and then use it as a jumping off point for their work and others). The entire thing was a house of cards. The company had invested tens of thousands and hadn’t even made ten thousand in gross profit over the years it was in business.

That’s pretty common for these companies, which is why they eventually collapse. They use the flow of money to remain alive, but the moment that flow dips for whatever reason, they fall deeply and quickly into a major financial hole.

The second category of small traditional publishers is a successful one—or so it would seem from the outside.

They’re a business driven, well run company, usually a corporation, and often run by writers who quickly realize that they would rather be managing someone else’s content than their own. A lot of these writers fall in love with data analytics and massaging algorithms. These writers are, in some ways, the opposite of the house-of-card publishers.

These former writers have actual numbers, a data-driven plan, and a well-oiled business model. Some of these folks pretend to still be writers by putting their name on the byline of books they did not write, but most of them move out of the writing game into the publishing game.

This is the category of small publisher to watch. Because these small publishers will grow into the traditional publishers of the future. These companies are data-driven and well managed. If they are properly set up as corporations and if they end up with a prime property—one that catches the attention of investors—they can sell the publishing company for a lot of money.

These companies are poised to step into the gap that real traditional publishing is creating. That industry is making itself irrelevant. This industry is making itself into a powerhouse.

Books will never go away. Books with data analytics behind them and with a different business model than the traditional publishers have now, as well as with a firm grip on the copyright licenses that they have, will become the most important publishers of the future.

This category hasn’t grown a lot, because it’s hard to manage. But I see it growing in the next ten years. I see it becoming very important.

And no, I’m not going to list who some of these successful companies are, because I haven’t seen their balance sheets. As I wrote above, a lot of companies look successful on the outside, but they’re a house of cards underneath.

The only way we’re going to know who wins at this particular part of the game is seeing who is still around five or ten years from now.

The Small Entertainment Companies

This trend is just starting and frankly, that’s because of the sea-change caused in the entertainment industry by the pandemic. If you want to understand what I mean by a sea change, read the previous post.

These companies started out as something reading- or writer-oriented. One of them started as a company to get backlist ebooks to readers, mining books that traditional publishers thought had no value at all.

The other company started as a way to serialize/stream books that did not involve Amazon.

Both companies sold for millions in 2021.

Let’s start with Wattpad, which sold for $600 million early in 2021. Naver, which some have described as South Korea’s Google, spent that much money to acquire what most in traditional western publishing still think of as a streaming service for teenage girls.

It’s not. It’s much more than that. I’m going to dive into these kinds of streaming services later in the spring, as I do my own research.

But here’s what we should all pay attention to. Wattpad did start as a way to bring young adult books to a non-traditional reading audience in a brandnew way. I remember listening to one of Wattpad’s editors at a writers’ conference in 2015 or so, and deciding that the entering that particular ecosystem was not for me because it was so narrow.

It’s no longer narrow. Unbeknownst to me, it grew quite large in a variety of ways, and now it’s poised to become even larger. Take a look at their (admittedly hypy) blog to see how rapidly the changes are occurring.

Was this a worthwhile investment for Naver? Impossible to say right now. Big acquisitions like this are often like the small ones I talked about in the previous section. They look good on paper, but they don’t work in practice.

We don’t know if this will eventually be worth Naver’s $600 million. But we do know that they’re going to work hard to make this kind of sale worthwhile.

The publishing game is changing, and some companies are growing and changing with it. Wattpad is just one of them.

Another—on a smaller level (if you call tens of millions small)—is Open Road Media.

Initially started by Jane Friedman to bring moribund backlist titles into ebook, Open Road has evolved into a book marketing company with a lot of reach.

Like Wattpad, Open Road Integrated Media is a data-driven business that seems to understand where modern publishing is going. Open Road just sold to an investment group for somewhere between $60 and $80 million dollars.

The group buying Open Road includes two media and entertainment focused private equity firms, and “prominent individual investors from the worlds of publishing and finance.”

David Steinberger, who heads the investment group that bought Open Road, was quoted in Porter Anderson’s Publishing Perspectives as saying this:

Data science represents the next frontier in book publishing.

 I agree. That’s why these two companies both sold for as much as they did. Whether or not these companies, which have their roots in the early part of the New World of Publishing, are the ones that truly change the landscape remains to be seen.

I do think, however, that they are the first of many such acquisitions that we will see in the next five to ten years.

And they will all come from one or another companies built out of the changes in the publishing industry. These changes come from indie publishing in all of its incarnations, not from the dinosaurs of traditional.

Sales like this would not have happened so quickly without the pandemic shining a bright light on the way that publishing is changing.

I think indie publishing is on the cusp of becoming the dominant form of publishing, not just in the numbers of books published, but in revolutionizing the way that books are marketed.

We’re seeing the changes now. They began about five years ago, but escalated in 2020. Now a lot of this change is becoming visible.

There will be more changes in the years to come. 2022 will be quite interesting on this front.

I can’t wait to see which changes will survive and which ones won’t. We’re in a period of great innovation. It’ll be fun to watch what comes of it all.


Some of you already know that we’re running a Kickstarter. We do the Make 100 Challenge on Kickstarter every January. This year, our project is 100 mystery stories (50 from me and 50 from Dean) spread over 5 volumes. Take a look because we’ve hit a bunch of stretch goals, which means writing workshops and extra books. The workshops this time are the kind that readers might find interesting as well.

Now, about these posts…

I always plan to write the year-end blogs in November, but I never manage it until December.  I wrote all of the year-in-review posts in the weeks between December 15 and the new year. I posted them all on my Patreon page first. If you want to read them sooner rather than later, then you need to go to Patreon.

If you liked this post, and want to show your one-time appreciation, the place to do that is PayPal. If you go that route, please include your email address in the notes section, so I can say thank you.

Which I am going to say right now. Thank you!

Click to go to PayPal.

“Business Musings: More Splits,” copyright © 2022 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / valigursky.




3 thoughts on “Business Musings: More Splits: Indie Publishing (Year in Review 6)

  1. Reading this a couple of weeks late, and a couple of days ago one of the online support groups heavily into Amazon algorithm massaging exploded with proof that the algorithms aren’t working as some have suspected for weeks. Lots of fretting and speculation over whether it’s a glitch in the code or a deliberate change to smooth out spikes. Lots of discussion on how to adapt algorithm maximization strategies. Lots of calls to band together to convince Amazon to fix it.

    I’m just not built to ride the ragged edge.

Leave a Reply

Your email address will not be published. Required fields are marked *