New Howey Report: Self-Published eBook Authors May Out-Earn The Rest By 27%

Hugh Howey speaks with a fellow delegate to Klopotek AG's Publishers' Forum in Berlin earlier this month. Photo: Klopotek AG
Hugh Howey speaks with a fellow delegate to Klopotek AG’s Publishers’ Forum in Berlin earlier this month. Photo: Klopotek AG

“Self-Published Authors Are Clearly Earning As Much”

A new quarterly report from AuthorEarnings.com is out this morning. Its data estimates are interpreted to show that, quoting the text, “Self-published authors are clearly earning as much as traditionally published authors on the largest ebook sales platform in the world.”

AuthorEarnings.com is the site housing these controversial reports generated by Sand and Wool author Hugh Howey wih the help of an unnamed author-associate (referred to as “Data Guy”). Together, they’re creating quarterly analyses of estimated online sales and earnings.

BookExpo America (BEA) attendees: Howey will discuss details and implications of the new report at BEA’s all-new Author Hub on the floor of the trade show, during the Hub’s ribbon cutting at 10 a.m. Thursday May 29. Howey is a headliner Premium member of the Hub, with fellow independent bestsellers Bella Andre, Barbara Freethy, C.J. Lyons, and H.M. Ward. The event is open to all with BEA badges. Full Hub membership is still available for entrepreneurial authors.

The intent behind the Author Earnings site is to offer writers as much information and perspective as possible to use in deciding whether to self-publish a given book or try to find a traditional publisher for it.

And several points of Howey’s new May 2014 Author Earnings Report are likely to raise eyebrows. The focus in these studies is on ebooks. And in his new article today, Howey writes:

How you decide to publish your manuscript today means looking at the difference in earnings to recent works. Self-published authors are not just holding their ground with Big Five [major publishing houses’] authors when it comes to releases after 2011, they are out-earning Big Five authors by a 27-percent margin.

Imbedded in this part of Howey’s report is an interesting indication: “The parity we see in our author earnings charts between self-publishing and Big Five publishing has a lot to do with the latter’s existing titles and not their new releases.” He’s talking backlist. And his basic point is that where traditionally published authors may have an advantage is there. But:

As self-published authors build their own backlists, and as more of these authors employ freelance editors and cover artists and pay attention to quality, could there be a future where self-published authors as a cohort are earning a good deal more than traditionally published authors? Our advice to an aspiring author today might be to do one of two things: either built a time machine and travel ten years into the past to query their work — or self-publish today.

Point-Counterpoint: The Hard Decisions

The impetus for Howey’s creation of the AuthorEarnings.com series of reports is a survey annually updated for the Digital Book World Conference (next set for January 13-15, 2015 in New York). That survey, in its 2014 iteration, is available from Digital Book World (DBW), What Advantage Do Traditional Publishers Offer Authors? It is produced in cooperation with DBW’s sister F+W Media company, Writer’s Digest. I’ll be doing a live onstage interview with Howey at both Writer’s Digest Annual Conference in New York and at its Novel Writing Intensive this summer.

Howey objected to findings of the DBW survey report and its presentation last January, noting along with some of his fellow high-selling independent authors that their own sales figures weren’t part of the DBW sample. The “outliers” of self-publishing, as they’re often called, weren’t represented, meaning that the survey may have been skewed toward less successful sales records in self-publishing.

And, most crucially in Howey’s opinion, the DBW methodology was flawed. A traditionally published novel, he noted, represents only a slim fraction of the books submitted by authors to agents and editors. (By some estimates, as small a cut as 1 percent of queried books may actually achieve traditional contracts.) Self-publishing, on the other hand, makes it possible for an author to publish without the winnowing effect of agents’ and editors’ approval. To compare indie books that may sell only a few copies in the “self-publishing column,” if you will — while counting only the actually published (and presumably marketed) work of traditional houses — is to count those low-selling independent books against self-publishing in an apples-to-oranges effort, Howey said.

Some reading on both sides:

There’s more about Howey’s original objections here, in Writing on the Ether: Where Publishing Surveys Cannot Go and in Howey’s Convention: “Organized Advocacy.” Howey responded to efforts to discredit his own survey work in this essay, Heads in the Common Ground.

For a look at criticism of Howey’s own methodology and approach, here is Ten Reasons You Cannot Trust Everything You Read About the Author Earnings Report from Dana Beth Weinberg, who worked with the DBW material. And veteran industry consultant Mike Shatzkin took on many of the issues of the debate in Comparing self-publishing to being published is tricky and most of the data you need to do it right is not available.

The general attempt of Howey critics has been to describe him as a talented and eloquent writer who knows too little about the industry to adequately criticize its ways and means. This is as curious a position as is that of folks who persist in calling him a poster boy for self-publishing: Howey has more than 30 traditional publishing contracts and makes no secret of the fact that he likes working with traditional publishers who deal with him as a partner.

And while Shatzkin’s headline may seem to be nearly as long as his article, its latter point is, in fact, the crux of the entire dispute over author earnings in the traditional and self-publishing realms: We don’t have the data.

The major retailers (most importantly Amazon because of its dominant position in selling books) do not share their sales data. This is perfectly okay, as far as legitimate business practice is concerned. Corporations can hold such information as proprietary secrets, and many do. As the international identifier for books, the ISBN, however, falls farther and farther out of favor with self-publishing authors, in particular — see It Just Got More Expensive To Make Your Book “Visible” here at Thought Catalog — the publishing industry has no way to quantify its output or its sales. We don’t know how many books are on the market. We don’t know how many authors are creating those books. And we don’t know how their sales are going. We have glimpses, partial views, estimates and predictions on all sides. We have little hard data.

The Howey AuthorEarnings effort, then, is to scrape information from sales pages of online retailers and match the data gleaned against the sales experiences of self-publishing authors. The main focus has been on Amazon.com sales pages, although one report was created (and is on the site with the others) on some BarnesAndNoble.com sales pages.

“Self-Published Authors Earning 2% More While Big Five Authors Hold Steady”

The overall news of this May report today is that this second major cull of data closely reflects the earlier round of reports in February. There’s a reassuring stability to the process at hand, the most persistent criticism of the AuthorEarnings approach being that it takes a one-day snapshot and extrapolates the results.

“Our long term goal,” as Howey writes, “has been to pull data every quarter to see if we can spot any developing trends.”

And he is candid about the need for “seven or eight of these quarterly reports” before yearly trends can be reliably detected.

Nevertheless, the overall message of this quarter’s study, he writes is this:

We see self-published authors earning 2% more while Big Five authors hold steady. Again, with fewer daily sales but a higher price, the Big Five publishers increased their own revenue while their authors stayed pat. Amazon Imprint authors saw a 3% decline, which might be due to the volatility they have as a small number of titles can see a large number of sales. What we can’t tell with these two data sets is if we are seeing real trends or just random fluctuations, but we can say that our findings from February have now been corroborated by this second data set.

The most interesting elements of this report come in a look at volatility: “How long were ebooks holding on to their rankings?” as Howey asks it. In the aggregate, he writes, “Titles by long-established Big Five authors (those who debuted prior to 2009) are the ones which have all the stability. New releases by tenured authors, as well as backlist titles from those tenured authors, make up the vast majority of the Big Five′s market share and the of Big Five′s stable sellers.”

Source: AuthorEarnings.com, The May 2014 Report
Source: AuthorEarnings.com, The May 2014 Report

Perhaps significantly:

Traditionally-published titles by newer authors, with Kindle debuts after 2009, show far less stability, and exhibit very similar volatility characteristics as titles by self-published authors.

In another angle, Howey finds a fascinating similarity in potential long-tail expectations for ebook authors, whether traditionally or self-published, writing:

The top 1,000 self-published and traditionally published authors are equally affected by the churn of the bestseller lists. The falloff toward the long tail normally seen with demand curves is also less than might be expected. While the extreme outliers from both camps earn most of the income–similar to what we see in most entertainment industries–there is health and wealth down the long tail for self-published and Big Five published authors alike. In fact, they nearly perfectly map onto one another.

There is more, with charts, in the report at AuthorEarnings.com.

And, for the record, here is how Howey describes the methodology in that new report today:

Using a custom software spider, we can crawl every Amazon bestseller list and pull info from each book’s product page html. This data goes into a spreadsheet, which gives us the price, ranking, average review, and much more for every ranked e-book on Amazon. Using established ranking-to-sales data from numerous bestselling authors (including our own works), we are able to present author earnings by title and publishing type. As with our past reports, all the data has been anonymized and is available for download at the end of this report. And just like with past reports, any reasonable numbers entered for the power curve of the product rank-to-sales ratio reveals the same overall picture. That is, our conclusions are not dependent on our estimates but are borne out of the freely available data.

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