Author Earnings Report for October 2016 Foretells Chaos, Panic, and Disorder

The latest Author Earnings report foretells a reversal of the ongoing trend of publishers' declining ebook revenues.

For the past couple years the Author Earnings report has detailed the rise of indie authors in the ebook market, but the October report shows that Amazon and other small and medium publishers gained market share at the expense of indie authors:

201610-unitsales-trend

Data Guy explained it thusly:

During the five short months since May, it seems that indies have somehow lost their market share gains of the preceding 18 months. This has been counterbalanced to a limited extent by a slight uptick in traditionally-published unit sales: both Big Five and Small/Medium Traditional Publishers have each gained roughly 1% in market share. But most of the lost indie market share seems to have instead gone to Amazon Imprints, who have gained a whopping 4% in market share.

That's depressing news, but curiously enough it is not reflected in the gross sales stats. indies took a serious hit in revenues, and so did the Big Five.

201610-grosssales-trend

Small publishers and Amazon were the ones which truly gained market share this quarter, but it is hard to say whether that will continue.

This could be a sign that the major publishers are rethinking their pricing policies, but that is unlikely given that a later section of the report shows that the Big Five are still pricing their ebooks at at higher price points.

At best I would say that the market has entered another period of flux, disruption, but that's not the only theory. Author Louisa Locke laied out a plausible alternative in the comment section of The Passive Voice:

I know that a lot of the most successful hybrid authors have gone wide this year (gotten out of KDP select) because they were not happy with the loss of sales that the introduction of KU was producing. If some of the most popular author's books are no longer in KU, this means that their books are not going to be as visible--since page reads definitely gives a book an edge--hence their sales will be down even more on Amz. However, many of them also report that sales that iBooks in particular (added to Nook and Kobo sales) are in many cases taking up the slack. So only a study looking at ebook sales everywhere would be able to see if the drop on Amz is really just a shift in where sales are happening.

In addition, my impression is that the success of Amz imprints (which are in KU) is in part because these books are still in KU--and now have less competition from popular indies there, and the fact that Amazon has been promoting their imprints rather than promoting indies with things like Kindle First, etc.

Do you think she's right?

About Nate Hoffelder (11581 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

8 Comments on Author Earnings Report for October 2016 Foretells Chaos, Panic, and Disorder

  1. I think it’s a confluence of events.
    KU.
    Apple growing.
    Higher Indie prices.
    Lower non-BPH prices, especially on backlist.
    Seasonality.
    Less ereader sales.
    Less tablet sales.
    Exploding Samsung phones.

    As in: all of the above. And more. 🙂

    One thing to consider is that bookbub moves a fair amount of books and they’ve gone heavily tradpub.

    And hey, maybe the tradpubbers are right and it’s the election. 😀

    No market grows forever and the smaller tradpubs not bound by agency were bound to react. They have been the biggest underperformers of the past two years, after all.

  2. Yup, a few combined factors but I think Bookbub’s the main culprit. For a while now its been competing more and more with Amazon in temrs of access to customers and the increasing uptake by trad-publishing seems a logical next step.

  3. KU aside, if these were the factors then all retailers would be seeing the same shift. Kobo confirm they are not.

    Mark says indie titles at Kobo continue “to show overall YoY growth as a % of our sales, with weekly unit sales much higher than and net sales on par with or occasionally higher than any single one of the Big Five publishers.”

    https://www.facebook.com/groups/441469159372773/permalink/581221128730908/

  4. I agree with Locke, but there are also clearly other forces involved. The move to other retailers is one (which I myself have done, and had exceptional results). Another big one that no one is talking about is what might really be going on with BookBub.
    Yes, trad pubs are using it now but the sales aren’t shifting to them only because they’re now using these channels more. I believe that a big part of the issue is that they are sucking up a lot more of the available slots…and that makes it harder for indies to get into BB’s newsletter.
    You can see that the BB ads they are offering off their newsletter might be a partial response to that. They can’t give everyone a slot and they’re losing revenue by not expanding slots, so instead they offer inferior ad choices (inferior because nothing works like getting a slot in the newsletter).
    BB has also increased prices, which of course any advertiser will do in the face of a glut of clients. So again, it’s even more difficult for indies to get in.

  5. I think BookBub is shooting itself in the foot going with TradPub. I used to check something out from BB at least once a week. Now it’s all the same stinking book blurbs I abandoned back in the 90s. The only time I click through is for an author I recognize, and it’s in SPITE of the blurb.

  6. Author Earnings has since been updated with an analysis of Bookbub’s impact, and Data Guy concludes Bookbub is not a significant factor.

    But what Data Guy does show about Bookbub is telling. A 50% decrease in indie deals in Bookbub since 2014, and that indies are mainly getting the lower-scoring deals with the minor categories.

  7. Could the drop in sales be anything to do with Amazon’s page flip? A lot of Indie authors have their books in KU and have had huge drops in sales due to the ‘cheat’ of reading in Amazon’s page flip which doesn’t count the pages.

    https://kdp.amazon.com/community/thread.jspa?threadID=319153&tstart=0&start=0
    https://teleread.org/2016/10/08/amazon-kdp-select-authors-are-losing-page-reads-apparently-due-to-software-glitches/

    • As I pointed out in an earlier post, Amazon denies the connection and it was unlikely anyway. PageFlip came out years ago, and even the updated feature was released in June. This problem didn’t happen until September.

      It’s not related.

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