Kindle Unlimited, Market Scrying, and Sales Cycles
Over the past couple months many authors have pointed to Kindle Unlimited and complained that Amazon’s 5 month old ebook subscription service is harming their sales, but there is growing evidence that this is not the case.
Russ Grandinetti revealed at the DBW conference last week that author revenues for titles in Kindle Unlimited were up, with the combined earnings of titles in KU in the last 5 months of 2014 were "double, more than double" what they were in the same period in 2013.
And now there’s growing evidence that the decline in revenue some authors experienced in fall 2014 might be the third appearance of a market cycle which also occurred in 2013 and 2012 (and possibly even 2011).
Earlier today john Chapman tweeted a link to an author ranting about his sales declining in 2012. Blaming recent changes to Amazon’s ranking algorithms, Derek Haines noted in November 2012 that:
Judging by my own ebook sales, it has worked spectacularly well, as my unit sales have dropped off a cliff from October to November.
That sounds an awful lot like the complaints made this past fall, and the complaints made in fall 2013.
What’s more, there was also at least one comment from an author who reported that she saw a similar decline in 2011. Debra Holland went on to note that:
Last year, my great books sales started a downward slide from after Labor Day until Christmas. Many people would still envy me my (pre Christmas) December sales figures, but for me, they were way down. With rare exceptions, almost everyone in the self-publishing community said the same thing was happening for their sales. AND people who’d self-published the year before (2010) were quick to reassure us that it had happened to them in that season previously and to wait for the Christmas wave. They were right. Christmas Day my sales popped up and were great through May and ok over the summer.
Therefore, I expected to have my sales slide during this season, and that’s what has happened. Again, in comparison to many, my sales are still good, just steadily declining. However, I’m shrugging my shoulders and focusing on getting the next book out. I know the Christmas sales will pop things up again. Having a new novella will pop sales up again.
And just to remind you, some authors saw a similar decline in 2013.
In short, folks, what we have here is strong evidence of a market cycle and not, as many assumed, the impact of Kindle Unlimited, Bob Mayer’s content glut, or whatever happens to be the cause du jour.
Do we know for sure that this is the only cause of the declines in revenue? No, but I believe that it is the most likely cause. At the very least, an annual market cycle better explains why authors who weren’t in KU saw a decline this past fall along with other authors who were in KU.
It would also explain Juli Monroe’s report that she saw a decline across all markets, and not just the markets impacted by KU:
Although I was blaming KU for my sales decline last year, when I stepped back and thought about it logically, I realized there had to be another reason. My sales dropped in all countries, including the UK and DE before KU had debuted in those countries. Obviously KU hadn’t been a factor in those drops.
She is one of the authors who isn’t in KU, and yet still experienced a decline.
Do you know of a better explanation? The comments are open.
images by karen horton, Kdt.
Market Cycle to Blame – Becton Literary January 18, 2015 um 11:19 am
[…] This article from The Digital Reader discusses the recent income drop that pretty much everyone had been blaming on the advent of Kindle Unlimited in 2014. It turns out that this same income drop happened around the same time in 2012 and 2013 as well: […]
Greg Strandberg January 18, 2015 um 1:19 pm
My 2014 Smashwords sales were a few copies above my Amazon sales. Could Amazon sales have been higher without KU being introduced? It’s a possibility, but the fact that my sales from iTunes were so high, and with no direct marketing for that platform, I know Amazon isn’t the behemoth everyone thinks.
My strategy for 2015 has changes markedly, mainly because I know iTunes can make a run at Amazon.
Still, the short books are remaining exclusive to KDP. It doesn’t make sense to do otherwise, for me at least.
Deborah Smith January 18, 2015 um 5:21 pm
You guys keep making this argument in spite of the fact that the effect of KU has been markedly different from the ordinary seasonal and yearly drop-offs. There is no comparison. And there is no compelling reason to believe any numbers stated by any executive at Amazon. None.
Nate Hoffelder January 18, 2015 um 8:45 pm
"Keep making this argument"?
How many times have I made this argument, twice? I’ve referenced it, yes, but I don’t think I’ve made it enough to justify your griping.
"the effect of KU has been markedly different from the ordinary seasonal and yearly drop-offs."
Do you have a lot of data to back that up? I ask because I don’t know anyone who has shared data which showed that sales declined only in markets affected by KU.
Daniel Vian January 18, 2015 um 5:41 pm
It’s amazing how people continue to talk about books as if they are all the same commodity. Anyone who runs a supermarket would laugh. Or anyone who makes serious money trading in the stock market. It’s amateurish and sophomoric and too simplistic. What’s more important for understanding and predicting the behavior of an individual stock? General stock averages or the specific industry of that stock? Do you really expect trends for category mysteries to be the same as for books about Plato? Any discussion about book sales by authors needs information about what kinds of books the sales of which they are reporting and discussing. Absent that information, the discussion is vacuous. Certainly, if the general economy is way down, you might expect sales of all books to be down. But then again you might be wrong, since during the Great Depression pulp fiction did quite well because evidently people needed cheap entertainment to get their minds off their troubles. All books are not the same commodity– in the same way that oil is not wheat. Many people have made this point and yet too many people continue to ignore it.
Mackay Bell January 18, 2015 um 9:02 pm
Very true. However, it is also true that KU can be having a big effect on sales rank which effects sales. Writers who aren’t exclusive to Amazon could be seeing some of their sales dropping, particularly in genre’s with a lot of titles.
But it seems perfectly reasonable for Amazon to give writers an incentive to be exclusive. And the only real way to do that is to provide enhanced discovery.
For writers who were already exclusive to Amazon, and remained exclusive, drops in sales are more likely seasonal.
Daniel Vian January 18, 2015 um 9:46 pm
In five years publishing with Amazon, sales rank has never been an important metric for me, particularly since no one apparently knows what the algorithm is that determines sales rank. KU borrows evidently do not show up in sales rank, and yet for many authors KU borrows bring in several times more revenue than ordinarly sales. Again, some kinds of books are huge successes in KU and some kinds of books are huge failures in KU. Without knowing what the categories are, how does that information help anyone?
Felipe Adan Lerma January 19, 2015 um 7:09 am
From age 17 (1967) past 2000, I either worked retail in a store as an employee, or did art shows as an individual in malls and conventions and via craft circuits. September thru November until Thanksgiving were dead months. Esp October and early November. After Thanksgiving sales again dropped off, slowly accelerating early December, peaking the last week of Christmas, then leveling off steady until past Valentines.
For me, this still happens not only with ebooks, but with physical merchandise I have in Amazon’s Marketplace.
Maybe at first ebooks were so new they didn’t drop off as badly as other lines of products? And more recently, as people have stocked up, the same pattern has emerged there too?
Also, similar to what Daniel mentioned above, about sales for pulp fiction increasing during the depression, sales of our $10 or less items increased during the down times I was working retail or selling my own art and original gift writings at shows (very early and then late 80s, mid 90s, and after the 2000 dot com bust).
If / when the next bust comes, maybe subscription programs will become even more popular. I guess we’ll see.
Derek Haines January 23, 2015 um 4:30 pm
Thanks for the mention and quote in your post, but I really don’t think my blog post from 2012 could have anything to do with Kindle Unlimited, as it was written 2 years before its advent. However, I am still of the mind that Indies have been used by KDP Select and its need for exclusivity, and that Kindle KU is simply a new extension of this exploitation. I agree that sales run in cycles, but they happily do the same on all retail platforms, not just KDP.
But overriding this whole argument is that so many more books are being published now, and in such numbers that they cannot be digested by the number of readers, which has not grown anywhere near the same rate. If at all. That is the reason author earnings are falling. Simple market dynamics.
Nate Hoffelder January 23, 2015 um 4:35 pm
Actually, your post (and the comment) is a counterpoint to the claim that authors are being harmed by Kindle Unlimited. It suggests that there is an annual cycle which is affecting the market.
Odd Lots – Jeff Duntemann's Contrapositive Diary January 25, 2015 um 9:54 pm
[…] dropoff in some ebook author revenues this past fall (which many blamed on Kindle Unlimited) may have been a sales cycle thing, unrelated to […]
How Le Guin (Accidentally) Got It Right: Amazon is Manipulating the eBook Market | Ink, Bits, & Pixels June 14, 2015 um 7:30 am
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