New Report States the Obvious: Indie Authors a Threat to Legacy Publishers
Indie authors, as well as outside pundits like Data Guy, have been saying for years now that self-published authors are a threat to the livelihood of the legacy publishing industry.
The Bookseller has a story this morning on a new report from Enders Analysis which basically repeats some of the facts uncovered by the Author Earnings Report over the past few years.
To date, self-publishing has become a fairly large presence in the e-book sector, but the impact on the publishing industry as a whole has been more limited. Self-publishing represents a significant but separate books market, with low prices, focused on series within genre categories. Readers are more sensitive to price than reputation and read in high volumes. In March, we analysed the 100 top-selling e-books on Amazon US, and found that 40 were self-published. These had an average sales price of $2.41, compared to $6.23 for all other books (and $9.10 for e-books from the “Big Five” publishers). Sixty-five per cent of the self-published titles we examined were romance or erotica, with a further 22% falling under sci-fi or fantasy, usually with a strong romance theme as well.
The piece then goes on to confirm what we already knew about rpices in the Kindle Store, that Big Five titles cost the most and self-published titles the least:
The report then goes on to say that self-pub would be a serious threat to legacy publishers if it could break out of the ebook market and conquer print, and that’s mostly true. Print is still the majority of the trade market and it’s dominated by legacy publishers.
But the report’s conclusion is also wrong. Authors are finding that they can make more money even trapped in the ebook market than they could if they signed with a legacy publisher.
And almost as importantly, there’s also the perception that authors can make more on their own. That buzz, whether it’s true or not, is keeping authors from signing with publishers.
And that’s the real threat, the one which Enders Analysis doesn’t see coming. It doesn’t matter if there’s more money in print if legacy publishers can’t recruit the authors to write the books to sell in the print market.
And from what Data Guy told me at DBW 2016, legacy publishers aren’t signing authors like they used. He said that the Big Five are still getting on the best-seller lists, but they’re not adding new names to that list nearly as fast as the indie part of the market.
And that oversight has lead Enders Analysis to suggest the wrong counter-attack.
This being said, the risk outlined is real, and publishers cannot be complacent. They are already trying to address what self-publishing platforms do better than them. Data and control is a key offering to authors, and as such there are many authors who may at some point be looking to publish traditionally, but who are also accustomed to the sort of dashboard offered by KDP. Amazon’s access to the reading device and its identity profiles for buyers gives it unmatchable advantages here. But publishers’ data offering is improving, with six-monthly royalty statements looking more and more dated, and on-demand dashboards for authors increasingly being offered.
And so while even The Bookseller has declared, and I quote, "Self-publishing [is the] ‘largest threat’ to industry", that august publication still doesn’t understand how the legacy publishers are being threatened and how to fight back.
Rather than focus on the money, The Bookseller emphasized the following keypoints:
The Enders report highlights the role terrestrial booksellers play in the curation and discoverability of books, and warns publishers of the consequences of them losing control over these key distribution channels.
“In our view, trade publishers have not been focused enough on the core book retailers,” the report argues, stating that “dedicated booksellers remain critical for maintaining the current shape of the books value chain”. It argues (see right) that self- publishing could still disintermediate agents, publishers and retailers, but not while the supply chain remains diversified. But it warns “publishers cannot rely on the advantages they already have”.
To be fair to The Bookseller, it’s not like they could go to their paying customers and tell publishers that they need to pay authors more.
But wouldn’t it be cool of Philip Jones had actually taken that position?
Sanity and rationality might have broken out in the publishing industry, and who knows what chaos might have followed.
image by rox sm
Fjtorres May 27, 2016 um 2:26 pm
They also need to highlight the "indispensability" of "terrestrial booksellers". (As opposed to maritime or martian booksellers, I suppose.)
I do like their innovative suggestion that tradpubs pander more to retailers.
Coming from a publication called the Booseller I never would’ve expected such a bold position.
author/reader May 27, 2016 um 3:53 pm
puzzled May 27, 2016 um 5:34 pm
"Readers are more sensitive to price than reputation and read in high volumes."
Interesting that they use the word 'reputation' and not 'quality'.
Smart Debut Author May 27, 2016 um 5:38 pm
According to non-publicly-released BookScan data, Amazon’s share of 2015 PRINT US book sales was over 35%, and that doesn’t include 10-20 million non-expanded-distro CreateSpace sales.
For 2016 YTD, US print sales are up roughly 1% compared to the same period last year… but now, 42% of those 2016 US print sales are happening on Amazon.
Puts all that "yaay! bookstores are back!" media bullshit in a slightly different light, doesn’t it…
So Phillip thinks that to survive, publishers must "maintain the current shape" of the retailer "books value chain"?
Um… 😉 Don’t hold your breath, Phillip.
ShellBell May 27, 2016 um 7:36 pm
I rely more and more on my local library for those traditionally published authors that I still read. With the earlier introduction of geographical restrictions, and now the price gouging by the UK publishers of the eBook market in New Zealand, my purchases of eBooks by the big publishers has greatly reduced. I have had to diversify not only with the authors that I read but also the genres that I read. Now I mainly buy eBooks by smaller publishers and self published authors. They are DRM free and reasonably priced, and still a good read. I may still buy the eBook issued by a big publisher if the price reduces to a level that I find acceptable, but UK published eBooks very rarely have price reductions. I don’t buy print books and I won’t buy over-priced eBooks. Big publishers can be as inflexible and unadaptable as they want but they are definitely getting less and less of my money.
MKS May 27, 2016 um 8:36 pm
Keep in mind when reading about analyst’s reports that are prepared for the publishing industry that they may well be using AuthorEarning’s findings as opposed to independently verifying that data with their own mechanism. So don’t interpret a summary of such a report as independent verification of AuthorEarnings work.
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Marion Gropen May 30, 2017 um 8:59 am
Fiction, as a whole, is less than 1/4 of the publishing revenues in the US for traditional publishing companies. It’s far, far, far less than that in profitability, because it is the least profitable piece.
I suggest that major houses seem to be planning to withdraw from mid-list fiction, and focus solely on blockbusters. That is where a major portion of the sales comes from the high-risk, high-investment, print runs of mass market paperbacks. Almost no author can or will take that risk, so those who want to reap that revenue will need to partner with a publishing house.
As for the rest of the fiction market? Their bottom line will be just fine without it.