The Pandigital E-Reader in a case with a light.

This month I read one of the best reports on e-publishing and e-book sales statistics that I’ve seen come out on the Web–the July 2014 Author Earnings Report from authorearnings.com

What made it great? Well, the e-book sales statistics analysis gives insights into how independent, or indie, ebook publishers are really doing in the marketplace–compared to the competition, traditional publishing.

But before we get to that, let’s take a look back at the growth of ebook publishing.

We all know that time flies on the Web. A year out here is, according to these calculations, about equal to 4.7 years in the face-to-face world. (See: http://www.fatdux.com/blog/2009/09/22/ calculating-the-length-of-an-internet-year/) So, let’s roll back to the beginning of e-books.

How fast has the e-book market grown?

In e-book publishing, the beginning of “time,” so to speak, was somewhere back around the turn of the 21st century. Since 2002 e-book sales in the US totaled less than $1 million, or 0.05 of the market, that’s a pretty good place to start.

To illustrate the phenomenal growth of ebooks, a decade after they slipped onto the radar of book buyers, in March of 2012, , J.K. Rowling’s newly launched website, Pottermore, grossed over $1 million in ebook sales its first three days! That was Rowling, of course, but even so it’s safe to say that pretty well all book buyers had heard of ebooks, and likely even thought about reading one in the space of 10 years.

Let’s take a quick look at the growth of ebook sales with this video:

By 2013 e-book sales started to stabilize. According to the Association of American Publishers ebooks represented 27% of all total adult trade sales through traditional publishers. That was up 4.45% from the previous year, when e-book adult trade sales accounted for 22.55% of the market.

What propelled indie ebook publishing?

The interesting thing about e-books is that traditional publishers, as you might expect, have resisted the move from paper to e-ink, at the same time that authors and readers have embraced them. Why?

Well, it certainly isn’t because paperbacks and hardcovers are better for either readers or authors. No. Paper is more profitable for traditional publishers because that’s how the system works. Joe Biel (founder of Microcosm Publishing) says just that in this blog post, “… the profit always works out worse for the publisher of an eBook than a print book.” See: http://takingthelane.com/2014/04/21/the-business-of-publishing-how-much-should-it-cost/

With traditional publishing, gatekeepers decide behind closed–and locked–doors what gets into the marketplace, thus dictating which authors get published and what books readers can have.

That’s what has changed with e-publishing.

Let’s go back to 2002 and take a look at how many new books readers had access to (based on ISBNs issued in the United States by Bowker)–a whopping 247,777 that included just 32,639 non-traditional (includes reprints of public domain books, print-on-demand, etc.) titles.

And that’s when words like self-publishing and e-publishing were something you whispered about to other authors behind closed doors. From 2006 (the Kindle dedicated ebook reading device arrived in 2007) to 2011 self-publishing nearly tripled, growing 287%, according to the Association of American Publishers/Book Industry Study Group statistics. See: http://beyondthemargins.com/2013/06/book-facts-and-stats/

But are indie ebooks “really” books that anyone will read?

That’s the question traditional publishers are asking, isn’t it? If everyone can now publish a book and there’s nobody guarding the floodgates, how much of what’s being released is actually something worth reading?

Sure, e-book self-publishers can get editors. They can hire cover artists. And they can get help setting up their ebooks (or POD books) for publication. But whether they are or not, how well are authors doing on their own?

Typically, writers are also readers, so it seems logical to assume they should know what makes a book “good.”

And that seems to be true, as at least some self-published authors have quite capably figured out how the system works. On August 5, 2012, the New York Times eBook List (unveiled February 13, 2011) of best sellers included 7 independent Smashwords distributed authors.

The e-book market, in general, has become so popular that Amazon’s 2012 ebook sales increased by 70%! It’s a safe bet too, that a large number of these books weren’t from traditional publishers.

What’s the difference for authors between indie publishing and traditionally publishing?

For authors, of course, the big difference between indie publishing and traditional publishing is in the paycheck. Independently published authors only split book sales with their publisher (Indie publishers generally upload themselves to Amazon as big book distributors, such as Smashwords, don’t distribute to Amazon) and get the rest–that means for every book they sell on Amazon priced between $2.99 and $9.99, they get 70% or $0.70 on the dollar. Traditionally published authors get a royalty calculated in various ways with 25% of list being around average on ebook sales, or $0.25 on the dollar–that’s a difference of 45%! See: http://www.authorsguild.org/e-books/publishers-own-analysis-shows-ebook-royalties-unfair-to-authors/

So, the money is better, which is no surprise.

The big surprise is that the latest research from authorearnings.com shows that indie publishers are actually selling more ebooks in some genres than even the Big 5 in New York can move, with all of their big-name promoted authors!

Now that’s a shocker, even to me, an ebook author since the turn of the 21st century.

What genres sell better from self-published ebook authors than traditional publishers?

The biggest selling genre in ebooks is, to nobody’s surprise, romance. But let’s take a look at who readers are choosing to read.
Romance
The Amazon earnings report from July 14, 2014, from http://authorearnings.com/july-2014-author-earnings-report/ (see the graph below, reposted with a Creative Commons License) shows that 66% of romance e-books sold were indie published!

Of the remaining 34%, 8% were from small or medium publishers, 7% from Amazon’s own publishing company, 1% from uncategorized single author publishers, and just 18% from the big five in New York.

What happened here? Well, it seems that the publishing gate keepers aren’t really all that accurate at predicting the types of romance books readers really want. So, they’ve passed over a lot of authors who can tell a great romance story. Now, with the revolution in e-publishing, these authors can get their own books on digital shelves and into readers’ “hands.”

Romance isn’t the only runaway genre for indie publishers.

The chart shows that 56% of science fiction and fantasy books purchased by readers are indie published, compared to just 29% from the Big Five, with the remainder of sales split between the other smaller publishers.

So, if you’re a romance or science fiction or fantasy author, odds are that you’ll make a lot more money going the indie publishing route. Not only will you earn more per book, but statistically, you’ll have more sales. Plus, you get to skip the whole submission/rejection process and go right to your readers.

What genres sell more through traditional publishers than from indie publishers?

This is where the graph below gets interesting. Of course there are places where readers are more drawn to books from established gatekeepers where they know a whole editorial team has participated in bringing a book to the marketplace.

As you might expect, the biggest area where publishers–Big Five and Small established publishers–take the lead, is in nonfiction. Nonfiction sales from indie publishers only make up 26% of the market share compared to 69% almost equally split between the traditional publishers.

Those numbers point to a reliability issue. After all, anyone can write a how-to book or history of something, and without some stamp of authenticity, like a publisher’s name on it, the reader has to verify for herself that the information is credible. However, when she’s reading that romance or SF story, she only has to sit back and enjoy the world the author created.

It may be those established worlds and authors that give the mystery, thriller, and suspense genres domination by the Big Five (54%). Think about authors like Stephen King, James Patterson, and others just as well known and it makes sense that their publishers pull ahead in this area. The remaining splits are: 23% indie published, Amazon’s own publishing house capturing 18%, and the last 5% with small publishers.

Author earnings by genre.

Author earnings by genre. Chart created and shared by a Creative Commons License from: http://authorearnings.com/july-2014-author-earnings-report/

What genres sell best in ebook format?

The authorearnings.com chart, above, summarizes sales from Amazon up to July 14, 2014. (See the report for more on how the data is compiled) And here’s a Forbes report stating that Amazon has a 65% share of ebook sales — http://www.forbes.com/sites/jeffbercovici/2014/02/10/amazon-vs-book-publishers-by-the-numbers/

Since Amazon has such a high share of the market, it’s reasonable to suggest that purchases by genre are similar across the board with other booksellers. However, Amazon’s KDP Select does have authors exclusive to Amazon, so while there could be some variation in genres based on those sales, it’s unlikely the difference is significant.

So, let’s take a look at what genres will make indie ebook authors the most money.

Obviously, romance leads the way for indie authors. Not only do indie authors have the lion’s share of sales, but romance is way out in front in terms of overall sales. The next most lucrative genre for indie authors is science fiction and fantasy, where again they lead in popularity. However, overall sales in this genre are less than half of romance sales.

In dollars and cents, if an author writes a novel that has both romance and science fiction elements, statistics suggest she’ll make more than double the income by promoting it as a romance novel than a science fiction novel, assuming that readers also find the romance strong in the book.

And for indie authors planning to publish children’s ebooks or literary ebooks, current advice has to be don’t quit your day job. With 21% and 13%  of sales respectively in genres only grossing $30,000 to $40,000 for all authors combined, the odds of making much money are pretty slim.

If you’re writing in a genre not listed here in the research, you’re safe in assuming it has lower sales than either children’s or literary fiction, and calculate your return accordingly.

How do you make the decision on whether or not to indie publish?

Publishing a book takes a lot of work. When you indie publish your own book, you’re the one doing all that work–whether you do it yourself or contract the work out to someone else. You wear all the hats from graphic designer to marketing executive.

Indie publishing the book you’ve been working on for years can be the most satisfying experience you’ll ever have.

However, indie publishing can also be a big disappointment if you’re not realistically prepared for both the workload and the potential benefits.

Now that ebook publishing is out of its infancy and taking baby steps, authors can at least look at the market and make informed decisions. That’s a good thing!

As you’ve learned from the graph and discussion of ebook sales, the most potential to earn a living self-publishing your own e-book is in the romance genre. But don’t forget you’ll also run into a lot of competition there, so your book must stand out. Ensure it’s well edited, has a good cover, and that you create a solid marketing plan.

You’re less likely to earn a living in the speculative fiction genre with science fiction and fantasy, although since series tend to be popular here that could work in your favor. If you’re involved in the SF writing communities, so that you’ve got a solid writer’s platform, that will also be an advantage.

If you’ve got a great non-fiction book you’re considering e-publishing, you’ll also need to develop a strong writer’s platform in order to appear as authoritative as competing nonfiction released by traditional publishers. The more confidence you can inspire in readers, the more likelihood that your sales will be significant.

The market for children’s literature (includes YA), is starting to shift, so even though it’s extremely low in ebooks right now, it could show improvement in the coming years. Read more at: http://www.publishersweekly.com/pw/by-topic/childrens/childrens-industry-news/article/61167-children-s-books-a-shifting-market.html

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But indie publishers don’t have to publish alone.

I can help if you decide to jump onto the e-publishing wagon and see where it takes you. My course, Publish and Sell Your E-Books, is offered by community colleges and libraries around the world. You can check out the syllabus and start dates here, plus find a school near you: http://bit.ly/QffYQB

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