If you’re planning to publish an eBook any time soon, you might be interested in the results from two recent book industry studies:
Keep those eBook prices down.
And don’t get carried away with your financial expectations.
You can see the case for low eBook prices in the just-issued September Author Earnings Report, (from indie author Hugh Howey and his Data Guy), which examines the book industry overall and especially authors’ earnings within it.
The “Big 5” traditional publishers have sold their eBooks for high prices for years. The new bestselling novels by Lee Child and Sue Grafton, for example, sell for $14.99 in their Kindle editions, far more than most Indie authors charge for their eBooks.
The Author Earnings report noted, “Over the past 18 months, [large traditional publishers have] responded to shrinking eBook sales with progressive and continual eBook price hikes. But now, in 2015, the largest traditional publishers are seeing both their eBook revenue and their overall dollar revenues — including print revenue — declining.”
Does that mean the eBook-buying marketplace is in decline? Amazon.com doesn’t think so, and the Wall Street Journal reported, “Amazon says eBook sales in its Kindle store—which encompasses a host of titles that aren’t published by the five major houses—are up in 2015 in both units and revenue.”
In other words, various forms of Indie publishing, including some of the new Amazon publishing options, now are making up for the declines felt by larger publishers. The Author Earnings report said that “indie self-published books, which made up 36% of all Kindle eBooks purchased in February 2014, now make up 42% of all Kindle eBooks being purchased on Amazon right now.” The dollars earned by Indies have been growing as well.
The Author Earnings report goes on to say, “When we first started analyzing Kindle sales in February 2014, traditionally-published authors were taking home nearly 60% of the eBook royalties earned in the largest bookstore in the world. Not anymore. Today, traditionally-published authors are barely earning 40% of all Kindle eBook royalties paid, while self-published indie authors and those published by Amazon’s imprints are taking home almost 60%.”
Why has all this been happening, and why now?
The “why” is less conclusive than the “what,” but the Author Earnings report offered some ideas.
Put simply, charging higher prices seemed to carry little penalty in the marketplace when e-readers first were being introduced around 2010. Now, as fewer people are busily stocking their e-readers, price points may be a more sensitive issue.
Here’s another factor. For a couple of years after a 2013 federal court decision pointing to price collusion between Apple and several large publishers, eBook prices dropped, as part of an interim series of agreements to cut those prices. In the last year, however, those agreements have expired, and prices have risen again.
More specifically, when eBook prices jump above $10 a book, those lower indie prices still hovering around $6-8 look a lot more attractive to a lot of readers.
Amazon has analyzed this (of course) and reported on its Kindle forum in July 2014, “For every copy an eBook would sell at $14.99, it would sell 1.74 copies if compared at $9.99. So, for example, if customers would buy 100,000 copies of a particular eBook at $14.99, then customers would buy 174,000 copies of that same book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000.”
Still, as long as indie authors compete in a marketplace where they can easily undersell the competition, they may continue to increase their share of the market.
They will need to, because a new survey from The Author’s Guild of its members shows writers are earning less than they did six years ago – at the dawn of the eBook era – and are spending more time on marketing. The Authors Guild membership consists mainly of traditionally-published professional writers, so they aren’t fully representative of the self-published community (though their survey indicates that a third of their authors have self-published). Still, the survey results are worth bearing in mind for self-publishers.
Among Guild members, the report said, author income has dropped by 30 percent for full-time authors and 38 percent for part-timers. It cites book industry consolidation, online book piracy and the rise of self-publishing as contributing to that decline in income for so many authors.
Writers are spending much more time on marketing now than in 2009 (about 59% more), and “many publishing contracts now require authors to maintain a web and social media presence. Many authors, both traditionally and self-published, have proven adept at using new technologies to connect with readers.”
But in all this, the Guild report does find a bright side: “The opportunities for author-reader engagement are unsurpassed in the history of book publishing—even if this engagement competes with an author’s writing time.” That’s a lesson many self-publishers already have learned for themselves in the past few years. It is part of what makes it all worthwhile.
Readers & Writers: I look forward to your feedback, comments and critiques, and please use BookWorks as your resource to learn more about preparing, publishing and promoting self-published books. My blogs appear every other week.