Most of us are not statisticians (if you are, kudos) and yet part of being an authorpreneur is understanding the business side of publishing.
Yet most of the data that can be used to calculate author earnings and information on e-publishing sales isn’t readily available to anyone, let alone indie authors.
For example, distributors like Amazon and Barnes & Noble don’t share their e-book sales figures. This is where Hugh Howey’s Author Earnings reports offer an intriguing solution. Howey is the self-published author of Wool, a dystopian novel which has been the #1 bestselling science fiction novel on Amazon. He released a report analyzing data on 7,000 e-books from several best-selling genre categories.
But how did he get the data?
He started by looking at his own sales figures. By charting his daily sales reports, he was able to roughly plot the correlation between his Amazon bestseller ranking and his sales. This, however, was not enough to provide reliable data on everyone else’s e-book sales.
Then, Howey got an email from an author who had a new software program that, in Howey’s words, “can crawl online bestseller lists and grab mountains of data.” This mysterious silent partner and his program are supposedly able to compile large enough data sets from information freely available to the public to provide a reliable picture of what Howey calls the “publishing revolution.”
Once Howie and his silent partner had this program, they had to choose which data to collect. Since his methods have been highly criticized by other members of publishing community, both traditional and self-publishers, it is important to know how he got his information:
The first report – called the Amazon 7k Report – looks at data on 7,000 bestselling e-books from Amazon’s most popular genres: Mystery/Thriller, Science Fiction/Fantasy, and Romance. Daily unit sales were estimated based on the correlations between ranking and daily purchases. They applied this sales per ranking data to the 7,000 bestselling genre books on Amazon to estimate the percentage of daily gross Amazon dollar sales claimed by Big 5 publishers, single-author publishers, small or medium publishers, books published by Amazon, and books published by indie authors. Finally, all data was collected from a single 24 hour period. Any estimates about authors’ yearly earnings are extrapolated from one day’s rankings.
His lengthy-but-comprehensible overview of their findings makes some interesting claims:
- Self-published works had a higher average review score (out of 5 stars) than traditionally published works
- The price of an e-book may impact ratings (i.e. higher prices are correlated with lower ratings)
- As a group, indie authors sell more books in the bestselling genres on Amazon than the Big 5 publishers combined.
- 86% of the top 2500 bestsellers in the Mystery/Thriller, Science Fiction/Fantasy, and Romance genre are e-books.
- Because self-published authors keep 70% of their total purchase price on Amazon compared to the 25% that most traditionally published authors get from their publishers, indie authors are earning almost half the daily author revenue in the Mystery/Thriller, Science Fiction/Fantasy, and Romance genres.
Howey’s report has not, however, been met with an entirely warm reception. Skeptics from both traditional publishing and self-publishing backgrounds took to their blogs to offer their critiques. Keep an eye out for Part 2 of Publishing Buzz: What’s Really Going on with Hugh Howey’s Author Earnings Report? for some of the most interesting criticisms.
What do you think so far? Will the Author Earnings report affect your authorprenurial decisions?
