Thriller Guy’s wife, Mrs. Thriller Guy, (MTG) often complains that the entries in this blog aretoo “inside baseball.” For those not familiar with this metaphor, TG always supposed the general meaning was that it means talking about a subject in detail that would appear boring to those not intimately involved in the subject. I.e. going on and on about the minutia and difficulties of The Writing Life until readers want to shout, shut up and just tell us the titles of some good thrillers. TG agrees: Guilty as charged. And before getting to today’s subject, TG can’t help but go just a bit further with the examination of the origins of the term “inside baseball.” Why? Because that's just the kind of guy TG is. It turns out that while TG’s meaning is correct, it refers not to simply talking about the sport of baseball in numbing detail, it refers to a particular style of play, sometimes also called “scientific baseball.” This is a style supposedly developed by the Baltimore Orioles back around 1910 that featured concentration on the small elements of the game: walks, bunts, base hits, and stolen bases, rather than home runs and other big plays. Who knew? Those who are whacky enough to look into this matter at even greater depth can start here with Wikipedia.
Onward to today’s subject: the struggle to make sense of the publishing business from the viewpoint of those who are completely indispensible to it: the writers. Those without whom there would be no business, and yet those who, at least most of them, are at the bottom end of the pay structure. It has always been thus, but with the rise of independent publishing and self-publishing it has seemed for some time that new possibilities are arising for writers to manage their own careers, output and financial rewards. But there has been little solid evidence for these possibilities. Until now. A new report on the important site, Author Earnings, shows that these opportunities are indeed real and that there is a body of statistics to back it up. TG suggests those who want all the details, and this should be anyone who is in the business of publishing on any level, should read the entire report here. The report is long, detailed, and at times the charts are difficult to make sense of, but it’s important to take the time and sift through it and figure it out.
Here are some of the takeaways from the report without the charts to get you interested. These are pulled directly from the report without any input from TG.
The Tenured vs. Debut Author Report
In our most recent earnings report, one chart jumped out at us and begged for deeper analysis: It was a look at daily author earnings according to publication date, and it revealed the heavy reliance Big 5 publishers have on the sale of their backlist titles. The same chart showed, less surprisingly, that self-published authors are making the vast majority of their earnings on recently published works. In a single chart we were witness to the economic effects of new participants entering an industry in which they were formerly uncompetitive. The same chart made it apparent that the effects self-publishing will have on the trade book industry have only just begun.
Because of this chart, we began looking more deeply at authors from two different camps: those who debuted prior to the explosion of self-publishing and those who debuted after. Authors getting their start today will of course be joining the latter camp. And we believe those authors will want to know the following:
• Big-5 publishers are massively reliant on their most established authors to the tune of 63% of their e-book revenue.
• Roughly 46% of traditional publishing’s fiction dollars are coming from e-books.
• Very few authors who debut with major publishers make enough money to earn a living—and modern advances don’t cover the difference.
• In absolute numbers, more self-published authors are earning a living wage today than Big-5 authors.
• When comparing debut authors who have equal time on the market, the difference between self-published and Big-5 authors is even greater.
In this report, we will also reveal how e-book earnings represent roughly 64% of a traditionally published fiction author’s income, and therefore why authors should focus less on statistics geared toward publisher earnings and trade bookstore sales and consider their own incomes instead. Finally, we will tackle the difficult question of just how many authors are earning a living wage today. The results are sobering. I’ll spoil it for you and say that there aren’t many. But there are reasons to celebrate. Read on to see why.
Roughly 46% of traditional publishing’s fiction dollars are coming from e-books, while the other 54% comes from print sales, audiobooks, and other formats. On the non-fiction side, e-books make up a far smaller fraction of gross dollar revenues: only 20%.
For the average traditionally-published fiction author, this means 59% of unit sales are now e-books.
While only 32% of the publishing industry’s gross revenue currently comes from e-books, nearly 64% of the average traditionally-published fiction author’s earnings is coming from their e-books. Earnings for the average genre-fiction author will skew even further toward their e-book sales.
There are far more indie debut authors from 2010, 2011, 2012, and 2013 who are now holding spots on the Amazon bestseller charts than Big-5 debut authors. Even more striking, the number of today’s bestsellers from these “New” indie debut authors increases steeply year-over-year, while the number of today’s bestsellers from “New” Big-5 debut authors stays flat. The number of today’s bestsellers from small to medium publisher debut authors is also growing year over year, although not at the same explosive rate with which indie debuts are grabbing and holding slots on the charts.
After years and years of querying and jumping through gatekeeper hoops, it appears that even the less-than-1% who are lucky enough to land an agent and a Big-5 publishing contract can’t manage to quit their day jobs. (This is an observation in the data that matches what we have seen anecdotally in the publishing and bookselling trenches).
By contrast, we see over 700 Indie-published authors who debuted in 2010, 2011, 2012, and 2013 who are today earning more than $25,000/year from their Kindle e-books alone. For these authors, e-book sales on other platforms and POD print sales will add another 20%-30% on average to this total. It’s easy to see that, for the past 4 years, and even taking lost print sales into consideration, far more Indie authors than Big-5 authors are earning a living wage from their writing.
Does this mean that earning a living as an author is likely? Absolutely not. Here is where optimism for self-publishing is often mistaken for naïveté. It’s where excitement leads erroneously to a gold rush mentality. Let’s take an example from sports: Aspiring basketball players know precisely how many roster slots exist in the NBA. (30 teams with 15 roster spots each). Aspiring writers are not so lucky. We have no idea how many slots are open for us as we begin to dream of writing for a living. Many of us hopeful writers grew up browsing bookstores with the misguided impression that all of those tens of thousands of authors we see on the shelves were writing for a living. The vast majority are not.
Yes, millions of people dream of writing for a living. Yes, becoming one of those people is difficult. But it’s never been more likely for those willing to put in the effort. You don’t have to be in the top 200 to 300 of fiction writers to earn a living these days. You can be in the top 2,000 to 3,000. That’s an enormous improvement. And yet it goes largely uncommented on and unnoticed. We hope to highlight this trend for all those with manuscripts in-hand and a decision to make.
The picture that is emerging from our data collection and our look at bestseller churn is that the number of Big-5 debuts at each earning level is relatively flat, year over year, while the number of living-wage-earning indie author debuts is growing exponentially year over year. Even ignoring the hurdles and roadblocks that are a built-in part of traditional publishing’s drawn-out querying process, it’s easy to see which method of publishing represents the greater and faster-growing opportunity to earn a living wage as a writer. Again, the data matches everything we are seeing in the publishing community trenches. And these observations help to explain many of the restrictions we see in modern publishing contracts.
To combat these trends, we believe that major publishers are going to have to pay higher royalties on e-book sales in the very near future. We have heard from some authors and industry insiders that this is already taking place. Unfortunately, the sweetest deals are going to existing bestsellers, which means the rich get richer while debuting authors are left behind. This must change. Higher royalties will have to become the new standard across the board. Otherwise, the word will keep spreading—both anecdotally and through hard data—that the choice on how to publish keeps tilting toward retaining ownership of one’s art. We’re not saying this decision will ever be simple. But it sure seems to be getting easier and easier.
TG here. See, there is hope. And as readers of this blog know well, hope is often the only thing TG can give writers to keep them at their desks, or at least in front of their computers, staring at that blank page, working and dreaming.