Thursday, 9 October 2014

Show Me The Money

Over the last few posts I've made statements about the future of publishing, the risk to authors, the rise of the self-pubbed industry and the decline and reshaping of the fiction market. It's easy to make such statements; harder to support it with proof.

However, I have been reviewing some data sets, which I'm going to share with you. Feel free to click on the links to get more details.


The market share of indie writers to trad publishers appears to be increasing.

When I say market share, I mean the percentage of dollars going to indie authors. This was reported by (click on the link to read the report), although they note that this is just based on two data points and two data points does not a trend make. It does, though, make an encouraging sign (if you're an indie publisher. Not so fab if you're a traditional publisher!).

Also of note is the rise of the small to medium publishing houses. As I've already stated, they have many advantages in this brave new world.

Mark Coker from Smashwords also reports similar findings. You can download his dataset and have a play with the figures if you feel so included.

Of interest is that while number of titles in the best seller lists are increasing in the indie and small or medium groups, they are decreasing for the big 5. This suggests that the smaller, more nimble sectors are replacing the larger incumbents. They are competing and winning.

Again, it will be interesting to see if this is just a blip or if its a trend. My gut feeling is its a trend, but I'd need to dig into the annual reports of the big 5 to see this and right now I don't have the time.

A quick aside for the non-financially literate: companies that are publicly listed on a stock exchange have to product annual reports. There are often little gems in these reports, and if you're seriously interested in a sector, it pays to have a read of them. Note to self: get the Amazon one.


The big 5 make their money from only a few authors. This is hardly startling news - I said at the beginning of this blog that writing is a tournament market place and in a tournament the 80:20 rule definitely applies; 80 percent of the earnings will be derived from 20 percent of the population (look up Pareto's Theorem for more information).

If you are not in that crowd, your opportunities to earn a living wage are low. You may be better off in the self-published group.

Furthermore, if you have a backlist to which you have the rights, you might be even better placed to consider self-pub, at least for your backlist. Why? It's off the backlists that the publishers make their money. Why shouldn't you?


The reason so many of us are thinking of moving to self-publish is because the earnings in trad are not that stunning.

Take a look at this graph from Author's Earnings

If that were to change, its possible that many of us would shift back. So, here's a thought for publishers to consider. Perhaps more innovative ways of payment - such as profit sharing, co-investment, rebates/discounts, supply chain partnership - might be worth considering

A note of caution:

As more and more people begin to self-publish, it's inevitable that opportunities for profit will drop off. Glory days of double digit growth always, always come to an end. That's what markets do, remember?  So don't go thinking that self-pub is a get rich quick scheme. There is no such thing. But there are always opportunities. Personally, I think it's worth digging into the data to know what and where these are.

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