Author earnings: an indie author revolution?

It’s an interesting time in the self-publishing world. In case you haven’t heard, best-selling self-published author, Hugh Howey, got together with an unnamed data guru and recently released an article on Author Earnings, titled the 7k Report. The findings have provided a real insight into the world of e-books and self-publishing, which has been lacking before now.

Below I’ve attempted to highlight some of the key points of the findings:

Amazon has previously reported that self-published books make up 25% of the top 100 list. Howey suggests that the real figure is something approaching 50%. He says this is because not all e-book sales are reported by e-book distributors.
Indie published books, on average, receive better reviews and are priced cheaper than Big Five published books, which are priced the highest and surprisingly, receive lower average review scores. Howey proposes this finding is related to the relationship between value received and amount spent.
A common myth is that self-publishing is hurting the world of literature. Howey counters this by suggesting, based on the findings, that pricing e-books higher than mass market paperbacks is having a negative effect. He states that higher prices may actually be driving customers to less expensive books and hence publishers are actually creating a market for self-published works.
Write in the correct genre: it’s been recommended by many that you need to select the right genre to succeed in self-publishing. Howey’s report supports this. If you write in Mystery/Thriller, Sci-Fi/Fantasy or Romance, you are on to a good thing. These genres make up 69% of the e-book sales on Amazon.
Based on daily unit sales of e-book genre best sellers, indie authors are outperforming the Big Five–a staggering finding.
86% of the top 2,500 genre fiction best sellers in the overall Amazon store are e-books. 86%. Hugh is still picking his jaw off the floor like the rest of us. At the top of the charts, the dominance is even more extreme: 92% of the Top 100 are e-books.
Daily Gross Amazon Sales reveals the Big Five dominate with over 50% of the pie. However, when you translate this into earnings for the author, indie authors are earning nearly half the total author revenue from genre fiction sales on Amazon. As Howey reveals, this has a lot to do with publisher revenue, with the Big Five retaining more than twice what the author makes on e-book sales.
Indie authors outnumber traditionally published authors in every earnings bracket but one. At first, it was suspected an indie author’s ability to output more books per year compared to the long lead time for traditional publishers had an impact here. Put simply, indie authors are most likely earning more because they have more books for sale, but the results were surprising: most self-published authors are, on average, earning more money on fewer books:

To self-publish or not to self-publish?

It’s not an easy question for any author. In creating his report, Hugh Howey has undoubtedly provided the author community with some much needed visibility around the changing publishing space. In his article he calls for even more transparency.

I’d strongly recommend taking a look at his original report below, as well as some additional articles by Mark Coker, owner of Smashwords, on this topic.