Analyzing the Author Earnings Data Using Basic Analytics

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Last week, when I was interviewed on the Self-Publishing Roundtable about the Digital Book World and Writer’s Digest 2014 Author Survey, I was surprised to learn of the deep animosity many indie authors felt toward this survey and its reporting. For Phil Sexton, who was also with me on the panel, and for myself, this was a hard pill to swallow, particularly since we have been doing this work with the intention of providing the best information we could bring to publishers, self-publishing service providers, and authors (as our upcoming reports will do more directly).

Now this week, along comes indie author Hugh Howey with his Author Earnings report.  I understand his project is being heralded, likely by the same indie authors who may not quite understand or agree with what I and the team at Digital Book World are doing, as the answer to the data problems in publishing. Howey explains in his report that:

Choosing which way to publish is becoming a difficult choice for the modern author. This choice has only grown more challenging as options have expanded and as conflicting reports have emerged on how much or how little writers can expect to make. Our contention is that many of these reports are flawed, both by the self-selected surveys they employ, the sources for these surveys, and, occasionally, the biases in their interpretation. Our fear is that authors are selling themselves short and making poor decisions based on poor data.

As I opened Howey’s report and data, I felt hopeful that he might be able to circumvent the issues we’d had with the Digital Book World and Writer’s Digest Author Survey, which is a voluntary rather than a scientific sample. Howey’s method of data collection overcomes some of the limits of relying on voluntary survey data and provides a new source of analysis and information that may be used to support or call into question other findings. At the same time, it introduces other limitations, some of which he clearly delineates and others that he does not.

Not everyone has the kind of training and expertise I bring to this type of research with my doctorate and years of research and teaching. What I would like to do here is take a closer look at Howey’s numbers, which he graciously provided in the raw, explain the limits, and provide you with more informed conclusions based on the statistics using widely accepted research and analysis techniques.

Interestingly, despite the posturing and vitriol on the blog posts and author loops, Howey’s data doesn’t contradict any of the findings I’ve reported here or elsewhere. This fact is actually quite depressing. We’d all like it if authors earned more; as a hybrid author myself, I know I would. And as a lover of books and reading, I genuinely believe authors are undervalued in society.

The Digital Book World and Writer’s Digest Author Survey has its limits, as I have outlined in my other blog posts: It is a non-scientific sample of volunteers, many but not all of whom responded to an invitation from Writer’s Digest to complete the survey. Nonetheless, the analytic methods are sound and the findings highly illuminating, especially compared to an investigative journalism piece which would rely on far fewer sources.

Trish McCallan, the author who interviewed me for the Self-Publishing Roundtable, presented the concern that the survey missed the success cases and, therefore, misrepresented what self-published authors were truly achieving. Howey had brought up a similar argument, faulting us for comparing the traditionally published success stories to the multitudes of self-published authors and failing to take into account the authors going the traditional route and stuck in the slush pile.

As a result, the indie authors, particularly the outraged on the Kindle Boards and Howey himself, were arguing that our findings were biased, skewed, or utterly worthless. I disagree with all of these assessments. As I explained, it would take an awful lot of success stories to move the numbers we had collected and change the story that we reported in a meaningful way—as you will soon see.

Howey’s numbers provide the clamored-for corrective of focusing on the successes, rather than on the broad spectrum of authors we have in our survey. Rather than interview authors or rely on a self-selecting group of survey respondents, Howey selected his sample based on sales-ranking success. He captured the Amazon rankings data for Kindle ebooks in the top-selling fiction genres of romance, sci-fi/fantasy, and mystery/thriller. His sample consists of a snapshot of nearly 7,000 ebooks (6,887 books in the data I downloaded).

The benefit of these data are that we know who was selected and who was not, unlike in the Author Survey where we don’t know how people selected themselves. Moreover, we can use statistical tests that we can’t use with a voluntary sample, since the sample Howey collected is representative of best-sellers on any given day. Yet the sample has its own inherent bias and selection issues, which are important depending upon what question you are trying to answer.

To be clear, Howey’s sample consists of the top ebooks on Amazon in three very populated genre categories. Opening my Web browser to the Amazon Kindle store today, I find that combined these three categories have 443,321 titles, although the same book may appear on more than one of these lists. Therefore, Howey’s data represent somewhere between the top 1.5% (assuming no overlap of titles) and 4% (assuming full overlap and using romance, the largest category, as the denominator) of ebooks in these genres. I would argue that far from being the “mid-list,” the way Howey presents it, these are actually and only the elite.

Howey makes a bunch of assumptions to get us from sales rankings to author earnings. Using data he and his friends collected from their own sales rankings, he extrapolates from the Kindle ebook rankings to the number of units sold on data collection day. Then, based on the kind of publisher and the price of the ebook, he further assumes the royalty rate the author receives. Finally, to get to yearly income, he multiplies the daily author revenue by 365. This final calculation assumes a constant rate of sales per day with no fluctuation and no difference in the sales trajectory of books based on publication date, publisher type, or being part of a series. Finally, while there are close to 7,000 books, Howey aggregates author revenue in his last set of analyses, bringing the total to 3,349 authors and giving them credit for all of their books in the top sellers, assuming all of their books are represented there.

I’m not sure that any of these assumptions are good ones, but I’m not going to challenge them for the purposes of this post. Just note that changing them could also change the outcomes of the analyses.

The Kindle ebooks rankings for the nearly 7,000 books in the sample range from Nos. 1 to 753,309, since the Kindle rankings also include books in other genre categories. To my considerable surprise, my own ebook, Kings of Brighton Beach Episode #1, might very well be included in Howey’s data file, depending on when the data were collected. As of this morning, I’m now at a rankings low of #368,105, still well within contention. Yet I’ve hardly made any money on my writing so far. In fact, I’m still in the red given my outlays for editing, formatting, and cover design.

While I might find my book in Howey’s data, his income analysis would have excluded me, since the rating I have does not equate even to one book sold per day. Yet these “zeroes” among the bestsellers in his sample were not included in the income findings or otherwise noted. That oversight equates to Howey ignoring the non-sales of 844 of the “best-sellers” in his data, including 9.7% of the indie ebooks and 6.7% of “Big Five” ebooks.

Since I have an LLC, I would have been among one of the “uncategorized” single-author publishers that Howey didn’t bother to categorize but which, based on my analysis of Bowker publisher data from 2002-2012, is almost certainly an indie author. Apparently, we weren’t “interesting enough” in the rankings to track down. Including these counts in the indie story substantially dilutes the results for indie success as would including the “zero” sales.

Howey has shouted foul for my similar analytic decision not to include unconfirmed zeroes in my analysis of income or to swap authors in and out of categories without clarity on where they belonged. So why didn’t he do it when given the chance? As we refine our analysis of this data in the coming days and weeks, we’ll find out I’m sure.

We’ll let his numbers stand and use them to tell the bigger story—which, if anything, should now be well-placed to show the striking advantages of indie publishing.

Faced with the choices of how to publish, what should an author like myself choose—especially if the goal is to make a living from my writing? What can I expect in terms of income?

While the Author Earnings sample examines the high end of earners, the results are depressingly consistent with the findings I’ve reported from the Digital Book World and Writer’s Digest Author Surveys for 2013 and 2014: While a few authors are making money from their writing, not that many authors make that much money.

In Howey’s data, 944 authors out of the 3,439 authors of the almost 7000 Amazon best-sellers (with estimated sales greater than one book per day) were estimated to have earned above federal minimum wage ($7.25*8 hours=$58/day) from their best-selling books on data collection day. This number represents more than a quarter of the top-selling writers in the selected fiction genres (27.42%), but it is an extremely small percentage of the writers in these genres with books for sale on Amazon.

As a college professor, I personally make more than minimum wage; so I am looking at long odds on having my writing income replace my job income. Assuming I had the choice, are my own odds of making a living at writing better if I go indie or with the Big Five or another publisher?

Certainly, there are more indie than Big Five authors earning above minimum wage in this daily snapshot (486 vs. 302), but to know the probability of hitting the right place on the list, we would need to know the distribution of publisher types across all of the ebooks in the selected genres. What we do know for sure is that there are more indie authors than Big Five authors. Since fewer authors make it through the Big Five gatekeeping process to begin with, it’s entirely possible that my overall probability of hitting a higher point on the list is far better if I squeeze through the Big Five gate at the outset.

What about how much money I will make? The table below presents the median, mean, minimum, and maximum estimated yearly revenue from writing from the authors in Howey’s sample. A statistical comparison of the means (for you data geeks out there, I used the post-hoc Bonferroni analysis in STATA12) suggests that best-selling indie authors did significantly better than the uncategorized authors and authors from small or medium publishing houses. However, there was no significant difference in indie author’s estimated income compared to the authors who came through the Big Five. In other words, the table shows differences between the groups, but if we were to draw similar samples on other days, there is a 95% or greater chance that this difference would disappear and is merely a random fluke.

The pattern changes if I only look at authors making $58 or more per day, in which case there are no significant differences in average estimated daily or yearly earnings between Indie, small or medium publishers, Big Five publishers, and uncategorized authors.

Screen shot 2014-02-12 at 4.27.24 PM

In both analyses, Amazon authors earn substantially more than anyone else on average. The big winners in the Amazon bestselling ebook story seem to be the authors who published with Amazon’s publishing imprints.

When so few well-known authors have rushed to embrace Amazon as a publisher due to their lack of print outlets, we have to wonder how much of the market is really represented in the figures Howey has collected. All of these numbers beg the question, what about sales outside of Amazon? If there’s no real difference in average Amazon income, do the Big Five or even the small and medium publishers pull ahead in author revenue with print and other digital sales with other retailers and sales channels? Does Amazon as a publisher fall behind?

The research raises as many, if not more, questions than it answers. This is why science is an incremental and iterative endeavor. What I find in these new data are confirmation of a number of the things we’ve already reported, and I’m left with greater faith in the integrity of the findings from the Digital Book World and Writer’s Digest surveys, for all of their limitations.

Even when we take a snapshot of successes, we learn many of the lessons I’ve been expounding based on my own studies and the Digital Book World and Writer’s Digest data. The findings are these:

  • Authors and publishers face a hard market, and it’s not easy to sell a lot of books.
  • Publishing is a segmented market. A very small percentage of authors are in a position to support themselves with their writing, no matter which publishing route they’ve chosen.
  • Publishers don’t have a lock on the answers, and the contributions they make to author sales and income are increasingly in question, leading to calls for partnerships that provide greater benefit to authors.
  • Self-publishing is making it easier than ever before for more authors to make at least some money, if not a lot of money, on their writing, but these authors are a small percentage of the whole.

For myself and others, I wish I had more optimistic findings that showed we could all share in an incredible gold rush, but the data are the data.

I welcome any questions about how I performed this analysis and my impressions of the data.

Dana Beth Weinberg

About Dana Beth Weinberg

Dana Beth Weinberg, received her doctorate from Harvard University and is Professor of Sociology at Queens College – CUNY, where she directs the MA Program in Data Analytics and Applied Social Research. Her research focuses on organizational behavior, work, and occupations. Inspired by her own personal experiences as a novelist, her current research examines the way that digitization is changing the book industry for readers, writers, and publishers. Find Dana at danabethweinberg.com or @DBWeinberg or https://www.facebook.com/danabethweinbergwriter

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56 thoughts on “Analyzing the Author Earnings Data Using Basic Analytics

  1. Two quick comments: I’m afraid the most likely reaction you get to this excellent post is, “Don’t bother me the facts.” And, second, the emphasis on indie vs. traditional as highly relevant factor is, I’m sure you’d agree, misplaced.

    • What facts? You can only get the facts of the DBW survey if you pay $300. Oh wait, the survey is self selected. There are no facts.

      • Sarah–

        Please see my comments below at who the report is for and why it’s priced the way it is. We definitely accept and welcome fair criticism at DBW, but you obviously haven’t read the report and it’s unclear at this point whether you understand who it’s directed toward and why. So, before declaring “there are no facts,” I’d invite you to read the comments below.

        Thanks for your comment.

        Best,
        jeremy

  2. Pingback: Publishing Opinions | Analyzing the Author Earnings Data Using Basic Analytics

  3. Thank you! I think being realistic about the changes in publishing–and money-making opportunities–is always a good thing. I’m glad that someone with analytics chops has examined Howey’s very interesting report. The same advice from days of yore for writers applies today: \Don’t quit your day job.\ At least until you become one of the \elite\ earners. The difference today, and it’s a marvelous difference, is that authors have another avenue after the PTB in publishing say \no.\ Or even before they do. Choice is a lovely thing. And I think that’s a great development.

  4. I quit my “day job” in 1991. Except writing is my day job now for 25 years. What I’m curious about is how much DBW makes off the report, a pdf which they charge quite a bit for? How much does each person working for DBW earn and what benefits? How much does Mike Shatzkin make off the DBW conference?

    We seem very focused on author earning but I’m interested in how much those who are second tier, not producers of the primary product, earn.

    • Yes, I agree. I am astounded at the cost of the PDF. The Howey data is available for free. Further, this article sounds very defensive: “Not everyone has the kind of training and expertise I bring to this type of research with my doctorate and years of research and teaching.” Really? This column unfortunately seems more like an effort to protect territory (and sell a book) than a rational response to the data that was released yesterday.

      • Hi Mary–

        The PDF is aimed at publishers and self-publishing service providers. While it does have some data that authors will find useful, it is most useful to companies that serve authors.

        Our data and Hugh’s data only overlap in any way in one area, and that’s the area of author income. We also have a tremendous amount of data on what authors want when they publish, what they find most important, what their impressions are of publishers and self-publishing and many other issues. In fact, we don’t think the author income data is even close to the most important for our prospective readers because when it comes to why authors want to publish books, making money is rather low on the list compared to other reasons, according to our data.

        Anyway, thanks for the comment.

        Best,
        jeremy

        • “The PDF is aimed at publishers and self-publishing service providers.”

          And you say the response will likely be “don’t bother me with the facts”. I guess. Why would authors trust you, when on the one hand Weinberg is saying ” we have been doing this work with the intention of providing the best information we could bring to publishers, self-publishing service providers, and authors” and on the other, you’re producing a report that is priced out of reach for many authors and you say it’s aimed at the industry, not the authors.

      • Mary: In fact, Ms. Weinburg DOES have the experience and skill necessary to do data analysis. It’s like complaining about a medical doctor who points out that her MD gives her the authority to speak about medical issues.

        Her field is a highly specialized one and she is precisely the sort of person who SHOULD be talking about the issues of data, how it’s gathered, and how it’s interpreted.

      • Definitely agree with you on tone, Mary. Words like “posturing and vitriol” have no place in something that claims (in not in exactly these words) to be scientific, academic, and impartial. Defensive is the perfect word.

  5. Pingback: Howey's Convention: "Organized Advocacy" | Jane Friedman

  6. What the data does not reflect is how many books were ignored and never sold on Amazon thanks to Amazon’s elitist deference to its own publishing houses, and blatant shunning of authors not on board with it with regard to lowering prices below cost. As a self-published author, I do not work with Amazon precisely because it did all it could to hide my books, shoving them down to the ranking of over 1 million and pigeonholing them in categories they did not belong to. To use Amazon as a control group is to skew the numbers radically, and no amount of statistics you supply will adequately reflect reality. The Howey numbers are based on data which was voluntarily submitted, and so spending so much money to purchase a PDF report is useless to me. Why you choose to charge so much for a skewed report is a mystery, since the data is freely obtainable elsewhere.

    • Hi Theresa–

      I think there’s a misunderstanding here. Our report is NOT based on Howey’s numbers. Our report is based on a survey of 9,000 authors. And while I think you’d get some use out of the report, it’s NOT directed at authors. It’s directed at publishers and self-publishing services providers — businesses, sometimes billion-dollar businesses, that serve authors.

      However, we do have data that authors would find more useful, data that might help authors make decisions on how to publish, etc, and we’ll be putting those out in reports that will be priced at rates that individuals can afford. Rates even Amazon would be happy with :)

      Thanks for the comment and hope that helps!

      best,
      jeremy

  7. The important part of all of this is that people are looking at numbers and addressing concerns of writer compensation and contractual woes. The more information, the closer we get to the truth. So, YAY to the discussion!

  8. Quote: \The big winners in the Amazon bestselling ebook story seem to be the authors who published with Amazon’s publishing imprints.\

    Whenever Amazon is involved, it’s always wise to be suspicious, very suspicious.

    I already know that Amazon’s search results can be tilted to display a profitable title over a less profitable one. An Amazon lawyer and I had a rather tense conversation over that. She didn’t deny that happened and her only defense was the potential customers could, by clicking on several obscure links, eventually reach a less expensive title. Keep in mind that this was over a very significant pricing difference: $50 versus $15. Trusting Amazon customers not only get screwed, they get screwed badly.

    When I lived in Seattle, I met an Amazon programmer who told me to \never trust Amazon search results.\ Software developers at other companies have told me that their Amazon counterparts spend a lot of time coming up with ways to highlight certain books and hide others. That include hiding hardcore porn from mothers who might get upset and steer their kids away from Amazon. Maybe they should.

    That in turn, raises an interesting question. Could Amazon be giving their books special prominence and downplaying others? That’s particularly likely to be effective in popular genres where the number of titles runs into the tens of thousands.

    It also raises interesting legal issues that may result in legal action when we again have a Department of Justice where ethics and law matter more than cronyism and silencing political opponents. The issues include:

    1. Whether a company that controls 70% of the retail sales in the ebook market and is also a publisher can favor its own titles. That raises issues of abuse of a near monopoly status, of illegal bundling and undue pressure on authors. For an illustration from the 1990s, imagine B&N trying to get a popular author to leave his existing publisher and sign up with their publishing arm. Consider B&N making a threat that, if they don’t publish with him, they’ll stock his books poorly and display them badly. That’s Amazon here. Digital just makes that favoritism more abstract.

    2. False and deceptive advertising. Amazon stresses its large selection of books and has never, to my knowledge, gone public with its selective display and distorted search results. That could easily be considered deceptive and false advertising. It’d be the ‘biggest bookstore in the world’ that doesn’t quite tell you that the book you’re looking for is still for sale.

    Given time, I’m sure other issues could be raised, but I think my point is clear. Most extremely large companies have enough sense not to be bullies. In the 1950s, GM, for instance, was careful not to crush Ford or Chrysler, despite the fact that it’s sheer size gave it an enormous economy of scale over its competition. Others, like Kraft, display similar good sense.

    Even the exceptions prove my point, particularly since they tend to be in the tech arena. Both AT&T and IBM tried to use their dominance to keep down those who wanted to provide peripherals to their systems. They ended up facing federal scrutiny and less than pleasant results.

    Much the same was true of Microsoft, software and browsers during the 1990s. In every case, a giant technology corporation got in trouble for using its size to give undue advantage. A good parallel can be drawn between IBM attempting to use its control over mainframes to limit the sale of peripherals (hard drives) to those it made and Amazon’s attempts to use its retail ebook dominance to force authors to publish with it (or earlier to print with CreateSpace). Yanking those buy buttons are an excellent illustration.

    Quite frankly, I don’t think there’s enough business ethics or even legal good sense at Amazon to fill a thimble. Recently, it’s come to bother me that Amazon’s likely to get away with destroying enough local retail outlets in certain fields (i.e. bookstores) that they won’t be around to recover when we finally get a federal government that’s not run by Chicago-machine crooks and thus inclined to bully the good guys (Apple) and take a pass on Amazon.

    When I get a little too ticked off, I remind myself that in the mid-1990s I was similarly ticked off at Microsoft and they got theirs. Then I also remember that I know quite a few people at Microsoft. When the feds came down on it, the life went out of them despite the fact that the rot was only at the top. The same is likely to happen to Amazon and those who work for it.

    • Michael:

      This is not a political discussion and your clearly Republican-leaning comments are inappropriate. This is a discussion about the validity of data presented regarding author earnings. You raise an interesting point about Amazon’s search algorithm impacting an author’s potential earnings. The rest is unnecessary vitriol.

  9. Hi Dana, ah the subject of making money off your work, especially if you are a self published author. I am really glad you started this discussion. Honestly my head is spinning after looking at the numbers, but that is not the fault of your writing, there is just a lot of data there. If I may, I would like to take the issue of making more from your book, especially an independently published book in a slightly different direction.

    Have you ever wondered why some authors make way more money than you, even though you are a better writer?

    As a media pitch coach, I have worked with over 1,000 authors, most of them very successful. In fact some are outright filthy rich. On the other hand I have met tons of authors that are outright failures at selling their book. Some of them even spent thousands of dollars on publicity using top PR firms.
    Right up front I can tell you two things about getting rich selling your book:
    1. Dana, I believe success does not depend on the quality of your book. Some of the best selling books are honestly just bad. And some of the best books I have seen hardly sold a copy. I am sure you have seen this yourself. Sure better to have quality, than not, but spending big bucks on squeezing that last bit of professionalism into your book, just does not pay back.
    2. The amount of money you spend on publicity has very little effect on the sales of the book. Most of the successful authors I coach do their own publicity and don’t even pay for press releases to be distributed. On the other hand some high priced public relations campaigns generate almost nothing in sales. How many times have you walked past a book signing in a bookstore and have seen no one there? Bookstores do not buy your books, bookstore customers buy your books.
    The key to being a rich author is to get on TV, radio and be featured in print, so the public knows about your book and wants to buy it. So let’s look at some of the things rich authors know about publicity and see if your readers can copy them. Here they are:
    · Rich authors take action. They don’t wait for someone else to pump up their book sales, they are pro active. They make a plan to get publicity and actually do it. More precisely, they copy a plan that someone else used to be successful. They do not try to reinvent the wheel. They do not put it off waiting till they are in the mood, etc.
    · And they do not have to rely on a PR agency to do it for them. So the key is to find a publicity plan that works and take action NOW!
    · For the most part they do their own publicity. Instead of using a PR agency or worse yet, doing nothing, they get out there and do their own publicity. No one understands your book and your target readers better than you do. Trying to translate that to a PR person who then has to translate it to someone else is a recipe for disaster.
    · They think outside the box in terms of book sales. Focusing only on bookstores and Amazon as the place to sell books causes you to leave tons of money on the table. But if you get a company like say Amway or Mary Kay to give a copy to each of their sales people, you are going to sell thousands of books at one time. I even had a client sell thousands of coffee table books to a large furniture retailer to use as a give away. What if you could get the Shopping Network, or “As Seen On TV” to pick up the book? Can you find a way to have a company to buy your book to use with their employees or to give to their customers?
    · Rich authors don’t focus on getting positive book reviews; they go right to their readers by getting on TV, radio, etc. Chasing reviews take a lot of time and effort and has a minimal effect on generating sales. Plus the big reviewers tend to concentrate on well know authors from the big publishing houses. Self-published authors do not have a chance with them. Contrast this with a TV producer who does not care about reviews or your previous success, they just want a good guest. Fiction authors find a way to make a story about something around the book, not necessarily the story itself.
    · They set their ego aside and think in terms of what their readers are interested in. Rich authors rarely start their pitches by talking about the book itself, they have a story much bigger than the book. Rich authors set their own opinions aside and listen to what the readers say they want to hear about. This is what rich authors do best of all. They give the audience what they want instead of forcing their own agenda on them. This is where the media forces you to think properly. Producers and editors know what their audience wants and they only focus on things that deliver stories that draw an audience. You have to think like a media person and only focus on what the media audience is looking for.
    · And then there is the number one thing rich authors do that poor authors do not do. Rich authors know how to pitch the media in order to get on TV, radio and print publications talking about their books. But lets face it, most authors are great writers, but haven’t a clue about doing their own PR. Poor authors do some reading on the subject and get the idea that blasting out a press release will get them coverage. Of course no one reads press releases anymore, but they don’t know that. Rich authors send out targeted, focused email pitches that cost them nothing. Talk about bang for your buck!
    OK Dana thanks for letting me comment and thanks again for starting a great discussion. Edward Smith.

  10. Pingback: Hugh Howley's Author Earnings Report is Going to Cut the Anti-Self Publishing Rhetoric Off at the Knees - The Digital Reader

  11. Excellent analysis. And what’s really fantastic is that you’re trying to make combined sense of your DBW survey results and Howey’s results, and “bridge the divide” between two camps that sometimes seem determined to fight about nothing. The reflexive sniping in many quarters isn’t helpful, when really all any of us want is better information.

    In an interview after the release of this data, Howey stated that he and his friend are pursuing the top 50,000 Amazon titles in the next data-gathering run, as well as B&N data. If so, I hope to see you update your analysis on the new sample.

  12. The one thing I noticed about your revenue chart is that it seemed to really show BOOK revenue. But indie authors make significantly more revenue per book sale than trad authors because trad books are paid on a royalty rate and indie books are paid on a distributor rate. In short, the revenue formula is not at all similar for the AUTHOR’s revenue.

    • Thanks for your comment. Howey assumed differences in the royalty rates received by different types of authors, and his estimates of what authors were receiving based on the price of the book and whether they were traditionally published or indie are included in his calculations–and reflected in my table. He provides the estimations he used in more detail in his Author Earnings Report. To your point, his data do not include advances traditional authors might have received, which, of course, in another important factor in AUTHOR’S revenue.

      • Ah, thanks for clarifying.

        But no, advances don’t really figure in author’s revenue; they figure in author’s cash flow. Which is important—VERY important—but not separate in revenue from royalties.

  13. After several decades in the business, Jeremy, I would totally disagree that income is “low” on the list of priorities. We all need to buy groceries. Editorial may be high on the list, but selling books is our connection to our audiences. It’s essential.

    • For you that may be true, but many authors have days jobs and when we asked 9,000 of them why they write, “to make money from my writing” was the fourth most popular choice. Now, as a professional in the field (more or less), income is higher than fourth for me. It’s my day job.

      That said, I don’t mean to belittle the necessity to make money. Also, if that’s why you’re writing, then more power to you and good luck. The best advice I hear about this from successful authors is to work on your craft. I hope this helps….

      • Unfortunately, it sounds almost as condescending as does Weinberg’s original article. :) I’m an award-winning mainstream literary fiction writer and have been writing for many years, with six books now published. I currently have the opportunity to co-present a workshop on self-publishing with a national writers’ organization. (But even if I were a newbie, your words would sound patronizing.) My view on the whole industry at this point is that a lot of companies see self-publishing authors as a cash cow, and that the DBW-WD survey is an example of viewing the companies who are milking the writers as cash cows — hence the hefty pricetag on your PDF. It’s pretty easy to self-publish, and it doesn’t need to cost a lot of money, and indie authors are about to put established presses out of business unless they wake up and smell the coffee. And indie authors readily share how-to info and data for free, as Howey is doing. We don’t need PhDs to figure this new world out.

  14. Pingback: Is Self-Publishing a Better Road to Wealth for Writers? | JaimeAndGrace.com

  15. You don’t have to be an ‘elite’ earner to make a living as an indie author. I sure am not and have done so for two years. I rarely have a novel in the Top 100 and my sales are a fraction of what the heavy hitters like Hugh Howey sell. Part of what we are trying to get away from is the MYTH that you have to be a best seller to do well as an author and I find her contention that the SEVEN THOUSAND books in Hugh’s sample are all ‘the’ top books. Most are nowhere near that.

  16. Dana, I’m late to the party here, but thanks for your analysis. I’m glad someone did the stats, since I no longer have access to SPSS since leaving academia. I was a bit confused regarding one conclusion of yours:

    “However, there was no significant difference in indie author’s estimated income compared to the authors who came through the Big Five. In other words, the table shows differences between the groups, but if we were to draw similar samples on other days, there is a 95% or greater chance that this difference would disappear and is merely a random fluke.”

    Could you please elaborate on why there would be a 95% or greater chance that the difference would disappear? It doesn’t fit with my understanding of statistical significance, but perhaps I’m missing something? What kind of p values were you getting for your comparisons?

    • Livia, thanks for your question. What you’ve highlighted was my inelegant way of trying quickly to explain the issue of p-values and statistical probability to a non-practitioner audience. We start with a null hypothesis that there is really no difference in the means between the groups. We reject the null only if there is less than 5% probability that the observed results are due to random chance. In the case here, the difference between revenue for Big Five and Indie authors did not meet that 5% threshold.

      Here’s the technical response to your query: In actuality, what I ran was a Bonferroni analysis, which adjusts the p-values according to the number of hypotheses tested. In the case of the test for Indie vs. Big Five in both analyses that I ran, this test actually returned a corrected p-value of 1.0. According to the STATA manual, “Of course, this calculation can go above 1, but that just means that there is no alpha<1 for which we could reject the hypothesis. (This situation arises because of the crude nature of the Bonferroni adjustment.) Stata handles this case by simply calling the significance level 1." (http://www.stata.com/manuals13/roneway.pdf) In fact, all of the tests reported as non-significant, with the exception of Big Five compared to small and medium, came back with p=1. For simplicity, I described the rejection at the 95% level.

      The tests I reported as significant all had p-values of 0.01 or less.

      • Thanks Dana, that’s a lot clearer. I’m actually quite impressed that the indie/small pub difference came out as significant with the Bonferroni correction. I’m not sure how things are like in your neck of the woods, but in my experience, I’ve found Bonferroni to be so conservative that hardly anything differences make it past the threshold. I’ll be curious to see how the data pans out as Howey et. al collect more data and we get more statistical power. I definitely agree with you that these results raise more questions to be answered, and I’m eager to see how it goes.

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  19. What’s most hilarious about this (aside from the waving around of your PhD, please do that again!) is that not only have you refused to provide your own raw data, you couldn’t even provide us with the questions you posed.

    • In fairness to WD and Phil. He did agree to provide these questions and data to the Self-Publishing Roundtable in our comments following the show. We haven’t got the data yet, but we did have discussions about it. I know there is a lot of hostility but I’m not sure it helps anyone.

  20. An interesting post and you raise some very good points Dana. We appreciated your time last week like we did with Hugh this week.

    The way I look at it is that we still don’t have all of the answers. There is good work being done here by both parties and room for improvement with both as well. As a writer all I care about is the facts. I’m just glad that people are doing something to try and bring this data to us in the first place.

    I couldn’t care less who nails it, as long as someone does. I hope that DBW keeps at it, along with Hugh and anyone else who wants to try and find the most accurate data to help all authors.

    I’m not interested in selfpub v trad. It’s a load of rubbish. I just want the best for all writers.

    Thanks again for coming on Dana and Phil and for the mention.

    Regards
    Carl

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  23. Estimate of sales based on a snapshot of top sellers and multiplying out the price ignores the frequency with with books are discounted. If books have climbed in the best seller ranks based on free-giveaways or steep discounts (an easy way to be able to call yourself a best-selling author, especially if you parse categories enough), then the sales price at the time of the sample may not be relevant in a meaningful way. The frequency of such discounts also means that annual income estimates based on the snapshot will be overestimates, and possibly by a wide margin. This may be a larger problem for electronic books, as Amazon can only drop the price of physical copies so far before there is a loss. Howey’s method seems critically flawed as it cannot take that factor into account.

  24. I find your comparison of ebook earnings/day to the minimum wage earner’s daily “take” perplexing. No, better stated, it’s irrelevant. Granted, I worked many hours to create my ebooks, but once they are for sale on Amazon that’s it. They’re done. I have worked a minimum wage job. Believe me, standing behind a register for 8 hours at a bookstore [or wherever] is no fun and very tiring. Over the past week, my ebooks have made more than $58 per day, your stated “take” for the minimum wage job/day. All I have done for those days is get my Amazon earnings report and made a note of it. Quite a difference, wouldn’t you say?

  25. Even though I have an Engineering degree and an MBA, I have a bit of difficulty following your debate. (That could be because I have never been the smartest person on the block and never will be.)

    Having said that, I totally agree with your 4 bulleted points for \The findings are these\:

    * Authors and publishers face a hard market, and it’s not easy to sell a lot of books.
    * Publishing is a segmented market. A very small percentage of authors are in a position to support themselves with their writing, no matter which publishing route they’ve chosen.
    * Publishers don’t have a lock on the answers, and the contributions they make to author sales and income are increasingly in question, leading to calls for partnerships that provide greater benefit to authors.
    * Self-publishing is making it easier than ever before for more authors to make at least some money, if not a lot of money, on their writing, but these authors are a small percentage of the whole.

    Insofar as how \we could all share in an incredible gold rush\, that is a pipe dream, one for delusional people. (Self-delusion is one of the greatest creations of the human mind.)

    Here is how you as an individual writer (rather than we) can share in the \incredible gold rush.\:

    Be committed to being a 1-percenter.

    First: Create a damn good book. And disregard the emphasis on perfect editing and a great book cover. Instead, follow this valuable advice that has served me well over the years.

    \It’s better to do a sub-par job on the right project than an excellent job on the wrong project.\
    — Robert J. Ringer

    Second: Once you have written the \damn good book\, then put more time and effort to promote the book than 99 percent of writers are not willing to do. My motto is: \Content may be king but promotion is the supreme ruler.\

    Just a note that I first started self-publishing in 1989, with my role model being Robert J. Ringer. He is the only person to the best of my knowledge to write, self-publish, and market
    three #1 New York Times bestsellers in print editions. His books sold several million copies in the 1970′s and the 1980′s. Not so long two of Ringer’s self-published books were listed by \The New York Times\ among the 15 best-selling motivational books of all time.

    Robert J. Ringer was a 1-percenter and that was the key to his success. It it the key to my success as well. That is why my pretax income from self-publishing (and just a bit from traditional publishing) will likely be around $150,000 this year. (By the way, I only work one or two hours a day.)

    In short, if you want to share in the \incredible gold rush\, forget about analyzing data. Just do it. Commitment leads to results. Everything else is just an excuse.

    Put another way, reasons only help you sound reasonable. They have nothing to do with manifesting achievement and prosperity in your life.

    Ernie J. Zelinski
    The Prosperity Guy
    \Helping Adventurous Souls Live Prosperous and Free\
    Author of the Bestseller \How to Retire Happy, Wild, and Free\
    (Over 200,000 copies sold and published in 9 languages)
    and the International Bestseller \The Joy of Not Working’
    (Over 250,000 copies sold and published in 17 languages)

  26. Thank you for you expertise and unbiased approach. I too would be classified as I die except I named my publishing company (OROX Books). I’m a writer, but I have also written numerous market research reports using data and survey analysis. Howey’s data is important and useful, as is your survey, but as you say, it’s not the whole picture. We all run the risk of being blind and attempting to describe an elephant.

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  33. It seems to me there are two issues. The raw data extracted, which actually covers a nice swatch of authors as the rankings go from 1 to 752,000. This grabs the mid-list nicely and we can see do a lot with that data alone. Then there is the calculations that take that data and attempt to determine daily sales and later yearly incomes. Yeah, there are a lot of problems with this…not the least of which is that a one shot pull doesn’t show the “range of rankings” for a book on a given day, or that sales at rank x are different in March then they are in December, or that a book won’t stay at the same rank for a year, which is where the train comes off the rails.

    The important thing is that Hugh has provided the raw data, and I’m sure Dana can tease some interesting information out of it. In fact, I’ve been dying to get my hands on the raw data of the DBW surey – as when I was answering the questions for myself, I was already thinking of data sets that were of interest to me.

    If we look at just the raw data (which I don’t think anyone is disputing its accuracy) it proves what many have been saying for a long time…that self-published authors are running toe-to-toe with traditionally published authors in terms of sales on the largest bookseller in the world. With higher royalties even if these authors ONLY get income from Amazon, they are making a really nice living wage. There are thousands of authors, without household names, that are making five and six figure incomes. It proves once and for all that self-publishing can be a viable option for those with the entrepreneur spirit, and even those seeking traditional publishing should rejoice, since it shows publishers that they are not in competition only with each other, but with the concept of “going it alone.” In such an environment, publishers will have to adjust their contracts and “industry standards” to attract and retain authors.

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