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Market Ebook share: Twenty-three months Trends
Using information on several hundred thousand books, it was possible to quickly determine the revenue and profitability of e-books by publisher paths. We wanted to help writers better grasp the evolving markets and use their script to make informed choices. Let's look at these developments before we go into this month's review, including our new February 2016 datapoints.
Within two brief years, the percentage of units sold has increased between India and Big 5 ebooks more than vice versa. Big 5 now accounts for less than a fourth of Amazon's e-book buying, while indigenous people are moving toward 45%. On the violet line above we see the drop in the proportion of e-book dollar earnings made by the Big 5 publishing houses.
In spite of the higher return of e-books compared to printed ones, some of these publishing houses have described their declining e-book revenues as a good one. Meanwhile, we know from our own figures (more on this later) and from Amazon's news reports that the total US e-book turnover in dollars has even increased.
There is a red indicator line that shows where most of the raise takes place. Today, a fourth of all retail dollar spending on ebooks in the US is spend on the purchase of indie-published ebooks. Leading chart for writers shows the fast varying rates of revenue of e-book writers through the publication pathway. Big 5 now provides less than a fourth of the dollar creative people earn for their e-book purchases.
However, the truth may be that large editors find it hard to rival large editors in terms of variety, prize, quality as well as publishing frequencies, as this convergence has increased over the last two years - long before the Big Five come back at a no rebate prize.
Tens of writers, all with full control over their real-time selling figures and the entire bestseller ranking, captured their figures in spread sheets and divided the common results. Since all e-books used the same curve regardless of the publication route, we were highly optimistic with our cake diagram percent.
On this occasion we relied on Amazon's crude report of the exact everyday sale numbers for several hundred volumes of many different writers over a multi-month timeframe. In our rough files were tracks that were among Amazon's top 5 - tracks whose KDP records confirmed they sold several thousand per diem issues each - and even tracks that were among the hundred thousand - tracks whose KDP records showed they sold less than a copy per diem issue.
Combining this wealth of tough selling information with a full Amazon Kindle everyday chart of sale ratings for each of these volumes, taken directly from each AutorCentral chart. Altogether, we have received almost one million different datapoints. What did we need so many datapoints for? Since Amazon's Overall Best Seller ranking is not a straightforward computation calculated from the one-day revenue of every account individually, it also takes into account time-delayed revenue from earlier years.
In order to reverse-engineer Amazon's rankings algorithm, the more revenue and rough rankings we use, the more precise our results become. And so we cheered on some high performance computer, gave them all this rough stuff and let them crack the numbers. Using a proper arithmetic gimmick of serial Convergence (one whose usability was no coincidence because Amazon's algorithm certainly relies on it), we came to a new, easier, more stylish and far more precise transformation from rank-to-sale to Kindle ebooks.
From a graphical point of view, the old AE graph pings between the recalculated top limit (shown in red), determined by the higher number of days of selling needed to "hit" a ranking first when ascending from a much lower turnover base, and the new calculated bottom limit (shown in blue), determined by the more humble number of days of selling needed to "hold" the same ranking consistently through constant days of selling.
At the Digital Book World 2016 conference in New York on March 9, 2016, I will present some of these results in more detail as "Data Guy". New risk-to-sale curves created from hundred thousand points of Amazon's report gross figures made almost no distinction. Substantially the way in which the turnover and results of ebooks are distributed among self-published writers, small/medium sized publisher, Amazon publisher and Big Five publisher did not change: the respective shares were less than 1%.
2 ) To calculate absoluteness of sale, the old AE rank-to-sales graph obtained from Crowds ran slightly high - overestimating Amazon's overall Kindle sale by about 18%. With the new method, we can correct this and make binding, data-driven predictions about how many e-books in general are selling each and every quarter from each type of publishers and Amazon itself.
Ranked revenue forecasts it provides for 300 random book groups from a single, retained "validation record" always match the group' real Amazon revenue of 6%...and usually 2%. However, the bigger the number of volumes for which we try to quantify overall turnover, the smaller the variance...so our models are even more predictable for bigger volumes.
Equipped with our all-new, data-based rank-to-sales converting method, we were at last prepared to take our most in-depth and complete look at Amazon's day-to-day selling of books. We' ve upgraded AE's web crackling spider bid to 250 powerful 8-core engines and listed it across each of Amazon's thousand of bestseller listings and categories subdirectories.
It took just over an hour to retrieve almost a ton of real-time information from the pages of over 500,000 of Amazon's best-selling products. The first diagram shows the overall proportion of bestselling eBooks "slots" owned by tracks from each publishing group. Keep in mind that this is a true number of tracks on Amazon's thousand best seller listings, all of which have been fully automized by our proprietary Spam Management program.
Not mathematics here, just a visualisation of how many books are ordered and how they were published: At 27%, the total proportion of self-published indexes on Amazon's bestseller list has not risen since September 2015. It' still more than twice as much as the Big 5 title. However, what has very significantly shifted is the extent to which Amazon's top 20 bestsellers and even the top 10 self-published stocks are dominating index writers - almost half of them have not been valued at $0.99, but at "full-priced" selling at between $2.99 and $5.99.
Those best-selling indices covered a broad range of different sports categories. Romantic and paranormal were certainly well represented, but Amazon's top 100 bestsellers also featured some self-published indian science fiction works, indian thrillers, indian suspense fiction, indian urban fiction and even Cozy Mysteries by indues. However, the bestselling slot holdings of any publishing style are far less interesting than the proportion of e-books we sell every day, which for the first time brings our fresh new risk-to-sale curves to bear:
So whether we use our new scientific derivative or the old origin crowsourced graph to calculate our paragraph, the trends we see are exactly the same. In terms of the number of ebooks shipped daily, the index shares of self-published index publications have increased significantly since our September 2015 review, while the combined shares of publishers have declined.
More than 42% of all e-book buys per Amazon.com per diem now come from indies. Part of this increase in independent selling was achieved in the shape of Kindle Unlimited loans. KU payments have increased to over $13 million per months, directly distributed to India writers (at least $8.25 million of which in the US).
By 2015, these disbursements amounted to more than $140 million, all of which went to indigenous writers. There has also been a significant increase in the number of consumers buying index books directly from retailers. As we drew the dates for this review, the date unveiled 20 of the Amazon Top 125 bestseller e-books that were self-published and not inscribed in Kindle Unlimited.
Once again, our figures showed that e-book selling coverage from our retail stores missed most of the action: Less than 45% of e-book buys every single Amazon.com every single working day come from popular books. Just 29% of Amazon.com's daily e-book purchase is formally "counted" in the Association of American Publishers (AAP) StatShot report.
Forty-three percent of the ebooks bought every single day on Amazon - almost half of them - go unreported in any traditionally reported sector statistic released by Bowker, Nielsen, et al. because 43 percent of the ebooks bought every every single daily on Amazon have no associated ISBNs. How many ebooks per capita is Amazon.com actually sell?
Starting in mid-January 2016, Amazon's US e-book business sold at a monthly download fee of 1,064,000 per download per annum. 155,000 of these fee-based everyday Downloads - or 14% of them - took the shape of Kindle Unlimited "full-KENPC" pages containing equivalent self-published independent author's, while the other 909,000 were frequent e-book purchase in-store.
Amazon's day-to-day e-book unitsales ( January 2016): Next, we look at how Amazon's everyday e-book sells are collapsing in consumers' $ spending: In spite of the higher e-book pricing that most traditional eBooks now carry, self-published indies made up nearly a fourth of all $1.5 billion in Amazon's total everyday consumption of eBooks.
In January, Amazon.com saw over $5,755,000 per diem of eBook spend by customers across all publisher categories - a running time of over $2.1 billion per year, of which over $1 billion was eBook spend by customers not covered by revenue from the sector in the AP. That is a great deal of cash, and a great deal that is worth nothing anywhere other than here and at Amazon.
Less than a fourth goes to writers who have been released with the Big 5. It' s any wonder that the unconventional business instrumentality and history maker gathering document decreasing e-book selling and decrease maker financial gain for their unit? 140 million dollars per year in the form of unlimited payments go directly to the writers, and yet this huge amount of revenue is somehow not reflected in conventional writer-interrogations.
There' s also a huge part of the book that is not covered at all, along with a whole bunch of writers who don't pay fees to the authors' interest groups and just do the deal of making an living from their work. Surely it will not be a sustainable policy for writers to stand by and watch while harmful price choices devastate their livelihood.
As we look at everyday sells on Amazon, why stop at just ebooks? Amazon also sold at least a fourth of all new specialist literature acquired in the USA every year - and around two third of all on-line commercial printing business. Amazon's stake in the download voice mail industry is even greater - its Audible affiliate.
With the same technology we used for e-books, we were able to calculate a risk-to-sales graph for Amazon's printed books by using Amazon CreateSpace's monthly report of many dozen print-on-demand multiauthor document reviews for monthly sale dates. The record contained best-selling Amazon top 50 printed publications that CreateSpace sale records found sold over a thousand times a day, as well as multi-million dollar sale leaderboards that sold less than one copy a monthly.
With ACX's reporting of dailies for tens of audible albums and the associated Amazon rankings, we've done the same for downloaded albums. As we operated our AE web spread for this review, we not only collected 200,000 of the best-selling Kindle albums, but also 250,000 of Amazon's best-selling printed albums and 25,000 of the best-selling audiobooks:
Let us now take a look at the pressure. We will use the same layout we use for e-book selling for our all new Amazon newspaper selling breakdowns, so the following graphics should look pretty trusted. It is interesting to see here that the Big 5 hold less than a fourth of the bestselling printed media slot, and their numbers, dollar and authoring fees account for less than half of Amazon's printing businesses.
It is a higher rate than any other publisher, but it reiterates the need for a balanced and prospective view when the top publishers' numbers reflect the entire sector; they do not even account for half of on-line revenues in the formats they are expected to override.
Returning the Big Five to the online price setting office could have been just such a case. Your e-book price policy should at least partially curb the decline in printed copy volumes. If they prevent Amazon from offering discounts on the Big Five's ebooks at their own cost, the Big Five could drive up the retail price of their ebooks by an artificial amount - higher than what many retailers are willing to spend on paying for them.
Big Five publisher thought, no doubt, that this would motivate these customers to buy fewer e-books at Amazon and instead buy more hardcover and paperback books at brickworks and grout bookshops, maintaining an outdated sales edge that has long been maintained by the largest tradition publishers...and one that quickly faded as an increasing proportion of books are bought on-line instead.
Between November 2014 and September 2015, Big Five publishing houses bargained with Amazon for all-new, two-year deals in which they aggresively struggled - and won - to stop Amazon from rebating their e-books. Before these agreements, the Big Five ebooks were greatly reduced at Amazon's own cost.
In 2014 and early 2015, our 2014 and early 2015 figures showed that Amazon sold an estimated Big Five and other traditional e-books to the consumer at break-even price, with no or little break-even. This is almost no gain on traditional released ebooks, while Amazon earns a sound spread on the sales of indies and Amazon imprinted ebooks.
Indeed, before the Big Five returned to the Amazon office, Amazon was more or less sold traditional ebooks at prime costs. Through the reintroduction of the agency's e-book price setting and the enforcement of their own consumers' e-book rates high while at the same time prevent Amazon from discount these ebooks, the Big Five publishing houses put an end to this. You have readily financially harmed your own profits, seriously damaging the turnover and profits of your own writers, to take away your biggest and most lucrative retailer's shares of the markets and controls.
Our information and Amazon's published declarations indicate that Amazon's total US e-book revenues in 2015 have increased further, both in units and US Dollars, despite the Big Five's resurgence to the Agency's e-book prices. Conversely, the Big Five's percentage of these e-book purchases has dropped sharply, both in US Dollar and units.
At the same vein, Amazon's on-line printversion also increased, boosted by sharply reduced hardcover and paperback books, which in many cases were even cheaper than e-book issues. Indeed, our evidence suggests that Amazon is experiencing even greater increases in its 2015 printed revenues than its 2015 e-book revenues.
Starting in mid-January 2016, 969,000 printed directories were sold daily at Amazon.com. Since the biggest bookselling groups will see their 2015 turnover remain unchanged or decline, and turnover in stores and clubs will also decline significantly, an increase in the number of locally operated bookstores is a small ray of hope.
However, it is very likely that most, if not all, of print's reports of "resurrection" in 2015 took place in the shape of higher levels of on-line printing revenues... at Amazon.com. The high prices of the Big Five e-book agencies and the higher discount on printed publications by Amazon may have caused the opposite of the desired effect.
Perhaps it discouraged tradtional hard-cover and pocket book shoppers - even those who had no interest in purchasing digitised issues - to take full benefit of these increased rebates and buy more of their book purchases on-line while purchasing less from bookshops. However, they may still have seen it as the minor problem if they could curb consumers' transition from printing to "e".
Either way, if it's the case, it means more printed books shoppers are now buying in a store where indian printed ones are sharing a significant part of the bookshelf area alongside those from conventional publishing houses, and where indian printed ones are quickly reaching double-digit percentages of printing turnover. It will be interesting to see in the next few months whether the sale of indies will further increase as more and more consumer are directed to a market place that offers fairer entry to all writers.
Full-grown colouring albums were a surprise development in 2015. A lot of people attribute to them that they have saved the total numbers of the incumbent publisher for 2015...a demand confirmed by Nielsen Bookscan's printed copy sale number. So it may come as no surprise that when we took our January photo, 11 of Amazon's 35 best-selling printed Amazon albums were adults' colouring albums.
Five of these 11 - almost half - were self-published colouring novels by independent writers. At the time when we completed our September 2015 review, a self-published children's edition was one of the top 5 bestsellers in the US. Since the purchase of printed literature is becoming more and more common on-line, self-published independent writers show that they can keep up with conventional publishing houses in terms of selling printed literature.
Independent writers take home with them a much greater portion of the revenue from each printing deal (an estimated 36% of the listing price) than the 8% pocket-book fees and 15% hard-cover fees they would normally receive if they went through a conventional publishing house. Downloads are one of the most rapidly expanding sectors in the sector, for both Indian and tradition publishers.
At Amazon.com, downloading books - sold through Audible - makes up the overwhelming bulk of book-buying. A physical-media auditory book edition - e.g. CD's, MP3's, CD's and the like - accounts for a minute fractions of the entire production of auditory books and only 5% - 6% of Amazonas production. com Auditory book sale. There are a few things that make the image more complicated when it comes to how book revenue and revenue are divided.
Much of the small/medium publisher Wedge's talking books, especially those released by Brilliance, Blackstone, Tantor, and similar specialist audiopublishers, are talking book versions of Big Five's own e-books, Amazon-Imprint's own e-books, and even Indie's own e-books whose writers were selling live audiopublishing permission. Amazon's verdant Keil represent books released in auditoriums...but some of them also turned out to be sound versions of Big Five released e-books, self-released indies, etc.
Whilst many would consider them self-published, we thought it would be less controversial to just keep them as uncategorised single-author publishers. As in the case of printed media revenues, it will be interesting to observe the development of the audio book industry in the next few months. In 2016, we expect audio books to be a tremendous field of expansion for self-published indies-writers.
By 2016, the range of self-published indies is by no means restricted to e-books. Everyone who writes indies should seriously consider publishing print-on-demand paperbacks and - as soon as high-quality stories are possible - audio book versions of their work. It is also important to keep in mind that 2015 saw a turning point for e-commerce, with some reporting that half of e-commerce growth occurred entirely at Amazon. com alone.
Selling on Amazon. com Walmart surpassed in-store selling for the first outing. Autonomous writers have identical rights to this window front. Indeed, with lower pricing, greater freedom of creativity, the possibility to post much more quickly to commercialize, and the capability to address a greater diversity of audiences, indies have great benefits on the Internet.
Given that the book trade is moving away from physically run bookshops, which are bound to restrict their choice and thus the freedom of speech of idea, we are expecting more and more freelance writers to find their voice and take home an ever-increasing piece of retail dollar. In order to undo Amazon's rating scheme, we addressed it as an engineering system identification (SI) issue and modelled Amazon's rating scheme as a dark case dynamics system with a straight-line, decreasing momentum answer to current unitsales input.
In fact, we even set up a two-layered neurological mesh and practiced it to forecast the actual ranking from historical sells, which gave us information on how to structure the more classical curved closures. Based on our calculations, the smallest MSE matches many different plant models and distribution patterns and measures which best match our own datas. At the end, we focused on a beautiful, neat, simple wording that gave the best log-MSE precision across the full spectrum of Amazon ranks and dailys.
If the same new technology is applied to the quarterly gross figures, the figures show that Amazon's total e-book revenues are growing steadily from quarterly to quarterly, i.e. 2014 and 2015. January 2016 first 3 week figures reflect Amazon's highest running rates ever for e-book purchases - higher than any other prior sequential year.
No wonder, considering what Amazon itself said to the Wall Street Journal a few month ago. Interesting to see, however, how it is independent validation with tough dates. Exit (3) the "Keep Retailer" part of the "Higher Slow Prices Ebks/ Casino Buyer/ Keeps Retailers/ Stopps Authors" e-Book pricing policy as described by Simon & Schuster CEO Carolyn Reidy.
Another fact that is rightly cited by analyst industries, and which we recognize, is the relatively low number of 2015 megabests on the tradition side: last year, there were no fifty shades, no divergence, etc. to increase revenues as an industries historically publish. This is a good point, but also an unimportant one for 99.99% of the writers who choose a publication route, unless they are given eight-digit advance payments by the Big Five.