May 2015 Author Earnings Report
Welcome to the May 2015 Author Earnings Report. This is our sixth quarterly look at Amazon’s ebook sales, with data taken on over 200,000 bestselling ebooks. With each report over the past year and a half, we have come to see great consistency in our results, but there is always something new that surprises us. Often, it’s something we weren’t expecting, like the massive shadow industry of ISBN-less ebooks being sold, or the effect Kindle Unlimited has on title visibility. This time, we went into our report curious about one thing in particular. But we were still not prepared for what we found.
If you’ve been shopping for ebooks on Amazon lately, you may have seen this new addition to many ebook product pages:
This announcement can be found on ebooks from several of the largest publishers, and it appears to serve as both an apology from Amazon and also a shifting of the blame for high ebook prices. Amazon has stated in the past that they believe ebooks should not cost more than $9.99. Self-published authors are no doubt familiar with this price constraint, as their royalties are cut in half if they price higher than this amount. But after a contentious and drawn-out negotiation with Hachette Book Group last year, Amazon relinquished the ability to discount ebooks with several publishers. Prices with these publishers are now set firmly by them.
Soon after these agreements went into place, industry observers noted an upward move in average ebook prices. Freed from Amazon’s discounting, and with complete control over pricing, the publishers made a decision to push the price of many of their books above $9.99.
With six quarterly snapshots, each snapshot consisting of 50,000+ of the top-selling ebook titles, we plotted the average price by publisher type to see just how much prices have gone up. The blue bars show the price of self-published ebooks for each of our reports. The purple bars show the average price of Big 5 published ebooks.
Since we started pulling this data, the average price of an ebook from a Big 5 publisher has gone up 17%. Compare this to a difference of 5% for self-published titles, or the increase of 7.5% across Amazon imprints. The prices for Big 5 published ebooks have risen quite steadily, rather than a sudden surge since the return to agency.
What will the effect of these pricing decisions have on unit sales, revenues, and author earnings? We were eager to find out.
The May 2015 Author Earnings Report
We start with a simple counting of the number of titles on Amazon’s ebook bestseller lists. No math involved, just a detailed look at whose works are showing up as top-selling titles. For comparison, we included the same graph from our January 2015 report.
Number of Titles in Amazon’s Ebook Best Seller Lists
In the last three months, the Big 5 publishers have seen a 26% reduction in the number of titles on Amazon’s Best Seller lists. This means fewer titles are selling well enough to make these lists, and it also means fewer titles are receiving that added visibility.
Ebook Unit Sales
Over the same period, daily unit sales from the Big 5 have fallen 17%. This is a measure of the average rank of each ebook. Just as publishers study the New York Times bestseller lists to gauge the strength of their competition, we are looking at the same thing. But with a sample size of 200,000, rather than 20.
Rest of the article: http://authorearnings.com/report/may-2015-author-earnings-report/