The market for adult fiction is primarily a digital one
It's commonly said that in the United States, overall trade book sales are divided about 70-30 print-digital, and that ebook sales at traditional publishing houses are flat to declining. (You've probably heard the celebratory and misleading claims that "print is back!")
But the latest analysis from Author Earnings shows that when you factor in "nontraditional" publishing sales, the digital share of overall US consumer book purchases changes significantly:
- 45% of all books purchased in the US in 2016 are digital
- In adult fiction, sales in the US are roughly 70% digital
- 30% of all US adult fiction purchases are books by self-published authors
"Nontraditional" sales include self-published work, Amazon's own imprints, and other sources outside of big trade publishing.
Amazon's market share is growing—across all formats
Industry consultants such as Mike Shatzkin observe that Amazon now has at least 50% of the overall book retail market across print and digital formats. When you study industry reports of print's buoyancy, and look closely at where the sales are happening, it's fairly clear that Amazon is stealing away print market share from bricks-and-mortar retailers like Barnes & Noble. And of course Amazon continues to dominate ebook retail, especially as Nook ebook sales continue their decline.
Furthermore, Amazon owns Audible/ACX—the No. 1 audiobook retailer in the US—and has been putting more investment behind the marketing of audiobooks and original audio programming. Over the last couple years, audiobooks have been the top growing format for trade publishers, with about 20-30% growth year on year. Amazon is primed to take advantage of this growth, whether the content comes from traditional publishers or self-publishers.
Finally, there's Amazon Publishing. Amazon now has 13 active imprints and is the largest publisher of works in translation. In 2016 alone, it's believed Amazon Publishing will release more than 2,000 titles. (Remember: This isn't their self-publishing operation—it's their traditional publishing operation.)
A data point that is unlikely to surprise anyone with knowledge of Amazon: eight of the top 20 Kindle sellers in 2016 were from Amazon's own publishing imprints. This statistic was recently pointed out by Michael Cader of Publishers Lunch (subscription required). Cader writes, "Amazon's share of its own top market has more than doubled" when comparing December 2015 to December 2016. "It makes you wonder what these numbers will look like a year from now."
Amazon is cracking down harder on suspicious and scammy activity of all kinds (or at least trying)
Amazon updated its customer review policy in 2016 to be more restrictive than ever and has sued sites that help facilitate paid reader reviews. While it remains acceptable for readers to review a book after receiving it for free or at a discount—as part of a giveaway, promotion, or pre-publication marketing campaign—reviewers must disclose in the review that they received the book free.
It is not okay to leave an Amazon review because you expect to receive something in exchange afterward—such as a free book, a coupon or discount, a gift card, etc. This also means it is not okay to "trade" reviews with other authors.
Most notably and most discussed among authors: It is not okay to post a reader review if you are, according to Amazon, "a relative, close friend, business associate, or employee" of the author. Interpretation of this policy, as you can imagine, drives considerable debate.
Finally, to post a review, customers need to have spent at least $50 on Amazon. Yes, this is official Amazon policy. This helps prevent fake reviews from people who never shop at Amazon and may receive payment to leave reviews.
The other challenge Amazon faced in 2016 was eliminating scammy activity by authors enrolled in Kindle Unlimited, its ebook subscription service. KU pays self-published authors for reads of their books from a pool of money that fluctuates monthly. Prior to July 2015, authors were paid a fixed amount for each book borrowed and read; now authors are paid for each page read. In February 2016, Amazon moved to a new standard of counting pages to be more accurate and fair. Still, authors have been finding ways to game the system and rack up page reads dishonestly. This ends up hurting all authors since there's a fixed amount of money to go around each month for page reads.
To make matters worse, during the fall, authors had to deal with incorrect reporting of pages read through KU, so distrust of the system—in addition to gaming of the system—may affect indie authors' desire to remain exclusive to Amazon in 2017.
There wasn't a new blockbuster for publishing in 2016
If you look at the overall bestsellers from last year, many of them weren't even published in 2016, such as The Girl on the Train. The dry spell was noticed as far back as July, by Publishers Weekly, who pointed out that no new novel had cracked the top twenty print bestsellers in the first half of 2016. Industry observers speculate that current events (the election cycle, terrorist attacks) may have squeezed out book coverage, but also that the division of sales between print and digital formats may be a factor.
But what about the new Harry Potter book, you might ask?
The release of Harry Potter and the Cursed Child lifted sales for its US publisher, Scholastic, as expected. While the power of Potter is real enough and undeniably impressive, what makes this less than boffo news for publishing is that, as Michael Cader writes, "the Potter gain was more of a movement of inventory dollars from new adult books rather than any kind of overall boost to the trade."
Self-publishing activity is still growing—with a fascinating shift
Back in 2012, there were many headlines about the tremendous growth in self-publishing output as demonstrated by the increase in ISBNs used by indie authors.
Since then, Bowker—the agency that issues ISBNs in the United States—has continued to release annual stats that still show growth in the sector, but these numbers always come with important caveats, including:
Bowker's figures don't reflect all of the self-publishing activity out there. They can't count books that don't have ISBNs, and a considerable volume of self-pub titles are published and distributed without ISBNs.
Bowker's counts are for ISBNs, not book titles. A single book title may use several ISBNs (e.g., one for the print edition, another for the ebook edition, and so on).
According to Bowker, ISBNs for self-published titles in 2015 reached 727,125, up from 599,721 in 2014, representing a 21% increase in one year. The increase since 2010 is 375%.
But I think more important is where the growth occurred. Bowker's numbers indicate more authors are using Amazon's CreateSpace, which is free to use; older, fee-based self-publishing services are falling out of favor. Here's a selected glimpse (again, remember these are ISBN counts coming out of each service per year):
- CreateSpace titles in 2010: 35,693
- CreateSpace titles in 2015: 423,718 (+1,087%)
- Author Solutions titles in 2010: 41,304
- Author Solutions titles in 2015: 23,930 (-42%)
The only area of Author Solutions' business that saw an ISBN increase in 2015 is WestBow, the Christian self-publishing imprint marketed through Thomas Nelson. Note that Penguin Random House, which used to own AuthorSolutions, sold it off in January 2016, unloading what was probably seen as an albatross.
By the way, I've never heard of AuthorSolutions either.
