As an indie author, I am the master of every facet of my business. I am responsible for managing my intellectual property rights, positioning my work, overseeing every aspect of my marketing plan, and expanding my readership.
For this reason, I spend a lot of time trying to understand reader behavior and predict where the industry might be headed. Publishing is the most rapidly changing industry that exists today. It changes faster than advertising, social media, or artificial intelligence. Unlike AI, for instance, where incremental changes are being made constantly, the publishing marketplace is being retooled year after year by sudden, sweeping changes.
New developments like the Kindle, Kindle Direct Publishing, print-on-demand, reading apps like Wattpad, and subscription services like Kindle Unlimited have not nudged us forward — they have completely upended business models. Kindle Direct Publishing and Kindle Unlimited made some authors wealthy and have driven others out of the game. What’s remarkable is that these are all relatively recent changes. The Kindle only came about in 2007, and KU was launched in 2014.
To still be in business in the next two, five, or 20 years, it’s critical to observe the changes taking place right now — both in terms of reader behavior and emerging technology.
Where We Are Now
To understand where we’re headed, it’s first important to understand where we are. Keep in mind that I can only describe my personal experience in detail. My experience is not typical of a traditionally published author — or probably even the average indie author. I find that an author’s income streams and mileage vary depending on their genre, audience, and strengths as a marketer.
I should also preface by saying that three of my four series are enrolled in Kindle Unlimited, meaning that they are not available on any platforms other than Amazon. Exclusivity to Amazon versus “going wide” to all retailers is one of the central debates in the indie community — and it has been since KU was introduced. I am not going to delve into that debate; I will only say that I moved from exclusive to wide and back to exclusive after a few years because I could no longer afford not to participate in Kindle Unlimited. (You’ll see why in a minute.)
Just as a goldfish grows to fit its bowl, my income has grown to fit the channels where my books are present. However, I chose these channels based on the trend of my earnings observed over the course of two years. As a publisher, I would rather have my books everywhere, but Amazon (and increasingly KU) is the big fish of the publishing world.
A Breakdown of My Author Income in 2018
In 2018, 95 percent of my author income came from the Amazon marketplaces (this includes CreateSpace, which is now KDP Print). Last year I sold books in the US, Britain, Canada, Mexico, Brazil, India, Japan, Australia, France, and Germany. Of that Amazon income:
– 73 percent came from Kindle Unlimited
– 26 percent came from e-book sales via the Amazon marketplaces
– 0.8 percent came from paperback sales
Where did I get the other 5 percent of my income?
About 3.5 percent came in the form of audiobook royalties from Audible (an Amazon company) and Podium Publishing. I have traditional deals with both of these audio publishers because the up-front expense of producing audiobooks for such an extensive backlist would be cost-prohibitive for me (more on this later). So far, I have licensed the rights to two of my four series, which means that I receive 11 to 16 percent of the net royalties, depending on marketplace and whether my agent gets a cut. In addition to Audible.com, my Audible books are also available online from Barnes & Noble and Target.
The other 1.5 percent of my income came from other e-book marketplaces (Google, Barnes & Noble, Kobo, Apple, Scribd) and Patreon, which is a new initiative I started in 2018.
Patreon allows me to reach readers on all platforms by releasing my fiction books directly to Patreon subscribers a week before I enter into an exclusivity agreement with Amazon. In the future, I hope to grow this income stream to a larger percentage.
The Rise of the Subscription Model
Over the past few years, I have seen my e-book sales dwindle and the royalties earned from Kindle Unlimited grow.
If you aren’t familiar with Kindle Unlimited, it is a subscription service that allows readers to “borrow” an unlimited number of books for $9.99 per month. Authors enrolled in the program receive payment based on the number of pages read on their enrolled books. This per-page rate varies from month to month depending on the amount of money in the KDP Select Global Fund and the total number of pages read across the program. In December 2018, this rate was $0.00487 — roughly half a cent per page read.
Many authors despise Kindle Unlimited because the per-page-read rate is unpredictable, or they feel that they should be paid more per page. The Amazon marketplace has also seen its share of scammers engage in practices like “page stuffing.” One could argue that the program is changing the structure of the novel itself, as it rewards authors for writing longer books that readers can’t put down.
While there are many problems with KU — number one being that it encourages authors to be exclusive to a single retailer — I have benefitted a great deal from having my books enrolled. As an author I like the program because it gives subscribers a risk-free way to try my books.
In my mind, Kindle Unlimited has replaced the free book method of getting new readers into a series. Rather than making the first book in a series free, subscribers can borrow the full-priced book without paying any more money, and yet I still get paid. Of course, many authors still make their first book free or price at 99 cents, but as the Kindle marketplace has grown more and more crowded, I see the effectiveness of this strategy waning. Plus, I think it’s difficult to convert “free seekers” to paid readers. (Many people hoard hundreds or thousands of free books on their Kindles without ever reading them.)
As the popularity of subscription models like Netflix, Amazon Prime, and Kindle Unlimited grow, I think we are going to continue to see these numbers shift to favor KU page reads over e-book downloads. “Whale readers” in particular — these voracious readers who devour a book a day — love Kindle Unlimited because it makes their reading habit more affordable. And considering that many indie authors price their e-books in the $2.99 to $4.99 range, KU is the most economic way for people to read an author’s entire series of three or more books.
‘Books on Tape’ Are Back
The big standout in publishing today is the unprecedented rise of audiobooks. “Books on tape” are nothing new, of course, but now instead of driving to a bookstore and hoping they have your book available on cassette, readers can simply open an app on their smartphone and get the book in one click or ask Alexa to get it for them. These innovations (smartphones, Audible, and smart-home devices) have given this old-school publishing niche a makeover and a serious boost.
Besides being convenient, audiobooks allow people who are “too busy to read” to consume books another way. Many people simply don’t have the attention span to sit down and complete a 300-page novel, but they can listen to a book chapter by chapter as they work out or drive to the grocery store.
While overworked, over-stimulated, and overstressed people today may be “too busy” to read, they generally have long commutes. The average American commute crept up to 26.9 minutes in 2017, and it has only gotten longer over time. This means audiobook authors have a captive audience — just as long as readers don’t have to use their hands and eyes.
Last year, Amazon released its Alexa Auto software development kit on GitHub, which will allow automakers to integrate Alexa’s features into more and more vehicles. While I personally think Alexa is the end of the world as we know it, people who have smart-home devices seem to love them. They can ask Alexa to read them a book while they wash the dishes or fold laundry. Alexa also advances Amazon’s mission to make online purchases truly seamless.
Who’s ‘Reading’ Audiobooks?
According to a 2018 Pew Research survey, 18 percent of US adults said they had listened to an audiobook in the past 12 months. A whopping 26 percent of adults ages 18 to 29 had listened to one (compared to 16 percent the year before).
Many of my twenty-something friends rely on audiobooks as their primary method of “reading.” They don’t bat an eye at paying $15 to $22 a month to get audiobook credits, and many of them relisten to these books. One of my friends plays the Harry Potter books for her dog every time she leaves Pixie home alone. (I wish I was kidding.)
Audible is the next great frontier, but there are some particulars that authors need to understand. For one thing, production costs are a barrier to entry for many. (This is why Audible is less crowded than the e-book marketplace.) Most audiobook narrators charge $150 to $250 per finished hour and read at a rate of 7,500 to 10,000 words per hour. This makes the cost of producing an 80,000-word audiobook anywhere from $1,200 to $2,700.
For those of us with a large back catalog, this can make the transition to audio extremely expensive. But there are some other avenues to producing quality audiobooks. Today authors can choose to do a royalty share with an audiobook narrator through platforms like ACX or Findaway Voices, but ACX requires exclusivity to Audible/Amazon for this arrangement. The percentage of royalties authors can earn from their audiobooks through Audible isn’t great right now, and Audible sets the price of the audiobook.
The Audible credit system also means that readers are looking to get a better bang for their buck on audiobooks. Many favor longer books when deciding how to spend their monthly credits. (We’re talking 10 hours or more.) This also influences which books get made into audiobooks when traditional publishers are involved.
Despite these limitations, I plan to make audiobooks a central part of my publishing strategy over the next several years. I am working to get my current series made into audiobooks, and I am exploring all my options to ensure I get the best royalty arrangement possible.
E-Books Are Old-School
While most publishers can’t argue over the rise of audiobooks, I think many would take issue with the prediction I’m about to make: Over the next 10 to 15 years, we are going to see a decline in the number of “traditional” e-books sold in the US and witness an unexpected resurgence of print books.
Did I just blow your mind? Let me explain.
By “traditional” e-books, I mean books that are licensed in their entirety for a one-time fee. Right now, for $0.99 to $4.99, a reader can go on Amazon.com or iBooks and buy a license to any number of novels that will live on their Kindle or iPad for eternity.
However, we are in a tricky transitional period between owning a secondary device for reading, gaming, and casual Internet surfing and owning just one device that is our phone, our e-reader, our gaming system, and our portal to the web. In the future, I believe the e-reader and tablet will be a thing of the past. Those who are still reading e-books will read on their smartphones, and many will consume their stories in bite-sized nuggets from apps — either for free or for a micropayment of perhaps a few cents per chapter.
If we are smart, the publishing industry will take cues from the gaming industry to train consumers to pay a small amount of money to “level up” or read the next chapter. If we are very, very dumb, publishing will go the way of the music industry, with content being available in its entirety for free or for cents on the dollar, such as with ad-supported platforms like Spotify.
What’s interesting to me is the huge influx of readers from developing nations that are coming online right now. Many of these people are skipping over the personal computer entirely and going straight to a smartphone. In these places, I believe low-cost e-books will soon be favored over cheap paperbacks sold on home soil. (We are already seeing this on a small scale in India, which is the country with the most English speakers outside the US.) If countries like China begin to move away from Internet censorship, we could see even more emerging markets ready to buy e-books written in English.
But for the majority of readers in the US, I believe we will move away from e-books and back to print. (And I say this as someone who makes less than 1 percent of my income from paperback sales.)
When I first began examining my audience, I was shocked to learn that most of my readers were men and women over the age of 45. (While 34 percent of e-book readers are the 18-29 set, 35 percent are over the age of 50.) Nearly 40 percent of Americans read print books only, and 29 percent read print and digital. (Only 7 percent of American adults read digital books exclusively.)
Anecdotally, most people I know who are in their twenties and thirties prefer either audiobooks or print books. (I know this because I always ask when I give my own books away.) My sister-in-law has two elementary-age daughters, and she says she intentionally reads some books in print so her girls will see “real books” at home. It is primarily my older relatives and acquaintances who are reading e-books on a tablet.
The Resurgence of Real Books: Paper Is the New Vinyl
How do you know what the future holds? Look to the young people. I don’t rely on my 45-year-old friends and relatives to tell me what is cool. I ask my nephews, who are all in their teens.
In my experience, people between the ages of 18 and 25 don’t buy a lot of e-books. Young people spend most of their reading time on college texts (which are still predominantly print), or they are so busy with new careers that they barely have time to read at all. Kids under the age of 18 don’t read that many e-books either because they often don’t have access to a credit card to make online purchases.
Not only that, but print books offer a tactile analog experience that is missing in many digitally connected kids’ lives. Think of the feel and smell of a real paperback or hardback book. To kids that grew up glued to their smartphones, this has the same allure that vinyl has to people my age who grew up with CDs and iPods.
Print books can also be a tool for social signaling. The visibility of the cover allows kids to show their peers that they are part of the “in-group” or the “out-group” based on what they are reading. The titles they read in print can tell their peers just how countercultural, political, highbrow, lowbrow, or “woke” they are in a way that a digital book on a generic device simply can’t.
After I spoke to a friend of mine who teaches sixth grade, I fully solidified my prediction that Generation Z (people born after 1995) and Gen Alpha (people born after 2013) won’t read e-books for pleasure at all.
We tend to think of today’s young people as being digital natives. Most of them literally can’t remember a world without smartphones and tablets, and many have had an iPad in their hands since before they could talk. In the education sector, administrators have been shoving iPads and laptops into the hands of these kids as early as possible to give them the skills necessary to survive in a world that’s going to be increasingly dominated by technology.
But you know what? These kids are sick to death of digital devices (even as much as they are addicted to them). This sixth-grade teacher friend of mine tells me that her students complain that their eyes are tired after spending several class periods staring at a screen. They want to go back to pen and paper and physical books to take a break from digital devices.
As these kids graduate from college and enter workplaces dominated by screens, the last thing they are going to want to do after a long day is pull out another screen to read books on. These young people are going to want to zone out in front of the TV or perhaps lose themselves in a paperback book instead of tapping through an e-book.
As someone who works on a computer all day, I no longer have any desire to read digital books. (And I’m a Millennial!) I switched back to print books a few years into my author journey. I still own a Kindle Paperwhite for proofreading purposes, but it is just a work device.
What do you think? Am I crazy? How do you envision the future of publishing? Tell me about your reading habits in the comments below. Be sure to include your age and your preferred method of reading!
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Photo by Clem Onojeghuo