How big is self-publishing? Data-Dancing on the platforms

How big is self-publishing? Data-Dancing on the platforms

The conga line forms here. 

If you've been with us in the past few days here at The FutureBook, you'll know that we're tripping the estimates fantastic in terms of just how large a market we're talking about when we say "self-publishing" in the UK and US markets. 

As the author Hugh Howey has pointed out, this certainly can be seen as a sign of the sector's rising significance. 

And as anybody within tusks' length of the issue inevitably reminds us, trying to sort out the scale of self-publishing, either in volume or value, is not unlike those proverbial blind men and their elephant.

In fact, a nod to Howey, who during our #FutureChat on the topic Friday (12th June) probably got off the most scathingly entertaining iteration of the self-publishing faction's perspective:

I'd like to point out to you, however, that Howey is leading a difficult and potentially critical new dialog within the non-aligned author corps. Here's more about his careful presentation of how self-publishing needs gatekeeping (hear that gasp?).

And I'll catch you up quickly on what we have so far for you on the self-publishing size-up exercise we're doing, then offer you some new views.

My Bookseller colleague Philip Jones kicked us off in his excellent context-setting essay, How big is the market for self-published titles? 

I followed this with our #FutureChat walkup, Data-Dancing: How big is self-publishing? (We'll have a recap.)

Jones then posted agent Toby Mundy's interesting and extensive workup on the question, How big is self-publishing now? An agent's view

And we're hoping you'll jump onto our quick and short-lived (by design) survey to give us your own ideas of the size of self-publishing. We're to have results on Tuesday, so don't wait.

Today, I'm glad to bring you comments from key representatives of three players in the self-publishing platforms. Like rigs in a vast sea of book production, these companies have become beacons to entrepreneurial authors whose temperaments are right for independently directed careers in a riotously competitive scenario. And when I set out to check in with several industry observers for some viewpoints on "selfpub's" scale in the States, these were natural go-to folks, generously responsive.

My questions to them all:

  1. What is your estimate for how big the US market for self-published books is (value and volume)?
  2. Can you detail (in brief) how you came to these numbers?
  3. What in your view is the main hindrance to working out the market size, and how would you suggest resolving that?

Draft2Digital's Dan Wood: About $1 billion of sales worldwide annually

Let's start with Draft2Digital's Dan Wood, who also joined us Friday in #FutureChat with some cogent observations. I'm quoting him from here to the next subhead.

Wood: I’m going to answer the questions in reverse since my reasoning for number one builds on the other answers.  I apologize if this is much more in depth than you asked for but I think painting a complete picture of our assumptions is important whenever we talk about numbers.

3. As long as Amazon doesn’t reveal their numbers it is next to impossible to determine the market size of eBooks in general.  Authors and the industry can appeal to Amazon’s better nature but it is probably in their best interest to keep that information secret for as long as their shareholders will allow.

2. I’m going to start with our numbers since I know them.  These numbers are for world sales but I’ll talk more about the US breakdown  We opened our beta right around the beginning of 2013.

  • 2013 (Ended with 18,668 books) - $4.9 million in sales
  • 2014 (Ended year with 37,723 books)- $9.3 million
  • 2015 (January to April, ended with 47,855 books)- $5.7 million (I cut off at April since it is the last month we have final numbers for so far this year)

The US has consistently been right at 69% of our sales. The breakdown for 2014 and 2015 are basically the same at this point but we hope to see central Europe grow due to Tolino.

  • 11% Australia
  • 8% Great Britain
  • 7% Canada
  • New Zealand, Ireland, Germany, Denmark, France, Netherlands (In order, each <1%)

We crossed 50,000 books as of [8th June 2015].  We currently distribute to Apple, Barnes & Noble (B&N), CreateSpace, Kobo, Inkterra (formerly Page Foundry), Scribd, Tolino and we are near the end of our beta  for Oyster and will be releasing it shortly.   

That means that between us and Smashwords there are approximately 400,000 self-published books using aggregators.  They’d have to go into the numbers but there is a chunk of their 350,000 that is only available on their store and not distributed to any of the major retailers.  Amazon currently claims to have 800,000 books in Kindle Unlimited (KU) [Seattle's all-you-can-read service].  While some of these books are parts of Amazon Publishing [Amazon's traditional publishing house, not self-publishing] and some are indie books that are allowed to be in KU without being exclusive, the majority are books in Kindle Select. 

Going back to April, Amazon paid out $9.8 million to the KDP Select Fund.  This worked out to $1.35 for every ebook “read” in KU meaning they had 7.14 million loans. Those numbers are fairly reliable at least due to the nature of the program. 

From B&N's year-end report last year they reported $500 million for Nook.  I believe that includes some items other than ebooks, however I think it gives us a cap.  While Apple has always been our strongest retailer, I think most would say that Nook was the No. 2 digital book retailer for a good period of 2014. I’ve also never seen Apple officially claim to have overtaken Nook, and I believe they would have mentioned it at Digital Book World if they had. 

The AAP report for 2014 put trade books somewhere around $1.519 billion.

Then let's add in that AuthorEarnings' most recent report makes compelling arguments that indie books account for ~40% market share at Amazon.

Anecdotally most indies I speak to make 60 percent of their revenue from Amazon and 40 percent everywhere else.  While this has been getting better, I think it is a reasonable number to go with.  I have heard similar numbers from publishers.

So between B&N's numbers, Apple’s close market share to them and everyone else (Google Play, Kobo, subscriptions, etc), I am going to argue that there is at least a billion-dollar market everywhere beside Amazon internationally, and I believe that this is a very conservative number.  Based on that 60-40 Amazon-to-others split, I am going to guess that the current ebook market is about $2.5 billion at the very least.

Based on bestseller charts, I think it is reasonable to assume indies account for around 40 percent market share at the other major retailers too.

1. Based on these numbers, assumptions, guesses and my own biases, I am going to put the self-publishing industry at about $1 billion of sales worldwide annually. 

I think it is safe based our numbers to guess that the US market is around $690 million. 

We’ve been focusing this year on helping self-published authors be available in international markets and helping them succeed in them.  I think just discussing the US market can be misleading since Amazon had such a huge head start here. 

I would be incredibly hesitant to remark on volume of downloads since "free" plays such a huge role as a funnel for indie authors to paid works.  For the purpose of possible discussion I will offer these numbers. In 2014 we had paid sales for approximately 3.3 million units.  We had approximately 12.1 million downloads total including any retailers that reported free sales to us.  In 2015 (January to April) we’ve moved approximately 1.9 million paid units and had 10.6 million total downloads.

Kobo's Mark Lefebvre: 'We’re one of the few players in this space willing to share data openly'

With winking apologies "for doing less speculation and more actual number-giving," Kobo Writing Life's Mark Lefebvre (who is also an author, as Mark Leslie) grabbed our questions and ran with them, as Dan Wood had done from Draft2Digital, from the vantage point of his own platform's performance.

Question: What is your estimate for how big the US market for self-published books is (value and volume)?

Lefebvre: For self-published books, for 2015 so far, the US represents about 9 percent of the business from Kobo Writing Life (KWL) titles.

  • Canada represents 51%
  • Great Britain represents 12%
  • Australia represents 11%
  • Interestingly France – is growing and is as high as 4% - several other markets, such as Italy, Denmark, The Netherlands, South Africa are seeing strong growth
  • RoW ("Rest of World," all of the non-localized Kobo territories), is hovering between the 3- to 4-percent realm and has been showing a significant growth.
  • For most of the highest earning KWL authors, RoW is typically their 3rd, 4th or 5thbest-selling global region.

Question: Can you detail (in brief) how you came to these numbers?

Lefebvre: Based on weekly reports on the KWL sales as well as reviews we’ve done in the past several months with some of our bestselling authors. The percentages above are based on dollar sales and not unit sales.

Toward market size, we’re likely going to see continued RoW growth as well as growth in many of what you see as non-traditional English language markets.

Question: What in your view is the main hindrance to working out the market size, and how would you suggest resolving that?

Lefebvre: It’s difficult to understand the complete market because we’re one of the few players in this space that are willing to share data openly.

Amazon and iBooks are pretty close-lipped about their data. 

To that end, we believe that the growth in the US market with a unique customer base that hasn’t been tapped-out by Amazon-Kindle lies within our fantastic partnership with the indie bookstores. We can really thrive together  in a customer base that isn’t already spoken for and many of whom might have been slower to adopt e-reading but are, in many ways, excellent customers with solid reading and buying habits.

We currently have about 250,000 titles published globally via KWL, so that would include the US. Ninety-five percent of the titles published are global rights. A few, however sold North American rights to a North American publisher and are using KWL to publish everywhere except Canada and the US.

Only about 40 percent of the published titles have seen any sales this year so far. That's not all that different from the way titles from major publishers sell – perhaps 20 percent to 40 percent of all titles actually sell.  I’ve seen the same patterns as a bookseller since 1992.

US authors account for approximately 45 percent of our overall KWL author total.

Smashwords' Mark Coker: 'A lot of squishy unknown variables'

When I ask the size of the US self-publishing market, Smashwords CEO Mark Coker says, "Gosh, I'd love to know the answer to this question. There are a lot of squishy unknown variables." He then obliges us by sorting through some thoughts on where things might be, as a preface to his answers:

Coker: "AAP/BISG estimates that the US trade market is about $15 billion."

"For the sake of this survey, if in US trade publishing ebooks are about 25 percent of the overall trade book market in the US, 75 percent would be print. Not sure where audiobooks are.

"Of the print market, let's assume that 99.5 percent is traditional publisher, and .5 percent (one half of one percent) is indie since indies don't have brick-and-mortar distribution. So indie print revenue would be .5 percent of 75 percent of $15 billion or $56 million in net revenue for print-to-indies. There's a decent chance I could be off by a factor of 5 or 10 if indie print is actually closer to 2.5 or 5 percent.  Maybe 2.5 but unlikely 5.

"If the trade ebook market is 25 percent, that would make ebooks a $3.75 billion market.  If indies control 15 percent of that, it would be $563 million for indies.  If it's 10 percent, it would be $375 million.  Let's call it 10 percent to be conservative.  I could be way off here.  If it's 10 percent on a dollar basis, it's probably 30 to 40 percent on a unit basis, especially if we include free books which are dominated by indies.

"So...

Question: What is your estimate for how big the market for self-published books is (value and volume)?

Coker:

  • Value: net revenue to indies, excluding audiobooks, is maybe around $430 million.  Wild wild guess.
  • Volume:  One-third of all ebooks downloaded are indie ebooks.  This includes free ebooks.


Question: Can you detail (in brief) how you came to these numbers?

Coker: Thin air magicianship, explained above.  I have little faith in my numbers.

Question: What in your view is the main hindrance to working out the market size, and how would you suggest resolving that?

Coker: To determine retail sales, we really need the online and brick-and-mortar retailers to step up to the plate and disclose numbers.  They know.

Coker adds an interesting point here, too, about the every exercise of reaching for a self-publishing quantification: on what criteria? 

There are so many ways to size the market. You can talk dollars to authors/publishers, or gross sales from readers at retail, or unit volume.  Another way to value a market is to examine the dollars spent by publishers and authors to bring these books to market.  An entire industry is springing up to offer services to authors and publishers. There's Smashwords in distribution, and thousands of freelance book doctors, editors, consultants, printers, ebook formatters, book designers, marketing services, etc.

Don't forget our survey. We'd be delighted to have you join us in patting down the elephant, and we're expecting to have results Tuesday (16th June).


Main image - Shutterstock: Jose AS Reyes