The top 15 ebook stores in 5 countries

Today, I am reprinting a new report by Author Earnings on how Ebooks are doing in five English-speaking countries compared with print books. Author Earnings is a website for authors, by authors. It’s purpose is to gather and share information so that writers can make informed decisions. Its secondary mission is to call for change within the publishing community for better pay and fairer terms in all contracts. I think authors and others will find the information eye-opening and useful. Ron Yates

Print bookselling remains artificially silo’d by country even today, for variety of legacy historical and logistical reasons. But by contrast, the global ebook marketplace is a seamlessly international one.

For authors, selling an ebook to a reader in a different country is just as easy as selling to a reader in your home country. Barriers to reaching an international audience no longer exist.

Today, with the click of a button, any author can start selling any title they wish simultaneously in 12 country-specific Amazon stores, 36 country-specific Kobo ebook stores, and over 40 country-specific Apple ebook stores.

As of yet, most of these non-English-language ebook markets are still fairly early-stage. But that’s not true of the four other major English-language markets outside the US. In those markets, too, as we’ll see, a substantial share of all new-book purchases has already gone digital. And, as we’ll also see, untracked, non-traditional suppliers make up a high percentage of ebook sales in those countries as well. Which means that these other digital markets have also been consistently underestimated and under-reported by traditional publishing-industry statistics.

Back in November 2015, we did a deep dive into Amazon UK. In examining how sales in the world’s second-largest English-language market broke down by publisher type, we saw firsthand the large nontraditional share of that market. And in October 2015, when we looked beyond Amazon.com to characterize US ebook sales at Apple, Barnes&Noble, Kobo, and Google, too, our “wide” report validated that indie self-publishing wasn’t just a massive market sector at only one ebook retailer, but rather represented an industry-wide trend.

However, both of those reports are already more than a year old. Since then, we’ve substantially overhauled and refined our AuthorEarnings methodology. We can now measure each retailer’s total sales in each country with far more precision.

So this time, we rolled up our sleeves and basically went for the whole enchilada:
The top five English-language countries
The fifteen largest ebook stores
750,000 top-selling ebook titles, in all genres and categories.
• All of it calibrated against 700,000 points of raw, unfiltered daily sales data, from over 20,000 distinct ebook titles across all 15 stores.

When we were done, we were looking at the most comprehensive international picture of English-language ebook sales available anywhere. And now, we’re excited to share it with authors everywhere around the world.

Total Ebook Sales by Country (Top 5 English-Language Markets)

Of particularly interest is how each country’s ebook sales are divided up among the different retail channels.

• Unsurprisingly, Amazon is the majority retailer in just about every market.
• But in Canada and Australia, Amazon is a lot less dominant than in the US and the UK.
• Taken all together, Amazon accounts for more than 80% of English-language ebook purchases, Apple another 10%, Kobo 2% and Nook 3%
• The remaining 3%–ascribed to GooglePlay and all remaining channels–is most likely overly optimistic. Their true share might well be even lower.

(If you’re comparing retailer breakdowns for the US against our October 2015 “wide” report, note that that report mistakenly used global Kobo sales totals instead of US-only totals. We’ve rectified that here. We hope that no one making the comparison will misinterpret it as a drop in Kobo’s actual market size or share. If anything, we think Kobo has actually grown some since then.)

Total Ebook Consumer $ Dollar Sales by Country and Retail Channel

In total consumer $ dollar spending terms, Amazon’s ebook dominance is slightly less pronounced than it is in unit terms. But we were still surprised to see that nearly 80% of consumer dollars spent on ebooks in the US now go through Amazon.

Our focus, however, is always take-home author earnings, rather than gross consumer dollars. And authors choosing different publishing paths are banking a very different share of the gross dollars consumers are spending on their titles–ranging from 17.5% to 70%–depending on how they chose to publish. So, naturally, we’re most interested in how ebook sales in each country, and at each retailer, break down by publisher type:

Ebook Unit Sales in Each Country Broken Down by Publisher Type

As always,
blue bands (at the bottom of each bar) represent ebook sales in each market by Self-Published Indie Authors
red bands represent ebook sales by Small/Medium Traditional Publishers: i.e. the combined sales of all traditional publishers other than the “Big Five”
green bands represent ebook sales by Amazon Imprints: Montlake, Thomas & Mercer, Skyscape, Little A, AmazonCrossing, etc.
purple bands represent ebook sales by imprints of the Big Five Trade Publishers: PenguinRandomHouse, HarperCollins, Hachette, Simon&Schuster, and Macmillan.
cyan bands (at the top of each bar) represent Uncategorized Single-Author Imprints: the vast majority of which are also self-published indie authors creating their own imprint names, but we haven’t taken the time to verify each individually as a self-publisher.

Our main takeaways from the above chart:
Self-published indie authors are verifiably capturing at least 24% – 34% of all ebook sales in each of the five English-language markets; it’s not just a US-only phenomenon. When you also include the uncategorized authors, the vast majority of whom are also self-published, the true indie share in each market lies somewhere between 30% – 40%.
Indies are competing particularly well in the Canadian and Australian ebook markets, nearly approaching the level of dominance they currently hold in the US.
The Big Five, on the other hand, are letting themselves progressively get squeezed out of nearly every English-Language ebook market. They make up only 38% of Canadian ebook purchases, and that’s the country where they are holding their ground best; in the US, the Big Five now account for barely 26% of all ebook sales.
Amazon Imprints have made the most market headway in the US. Despite being single-retailer exclusive to Amazon Kindle, the dozen or so Amazon “house” publishing imprints between them account for 14% of all US ebook sales, 10% of all UK ebook sales, and 8% of Australian ebook sales. In Canada, the Amazon Imprint footprint is a much more modest 3% of all ebook sales, largely due to the substantial shares of the overall Candian ebook market held by Kobo (25%) and Apple (14%).


Ebook Unit Sales at Each Retailer Broken Down by Publisher Type

Our main takeaways from the above chart:
Self-published indie authors are verifiably capturing at least 20% – 35% of all multi-country ebook sales at each retailer. When you also include the uncategorized authors, each retailer’s true multi-country indie share lies somewhere between 25% – 42%, with Amazon staking out the high end at 42% and B&N and Apple holding the low end at 25%.
The Big Five have managed to hang on to more than half of all ebook sales at Apple and Barnes & Noble Nook. At B&N, in particular, their share tops 61%, but that merely makes them the largest fish in a rapidly-shrinking pond. (B&N’s overall ebook sales have contracted dramatically over the past few years, to where they are now make up less than 4% of the US total (or 3% of the five-country total)).

*As a side note, in comparing these new US retailer market-share breakdowns to our data from October 2015, indie market share has grown a little since then at Apple, Kobo, and Amazon (even after Amazon’s sharp 2016 May-Oct indie drop). At B&N, However, indie share has actually contracted (leaving indies there with a reduced slice of the now much-smaller B&N pie).

One fascinating consequence of all of the above is how differently each type of publisher sees their own ebook sales “pie” split across the various retailer channels:

Ebook Unit Sales by Publisher Type, Broken Down by Retail Channel
(The relative size of each pie reflects the total ebook sales volume for that publisher category)

(The relative size of each pie reflects the total ebook sales volume for that publisher category)
• Due to the Big Five’s disproportionately small share of Amazon’s ebook sales, only 70% of Big Five sales are through Amazon, while 30% of Big Five sales come through the other retailers, which together comprise less than 20% of the broader ebook market.
• On the other hand, indie self-published sales go disproportionately through Amazon, with that retailer making up 91% of all self-published ebook sales.

However, that 91% for indie self-published sales is somewhat misleading, as it lumps together the sales of Amazon-exclusive indie titles in “Kindle Select” with the sales of indie titles that are available “wide” at all retailers.

To provide greater insight, let’s separate the sales of Amazon-exclusive indie titles from those of “wide” indie titles, proportionately dividing the blue indie pie at the left of the chart into the two pies below:

(Again, the relative size of each pie reflects the total ebook sales volume for that publisher category)

Should Indies Go “Wide” or Amazon-Exclusive?

Indie authors often struggle with the choice of whether to make a particular title a KindleUnlimited-enrolled Amazon-exclusive or to sell it at all retailers. For those authors, the breakdown of indie sales on the left side of the above chart is a particularly interesting one. But it’s worth keeping in mind that around half of the “Kindle Select” indie sales are actually full-read-equivalent KindleUnlimited payments to indies, rather than straight retail purchases.

So let’s now break those KU full-read equivalents out separately, as shown as yellow pie-wedges in the two charts below:

So what do the above graphs tell us about KindleUnlimited and indie author earnings?

The breakdown of indie dollar author earnings looks nearly identical to the unit-sales splits shown above. KindleUnlimited indie page reads (at a current run rate of $180M+/yr) are now paying Amazon-exclusive indie authors far more total dollars than “wide” indie authors are earning from their sales at all non-Amazon ebook retailers combined (a total run rate of roughly $50M/yr in non-Amazon indie author earnings).

But at the same time, limiting a given title to Amazon exclusivity will:
• reduce the impact of external marketing and promotion efforts for that title
• make it harder to secure BookBub ads and the like
• reduce the virality of reader word-of-mouth referrals
• mean giving up 5x as many parallel opportunities for retailer promotional featuring and acceptance into retailer outreach programs, any one of which can give a title a substantial visibility or sales boost.
• if a title appeals to Canadian or Australian audiences, it will be unavailable in the retailer channels where almost half of those countries’ ebook purchases occur.

“Wide” authors who are able to effectively take advantage of promotional opportunities at other retailers often see far more than the a quarter of their sales coming through non-Amazon channels; some high profile indies are doing so well at other retailers that Amazon now represents less than half of their sales.

It’s also worth considering what happened sometime between May 2016 and October 2016, when indies experienced a sharp quarter-to-quarter downturn in KindleUnlimited page reads and an overall drop in retail sales for Amazon indie authors. After growing consistently every quarter for nearly 3 years, we saw indie market share at Amazon US suddenly plunge from 44% to 36% of Amazon’s total unit sales. While things appear to have stabilized now, and indie market share is once again growing–but more slowly now–at Amazon, relying upon a single retailer for 100% of one’s sales means an author is far more likely to see sudden, dramatic shifts and reversals in their own individual fortunes.

So for indies contemplating whether to go “wide” with a title or enroll it in Kindle Select as an Amazon exclusive, there’s still no easy answer. (Sorry.)

Putting all one’s eggs in the same basket, even if it is a big basket, carries unique risks. There is a strong case to be made for diversification of an author’s sales across different retail channels for that reason alone.

At the same time, KindleUnlimited has grown into a Top-3 ebook retail channel in its own right; KU is now paying indie authors twice as many dollars as Barnes&Noble’s Nook is paying to all publishers combined. To completely ignore a retail channel of that size makes zero sense.

The best strategy for an indie author seems to be to keep some of their titles in wide release, have some in KindleUnlimited, and experiment with what combination works best and generates the most income. Luckily, the exclusivity decision for each title can be revisited every 3 months, allowing indie authors to be reactive when their sales to take off at a particular “wide” retailer.

Conclusions
Our look at the wider world of ebook retailers tells us that the rise of ebook sales in general, and indie publishing in particular, are not limited to the US nor to a single retailer (Amazon); they are international, industry-wide phenomena. The US currently leads the world in both ebook penetration rate and the indie share of that market, but other ebook markets are starting to catch up: particularly the other 4 major English-language ones. Taken together, ebook sales in these 4 additional markets add a combined 25% to the US-only total.

And, somewhat counter-intuitively, self-published indie authors are proving to be far more capable of taking advantage of their global digital reach to achieving commensurate international sales than traditionally published authors are.

Back in our October 2015 UK report, we made the then-surprising (to us) discovery that best-selling indie authors in the US were far more likely to also be best sellers in the UK than their best-selling traditionally published US counterparts. The same held true in the opposite direction as well, with best selling UK indies outperforming best selling traditionally published UK authors when it comes to their cross-Atlantic sales in the US market.

In the comments on that report, noted author and author-advocate Harry Bingham explained the reasons behind this apparent discrepancy far better than we could. Here’s what he said:

1) Writers will be published by different publishers in either territory.(or, even if part of the same corporate machine, one that operates with effective independence from its sister companies.)

2) In both cases, sales strategies will be print-led in the first instance, and most examples of Big 5 e-successes will be very largely reflecting an original success in print (and the media opportunities which are so often exclusive to print successes.)

3) Publishers fail to meet budgetary expectations with most trade fiction – let’s say, 7 in 10. They only have a real success with maybe 1 in 10.

4) Those things can’t be – and aren’t – predictable in advance. They may be dependent on such things as cover design, the choices made by key retail buyers (who won’t in most cases have read the book in question, &c). In other words, there’s a high degree of chance – as well as author quality – in what determines a print success. Given that print-retail slots are scarce and book shelf lives are small, you just can’t rely on quality alone to get you through.

5) So what your data shows is exactly what we’d expect. Publishers spin the wheel in both territories. If they get lucky in one territory, that luck doesn’t translate particularly well to others. So you’re seeing a reversion to the mean effect – a print success (and hence e-success) in the UK just doesn’t affect the US odds very much and vice versa.

6) Indie-authors aren’t ruled by the gods of the print world, so there’s less random chance involved The bookshelves are infinite, books are forever, quality (in design, marketing as well as writing) had a much higher chance of determining outcomes.

As he explains it, the seeming oddity now makes perfect sense.

In practice, it’s true that the very topmost handful of decades-old traditionally published mega brand names do indeed see their titles launched internationally to great effect across all markets. These long-established megasellers such as Patterson, Roberts, King, Baldacci, and Rowling (who, incidentally, held on to her digital rights and self-published her ebooks and audiobooks through her own Pottermore imprint) are truly international best sellers in every book format. But below that top fraction of 1% who receive coordinated international releases and global marketing campaigns for their titles, most traditionally published authors are lucky to become best sellers in a single market only, if ever at all. And this goes doubly for authors of genre fiction, where the overwhelming majority of all consumer purchases–over 70%–are now in ebook format.

The larger the proportion of sales in an author’s genre that are now digital, the more of a disadvantage being traditionally published seems to impose upon authors hoping to also achieve significant ebook sales outside one’s home country.

One of the other interesting implications of this is that authors in the UK, Canada, Australia, and New Zealand have the most to gain by indie-publishing their digital editions. For them, the overwhelmingly largest market for their books lies overseas–and it’s one where they absolutely cannot afford to be handicapped by a traditional publisher’s local-market-oriented, print-first focus.

And Finally… a Brief Look At How Amazon US Ebook Sales are Trending in Early 2017
Pulling together data for this 5-country, 15-retailer report meant collecting and incorporating a early-2017 dataset from Amazon.com US: the largest ebook retailer of them all. Amazon US alone comprised 65% of all unit sales and 64% of all consumer dollars in our entire 5-country, 15-retailer dataset. A deep dive into just the 2017 Amazon US data is something we’ll save for another day.

But we’ll share the following updated trend graph:

And we’ll tease a few interesting findings:

Between early 2016 and early 2017, overall Amazon US ebook sales grew another 4%
While that’s not the kind of double-digit (or triple-digit) growth we had seen in the earlier days of the ebook era, it’s still more than enough to offset the ongoing shrinkage at Barnes&Noble’s Nook. In other words, albeit slowly now, the overall US ebook market is still growing.

Indie ebook market share, after the sudden sharp drop that we reported in October 2016, seems to have bounced back a little in early 2017.
It’s too early to conclude whether this is simply a plateau or the beginnings of a new phase in indie market share growth. We’ll be curious to see which direction things head as we move deeper into 2017.

Amazon Imprints’ market share continues its steady climb.

Amazon Publishing’s growing share of all Amazon ebook sales is a fascinating, and somewhat unsettling, trend to watch.

Big Five ebook market share, on the other hand, after a brief flirtation with recovery in October 2016, has fallen precipitously once again in early 2017, to just 20.8%.

As of February, titles published by the Big Five made up just 20.8%–or barely one fifth–of all Amazon US consumer ebook purchases.

And finally:
“Small/Medium Traditional Publishers,” as a cohort, have continued their slow, steady climb in unit market share, but their share of total consumer $ dollars spent on ebooks is rising far faster.

In fact, per the below trend graph charting the shift in consumer $ spending, we can see that for the first time “Small/Medium Traditional Publishers” are capturing more total consumer dollars than the Big Five.

That represents a wildly dramatic shift in fortune for non-Big Five traditional publishers; three years ago, their combined $ ebook sales were less than half of what the Big Five’s were.

But keep in mind that our “Small/Medium Traditional Publisher” category lumps together many disparate types of publisher, from the smallest micropresses to the non-Big Five traditional giants like Houghton Mifflin Harcourt and Scholastic, from traditional university and academic presses to newer, digital-first publishers like Open Road Media. Not all of these different types of publishers that make up our “Small/Medium Traditional Publisher” category are seeing this rapid sales growth; in fact, quite the contrary.

We’ll save a more detailed breakdown of the Small/Medium Publisher category for a future report, but we’ll say this:

Almost all of the recent “Small/Medium Publisher” gains appear to be driven exclusively by one particular narrow subcategory of publishers, which is now seeing explosive growth in their ebook sales.

Hint: it’s not whom you think…

Comments

comments