The Future is Indie

I think the argument for a digital future has been largely won. I don’t think anyone still disputes that e-books will be the dominant format pretty soon (if they aren’t there already).

Lately though, I am seeing some pushback against the idea that this spells trouble for large publishers. After all, the bestseller lists are filled with of familiar writers from the publishing conglomerates and their e-books are selling at much higher prices than self-published work.

Large publishers are making, the argument goes, millions and millions from e-books. Plus, switching to digital has ancillary benefits for publishers like lower costs from not having to print, store, and haul all that paper, as well as not having to deal with returns.

The problem for large publishers, however, is that they are transitioning from a marketplace where they controlled distribution to one where they don’t. The digital playing field is wide open and, for the first time, the publishing conglomerates are facing real competition from a horde of hungry self-publishers, savvy small publishers, as well as, of course, Amazon.

This isn’t just supposition. The monthly AAP stats show e-books booming and print collapsing in 2011. One thing is clear: the rise in e-book revenue is not sufficient to offset the losses in print – at least for the publishers measured by those surveys.

The more comprehensive Bookstats Report showed some growth overall, but that only took account of the industry up to the end of 2010. Needless to say, this only covers the beginning of the huge boom in e-books which commenced in November last year.

Since then, we have seen self-publishers capture more and more of the top spots. For the last few months, indies were responsible for between a third and a quarter of the top-selling e-books on Amazon.

That’s a lot of lost revenue for publishers. These self-publishers are either writers who have left trade publishing to go it alone, those that couldn’t crack it in the first place, or some like John Locke who didn’t see the point of querying. And the spots on the bestseller lists – and all that increased exposure – are now going to operators outside their system (and not measured by AAP reports or Bookstats surveys).

As more business shifts online and to digital (and this Christmas will be huge in that regard), large publishers are going to suffer even more as, for the first time, a significant portion of their business is going to be subjected to the kind of competition they were shielded from through their control of the print distribution network.

They are going to lose a portion of all the customers that switch to buying online and buying digital, because those customers are going to be subjected to a much greater selection than ever before – including lots and lots of great, enticing, well-reviewed, visible books from small publishers and self-publishers that couldn’t get into bookstores.

I knew that readers of genre fiction were the first to switch to e-books (for a number of disparate reasons), so I thought it would be instructive to examine the Kindle Bestseller lists in various genre categories. Perhaps it will give us a glimpse of where things are headed for large publishers.

Five of the Top Ten Thrillers are self-published. Big names such as Grisham, Baldacci, and Patterson keep things respectable enough for the large publishers. Only four of the Top Ten Horror e-books are self-published, but two more are from Amazon’s newest imprint 47North (and were originally self-published), and one is a public domain re-release, leaving only three spots for the publishing conglomerates.

Things seem better in Romance, where a few Harlequin books, a couple from Nora Roberts, and one from Sophie Kinsella leave only one spot in the Top Ten for self-publishers. However, nine of the next ten books on the list are self-published.

Science Fiction is almost a washout. Six of the Top Ten are self-published, two are from small presses, and one is a public domain re-issue, leaving only a big release from Brandon Sanderson as the sole representative of Big Publishing.

My point is, if you really want to see where the large publishers are headed, don’t look at the performance of the titles they are putting out, look at the stuff they aren’t.

Those lucrative spots on the genre bestseller lists have been grabbed by self-publishers who either went out on their own because they weren’t getting paid enough (or backed enough), or writers couldn’t get an agent or a deal in the first place.

All these writers could be generating revenue for the large publishers. Instead they are competing with – and beating – big releases from their biggest writers.

The future is indie.

32 replies
  1. avatar
    Maryann Miller says:

    David, thanks for this insightful and encouraging article. I am hoping that indie authors will soon have the same reputation as indie filmmakers who are most often equated with fresh, innovative and quality films made on a modest budget. Creativity does not have to cost a lot.

  2. avatar
    Lisa Grace says:

    Hi David,

    As usual, you have another great insight. I write in the 43rd most popular genre according to Sally Stuart’s Christian Writer’s Market . But my book was number 1 in teen horror in Amazon’s Kindle store for part of August and September.
    I’m signing a major motion picture deal for the first two books in my series, and now publisher acquisition editors are coming to me. I may approach Amazon and see if they are interested instead. Why not?
    I love how they help keep books on their best sellers lists (mine is teen horror for the Kindle) and how they suggest to potential buyers they might like my books too.
    They never cared that my books were self-published or in an a lesser-selling genre. When my books started selling well, they helped with the cross-marketing.
    For self-publishers, I see nothing but a fair chance to compete with the big boys.

  3. avatar
    Saul Tanpepper says:

    Nice post, David. It confirms what those of us with an eye on the market have long suspected, but it may be a surprise to those late to the party. What surprises me is how resistant Big6 and their supporters (writers, agents…) are to the shift and their denial that the old models are no longer relevant. In the broadest sense, publishers are facilitators between writer and reader (editors, design folks, marketing and distribution), roles which remain highly relevant, even to the indie writer. But it’s those publishers who stubbornly adhere to the old ways who will become irelevant.

    • avatar
      David Gaughran says:

      I wonder how many of those editors and designers would ultimately prefer working as freelancers where they can pick and choose which projects to get involved with, rather than having to deal with (someone else’s) commercial concerns so much.

  4. avatar
    Adam Pepper says:

    The big guys are getting their tails kicked by the authors they didnt treat well and the ones they didnt give a shot to. When you put it that way, it really does sound like a revolution!

    It’s gonna be a very Indie X-Mas this year!

  5. avatar
    J S says:

    Remember .. the big publishing houses had such a monopoly for so long, they are out of shape. Everyone working there is dragging in on Monday and thinking about the weekend by Friday. Oblivious to the scores of writers who are beavering away at their latest works in the early mornings, late nights, or weekends; often their second or third job. Those writers at last have hope, hope they can have a little more control over getting their content to the readers directly. And so they write … and change the industry.

  6. avatar
    Scott Nicholson says:

    Nice work as usual, David. However, I’d suggest that “The future is indie…for now.” We don’t yet know what happens when we turn the page, except that large publishing will be another page in the past.

    • avatar
      David Gaughran says:

      That’s fair enough. Although “The Future Is Indie For Now, But We Don’t Know What’s Around The Corner Except That It Will Be Different” doesn’t make for sexy Twitter-bait.

  7. avatar
    J.A. Konrath says:

    Always love your posts, David. You have a level-headed approach to the situation, and you use logic and common sense to draw conclusions, 99% of which I agree with.

    Here’s a rare 1% that I don’t:

    That’s a lot of lost revenue for publishers.

    Actually, it’s revenue they didn’t earn. But they didn’t technically lose it. You’re using what Barry and I call “analogue thinking.” Analogue thinking is comparing the new paradigm–which is digital–to the old paradigm and thinking they have equal value.

    The proliferation of indies on the bestseller lists isn’t a loss for publishers, because there is less competition with ebook buying.

    In the analogue world of yesterday, a reader would go into a bookstore with $25 and they had to choose between the latest Konrath hardcover and the latest Patterson hardcover.

    But with ebooks, a reader with $25 can get the latest Patterson for $9.99, then buy two Konraths, an Eisler, and two Crouchs for the same amount.

    Patterson’s publisher still made the sale. They didn’t lose. But the indies are benefiting.

    This will still lead to the end of publishers, because eventually Patterson is going to wise up and stop splitting royalties. I also agree that as more and more authors go indie, publishers will earn less and less because they won’t have as many releases.

    I make the same mistake in terminology myself, all the time. I talk about all the money I’m losing because Hyperion and Hachette have my legacy pubbed books. In fact, I’m not losing anything. I’m just not earning what I’d be earning if I had those right back–to the tune of several hundred thousand bucks a year.

    • avatar
      David Gaughran says:

      Hi Joe,

      This is the weakest part of my argument – for sure. But I don’t know if it changes the general point. I’ll try and argue my case.

      A more accurate way to phrase what I was trying to say would be: “that’s potential revenue that publishers are missing out on.”

      As Scott noted, it’s possible for the pie to have grown to the point where the market can bear publishers making their regular sales (or more), and indies generating new additional business to sufficient for a large number of them to have infiltrate the higher reaches of the bestseller lists.

      And, I suppose, it wouldn’t even have needed to have grown that dramatically as indie books are priced cheaper. In other words, indies could be generating, for example, an extra 50% of unit sales, but, as their books are a third of the price, the market would only have needed to have grown slightly to accommodate this extra business. That’s plausible, for sure.

      I guess what I was trying to say in the article was this. Look at the overall Kindle bestseller list: indies have got roughly a third of the top-selling books. But if you look at the genres which went digital first, indies are capturing half, or more, of those lists.

      That would seem to suggest that indies capture a bigger slice of the pie for each demographic as they spend more time reading e-books.

      I think this makes sense. New digital readers are exposed to work from indies and self-publishers they never got a chance to see in stores. And they are reading it, and reviewing it, and spreading the word about it.

      The longer after they first switch to e-books, the more indie books they seem to read. In other words, the more exposed readers are to indie books, the more of them they buy.

      It’s not about that reader suddenly not becoming a Patterson fan anymore. It’s about him not buying Dan Brown anymore – who he was never crazy about to begin with, but it was all the airport store had. Now he has his Kindle, he can download whatever he likes wherever he likes – and a lot of that stuff he is buying instead of Dan Brown is going to be indie stuff, and some that reader’s dollars are no longer going into the large publisher’s coffers. In fact, I’m arguing that the proportion that will is going to drop over time.

      I haven’t stopped reading any of my old favorite writers – almost all of them published by large publishers. But, I’ve stopped buying stuff I was on the fence about. I’ve stopped taking risks with trade published stuff – I would rather risk $2.99 on an indie. I simply spend far less on books from large publishers than I used to – far less – and I would be surprised if that proportion didn’t drop further over time.

      Big Publishing is fighting battles on all fronts right now. Shedding writers may be a bigger factor in its decline over time, but I think this loss of business is hurting them too.


  8. avatar
    Scott Nicholson says:

    I agree, Joe–as I pointed out on David’s personal blog, we can’t assume the “reading pie” is going to remain the same size and that traditional publishers will have an ever-smaller slice of the pie. It could be both the whole pie and the publisher slice each get larger. I bet it does, for a while. And then, well, there will be some crumbs…

  9. avatar
    Sion Smith says:

    Nice post… taking a bit of a global view on this, Kate Bush releases her latest album in a week or so – on her own label. No help from record companies or high street distribution chains. It’s only a matter of time before somebody big figures it out…

  10. avatar
    J.A. Konrath says:

    I agree that publishers aren’t earning as much as they would be without indie publishing, and I agree with the examples you give.

    While I did not make the Kindle million club for this announcement, I just totaled up all of my Kindle sales. I’m in the Kindle 500,000 club. 🙂

  11. avatar
    James Bruno says:

    Two of my books have been Kindle genre paid bestsellers pretty steadily since early this year. My third, just released, has joined the first two in Kindle bestsellerdom. I’ve been featured on NBC’s Today Show, and in the Washington Post, Christian Science Monitor, Huffington Poast and other media. This comes after three good agents couldn’t land me a single deal with traditional houses. Like others here, I happened to climb onto the self-publish bandwagon just when it started to take off. I’m not looking back.

  12. avatar
    Terry Tracy says:

    I think the first part of the story about self-publishing is exactly what you reported: profit ratios, the Kindle effect, the fate of publishing conglomerates, etc.. But I think there is a second part to the story that will be coming down the road in about 2 to 3 years. How self-publishing is influencing literary trends and the role of book bloggers as partners in this phenomenon.

    Book bloggers escort self-published authors into the world of readers. They’re something like an 18th century society matrons introducing a young lady to eligible bachelors. Some book bloggers are very egalitarian and review a NYT best-seller one week and a self-published book the next and do not differentiate between them in their treatment. Many have a few hundred followers and some have more than thousand. I have had jumps in the sales of my book after a good review from a book blogger.

    Although bloggers help us enter the world of legitimate readers (not just our friends) and ease the stigma of self-publishing, it’s still there. Regardless of profit margin I agree that most self-published authors want to be part of the establishment. So in a way these book bloggers will be the front-line of literary scouts and these indies will be discovered and graduate to a traditional publishing houses. But I don’t see those writers as corporate sell-outs. I think new approaches and new sub-genres in writing as much as new talent are going to come inside the establishment through these book blogger scouts and the authors themselves. Writers can bypass the traditional route of creative writing programs and literary magazines.

    One emerging piece of evidence for this prospect is the science fiction & paranormal market. They were long treated with some disdain and so self-published authors filled the void and they seem to still as your numbers report. But I think the conglomerates and the literary intelligentsia will be persuaded as those sales figures increase. They cannot afford to ignore that market. They’ll start producing and that genre will get more respect, more writers, more ideas, and everything that comes with a new trend.

    Book bloggers and indie authors–it’s more than just sales. They will not replace the intelligentsia, but they’re going to make them listen and I think literature will be influenced. But that story is about two to three years down the line and a few iconoclast Phd candidates are going to have to introduce the idea to academia.

    It’s just a thought.


Trackbacks & Pingbacks

  1. […] In this week’s column for IndieReader, I show that a cursory glance the Kindle genre bestseller lists will show that the large publishers are losing readers in their droves to self-published work (which is not measured by the AAP). […]

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