Publishing is a crucial step to becoming a highly paid author, but that’s not how most writers see it! Most writers see publishing as the final goal. “Once I get my book published, I’ll have it made!” is a fantasy that far too many writers delude themselves into believing.
Most traditionally published authors I know earn very little, if anything, from their books. Some earned small advances of a few thousand dollars, while others received even larger advances. Regardless of how big the advance was, the vast majority of authors never received a royalty payment because the book sales aren’t enough to earn out the advance.
Marketing is another crucial step to becoming a highly paid writer – and because most authors don’t even understand they’re responsible for marketing, they never sell enough books to earn a substantial income. If you’re hoping to get published, and that will solve all your problems, you’re in for a rude awakening.
In the old days, everyone knew what you meant when you said “my book is published.” Today, that could mean many, many different things.
Is your book published by a Big Five publisher, a traditional publisher, an ebook-only publisher, a small independent publisher, a self-publishing firm, or something else? Did you self-publish it? Is it published as a paperback, hardcover, ebook, audiobook or app? Is it distributed through Amazon, iBooks, Barnes & Nobles, Kobo, Smashwords, or one of the thousands of other book distributors?
The options for publishing today are too many to count. Because the publishing industry has changed so drastically over the last few years, most writers are still struggling just to understand what publishing is anymore. Well, I can tell you one thing – it’s not what it used to be!
A few years ago, everyone was talking about the differences between self-publishing and traditional publishing. But even in the last few years, the changes in the industry have been astronomical. There are more self-publishing options today than there ever have been. And there are more distribution channels for books than there ever have been before, and most of the books now sold are sold through distribution channels that didn’t even exist just a few years ago! Add to that the fact that ebooks now outsell physical books by over 30%, and you begin to realize just how drastic the changes in the industry have been.
But even though these changes have come so quickly to the publishing industry, the perception of most writers hasn’t changed at all. Most writers I talk to today have a simple plan: spend a few years writing a book and then get it published by a traditional publisher and live happily ever after.
The problem with this plan is that the odds of being successful are lower than the odds of winning the lottery!
First of all, the number of new authors becoming traditionally published has been in decline for several years.
Secondly, if you’re lucky enough to get a publishing contract today, chances are you will never earn out your advance – meaning you won’t ever actually earn any money other than your advance.
And third, if you spend a few years writing your book, who knows what the industry will be like by the time you’re ready to get it published?
At the rate things are changing now, chances are that in 5 years traditional publishing as we know it won’t even exist. By 2016, Pricewaterhouse Coopers projects consumers will spend more money on ebooks than physical books. Today, consumers already purchase more ebooks than physical books, but since ebooks are much cheaper, consumers are still spending more dollars overall on physical books – but not for long! So what will a traditional publisher even do in a world where physical books are only a tiny fraction of overall book sales?
Answer: they will become printers who have relationships with distributors, a shell of what once was the centerpiece of the publishing industry.
So instead of focusing on the differences between traditional publishing and self-publishing, I’d like to share with you the various pieces of the publishing puzzle and how they fit together so that you can:
1) understand the publishing environment as it is today
2) determine which of the many publishing opportunities are right for you
3) understand the costs and benefits of various publishing routes
4) understand how and why the industry is changing so fast – and where it’s headed
What Publishing Is
Publishing today can mean many different things. First of all, the question you must ask is, “What kind of book do I want to publish?”
There are dozens of book forms that can be published including paperback books, hardcover books, ebooks, audiobooks, and specialty books (like pop-up books). What formats do you want your book to be published in?
Publishing Industry Data
It’s very hard – no, impossible – to find reliable data for book sales. I’ve done the research and pieced together data from different sources to try to give you the big picture of what’s happening now in the industry, where we’ve been heading and where we’re likely to end up in the future. Please realize that all this sales data is biased, and none of it should be seen as “the truth”. But it is the best data there is, and the picture of what’s happening in the industry is quite clear if you learn how to read the data.
In 2011, according to Pricewaterhouse Coopers, the Total United States Consumer book market was $19.5 billion (note: different sources, such as AAP, will quote very different dollar values of the book market based on the limited data they’re reporting. The real number of the U.S. is close to $20 billion). That number is expected to grow to $21 billion by 2016. That’s about a 1.1% annual growth rate, which actually a negative real growth rate when you take into account inflation, which is much higher than 1.1%.
So what does this data show us? First of all, this data shows us that the US consumer book market is very big – $20 billion is a lot of money. Secondly, it shows us that the market is actually declining. Even though the market is growing by a nominal 1.1% a year, that growth rate becomes negative when inflation is added to the equation. This means consumers are spending slightly less value each year on books. I use value here instead of money because consumers are spending more dollars on books each year but the dollars are worth less.
According to AAP, ebooks accounted for about 22% of all book sales dollars in 2012. AAP reported that the ebook market in 2012 grew by 46% in the US and 44% in the UK.
According to AAP, the US downloadable audiobook market in 2012 was $87 million, and grew at a rate of 20-30% annually. So downloadable ebooks make up about 1% of the total US book market.
I created a pie chart based on these numbers that you can see below to get a visual representation for the current book market in 2013, and what the market is projected to be like in 2016. Study these charts well because they may hold the key to your financial future as an author.
Estimated Chart of US Book Market 2013
Projected Chart of US Book Market 2016
Based on the best data and projections we have, you can see that the ebook market is about to grow over the next 3 years from $4.4 billion to over $10 billion, the physical book market is about to shrink from over $15.4 billion to $10 billion, and audiobooks will grow from $200 million to over $750 million.
Of course, all this data is really just a best guess from some of the best financial minds in the world – and no one can truly predict the future. So the numbers could vary significantly. But my best guess is that the ebook market will be between $9-$12 billion, physical books will be $8-$10 billion, and audiobooks will be $400 million to $2 billion (I believe audiobook sales will grow much faster over the next few years than the experts project due to innovations in audiobook technology that will make it easier than ever to create, purchase and listen to audiobooks.)
Regardless of how accurate the actual numbers are, everyone who knows anything about the industry knows three things for sure:
1) Ebook sales will increase dramatically
2) Audiobook sales will increase dramatically
3) Physical book sales will decrease dramatically
And even though we’ve only discussed the US market here, the same holds true for every other major book market in the world – the UK, Europe, Asia and South America. Ebook and audiobook sales will continue to grow rapidly while physical book sales will continue to decline rapidly.
So what does all this mean for authors like you and me? It means one thing for sure: if you’re hoping to earn a living selling physical books through the old and outdated traditional publishing system, your chances of success are poorer than ever before and only going to get worse!
On the other hand, if you plan on selling ebooks over the next few years, chances are you will join the huge pool of authors who are earning a significant income selling ebooks. As they say, “a rising tide floats all boats.” And trust me when I tell you – the tide of ebook sales has only just begun, and will continue to rise rapidly.
The only question is – will you join us?