Kindle Review – Kindle Fire Review, Kindle 4 Review

The Kindle has seen a deluge of $1 books from indie authors. Now, we have Amazon and publishers getting into the game too – Alone by Lisa Gardner is at $1, Old Town is at $1, Stalina is at $1, The Summer Son is at $1, The Hangman’s Daughter was at $1 before it went up to $3.99.

Here’s a question -

If $1 is what lots of authors are using to get into the Top 100, how long before everyone has one or more books at $1?

It’s not a hypothetical question. Consider this list -

1. Hangman’s Daughter is at $3.99 but it used $1 preorders to get into the charts. 
2. Switched is hovering between #2 and #4, and is at $1. 
3. Alone by Lisa Gardner is at $1, and it’s at #6.
4. Saving Rachel by John Locke is at $1, and it’s at #13. 
5. Deed to Death by D. B. Henson is at $1, and it’s been in the Top 100 for 224 days. It’s currently at #25.
6. Amanda Hocking has another $1 book in the Top 50 – My Blood Approves is at #27.
7. Where There’s a Will by Katriena Knights is at $1, and at #30.
8. Another John Locke book, Lethal People, is at $1, and at #37.
9. Her Last Letter by Nancy C. Johnson is $1 and at #39. It’s been in the Top 100 for 71 days.
10. Not What She Seems by Victorine E. Lieske is at $1, and at #44.
11. Impetuous by Lori Foster was $1 for a long time. It’s managed to stay in the Top 100 for 50 days. Now it’s at $3.38 and down to #50.

Apart from Lisa Gardner and perhaps Lori Foster, none of these authors would have been very likely to make it to the Top 50 without the $1 price. They are taking up spots that $10 and $12.99 books would have taken. Add on the books priced between $1 and $5, of which there are 9 in the Top 50, and we’re seeing a huge shift.

Is it going to become vital to price books at $1 and $5 to be in the Top 100?

Yes. Without a doubt.

We already have 24 out of the Top 50 at $5 or below, 10 of which are priced at $1. Remove the newspapers and magazines and we get two interesting figures -

1. Nearly 25% of books in the Top 50 are at $1.
2. Nearly 50% of books in the Top 50 are at $5 or less.

A year ago there used to a handful of books below $5 in the Top 50 – between 5 and 10, sometimes less. It’s hard to get an exact read because it was a combined list with free books and paid books However, if you had weeded out the free books, you would have found hardly any books below $5 in the Top 100. $9.99 ruled. Publishers blew up $9.99, and now they get the infinite joy of watching $1 and $5 books rip them to shreds.

For better or worse, we are seeing a situation where authors have to figure out how to survive on books priced at $5 and below. For indie authors it’s even tougher - they have to figure out how to survive on books priced at $1 and $3.

Can authors survive on $5 books?

Let’s do a simple guesstimate -

1. Let’s assume a $5 book that makes it into the Top 50 spends an average of 25 days there. 
2. Let’s assume that the #1 book in the Kindle Store sells 10,000 to 20,000 copies a day, and that the 50th books sells 250 to 500 copies a day. 
3. Let’s assume that across its 25 day stay in the Top 50 the $5 book sells an average of 700 copies a day.
4. 70% of $5 = $3.50 per copy. 700 copies per day for 25 days = 17,500 copies. That’s $61,250.
5. So the $5 book is making $61,250 which is split between Publisher, Author, Agent, etc. Let’s say the author gets 40% which equates to $24,500. 

$24,500 from a $5 book that’s a hit isn’t bad. It’s a start.

Let’s assume that ebooks grow from the current 10% to 70%. Competition increases, and other factors kick in, so let’s assume the effective increase in the market is not 7 times but 4 times. That would mean a $5 book that makes it into the Top 50 and does well would generate $98,000 for its author.

Could an author write one such book every year and earn $98,000 per year? You would think so.

Could an author write one such book every 3 months and earn $392,000 per year? It’s possible though not probable.

It should be pretty obvious that $5 books are a very viable proposition – at least for authors.

Can indie authors survive on $1 books?

Indie authors are in much more trouble than authors. They have to compete against established authors like Suzanne Collins at $5, and against superstar authors like John Grisham at $10. They even have to compete against $1 books from Lisa Gardner, $2 books from Brad Meltzer, and against the $4 The Lost Symbol.

Their only hope is to price their first book at $1 and price subsequent books at $1 to $3.

Is this a sustainable model?

Well, let’s do guesstimates using a few hypothetical scenarios.

Scenario 1: The solitary $1 indie book

All the same assumptions as the $5 book.

1. We get a 25 day stay in the Top 50 with 700 copies sold per day.
2. This time the author is getting just 35% of $1 which is 35 cents. That’s one-tenth of what the $5 book is earning per copy.
3. It translates to a paltry $6,125.

While there are enough indie authors who would be perfectly OK with selling 17,500 copies of their book, and earning $6,125, that isn’t what our question was. Our question was -

Is there a way to make a living on $1 books?

Well, you might say that when ebooks have 75% of the market the earnings will be 4 times – translating to $24,500 per book. You might even say that an indie author could write two such books per year and make $49,000 per year.

It’s certainly an interesting possibility. It’s remarkable than even while earning just 35 cents per copy, indie authors have a shot at making a very good living – Provided ebooks really, really take off.

There are, however, two other possibilities that are far more enticing.

Scenario 2: The $1 left with the $3 right

Again, it’s the same assumptions. Except here we have the indie author releasing one $1 book per year and one $3 book per year.

The $1 book earns her a paltry $6,125 and the $3 book earns her a healthy $36,750. And that’s right now – at the beginning of the rise of ebooks. If ebooks take off she would be earning $24,500 from her $1 book, and $147,000 from her $3 book.

That’s a very healthy figure.

However, our third scenario is the one that’s really mind-blowing.

The problem of the one-off super winner

What throws everything into disarray, and seduces all indie authors into going with $1, is the one-off case of an indie author who hits the Top 10.

That’s an author selling 2,000 to 5,000 copies a day. That translates into $700 to $1,750 per day in earnings if it’s a $1 book. If she stays in the Top 10 for 50 days - she’s made $35,000 to $87,500.

Now, contrast the difference -

1. $1 Indie Author book hits the Top 10 – Generates $35,000 to $87,500. 
2. $3 Indie Author book hits the Top 50 – Generates $36,750.
3. $5 published Author book hits the Top 50 - Generates $61,250, out of which the author gets $24,500.  
4. $1 Indie Author book hits the Top 50 – Generates $6,125.

The first two scenarios are so attractive that lots of indie authors and some published authors will take a shot. They might end up in the 5th scenario or they might never make it to the Top 50. However, the possibility that they hit the Top 10 and earn $87,500 in a 50 day stretch is too enticing for them to turn away.

Almost every single indie author, and lots of published authors, will end up going with $1 and $3 and $5 books.

Additionally, whether or not an author wants to go with low-priced books, it becomes necessary – How can a $10 book compete with a $1 book? How can a $10 book compete with 10,000 $1 books?

Is there a way to make a living on $1 books?

We end up with a rather interesting answer to our question -

Yes, there are a few ways to make a living on $1 books.

1. You can hope that one of your $1 books, and one of your $3 books, make it to the Top 50 every year.
2. You can hope that your $1 book hits the Top 10.
3. You can hope that Amazon starts giving a 70% cut on books below $3, and that two or more of your $1 books hit the Top 50 every year.
4. You can hope that the ebook market increases to 75% of books, and that one or more of your $1 books make it to the Top 50 every year.

Please do keep in mind that it’s only the top 0.1% of authors selling their books for $1 that will be able to live off of book sales. Also, you’ll have to be prepared for the time when Lisa Gardner isn’t the only top author selling her books at $1, and when 90% of indie authors realize that they must come in at $1 to have any chance.

Filed under: thoughts Tagged: | future of books, kindle analysis