One of the favorite topics of discussion for people in the publishing industry is. . . the demise of the publishing industry. From the rise of the evil empire of Amazon, to the proliferation of self-published books, to the relentless consolidation of publishing houses, signs abound that the publishing industry is “not what it used to be.”

Industry statistics support the anecdotal evidence. After peaking in 2007, U.S. bookstore sales have declined 42%. The traditional book publishing industry overall in the U.S. contracted 17% over the last decade—from $32.4B in 2011 to $26.8B last year, declining 3% per year on average. That’s not a healthy industry.

A recent Twitter storm precipitated by a post by the author April Henry shows just how bad things have become in the traditional book publishing industry. Henry cited statistics disclosed in the Penguin Random House/Simon & Schuster antitrust trial, claiming that of the 58,000 trade titles published per year (these are the “best” books by the “big five” publishers), half sell fewer than one dozen copies and 90 percent sell fewer than 2,000 copies. Although other authors and publishing experts have disputed these numbers, with one asserting that, never fear, it’s only about 15% of trade-published books that sell fewer than a dozen copies and that 7% sell more than 10,000 copies (phew!), the data is undeniably depressing. The New York Times reported that 98 percent of published books released in 2020 sold fewer than 5,000 copies.

And these data are for the ostensibly best and biggest publishers. It doesn’t even include the sales of self-published books, which have exploded in recent years. None of this should come as a surprise. Like any market, the book industry is governed by the laws of supply and demand. As the traditional publishing industry has struggled due to low demand from readers, a vibrant new opportunity has flourished thanks to the supply of authors. That leads me to the core thesis of this post:

The real publishing industry today is not selling books to readers, it’s selling services to authors.

Obviously, the exponential growth of self-publishing has fueled this parallel new author-focused publishing industry. According to ProQuest Bowker Report, nearly 1.7 million books were self-published in the U.S. in 2018, up 264% in 5 years. By 2019, the total number of books published in the U.S., both traditional and self-published, exceeded 4 million. That’s incredible growth, and a lot of authors looking to hire help to publish and promote their books. The entrepreneur in me says, “Market Opportunity!”

The interesting question is whether this new author-driven publishing industry is already bigger than the gradually declining traditional reader-driven publishing industry. Although reliable statistics are hard to find, my firm belief is that yes—yes, it is.

The reason I believe this is that publishing a book is not inexpensive. As I can attest.

Although I worked with a great independent publisher, I still shouldered most of the the costs of publishing and promoting my book myself—including hiring editors, designers, and publicists. Even traditional big five publishers have had to scale back the support they offer authors, since it only makes it harder to be profitable. It’s a matter of simple math. For the 98% of traditionally published books that sell fewer than 5,000 copies, the publisher only stands to make $20-30K . . . best case. That implies a very small budget to edit, produce, distribute, publicize, and promote a book and remain profitable. So publishers are naturally reducing their advances, minimizing their investment, and pushing more of the financial risk to authors.

There’s a favorite joke among winemakers: How do you make a small fortune in the wine business? Start with a large fortune. The same seems to be increasingly apropos of writing books. Although each author’s personal investment in their book will vary, the vast majority of those 4 million authors will lose money on their book

As an author, there is a never-ending smorgasbord of vendors offering to help your book become the next bestseller. From ghost writers to copyeditors, proofreaders to publicists, nearly every resource you could possibly need is available for hire. Entire marketplaces like Reedsy make it easy to find and hire talent. And once the book is finished, there are even more ways to spend money promoting it. Need book reviews? You can buy those. Want an award? Pay to submit your work. Need media coverage? Hire a publicist. Want sales? Buy ads on Amazon or Goodreads or "Boost" your posts on Facebook. Since my book launch, an entire cottage industry of service providers have come out of the woodwork offering to promote my book in everything from paid reviews to Bookstagram “influencer” campaigns.

While authors can spend a nearly limitless amount to publish and promote their work, the challenge they face is the same one crushing the traditional publishing industry: the more you invest, the more you need to sell to break even.

Let’s take the case of a truly self-published work, usually via Amazon where the author makes 60% of the sale of their book, and assuming a generous average sales price of $16 (most self-published titles sell for well below that amount). The typical self-published book costs the author about $2,000, but the investment by an author can vary—from a low of around $1,000 to a high of $20,000 and up. Here are some hypothetical investment levels, depending on the budget of the author, and what is required in terms of book sales to break even:

The challenge is that it’s extremely unlikely at any of these investment levels, that the sales of the book to readers will surpass the money spent by the author on service providers. That means the vast majority of authors will spend more to publish and promote their book than they will make from selling their book. Which is why I conclude that the industry of selling services to authors is already bigger than the “traditional publishing industry” of selling books to readers.

Even with the advantages of an award-winning independent publisher that I love (SparkPress) with high editorial standards, expert resources, and traditional distribution to bookstores across the country, I will be hard pressed to break even on my personal investment in publishing Bit Flip. Seeing these statistics on book sales by big five publishers makes me feel much better about my sales figures to-date, which already have me in the top quartile of book sales after only one month! With the average U.S. book now selling fewer than 1,000 copies over its lifetime, I'm hustling to be the book that breaks out.

I’m fortunate enough that I don’t need to make a living from my writing (not even sure that’s possible anymore). Further, I can rationalize my investment as building for the long-term, since I have already written my second book and plan to publish multiple books. But the reality is increasingly undeniable—as production exceeds consumption, the growth market is on the supply side.

The Real Publishing Industry