On this episode of the Self-Publishing with ALLi podcast, Dan Holloway takes a close look at Amazon’s new book discovery algorithm and how it may be impacting indie authors’ visibility and sales stability. He contrasts the uncertainty of platform-dependent publishing with the growing reliability of direct sales, particularly through Substack, where income trends show consistent returns for authors building engaged readerships. Dan explains what these shifts mean for indie authors trying to build sustainable careers in a changing marketplace.
Listen to the Podcast: Amazon’s New Algorithm Shakes Up Book Discoverability
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About the Host
Dan Holloway is a novelist, poet, and spoken word artist. He is the MC of the performance arts show The New Libertines, He competed at the National Poetry Slam final at the Royal Albert Hall. His latest collection, The Transparency of Sutures, is available on Kindle.
Read the Transcript
Dan Holloway: Hello, and happy Halloween from the Self-Publishing News podcast.
Talking of all things terrifying, let's start with Amazon's new algorithm.
In the late summer, Amazon launched a new discovery algorithm for recommending books and putting recommendations in front of readers. I believe it's called A10. So, it is literally only 14 iterations from being an actual act of horror; drop a comment if you get that reference.
Dan Holloway: There have been reports, and there always are when Amazon changes it's algorithm, that this is really affecting, in particular, the volatility of sales for indie authors.
This is something that I remember as far back as I have been self-publishing, as far back as Kindle has existed, there have been discussions of whether the algorithm is changing and how that is affecting sales.
The fact is, when algorithms change and alter the way that they bring books to readers, it can make it really difficult as an author to plan. Obviously, one of the most important things as an indie author is being able to come up with a system that works and then replicate it.
Dan Holloway: So, one of the books that I've been reading this year, a fabulous book that many of you will have read called How Big Things Get Done, which is all about megaprojects and the steps to making sure that your mega project, which could be something like building a new city, or it could be something like writing a book, how to make sure that they don't go over budget and over time.
One of the key things that the authors of that book point out is what they called “finding your Lego”, which is breaking things down into replicable chunks. As an indie author, we know that if you want to be financially successful, you need lots of titles. If you need lots of titles, then you need ways of bringing your books to market where all the gubbins around the book is something that you can put into an operating procedure and then replicate time and time again, and that includes your metadata, your description, your cover, how you present your book.
When Amazon changes its algorithm, that makes it really hard to do that, and this is what authors are reporting.
Really fascinating article in The Bookseller. So, our very own Orna has been talking about this. Everyone in fairness who is talking about it, Orna included, is coming up with the usual and very wise caveats that obviously you never know how much influence is down to a new algorithm or not.
Nonetheless, it does seem as though there is some impact on discoverability and Orna makes the point that this is a really important point to consider when considering how to publish your books, and it's one of the pluses of direct sales, is that you free yourself from this sort of variability and you have something that's much more manageable and much more controllable.
Anyway, how is the algorithm affecting sales? One of the really interesting points in there was Rachel McLean, who is someone who will be familiar to many of you, an absolute indie hero who has won the Kindle Storyteller Award in the past. She says that she has not actually seen much volatility in her sales, what she has seen is more volatility in her best seller rank.
One of the reasons for this may be, and I think this is something, that Orna is talking about as well, that the new algorithm is more aimed at producing something more stable and sustained in terms of the way that lists are presented to readers and not what has tended to be the case in the past, that you can stack things up for your launch, get a really big spike, a really good bestseller position, and then the book suddenly disappears.
So, that's one of the suggestions that actually this is more about stabilizing the way that books appear in the bestseller list.
And some really interesting stuff from Kindlepreneur's Dave Chessen, who says that the new algorithm is trying to place your book.
So, what it's doing is it's taking all your metadata and it's trying to examine that metadata to figure out what kind of a book it is you're selling, where to position it so that it finds the right readers, and one of the things that will affect how prominently it displays your book is how confusing or how easily legible those metadata are, and the more easy it finds the task of positioning your book, the more likely you are to appear higher up in that category. And the harder it finds it to position your book, the less likely you are to appear in a bestseller list or to appear prominently displayed, because the algorithm doesn't know where to display you.
So, really interesting stuff. As I say, it is something that is always a bit of a headache, is how do you manage algorithms to ensure that you don't have to spend all your time managing algorithms, but that you can actually put a system in place that works time and time again.
Dan Holloway: One of the few ways you can do that is direct marketing or direct sales. There has been a lot of talk about direct sales recently.
Substack Revenue Figures Show Automation Pays Off
Dan Holloway: One of the interesting things I came across this week was some stuff about Substack's revenue figures. Substack, obviously, is a newsletter platform. Long-form newsletters are a really good way of producing something that is very replicable. You can do the same thing time and time again to a particular format for a particular kind of readership.
One of the things that was really interesting about the figures in Substack was they suggest that doing this just works. It's not about finding a magic formula. It's not about getting yourself to the top of a bestseller list so that you get extra prominence, extra visibility, and then it becomes a self-fuelling thing. Rather, unlike a lot of what we are seeing in many platforms where you do have to get yourself right to the top and most of the income goes to the very top couple of percent of creators, on Substack it's much more evenly spread, and actually of all the different income brackets or subscriber brackets, the one that has the largest proportion of the income at just over a third, 36%, is for writers who have 10 to 50,000 subscribers.
So, that sounds like a lot, but there are two tiers above that. There's the hundred or three tiers above that, 50 to a hundred thousand, a hundred to 500,000, and half a million and more.
And actually, it's not the half a million and more newsletters that have the really big revenue, most of the revenue is in some of these ones in the middle, so 36.6% for the 10 to 50,000 subscribers. Further, 21.3% to the 100 to 500,000 subscribers.
The amount of money that people are earning with this number of subscribers basically equates to a dollar a year per subscriber or just over. So, for those in the 10 to 50,000 subscriber bracket, it's an average of $55,000 a year.
This seems to be based on an average conversion rate of subscribers to paid subscribers of about 2% to 3%. So, of every hundred subscribers, two or three are going to pay for a subscription, and most people who pay for a subscription pay $50 a year, which is what Substack recommends that you charge as your default.
So, if you do the maths, that sort of fairly simply adds up to one and a half dollars per year, per overall subscriber that you have.
This is a metric that is the same whether you have under a thousand subscribers or more than half a million subscribers, and that's really interesting because that tends not to be the case in other platforms.
So, it's a really interesting contrast, these two stories this week, because at the heart of them is this very important question to us of, how do you minimize the friction involved in or around your writing so that you can just concentrate on the writing because everything else is automated?
Changing algorithms is a really good example of something that makes automation hard, and a very predictable growth curve like you see on Substack is a really good illustration of something that makes automation simple.
Dan Holloway: With that, I will wish you a happy, as I believe when this goes out, it is now All Hallows Day. So, happy All Saints Day. Happy Winter, or indeed, happy summer for those of you in the Southern hemisphere.
I very much look forward to speaking to you again same time next week.
