Sunday, March 4, 2012

Will Amazon Become the Microsoft of Digital Publishing?

Consider this an imromptu blog consisting of an informal poll.

The matter of KDP Select has been on my mind for some time.

When Amazon first announced it, I had mixed feelings about it. I still do.

If you enroll your titles in KDP Select, you can't publish or promote or sell your work anywhere else. This means not publishing on Smashwords with the sole goal of having the title(s) distributed to the other major e-tailers: Kobo, Barnes&Noble, and iTunes.

Enrolling in KDP Select means people who read ebooks on a Nook, Kobo, Sony Reader, iPad/Apple device will never see your title available among the virtual shelves where they shop for and buy ebooks.

Does this concern you?

(Granted, Amazon has free apps which enable people to read Kindle ebooks on non-kindle devices, but how many people know about this and use such an app?)

For writers trying to make a name for themselves, should they be concerned with not having their work distributed to Nook, Kobo, Sony, iTunes, et al? And for writers who are already doing very well with sales of digital products, why is it that so many of them are enjoying sales almost exclusively through Amazon?

It seems Amazon is giving writers something for their pledge of KDP exclusivity in the form of the borrowing fee. But how many borrows are they having? And why has the borrowing royalty decreased from $1.70 to $1.60? (Thank you to thriller writer Russell Blake (@Blakebooks) for bringing this to my attention.) And is this decrease going to become a trend?

What is Amazon's goal here? To continue to garner more of the ebook market? That's likely a given. But is there something else at work? I can't help but wonder.

This whole thing smacks a bit of the trouble Netflix encountered recently when they screwed around with their business model. Netflix raised their prices and split their service into streaming/mail-only DVDs. This pissed off A LOT of people. A LOT. Of people. As a result, a lot of people cancelled their Netflix subscriptions; if memory serves, it was something like a million people in a day or two. It was a lot. Their CEO had to more or less admit he'd done something stupid and beg everyone to come back.

Why couldn't they simply have left well enough alone?

Why don't oil companies and insurance companies and automakers agree to lower their prices and pay their employees more in exchange for a BIT smaller profit?

Rhetorical questions, those.

This whole thing also reminds me of when I was a kid and one of the fundamental dilemmas of our existence was "Apple or IBM/PC?" And "Atari or Nintendo?" In more modern times it might be "Playstation or XBox?" or "iPhone or non-iPhone?"

Will we soon be faced with "Amazon or non-Amazon?" Will Amazon become the Microsoft of digital publishing, along with the (allegedly) nefarious reputation? I truly hope not. According to thriller writer Joe Konrath (and survivor of the the 30-Day Beer Diet!), Amazon understands the digital revolution and the new publishing paradigm better than anyone else (ie traditional,Big 6 publishers). I truly hope so.

So, if you're a writer, will you be enrolling your titles in KDP Select? Have you already done so? If so, why? If not, why not?

And if you're someone who enjoys and regularly reads/buys ebooks, where do you usually purchase them? What device do you use? Do you have an Amazon Prime membership? And do you borrow books? Does the idea of a great Amazon Library appeal to you?

Thank you for sharing any thoughts you care to express.


  1. Hi Ryan,

    I just released my first book and I opted to put it everywhere. While I understand the way that Amazon is wanting to go and fact that it does give it's authors a portion of the "lending library fund" if they go the route of KDP Select, I cannot help but wonder if it's worth it? I have a Kindle to PC app on all of my computers and the app on my Blackberry. I can download Mobi files from Smashwords and from there I can load them into my Blackberry if I so should choose. Will I go completely Amazon? Probably not. There are quite a few readers that are against the Kindle - why would I want to alienate them? And to be honest, Amazon pays out the lowest royalties. Does the addition of the "lending library fund" and the potential of some extra royalties outweigh my books availability across all POS markets? Not in my book...

  2. Thanks for the comment, Julianne.

    You stated a lot of what's been going through my mind about being on multiple platforms and being available to as many readers as possible.

  3. Excellent blog Ryan and I agree about these huge companies and would add why don't they pay less dividend to their shareholders and keep the price of their products down? My answer - greed!

    1. Thanks for the comment, David.
      I don't have a problem with free-market capitalism, as it is supposed to use things like supply and demand and product and service quality to regulate prices. Make a good product and people will buy it if the price is acceptable or a price that the market will bear.

      That being said, it's always seemed to me that if a company which regularly shows profits in the billions-with-a-B, why not reinvest some of that capital back into the company in the form of profit sharing for employees or a decrease in pricing for the customers. This would show concern and a desire to share, which would then build loyalty. It seems there's not much loyalty anymore; price is what's important and everybody expects something for nothing.

  4. This is one of those "it all depends things." KDP Select is a tool, nothing more. It may or may not be the right tool for a given author and a given book at a given time. It's also not an all or nothing forever sort of thing. Worst case scenario? Your book is an Amazon exclusive for 90 days. That 90 days isn't going to kill you either way: digital is forever, as Joe Konrath likes to say, and you have to be in this for the long game.

    On the other hand, it may not be for authors who have a significant stake in other platforms. In my case, over 95% of my royalties are from Amazon, so putting one or more of my books in Select isn't going to have a significant impact on the other segments of the market. For other authors, that may not be so. It's a business decision that each author has to make for each book.

    I have several books in KDP Select, and plan to keep them there because the program has had a major positive impact on their sales. I've tried a couple other books that didn't see similar results, and those I'm taking out and putting back into general distribution.

    I also don't plan on putting newly released titles into KDP Select, at least initially, because demand for them (hopefully!) will be sufficient that they won't need the promotional horsepower of Select to get them to sell at least reasonably well. And this will also get them out into the hands of readers using other platforms.

    As for the per borrow payout decreasing from $1.70 to $1.60, in February it went up to $2.01. This isn't Amazon monkeying with numbers, it's simply a per-share basis of the pot of money Amazon earmarked vs. the number of borrows. That number will fluctuate every month, and will probably be lowest during peak shopping periods when there are floods of new Kindle owners who also join Prime.

    And the reason Amazon doesn't leave well enough alone is that they are innovators. That's why they've been so successful. "Leaving well enough alone" is the business model used by the Big 6 publishers, and that's why they're going out of business. Yes, Amazon's in the game for profit - that's what business is all about. But they're savvy and smart, albeit not perfect.

    With the Select program, the other thing you have to keep in mind is that Amazon isn't just a bookstore like B&N. There are lots of wheels turning: book sales, Kindle sales, all the many spinoff opportunities from Prime, etc. So when they do something like Select, they're often looking to leverage several different profit streams...

  5. Thank you for weighing in on this issue, Mike. And with your typical acumen.

    Thank you, particularly, for clarifying that the per borrow payout is a function of the number of books borrowed vs. the monthly dollar amount allotted. This makes sense. And is less sinister.

    And you're right about Amazon being an innovator. I do not mean to suggest that they're a big, bad, evil conglomerate and we should all go elsewhere. I am however trying to look down the digital road a year or three or five to see where things are going.

    We watched "Moneyball" with Brad Pitt last night, the story of the 2002 Oakland A's and their 20-game win streak that resulted from Billy Beane's unorthodox team-building strategy. That was an innovation. According to the film (which was excellent), Billy wanted to change the game of baseball for the better. It may well be that Billy Beane and Jeff Bezos would have a lot to talk about.