The Cost of Kindle Select

I checked my balance on Smashwords this morning, as I do intermittently—Smashwords does not have anything like the real-time reporting of Amazon’s Kindle Direct Publishing so it is not nearly so addictive. I am not sure I completely understand Smashwords arcane system of accounting but I was pleasantly surprised to discover that I am owed roughly $150. That’s not a great deal for a 5 month reporting period but it’s all extra money, most of it earned in the past three months. That got me thinking about Amazon’s Kindle Select program and its exclusivity clause, the one that says you cannot sell your books anywhere else, not even your own website. It made it real to me that there is an actual cost to joining the program. In my case, let us just say that is $40 a month right at this moment in lost sales through Smashwords. Intellectually, I’ve always known this but it’s quite a different thing to have it demonstrated to you before your very eyes in terms of lost beer vouchers, to use a phrase from my long gone youth.

Let me just rewind a moment for those of you who do not know what Smashwords is. Smashwords is a website that allows you to upload and create your own ebooks. It distributes them for you, for a cut of your profits to Barnes and Noble, Kobo, Apple’s iBookstore, Sony and Diesel. It also lets you create discount coupons to sell your books cheaper or for free on the Smashwords site itself.

To tell the truth, Smashwords is a bit clunky, its reporting is arcane and it can be slow but, hey, it works. More to the point, it is the only way for a non-US resident like myself to get their e-books onto the Nook, and it provides free ISBNs that allow you to get into the Sony and Apple bookstores. (I do not know why Apple and Sony insist on this but they do and it can be quite expensive to block buy your own ISBNs.) On cheaper books Smashwords works on a different and slightly better royalty structure than Kindle. Buying from Smashwords also spares international readers the dreaded Amazon surcharge. On its own site, the ebooks you upload to Smashwords are available DRM-free and in a variety of formats to anyone who buys them. I believe this is a Good Thing. (I make all my books DRM free anyway on Amazon, but you can pick them up in a native format from Smashwords if you don’t have a Kindle.)

Anyway, let’s get back on topic. The cost of joining Kindle Select is an opportunity cost. By  not distributing anywhere else, I am losing out on that $40 a month. I am also losing out on something else; the chance that I might see a sales spike on B&N, on Apple, on Sony, on Kobo. I am not saying it’s likely but it is possible. My sales have grown by leaps and bounds over the past few months on Amazon, and I can’t rule out that the same might happen somewhere else.

After all, a great deal of the upward trend in ebook sales seems to be just compounding over time. It takes time to get embedded in the system and for word to spread through it. All the evidence points to Amazon’s system being better than the others for this, but there does seem to be some element of it in all the e-book stores from my limited reading on the subject. So by opting out of the Smashwords distribution system, I am saying goodbye not just to that $40 a month, but potentially a larger sum if my sales in those other venues achieve critical mass. I am not saying that this will happen but if I pull my books out now I will never know and I will lose the benefit of them having been in the system for all those months. There is also the fact that my $40 a month will most likely grow as I add more titles even if there is no spike.

I know I have just demonstrated in a very laborious fashion something that should be bloody obvious, but like I said before, it’s one thing to understand something intellectually, it’s another to feel it in terms of money actually missing from your wallet!

I am not going to get into the argument about whether Kindle Select is a move intended to grant Amazon a monopoly. (I don’t think it is or will but if it did that would not be a good thing.) I am just saying that looking at it from a purely selfish point of view, there are very definite costs that mean long term I won’t be using it for all my books. I am going to experiment with Amazon’s program in a limited fashion but I am going to keep the books that are already in Smashwords distribution in Smashwords distribution and I am going to approach Select very tentatively and in a (dare I say it, yes I do) selective fashion.

Comments

  1. I think it might be something that needs to be considered on a case by case basis. For me, Judgement hasn’t sold in several months on Smashwords. But after taking the Kindle Select option, making the book free for one day and getting nearly ten thousand downloads, the gains were hugely significant – at least, for me.

    What you say makes me inclined to believe K Select may be aimed less at pro writers such as yourself and more at the ‘indie’ writers like Fergus Bannon and God knows how many others. The sales such writers lose in markets like Smashwords is probably startlingly minimal, but if enough of them move over to Kindle Select, then even if each of those books sells only 1 or 2 copies via Kindle rather than Smashwords, I suspect the aggregate gain for Amazon might be substantial. Which is good for Fergus Bannon, but not so good for someone like yourself.

    By the way – I’ve noticed a definite and very significant spike in paid-for sales – fifty in the past week, which is more, really, than the book sold via Kindle in the entire past year. It’s had that many sales and more in the past via Smashwords, but it’s also clearly significant that this trailed off to zero as the Kindle market grew.

    • I completely take your point, Gary. I think whether to go with Select or not is a very personal decision. The only argument I can offer counter is that a few of the people that have done well out of the Nook ( better than on the Kindle in some cases) say that they have had their books there for a very long time. It is possible it just takes a lot longer to work your way into that system. That is purely anecdotal though. What you have is empirical proof that Select has worked for Mr Bannon. I fully intend to try Select with a few of my new books, just to see what happens. If it proves to work significantly better for me than broader distribution, I will, of course, follow the money. As I’ve said before, right now Smashwords and all its sales in aggregate represent 3% of my total sales (less in cash money, I just realised). I just don’t want to rule out any options at this stage.

      BTW excellent news on Fergus Bannon’s sales. Let’s hope they keep up. He deserves a wider audience.

  2. Isn’t this really just part of the increasingly complex commercial relationships authors are asked to work out? Time was – more or less – where an author would write a book, with an advance, perhaps, but under some fairly straightforward financial arrangement, who would then sell it to booksellers. As bookselling has become more competitive, and booksellers accordingly fewer, it seems to be the case that they’ve opted increasingly to influence the earlier or higher-up parts of the book-buying process as much as they can – there’s been the negotiated discounts for a long time, of course, or getting bundled in with 3 for 2 offers at places like Waterstones, then various exclusive deals in some cases, then latterly the bundling of digital rights, and now this. It’s not a particularly alarming trend in itself, but what does seem to be the case is that as these changes occur, publishers and retailers are much better placed to defend their interests (however much the publisher might think themselves pinched by the retailer) than is the poor old author. Insert a publisher into the kind of thing you’re doing here, Bill, and it’s presumably the author’s relatively meagre cut of the profits that gets cut even further to provide the publisher their share. I’m inclined to think of some of these problems as created by desperate publishers clinging on to increasingly inadequate models, but whether any of this offers a means by which an author might actually swing things back in their own favour, I don’t know. Your case is perhaps unusual – though there is no such thing as a typical author – and how the now quite complex demands of publishers and retailers might alter the publishing landscape generally, I’m not really sure.

    • “…an author would write a book, with an advance, perhaps, but under some fairly straightforward financial arrangement [WITH A PUBLISHER], who would then sell it to booksellers.”

      More speed, less haste, Keefe…

    • In truth Matt, with ebooks the relationship tends to be simplified, entire tiers of distribution are cut out. Effectively with KDP, for example, the book goes from you to Amazon to the reader. That’s it. The royalty arrangements are very different from conventional publishing as well. On books of $2.99 or less you get 35%, Amazon gets 65%. On books of $2.99 to $9.99, you get 70% and Amazon gets 30%. Over 10 bucks your royalty goes back to 35%. As I am sure you know this is very different from conventional publishing where I have gotten royalty rates of anything from 4% to 10% over the years depending on territory and format etc. Amazon pay monthly. No need to invoice either. It’s a very simple arrangement. The main relationship with ebooks is now between writer and reader, since Amazon tends not to get in the way. This is a tectonic shift in the industry. There will be fallout.

      • What I’m wondering, though, is how this all works for authors who have the digital rights for their books tied to a publisher – i.e. the ‘middleweights’, who aren’t self-publishing or on an indie, nor as established as yourself. I wonder what power there is to their elbow. It’s where the fallout comes, really – will it ultimately be traditional publishers who lose out, because they look increasingly unattractive propositions and can’t dictate the same terms, or authors who are squeezed further, or a particular strata of authors, such as newer authors, those stuck with a traditional publisher, etc. It’s also what all this means for the chances of varying ‘weights’ of author that seems difficult to predict at this point – what it might mean for promotion, new authors, etc. I’m sure many authors will win out – I just wonder who and how.

        • It kind of makes me think of punk back when I was a teenager. Some people got fed up with stadium rock and started doing things for themselves. Eventually some of those people ended up doing stadiums too but in the interim there was a tremendously vital, chaotic, exhilarating period. That’s kind of where we are now. The means of production just got democratised! Nobody knows how this is going to play out and all manner of things are possible. I am experimenting with some of them myself– short form novels I have always wanted to write but which no publisher would buy because they did not fit into a certain length bracket, cross-genre hybrids that marketing departments would (and have :)) hated, novellas even, all this stuff. I have not felt so excited about (get this!) writing in a long time.

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