E-Books: The Content Wars Begin

When I signed into my KDP account today there was a new banner right beside the logo announcing KDP Select and showing a link to the details of the new program. (For those of you who do not know the acronym, it stands for Kindle Direct Publishing and it’s the arm of Amazon that lets me distribute those ebooks you see in the right hand column of this blog.) The basic information is interesting.

In return for going exclusive with Amazon for 90 days you get access to some bonus features. You can make your book free for 5 days out of 90. (This is a bigger deal than it seems since free can be an important promotional tool and it is very difficult to get your book to go free on Amazon without jumping through a lot of hoops. This is particularly true if, like me, you don’t live in the US.)

Perhaps most interestingly Amazon has established a fund of half a million dollars from which it will pay out a lending fee to those whose books are borrowed in December. This library is open to its Prime customers. Amazon is apparently going to be doing this every month from now on. This is a bit like the Public Lending Right system that the UK has except that it is being used by a private company.

I suspect some people are going to make a fair bit of cash from this to begin with, mostly the people who are already doing well from ebooks, and maybe a few others if not very many people sign up. However long term I am not so sure this is a great benefit for writers although it is for Amazon. It effectively establishes a fixed amount for them each month to provide a well of free content for their Prime subscribers.

It’s worth taking a moment to think through some of the implications of this. This is a prototype subscription model. It takes a fixed amount of money and it divides it among a number of suppliers whose content is then going to be made available to Amazon’s fee paying Prime Members. Remind you of anything? Of course, Netflix, HBO, your cable supplier all use a similar model. It has one huge advantage for Amazon though—Amazon gets to set how much money it’s prepared to spend each month. It is not being negotiated with the providers save by an opt-in or opt-out measure.

Don’t get me wrong. I don’t think this need necessarily turn out to be a bad thing or that it’s the final model. I think this is a scale model, being run with indies as guinea pigs, to see how this whole system will work out. If it works fine. Amazon will then have a working prototype for something bigger that it can show to the big boys in New York or London. And by big boys I don’t just mean publishing houses, I also mean megastar authors. This is a whole new revolutionary system as far as the book business is concerned, a whole new business model. Nothing like it has been seen in the business of publishing before, other than the limited state sponsored initiatives by the British, Irish and German governments and these were not meant as business systems at all.

What are the benefits for Amazon: lots of exclusive content. Short term: a small perk for its Prime customers.  Competitors locked out. At first in the relatively unimportant indie market (sorry fellow indies but its true) and possibly in the much more important big publishing markets if  Amazon can make the system fly. It’s not about locking out Big Publishing either. I am sure Amazon would be delighted to cut a deal with New York. It’s about the competition with Apple and Google and Microsoft and whatever new disruptive competitor might leap into the market. It’s about being a monopoly on distribution or part of a limited monopoly (an oligopoly if that’s the word.)

As an indie writer, what are the consequences for me? I will try it. The truth is that Amazon represents something like 97% of my sales anyway. I can’t do it with the old books because they are quite tough to pull out of general distribution. I was thinking that freebie promotions would be a good way of boosting sales on a series and you would only need to go exclusive with the opening book in the series. It did not too long to spot the flaw in my logic there. (It’s not much use making all the other books in a series non-exclusive if readers can only get the first book from Amazon!) I strongly suspect that going exclusive with Amazon might lead to a little extra cash for a writer like me, and a lot of extra cash for the big name indie success stories. In either case, I am not sure that it will make difference to the big picture for us.

I think what’s important here with Select is that it gives us a clue as to what Amazon is thinking, and the way in which it is looking to the future. Select could be the start of the long discussed rental model for ebooks. Because of the way it’s set up, it looks like it’s just one small skirmish in a greater struggle, but I think it’s a harbinger of things to come.  I think that, as far as publishing is concerned, the content wars have well and truly begun.

Addendum: David Gaughran has put up an excellent article on the pros and cons of the Select program here.

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Comments

  1. Cory Rathbun says:

    Hey there man, @Flameinc on Twitter.. if you accept the deal with Amazon exclusivity, does it bar you from releasing the books in a more accepted format elsewhere? My preference is for Epub rather than Mobi.. converting them isn’t a big deal if it HAS to be done, but given the opportunity to support an author without having to do so, would be nice.

    • I’m afraid it does, Cory. On the plus side, I refuse to DRM my books on Amazon so even if you have to buy it from there, you can always convert it to a different format with Calibre easily enough.

  2. Cory Rathbun says:

    Calibre is what I’m using.. there are sometimes some odd formatting errors depending on the source, but its not a huge deal. Though, since I rooted my Nook Tablet I guess I could just use the Kindle app as well… hrm..

    Wish they would give the content creators a bit more leeway, particularly as regards format. Tech savvy people or other brands of power users won’t have an issue if they adopt a particular sales ecosystem, but you gotta wonder how many potential customers you lose by having to wrangle competing formats. The divide is only going to become greater as tablets and e-readers slip under 100 dollars and mainstream acceptance starts to seriously hurt paper book sales. My further gripe would be the costs of ebooks relative to paper copies.. but thats a much longer discussion.

    • I agree about price which is why I try and keep the cost of my self-pubbed books low. My issue with DRM is with the lock-in not where I can read it. There are Kindle apps for pretty much everything, including the Chromium browser on Linux. But what if I want to move to a completely different ereader in the future? It’s happened to me a few times in the past from Palm to Mobi to Kindle. I would like to be able to take the books I have paid for with me. Sometimes the people I have bought the books from have even gone out of business, leaving me with no way of getting access to the books I have paid for. iTunes irritates me in this fashion as well. Unfortunately, proprietary formats seems to be the way the industry is going.

  3. “The truth is that Amazon represents something like 97% of my sales anyway.”

    Why do you think you’re not getting many sales on the other stores?

    Brian

    • A lot of reasons, Brian– Amazon is far and away the biggest market. It makes it much easier to find independently published books than any of the others. Most of my sales are in the UK and the only real competition there is Apple. 97% is a not uncommon figure. It’s the same for many independents.

      • Ah, I hadn’t thought about your sales being in the UK. My split is more like 60% Amazon, 30% B&N, and 10% split among Apple, Sony, Kobo, and direct. (And for all of the work I have to do to get the books listed on Kobo and Sony, I wonder if they’re worth it some days!)

        • Being non-US based, I have to go through Smashwords for most of these. My first ever non-Amazon sale was through Kobo but then they suddenly decided to make it more difficult to list through Smashwords. I think I’ve only ever had that one sale through them!

  4. I’m curious that you seem to view this as, at the very least, an acceptable thing. In my opinion it’s one step away from paying authors a set (low) monthly fee for all of their content and eliminating the royalty. Authors will be ‘content providers’ and will earn accordingly.

    It’s the WalMart model for books. Maneuver the suppliers into needing the distributor, then squeeze them on price. If they don’t like it, too bad, there’s no where else to go.

    • It was badly phrased because I was writing quickly in response to what I saw at the time. I think if things stay the way they are with Select, it will not be acceptable, because obviously dividing up the same size pie among an ever-increasing number of authors will result in ever-diminishing returns for those authors. What I was struggling incoherently to say, and I may change in the text, is that I don’t think this is the final model just yet. An acceptable model would be where Amazon increases the size of the pie based on the number of downloads or customer loans or whatever. My basic point is that this may well be the first step to exactly the sort of model you describe. At the moment, it’s not because Prime customers are limited to one loan a month so unless they only read one book a month, they can’t get all their content this way. I agree it could easily shift to something very nasty. It does not have to, which is why I am currently withholding judgement till I see how it turns out.

      I should also point out that the exclusivity is for 90 days. You are not forced into it and it’s easy enough to go elsewhere if you want to. It’s not quite WalMart yet. I don’t see Apple, Google or anybody else being driven out of business because Amazon is signing 90 day exclusive deals with indie authors. Of course, I could always be wrong :).

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