Home » Amazon, Ebooks, Pricing, Self-Publishing Strategies » Indie Publishing in 2013: Why We Can’t Party Like It’s 2009

Indie Publishing in 2013: Why We Can’t Party Like It’s 2009

3 December 2012

From Anne R. Allen’s Blog:

Amazon’s Kindle turned five years old last week. What an exciting half-decade it’s been!

Jeff Bezos showed his genius when he gave his e-reader that name. The device sparked a conflagration that is still pretty much out of control. The old publishing world is in chaos, and nobody has a clue what direction the wildfire will take next.

. . . .

In five years, Amazon has gone from mail-order bookseller to major player in world publishing.

They did this partly by sparking the “indie revolution”.

The “revolution” was another product of Mr. Bezos’ marketing genius. He wanted cheap electronic books for his new Kindle, and the Big Six were not about to slash prices for some upstart online retailer with a gadget nobody thought they needed.

. . . .

So they opened up Amazon to self-publishers, offering an author-friendly e-book creation system and a 70% “royalty” to authors who priced their books in the range Amazon wanted to promote: between three and ten dollars.

I’m putting “royalty” in quotes, because, by strict definition, Amazon doesn’t pay a traditional royalty. Publishers pay royalties. Retailers take a percentage. For self-publishers, Amazon is a retailer, so technically, Amazon is not paying a 70% royalty; it’s taking a 30% sales commission.

But whatever you choose to call it, the payment system worked. Big time. While the Big Six were shrinking advances, lists and print runs—and making increasingly unreasonable demands on authors—the Zon offered writers a new way to distribute their work and actually make money at it.

. . . .

What we do know is that Amazon’s attempt to bring down prices through the legal system finally paid off. Big name ebooks by Big Six authors are now selling for reasonable, and even give-away prices.

So indies aren’t as necessary to the Amazon bottom line as they once were. I’m not sure things are as dire as Derek Haines says in his post in The Vandal, because established indies report they continue to have good Amazon sales. But he has some legitimate worries.

For the new author who is thinking of launching a career by self-publishing through Amazon, it’s important to be aware things have changed drastically in recent months. One thing to be aware of—especially if you’re a newbie—is that a lot of the most powerful marketing strategies of the “Kindle Millionaires” are no longer viable.

Link to the rest at Anne R. Allen’s Blog

Amazon, Ebooks, Pricing, Self-Publishing Strategies

27 Comments to “Indie Publishing in 2013: Why We Can’t Party Like It’s 2009”

  1. “What we do know is that Amazon’s attempt to bring down prices through the legal system finally paid off.”

    Yes, I clearly remember Amazon colluding with a bunch of other publishers to bring down prices, and, when that didn’t work, they involved their legal arm, the DOJ.

  2. OK, so this is me wearing my pessimists/conspiracy theory hat: once again Amazon is reminding me of MP3.com.

    Back in the early days of MP3.com, it was an indie paradise. Lots of independent bands and solo musicians would post their music on the site, and MP3.com would run features on them, billing various indie artists as “new voices on the music scene.”

    Just before they went public, they got a few big-name, mainstream artists to post music on the site. Naturally they started to feature them as well, which to be honest made perfect sense, because duh.

    Then they went public and boom–the joke was that it was suddenly alannismp3.com because all you ever saw on the front page was Alannis Morrisette.

    The point was, MP3.com decided they already had the indies and they audience that came with that. That audience was big enough to get them the initial visibility they wanted, and their business plan now dictated that they draw in bigger names and their audiences as well.

    I can’t speak to Amazon’s business plan, other than they want to sell Kindles and ebooks. If they’ve decided they already have the indie/self publishing market–that there are no more eyeballs in that realm–they need to focus on bringing in more than the 30% they have, and that means making it friendlier to people who are afeared of self-publishin’ and that means ghettoizing self publishing, walling it up so that it’s still there, it’ll just be harder for those who don’t want any of it getting on them to… you know… get it on them.

    Now, wearing my slightly less pessimistic hat: I suspect that Amazon will be very happy to take down all those news walls if you’re willing to consider KDP Select.

    Now, wearing my only moderately paranoid hat: I suspect it’s not nearly as bad as my top-tier raving above, because Amazon appears to be doing brisk business as it stands and why would they want to stop doing that?

    That said, from a purely soulless business perspective, the best reason to stop making the money you’re making now is to make even more money doing something else…

    • There is one HUGE difference between MP3.com and Amazon, (well, there are many, but on particular one relevant to what you say here):

      Amazon is already a public company. When you’ve got a little upstart that’s trying to get somewhere, they behave in all sorts of ways to build their company before they go public. Going public, for a little company like that, always means a change in nature. Very often, the important leaders of a company like that do it to cash in, and they’re gone after they go public. If not, the pressure of the stock market change the leadership style.

      Amazon went through that transition a long time ago, and weathered it. Maybe, when Bezos dies or retires, you might have to worry more about that.

      There will certainly be changes in Amazon in the future. It’s a fluid company. But the changes will actually have to do with forces — and there is no force (but one – see below) that pushes on Amazon to cut back on indie publishing.

      Indie publishing is huge, and like their Associates program, brings in a huge amount of customer loyalty and brand building from the participants. And it costs way less than the Associates program.

      Furthermore, it’s important to their whole business model – to have everything under the sun available, even if only one person in the world wants it, they can find it at Amazon.

      Which isn’t to say they won’t change the deal. It’s just that keeping indies around, right now, is entirely in Amazon’s self-interest, and Bezos knows it, and is delighted about it. And there is nothing on the horizon that would change that. Right now.

      Well, except for the one, which I don’t think will ever be big enough to make a difference: Bad behavior on the part of the indies. This has brought down many resources before: people striving for advantage and leveraging technology in ways that makes it not worth it for the provider. It seems like Amazon has this under control by just being faceless and non-responsive and immovable. They didn’t like what was going on with the review squads, so they started shutting down reviews.

      Writers screamed about it, and some apparently innocent people got threatened. I’m sure even more non-innocent people got shut down completely. But that’s the price of having this huge open playground — the keepers of the playground gets to shield themselves from annoyance in any way they please. Fairness doesn’t enter into it.

      So, imho, even that fear, that the writers themselves will shut down the system (as happened with eHow), isn’t a serious threat to the KDP.

      There will be major changes, though, as there have been all along. For instance, this quote from the article:

      “…a lot of the most powerful marketing strategies of the “Kindle Millionaires” are no longer viable.”

      Absolutely. And good riddance, imho.

      Amazon is not likely to take the KDP away. They are likely to take abused tools away.

      • I don’t think they’re going to take KDP away. I hope I didn’t imply that in my post. However, I could see a business case for putting indie in the corner and putting walls around it, which is one of the things the original article talked about.

        • I could not see a business case for that. A lot of established writers have been self-publishing their backlist. If Amazon want to build a wall around self-published writers, they’ll be dividing those writers’ work into two categories and displaying them separately — which means readers will have to know which books fall into which category in order to find the ones they want.

          The ‘long tail’ marketing model requires that the retailer make everything as transparent and discoverable as possible. That means Amazon can’t afford to put arbitrary restrictions on the visibility or availability of work from small publishers.

        • Well, before we can agree or disagree or project, I guess we have to define “wall.”

          I think people in the old paradigm have a very different idea of barriers than Amazon does. Amazon is fully in the new paradigm. I don’t see them ever using walls in any way that matters. That is, in any way that would target indies for unfair disadvantage.

          Amazon is FULL of processes that give fair advantage. There are already lots of invisible walls there. They move them around all the time, looking to counteract one group an inappropriate disadvantage over another.

          For instance, they changed some algorithms so that the popularity and relevance of free and cheap books reflects the popularity of the book, not the price. That kind of wall, they’ve already got and will keep building more.

          KDP Selects, on the other hand, will be interesting. What they’re doing isn’t working to get what they want: the incentives to get people to sign up for it has cause the list to be almost all indies, and mostly in certain genres. It’s an indie ghetto right now. People who are looking for best sellers and familiar authors and other genres won’t find anything they want.

          What will Amazon do in response? That depends on what Amazon’s long game really is. And that’s where it gets interesting. They don’t act like this is really a big deal to them. If they really wanted to make the Kindle Lending Library fly, they would remove restrictions. They’d let big time publishers be in the program without exclusivity. They start making offers to best selling indies with that too. Heck, they would allow readers to borrow more than one book a month. (But no more than one at a time.)

          But instead, they are doubling-down on what will attract MORE indies: they are putting more money into the program and touting it all over indie-dom.

          I suspect that they have a different agenda, that this is only the experimental beginning game. And it may have more to do with studying, expanding and developing the customer base than it has anything to do with the publishers or writers.

  3. Amazon started out taking a 65% commission. The option to make it 30% didn’t happen until June/July 2010.

    The author-to-author reviews bit from one of her links, well, Amazon doesn’t allow reviews from anyone with a financial interest in a product, or from competitors with the same type of product. I don’t know if that was added into the review guidelines in the past 2 years, but that’s roughly how long I’ve been aware of it. It’s not *new*.

  4. I confess I react badly to any post that seems designed to discourage authors from considering self-publishing, or from considering using KDP Select as one of their promotional options, particularly when the data is so anecdotal.

    There is no proof, for example, that it is indie authors books or reviews that are being targeted for removal http://selfpublishingadvice.org/blog/amazon-answers-indie-authors-questions/ although it may be because indie authors are more committed to marketing (ie putting in linked signatures, etc) that more of them have been caught in the net than traditional authors. And I would prefer to have the bulk of my reviews come from average readers than other authors anyway, and KDP Select promotions have made this much easier to do. It took 2 years to get 38 reviews on my first book, and after KDP Select it took one year to get over 100 more, and my newly published book last October got a substantial number of reviews much faster, because of free promotions.

    Second, until we get through the next 3 months holiday sales we simply won’t know if the change in algorithm has dashed our hopes to sell as well as last year. I do know that my sales in 2011, before KDP Select existed, showed a downturn in my sales in the late summer and fall, very similar to the downturn I experienced the year before, and this year. No conspiracy to depress Indie sales here, just seasonal buying patterns for my particular books.

    And yes the change in algorithm in March did make it harder for indies to translate KDP select promos into enormous sales, and the change made traditional books more competitive. But I do think that this was an adjustment that needed to happen. Just because I was able to do KDP Select and garner a high rank in the categories, and traditional authors weren’t able to do so because they weren’t getting the extra boost (poor things-they are the ones who keep getting screwed), it really wasn’t fair to the reader that they weren’t finding any of their beloved books on those lists. Yes, it was nice having the advantage for 3 months, an advantage we still have because 10% of 1,000 or more downloads (which is pretty easy to get with a promotion) which none of those traditional authors are selling in any given day with their older books–lets us jump right over them for a few weeks.

    I just don’t buy that any of this was designed to hurt indies, but it was all designed to sell more books, by any author.

    In short, there are still very good opportunities for indies using Amazon, and if Barnes and Noble and Kobo would just step up their game faster then I believe that we will either have enough options to compensate for any decisions that Amazon makes that have negative effects on us, or Amazon will step up its game to stay competitive. All which means that while the “party” might be over–the opportunities to get our books to readers and not be stopped by the traditional gatekeepers (or Amazon) is still very much there for those of us who keep working at it and have books that people like to read.

    • Unfortunately, unless you’re a data modeller, anecdotal data is usually the only information you have to go buy if you’re trying to anticipate and prepare for change.

      I didn’t see this as a warning for people to not self publish. I did see it as a warning that “the tactics people are still talking about either don’t work or will stop working soon” and I think, if she’s right, that’s something new self publishers need to know. And self publishers who have been around a while, for that matter.

      • You’re exactly right, Christopher. This post wasn’t designed to scare off anybody from self-publishing. Instead, I’m addressing some of the fears sparked by the mass review removals and other Amazon (and Facebook) changes. I’m just trying to let new self-pubbers know that a lot of the “rules” they’ve learned about marketing no longer apply. Amazon is just a business, like any other. It’s not Santa Claus for indies, as some of the early “Kindle Millionaires” seemed to say. Self-publishers need to be aware they’re starting a business and they need to keep on their toes in a rapidly changing industry.

        • In that sense, I agree with you. What indies have to learn is that cheating doesn’t work. (And yes, flogging for lots of review, even honest ones, is cheating in the world of algorithms.)

          If you find a short cut it will be cut off. That’s not new. Both Google and Amazon have been doing this for as long as they’ve been around.

    • I admit, my defenses were up when I started reading this post. I’m about to indie publish my first novel (I’ve gotten my feet wet with some short stories), and my first reaction before reading the whole thing was, HOLY s*** I WAITED THREE YEARS TOO LONG AND NOW I’M SCREWED AGAIN. I do that.

      Then I took a deep breath. It’s not discouraging unless you’re looking for discouragement. I think a subtitle would be, “what worked then won’t work now, but something else will work and we don’t know what you should do, EXCEPT… write a good book. I can live with that.

  5. Interesting. I haven’t noticed that the Big 6 have dropped prices on ebooks. Just checked the new Stephanie Plum. Yep slashed to $3.40 more than the hardcover.

    A long way to go, I think.

    • Yeah, I haven’t noticed any of the big name author e-books coming anywhere close what indie prices are. Even if they do, I don’t think that’s a long term model that the Big-Five/Four could sustain. They need to keep their prices high. They have many employees to pay.

  6. She also quotes a post by D.D. Scott:

    “Due to the agency pricing/cost-fixing schemes and the resulting Department of Justice settlement with a few of The Big Six Publishers – with several more holding out for litigation, many Big Six/TradiPubs are lowering their prices to between 99 Cents and $3.99.”

    Uh, what? Where are these $0.99-3.99 Big 6 novels? I really want to know. I. WILL. LOAD. MY. TABLET. UP.

  7. Informative article, and I think Anne has a very important point to make here.

    Although, first, it did seem to me there was a slight tone of “anti-Amazon” to this article. Amazon is not responsible for the fact that giveaways are less effective, for example. This has to do with the changing landscape more than Amazon’s policies.

    And I still think Amazon is a powerful tool for the indie author.

    But it’s just that – a tool. I think Anne’s point is well-taken. Amazon could change their policies, they could lower their royalty rate, they could decide to court Publishers instead of the Indies. I don’t think they will do that, but you never know.

    But then, Smashwords, Kobo, etc, could also change their policies.

    It’s really good for indies not to put all their eggs in one basket. That is part of what tends to keep everyone more honest – competition. So, in this way, Anne’s article, is dead on target, imho.

  8. In all branches of writing, The Golden Age was always always always just before YOU got here, no matter who you are. I’ve been hearing that I Just Missed the Golden Age ever since I began my full-time self-supporting writing career in 1988.

    • Methinks this might be the Universal Law of Every Golden Age: Over before you got there, or, if you were there, gone the moment you started paying attention.

      • I worked with a talented young lady in the early 00′s who was very depressed because she was turning thirty and wasn’t yet a millionaire like so many other techies became during the dotcom boom. “If I haven’t made it by now I’m not going to!”

  9. Interesting how many people think that Amazon did them a favor. Amazon did nothing for no one except for Amazon. I’m not saying this in anger, but as a pragmatist. Amazon is in the business to be profitable and acquire as big of a market as possible. Amazon makes no money when it allows Indie publishers to give their books away for free. But they used the Indie zero and cheap prices of books to put pressure on the big pubs and to give the illusion that Kindle is the low price alternative for the eBooks. KDP puts tremendous pressure on the competition, keeping exclusive sales of eBooks only on Kindle. In the meanwhile let’s take advantage of what is offered, if you think KDP is a good strategy, and adapt as the entire publishing and e-retailing market for books evolves.

  10. The problem with the linked post is that it concocts a completely misleading narrative, based on nothing more than a few unrelated events, a bit of serious misinformation picked from another source, the misinformation that Amazon support is inadvertantly spreading, and the insecurities of writers.

    The following claims are false:

    1. But a few months ago, things began to change. Amazon made some policy changes that were decidedly less friendly to self-publishers.

    Not one of the so-called policy changes was aimed at self-publishers in particular.

    2. What we do know is that Amazon’s attempt to bring down prices through the legal system finally paid off. Big name ebooks by Big Six authors are now selling for reasonable, and even give-away prices.

    There is zero connection between the DoJ lawsuit and the lowering of prices on some trad pubbed books, except for the bestsellers that Amazon sells for $9.99. In fact, the direct result of the lawsuit was that prices of many bestsellers went up. Check the facts.

    3. So indies aren’t as necessary to the Amazon bottom line as they once were.

    Nothing has changed with respect to KDP authors and their importance to Amazon. You were never crucial to Amazon’s strategy, but you do still matter.

    4. “Also…and this is HUGE…Amazon’s algorithms have definitely changed to favor the TradiPub books at these lower prices.”

    Completely false.

    I could go on.

    The reality is that Amazon has built an incredible platform for the distribution of ebooks. It continues to evolve. The reason that everybody’s formula for success has broken is that none of them was founded on a systemic understanding of how books are sold to readers. There is a reason that Edward M. Grant does better on Smashwords and M. Louisa Locke does better on Amazon. It isn’t genre, it isn’t random, it isn’t even the difference in the positioning of their respective initials. It has everything to do with network diffusion.

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