Home » Amazon, Ebook Borrowing/Lending, Hugh Howey » It’s 2011 All Over Again

It’s 2011 All Over Again

22 July 2014

From Hugh Howey:

I’m having a Groundhog Day moment, here. Indies are getting screwed. Exclusivity is death for authors. We are in coach and Big 5 authors are in first class. Our pay is going down.

The same discussion exploded on KBoards back in 2011. They were the Kindle Boards at the time, and self-publishing was a lot more stigmatized than it is today. Amazon launched a program called KDP Select, and if you went exclusive with them, you gained two marketing advantages: Your ebooks became part of the Kindle Lending Library, and you were granted 5 “free” days for every 90-day period of Select.

There was a lot of consternation and hand-wringing from self-published authors at the time. Was it worth going exclusive for the added exposure? Were we crazy to give our books away for free? How much would a borrow pay? Would borrows affect our sales? Our rankings? What about the freebies? Who would be dumb/brave enough to sign up for this?

Those who did sign up tended to do very well. Those free days were as good as gold, and soon we were complaining that we didn’t get enough of them. I know of quite a few indies who credit Select as the tool that allowed them to transition to writing full-time. In fact, it was just a year and a half later that KBoards would erupt with threads complaining about the reduced efficacy of Select. Free downloads no longer had the same effect on ranking. The system was too beneficial for indies, and so Amazon tweaked it.

. . . .

Self-published authors have never had a level playing field on Amazon. (Despite this, they now earn more daily ebook royalties than all the authors at the Big 5 combined.) What we do have is limited control over our prices, 70% royalties in a sensible range, an equal sales platform, and no rank manipulation, like we see elsewhere.

Another thing I mention in my previous KU thread is the danger of paying too much for subscription borrows. That’s what I think is taking place elsewhere. Paying full price for a borrow is not sustainable, and Amazon shouldn’t do it either. Oyster and Scribd are doomed, or they will have to alter their pay structure or charge more for their services. What I wish Amazon would have done is make KU indie-only and invite publishers to play by the same rules. Asking Amazon to give us full sales commission for a borrow and a 10% read is like asking a manufacturing plant to pay starting wages of $60/hour. It would be fun for a little while, but then they’d have to close the plant. We need something that will last, something fair to readers (who don’t get to keep these books), writers, and retailers.

I’d be happy with $2.50 – $3.00 per borrow. I’d also be happy with a tiered payment system. I don’t think 99 cent short stories should be treated the same as $8.99 novels. I think Amazon should add a “tip button” at the end of the reading process to quickly and easily send 1 dollar directly to the author. Or create a way to subscribe to the author’s upcoming content. Or allow us to tie our own newsletters into the Amazon architecture (or build a newsletter system for us, since MailChimp can get expensive).

Link to the rest at Hugh Howey and thanks to Sandra for the tip.

Amazon, Ebook Borrowing/Lending, Hugh Howey

43 Comments to “It’s 2011 All Over Again”

  1. Paying full price for a borrow is not sustainable.

    Probably true. There is a case to be made for the full pay model. It is heavily dependent on assumptions about subscriber behavior. This is worth modeling. I might do that over the weekend. Unless someone beats me to it.

    • I agree. Personally I do binge read but not on a regular enough basis that this would always be worth it. I wonder what Amazon’s thoughts are on people who sign up and opt out over and over again from KU? I could definitely see the subscriptions increasing say during the Summer months, and then petering back out again as we head into the holidays where folks are more inclined to hang onto their money because they’ve got so much going out. But really that’s like any and every consumer driven industry/company; certain times of the year are more profitable than others. It will be interesting to see some stats this time next year.

      • The thing is, people are lazy about that kind of thing–or maybe I’m the only lazy one. I had Hulu for about three months longer than I should have because I kept forgetting to cancel it.

        It’s ten bucks a month, and most people will let it slide one month when they are busy because they figure they might use it the next month, when things are less busy. I know I’d rather pay the ten dollars rather than enroll and then quit over and over.

        • It depends how hard it is to quit. Netflix makes it super easy to quit, so I quit their site a lot when I got too busy to watch movies. Amazon makes it a little harder.

          • Really? I guess I’m lazy. lol. I always think I will use something…eventually. I used to go to the gym all the time for four years, so when we moved and it wasn’t as convenient, I kept telling myself I’d go back,but then would go only a few times in the next six months. That was $67/month, so a lot bigger drain on the budget. I didn’t even go to their website to find out how to quit for several months, and then when I did, I found out I had to go in to sign something. :/ I actually did that in just a few days though, so I can’t blame that hassle for my procrastination.

            • You are the customer that Oyster and Scribd are depending on. However, gym memberships are the subscriptions that are most oversubscribed (and whatever is in second place isn’t even close).

              I am not sure that the same pyschological factors are at play.

            • Lol. I guess I’m just cheap. I don’t like paying for services I don’t use even if it’s just $10. That’s a huge motivator that overcomes my laziness at times.

              Gyms always hated me. I read contracts. I cancel the second I get too busy to go (actually I’ve learned to just not sign up with gyms because they’re such a ginormous waste of money). I adore the Netflix model.

        • It depends how hard it is to quit. Netflix makes it super easy to quit, so I quit their site a lot when I got too busy to watch movies. Amazon makes it a little harder.

  2. Bravo! I couldn’t agree more. Your suggestion re a tiered payment system is brilliant.

  3. What I think has happened is that Amazon used the Select titles to launch because the terms of service already allow for it and it gives them a large of base of titles to tempt readers.

    What I think will happen is that once the kinks are worked out and Amazon has a better idea of reader enthusiasm and has done some data collection, that the criteria for being in the KU program will change. I doubt very much that it will be limited to exclusive titles only–why should it be? The success of any subscription model depends on quantity and wide selection. Publishers will be able to opt in their titles, including indies, and it won’t depend on being in Select (which I kind of suspect is on its way out).

    • Patricia Sierra

      I think KOLL is already gone. It doesn’t show up on any of my product pages.

      • The KOLL is still alive and kicking. I’m on my Kindle Fire at the moment, and just clicked over to the Books tab to check. Yep, still there. 🙂 Although the fact that it has vanished from the website product pages doesn’t seem to bode well for its future.

        If they dump the KOLL, it would mean eliminating one benefit of Prime membership. Unless they intend to give Prime members a free KU subscription in its place?

        I hope they keep the KOLL. It’s been very good to me the past couple of months.

  4. Or create a way to subscribe to the author’s upcoming content.

    Yes, I’ve wanted this feature for a while, both as a reader and a writer. If I could subscribe to an author, I’d do it in a heartbeat for several, maybe a dozen, writers off the top of my head.

    • [C]reate a way to subscribe to the author’s upcoming content.

      Such a service already exists: http://www.patreon.com/

      I stumbled across it via Schlock Mercenary:
      http://www.schlockmercenary.com/
      and
      http://www.patreon.com/SchlockMercenary?alert=1

      • I use Patreon (the link above is actually a link to my Patreon project – art, not writing, though). It’s not quite the same beast as what I think Hugh Howey wants.

        Patreon is supposed to be a service where the creator will release free things and wants patrons to support them. Some writers might be fine with that sort of program, but I’d like to sell my writing, personally.

        Some people are using Patreon as a sort of platform where they get people to support them and they get a free copy of what they’re working on, but I don’t think it’s meant to be used that way.

      • By introducing Scholck Mercenary to this group you have now caused someone to lose six months of reading. (reading one month a day) Having said that I encourage everybody to take a look. Howard Tayler has done a great job telling a long form story with a punchline every day without missing an update since June 2000.

  5. All of Hugh’s ideas are wonderful. I know he’s had the opportunity to bend Amazon’s ear in the past. I hope he gets a chance again, and presents some of these ideas directly to them. I’d LOVE a way to allow readers to subscribe directly to my content. I’d love a tip jar for “borrowed” books. I’d love it if those bitchy Big Five publishers who think they have everything sooooo hard would have to play on the same level as the rest of us: exclusivity with Select if they want to maximize sales on Amazon, or don’t use Select.

    Hell, I’d love it if something could reliably maximize sales on Amazon for the long-term. Select doesn’t seem to be able to, and I don’t expect KU to be all that different once the hype burns itself out.

    • I have been thinking very hard for over two years about something that would indirectly help authors maximize their sales on Amazon. The problem I would like to solve is how to identify the book that a particular reader would most enjoy reading next at any point in time. If I limit the problem to readers who read 30+ books a year, the problem seems tractable. If this is possible, it would go a long way towards helping (non-bestselling) authors maximize their income.

      When I analyze this problem systematically, I realize that at certain points in time the problem is relatively simple. For example, when Barry Eisler comes out with a new John Rain thriller, that becomes my personal answer to that question. [Which is why all authors should have a new releases mailing list, even if grumpy people like me won’t sign up for them, not even Barry’s.] Readers need very little help at times like this. On the other hand, there are times when I would like to know about a Lovecraftian steampunk novel written in the style of Jorge Luis Borges, but I have no idea that such a thing exists (which it doesn’t, does it? Because I would be all over that. Seriously, why hasn’t somebody done that?).

      This is one of those theoretically solvable problems that has been practically impossible until recently. It might still be impossible. But I would love to solve it. If it sounds like I want to do this just to solve a personal problem, well, that is how a lot of great software gets created.

      By the way, I am well aware that there are many people who are offended by the notion that an algorithm could be a good way to recommend books. I would like those folks to consider that algorithms are what they use to make book recommendations.

      • “there are times when I would like to know about a Lovecraftian steampunk novel written in the style of Jorge Luis Borges” –

        brilliant William 🙂

      • I’ve thought about the same thing. I wonder if the lower volume readers could be assigned a surrogate from the higher volume readers. If all three of the books I read this year match three books from a 30-book reader, then recommend a book to me by genre from the 30 books.

        If I buy, keep the same surrogate reader. If I don’t buy, try another surrogate.

        People might be offended by algorithms recommending books. But they might be more offended if they work.

      • Oh my god! I’d LOVE to see something like this. I hope you solve the problem, too! If I can help in any way (providing input, beta testing, whatever) please let me know!

      • I’ve noticed that like/dislike ratings can’t quantify detailed information about what I liked (or disliked) about specific books. Sometimes it’s the overall concept, the plot twists, the style of writing, the characters, story threads, pacing, and so on. Without this depth of info, it seems the algorithms are going to be limited to keywords and “other customers who bought….”

        • Yes, assuming we had access to the texts of stories, one question is whether natural language processing can identify the types of qualities you mention. Some things are fairly straightforward (e.g. gender of the protagonist, size of main cast), others seem complicated, but aren’t (e.g. plot driven vs. character driven), and others might be impossible (e.g. historical accuracy).

          Then the problem becomes choosing the universe of qualities to track, identifying which ones are important to individual readers, and creating a recommendation.

          Just in terms of a thought experiment, assume we have access to the texts of a huge number of stories, the reading lists of a whole bunch of avid readers, and a model of attributes that we think influence the enjoyment of stories. Could we discover the set of attributes that have the most predictive power for most readers?

          One way to look at this is to assume the Amazon alsobot identifies good training data. The substantial majority of books related by the alsobot share some set of attributes that cause readers to like the book. In theory you might be able to find two sets of popular books within the same genre that have very little overlap in alsobots. Identify a set of attributes for which one set consistently scores at a different end of the spectrum than the other and you might have a way to cluster books within that genre. That could form the basis of a prediction system for individual readers.

          This is a non-trivial problem, but there is real potential.

          • Another feature i would like to see on a retail sight using this sort of thing is “channels,” the way pandora has. This is becase of my experience with pandora, which is that unless you consciously dislike songs on a given playlist that don’t fit the mood of the playlist (even though you lije the song) then eventually all your playlists start to sound the same. I have had classical become pop via movie scores to soundtracks…country become 90s alternative via the alt-country of the early aughts… It’s annoying. And since i read several genres with a narrow taste range in each, i would like to be able to maintain separate recommendations for each genre. Here is my historical romance, unclouded by my taste in epic fantasy, and this third thing is my erotica preferences discrete from either. While we’re brainstorming and dreaming 🙂

    • Libbie said:
      I’d love a tip jar for “borrowed” books.

      Couldn’t any indie author just put a link to their own “tip jar” at the back of all of their books? Put it right after “The End” and before the back matter like copyright, etc. so it would be seen by anyone finishing. Heck, link to it from the table of contents too.

      Word it something like:
      If you read this book for free and feel like supporting the author with a donation, here’s a link to the tip jar.

      I think this would violate any exclusive arrangements like Select or KU, but for those books not in such, I don’t see why it would hurt.

      Anyone see any downsides to this?

      JEH

      • I do. Many people find begging unpalatable.

        I’ve gotten mellower about artists asking for money since I became one, but if I saw a little blurb at the end of a book *I paid for* that says, “Please give me money!” I wouldn’t like it. If you need more money, raise the price of your book.

        At the end of a permafree, that I might could see. And a tip button on a website, I can live with. But don’t put ’em in your books. That feels like, “I know I said the book was a dollar but…”

        Once I was walking to the subway after a long night at law school. For some reason I had a pocketful of change (like three or four bucks worth, easy.) A beggar came up to me and asked very politely, “Spare change?”

        I hate hate hate HATE change in my pockets. So even though I wasn’t exactly flush, I thought, “He has no idea, what the Hell?” and reached into my pocket and brought out the change. Now, it was dark, so he couldn’t see how much I had in my hand, but he could tell it was coins. He said, “Would you happen to have a dollar, sir?”

        I closed up my hand, shook my head, and said, “Lost it.” Then I walked away.

        Ask me to go to your site. Ask me to buy more books. But don’t ask me for more money.

        ETA: A tip button which shows up for books accessed through KOLL or KU universally is different. I mean as an individual author thing.

  6. Hugh’s ideas are full of win. I second the hope that Amazon is listening. Bezos, pick up the white courtesy phone, please …

  7. There are no level playing fields in free markets. It’s a myth. Everyone is trying to tip the field in their favor.

    • Yes, but you shouldn’t let them get away with it.

      • So how do you propose stopping them?

      • Of course we should. They tip the field by innovating, promotion, being more efficient, introducing new products, etc.

        Amazon just tipped the field by introducing KU. It tipped it by introducing the Kindle. Apple tipped it with the iPhone. Independent authors tip it with free books. Henry Ford tipped it with the assembly line.

        • If Amazon doesn’t pay me a fair share for my book on KU, my book will not be on KU. That’s how I’m going to stop being ripped off.

          Their innovation is done for their benefit. When it doesn’t fit my plans, I won’t support it.

          • It’s great that we can decide to participate or not. I just blogged about why I put most of my books in KU. As I was writing the post, I realized that I’m no longer upset that traditionally published books receive the full purchase price. As an indie author, I don’t have to divvy up the money paid for download with anyone. I’m not splitting it with an agent or publisher. Can you imagine the royalty a trade published author would receive if Amazon threw their books in the same pool as ours? Those authors–who have no choice at this point on whether their books are in or out–would get about 25 cents, if they’re lucky! (math isn’t my strong suit–someone else can figure out the actual payment.)

            Not only that, but for KU to be as attractive as possible for readers, we need some big name books/authors to be in there–authors with years of publishing and legions of fans who will then explore without any hesitation due to money worries.

  8. If you can stop them, doesn’t it cease to be a free market? Isn’t trying to stop them what controlling Big 5 are trying to do to free-enterprising Amazon?

    • I contend that a free market will eventually show disparity when it adversely effects the consumer. The disparity may exist for a looooong time before the consumer understands that there are alternatives to the company that holds the majority share of the market. This alternative must be of equal or greater quality at equal or lower price. Then the TRUE tipping point will be achieved.

      Think IBM, Xerox and Apple. All once dominant forces in their markets, brought down by competition and a realization (by the consumer) that a disparity existed. Market forces took over.

      Soon RandomPenguin will be the Xerox of publishing… Still in operation, but not THE driving force or largest player.

  9. Pure speculation, but it seems Amazon is offering nice deals to publishers (paying for each borrow) because it is growing the ecosystem, and they’re wooing publishers, who are probably more reluctant than indies to experiment.

    In order to get customers to see the value of spending $10/month, Amazon wants to be able to say, “Look, all of your favorite authors are here! Unlimited!” That makes sense. But I agree with those who believe this isn’t a long-term sustainable strategy, and Amazon knows it too. Once they have the subscribers and the books on board, they will be free to tweak their pricing and royalty models to fit their Profit and Loss projections. By that time they’ll have, I dunno, some millions of customers and publishers will have to think long and hard about pulling their books, especially if those customers have converted from buying to subscribing.

    Amazon’s investors have time and again shown a willingness to take risks and tolerate razor-thin returns. The company grows revenue reliably but it sure spends a lot, too. It’s very interesting.

    • Scribd and Oyster are already doing this and have more top publishers’ titles, the same time not requiring exclusiveness from indies and paying a fair royalty.

      The number of customers they are drawing is, in my opinion, one of the reasons we’ve seen Kindle Unlimited roll out.

      That said, if KU didn’t require my exclusivity, I would be all in.

      My belief is, Amazon no longer needs exclusiveness from indie artists. It can and should continue to make deals with individuals that draw interest to the program.

  10. I suspect Amazon is paying the traditional publishers full purchase price on KU borrows (for now) simply because it was the most expedient way to make these “borrows” happen under their existing agreements with those publishers (which already included the free 10% proviso for sampling.)

    The alternative, which would have involved months and months of negotiation and which would have delayed the KU launch or made it an indies&Amazon-pub-only offering, was less desirable to Amazon than launching KU fast, even if Amazon has to subsidize Big Publisher books temporarily while they collect data on customer adoption of KU and figure out where to go with the service.

    I have no evidence to support this idea. It just seems logical.

    If true, it means those full-payments aren’t going to last. A lower borrow rate will be negotiated with each Publisher, one at a time.

    Again, just guessing here.

    • Yeah, I suspect the same thing. I found it pretty concerning that Amazon didn’t seem to consult their big name authors like Howey about this though. I find that part a little worrying.

    • Have we found one of the sticking points in the Amazon/Hachette cerfluffle?

  11. Here’s how I’ve decided to conceptualize it so my brain can get back to writing and stop worrying.

    First, in my six month’s of publishing and reading the forums I’ve been instructed that my Wharton model is to make the first free, sell the rest.

    Got it.

    Second, I can view each ten percenter as a freebie giveaway that I would have made anyway, had I been able to get Bookbub to take my money. The difference is that, instead of giving away 20,000 in one day, I’m doing it incrementally, with readers whose read might even result in profit both from the giveaway and from follow-on purchases.

    Third, for me, three of my books are on the KU first page of search results in my sub-category. I know, the trads might join up and push me down, but that isn’t the case as I write this and i don’t like playing “what ifs” since I quit law.

    I could really like this.

    • Exactly. This is the way I’m looking at it, too. It’s Permafree, but you get paid for the freebies that actually get read. 😉

      Now if D2D will finally process my uploads, I can turn around and pull my new book off other channels and stick it into KU. See if it works the same way Permafree has worked for me in the past. I think it will!

  12. There is a big problem with using ‘10% read’ as a metric to decide a reader liked a book. When I find I’ve been pulled in by advertising or a well-edited start, but the book is going nowhere for me, I often skip to the end to see how it ended before dumping it.

    I can’t be the only one who, once they’ve invested in the beginning, skips to the end. I would rather not reward authors whose books go downhill, but I don’t want to go leave a bad review – someone else may like them.

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