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Q&A with Pronoun: An Increasingly Competitive Ebook Distributor

22 January 2017

From Jane Friedman:

Do you remember the digital publishing startups Vook? Booklr? Byliner?

All of these services/companies have been folded into an ebook distribution service known as Pronoun, which was launched in fall 2015 and later acquired by Big Five publisher Macmillan.

Pronoun works with independent authors to distribute and sell ebooks to the five major online retailers: Amazon, Apple, Barnes & Noble, Kobo, and Google Play. Pronoun charges authors nothing upfront, and doesn’t take a cut of ebook sales either.

Let’s restate that, since it’s so remarkable: Authors are paid 100 percent net on ebook sales (after the retailer takes their cut), and authors pay no fees to Pronoun.

Today, Pronoun is announcing some significant changes to their terms, including:

  • 70% royalty on ebooks sold through Amazon when the price is below $2.99 (standard is 35% if you sell direct to Amazon via KDP)
  • 65% royalty on ebooks sold through Amazon when the price is beyond $9.99 (again, the standard is 35% if you sell direct to Amazon via KDP)
  • The ability to make ebooks free at any time through Amazon without being exclusive (not possible via KDP)
  • No requirement to be “all in” with Pronoun; you can use them to distribute to just one retailer, several, or all. It’s up to you.

Recently, I asked Justin Renard, Pronoun’s head of marketing, a few questions about Pronoun’s services for authors.

As far as I know, Pronoun is the only distributor open to indie authors that can promise a 70% cut on Amazon sales on prices below $2.99 or 65% at price points beyond $9.99. Do you welcome authors who are already selling their ebooks through Amazon KDP to move their books over to Pronoun to take advantage? How long does it take you to get a book available for sale on Amazon once someone sets up their account and uploads their files?

Justin Renard: Our door is open to all authors who are excited by what Pronoun has to offer, and with our new terms, we offer the flexibility for authors to decide what publishing strategy makes the most sense for their books. 70% sales on books priced below $2.99 will be very appealing to authors who rely on ebook price promotion tools to market their books.

We’ve tried to create a frustration-free publishing experience—from uploading and producing a cover, to preparing a book for success on retail sites. Once you press publish it usually takes between 2 hours and 48 hours for your book to appear on all the retailers we serve.

Right now, Amazon KDP offers authors immediate sales data about their ebooks, as well as total control over all the book information and metadata. Does Pronoun match all that functionality in its dashboard for authors?

We do offer total control over all the book information and metadata pushed out to retailers, the difference being is that on Pronoun, you can push the updates out to all retailers at once. Our sales reporting updates daily from all retailers.

Copies sold, total sales, and estimated earnings are some of the sales information we report from all retailers. We also automatically record major events like go-live dates and metadata changes so authors can see the impact of their work on their sales. Authors can also add their own milestones for promotional activities or any offline marketing.

Link to the rest at Jane Friedman and thanks to Ryan for the tip.

Ebooks, Self-Publishing

37 Comments to “Q&A with Pronoun: An Increasingly Competitive Ebook Distributor”

  1. How does Pronoun make money? I went to their site and I don’t see how they get paid for their services. I don’t trust this.

    • That was an amazing answer as non-answer in the interview, though. Must give them credit for that.

      Apparently MacMillan is going to lose money on every sale, but make it up in volume. Or something.

      • Pronoun has said they are making money by selling services to traditional publishers. They haven’t said what those services are, or if that’s still the case now that Macmillan bought them, but in 2015, when they were starting up, that was the answer. And that eventually, they will offer paid extras to indies.

        Again, this was all prior to the Macmillan purchase. Macmillan bought them for their data and keyword algorithms. I doubt they are allowing those services to be sold elsewhere anymore.

    • I am complete!y making stuff up here. Thinking about this as a way for MacMillan to make money off the Indie Writer population. Maybe the eBook editing software platform, the dashboard, etc. Scales up really nicely and so it doesn’t cost them a lot per author. They then collect data on authors and consumers that they can use to spot bestsellers to recruit into MacMillan’s conventional publishing model; to agent to other media; and to sell on advertising, coaching, and various design packages? Or use the data to find underserved niche markets and then use the data for promoting conventionally published books to those markets? This is all possible after they clone a team of Data Guys, so he should patent his DNA profile so he can bill them later.

  2. It’s addressed in the full-length interview near the end. (Perhaps not completely–but the question is asked and answered.) Reading between the lines, I surmise they will probably try to sell authors additional services, having convened (they hope) several million of us. Which is fine, if the services are good and well-priced; and not fine, if they are per usual and elsewhere.

  3. I still don’t get the way their payment works–if Amazon is only paying 35% for a particular sale, and Pronoun is paying the author 70%, where is that extra coming from? I don’t mind a distributor making a profit for a real service, but this is Underpants Gnomes Economics.

  4. the key is going to be the definition of ‘net’, if they pay the authors 100% of the money that they get from the retailer, they have no business model. If they subtract their “expenses” from that, anything goes.

    • Pronoun has always paid 100% of net. They cover their costs with other services:

      “In addition to offering free services to thousands of authors, Pronoun also powers the publishing programs of large media companies like The New York Times, Forbes, and Fast Company, who are paying partners,” a spokesperson told me by email. “Down the line we may offer optional paid services or tools as well, but the focus right now is on making the core publishing services the best they can be, and those will always remain free.”

      from:
      http://the-digital-reader.com/2016/01/21/96627/

      • how many companies have been offering no-cost services when things are going well, only to shut them off when times get tight?

        • This is the Google model. Pronoun is after your data, not you money. You are the product, not the services they offer you.

      • The service Pronoun in offering probably costs Pronoun very little.

        I don’t know publishing, but I used be in the software industry. When we started downloading software instead of shipping CDs, tapes, disks, etc., the cost of distribution and delivery practically disappeared. I imagine it is the same for ebooks. In other words, distributing an ebook for free is a perfect loss leader, like those free gigabits of storage offered by the cloud storage folks. They pay for those loss leaders with pocket change.

        I wouldn’t be surprised if Pronoun has a dream of taking a bite out of Amazon’s KDP/KU business, which strikes me as far too profitable not to be undercut, but how they will try to do it, or whether they will succeed, I don’t know.

  5. That is indeed remarkable. If they have some deal with Amazon where they get 80%, they can give 70% and keep 10% in order to get clients that they can market services to and, as someone mentioned, look at as a pool of possible “recruits” to traditional (if they’re selling really well).

    I’d need to see the small print. As long as authors can enter and leave at any time (like KDP), this sounds great. Worth keeping an eye on, at least.

    Mostly, I like it because it might pressure Amazon to pay 70% from 99 cents up.That would be wonderful if Amazon took this as a challenge.

  6. I’d say the answer to “how are they making money?” is right here:

    “Pronoun has been tracking data of over six million books for over five years, recording important information like sales ranks, ratings, prices, keywords and categories…”

    They’ve been tracking with imperfect tools on much of that, so if we nice little indies amble in and put all our channels through them, they now have a much better quality of data. And that data is worth money to someone. Whatever they might make selling services to authors will be a rounding error compared to the value of the data.

    While one stop uploading/reporting/payment is all very convenient, it requires consolidation of data in a way that I don’t want any one entity knowing.

    It’s a Facebook situation: if you can’t identify the moneymaker, you *are the moneymaker. More than worth it to them to chip in 35 cents on a book. And that assumes Amazon isn’t one of the outfits interested in the data, enough to cut them a sweetheart deal. And if I were Pronoun, I’d dance around that issue too.

    • I think Amazon has enough data of its own. You’re probably right about Pronoun selling data, though. What worries me is who are they selling it to, and how much spam will I start seeing in my inbox?

      • You don’t think Amazon would like to know directly what’s cooking in Apple’s pot? Just because they have all the data on themselves doesn’t mean the others aren’t of interest. I can think of several reasons they might want such things.

        If the others retailers were sufficiently interested in selling books, or sufficiently capable of selling books, they’d probably like to know what’s cooking in Amazon’s pot too, just to be able to generate better numbers for themselves.

        I really don’t think the parties most interested in the numbers will ever send you an email directly. Unless it’s MacMillan.

    • Hmm, if they don’t admit they’re selling your data they don’t have to say *how* they’re selling it. Author Earnings strips out author specific data before publishing but Pronoun might not.
      Plenty of people would be interested in very fine-grained author-specific data. Particularly MacMillan itself. Stuff like how much money each author makes when and where.

      Uh, no.
      Until they openly say they’re not I would have to assume they are. “If you’re not the paying customer you are the product.”

      TINSTAAFL!

  7. This article from the ALLi website is interesting. On the surface at least, it appears to allay many of the fears expressed:
    http://selfpublishingadvice.org/pronoun-macmillan-acquisition-update/

    Of course, time will tell!

    • Allay? Not for me. I’m seeing where they’re all but promising to charge for the “value added services”. Want to publish? That’s free. Want your competitors’ keywords? $$ Give them 6-9 months to get a good influx of indies, and there will be a change. And that is valuable data, providing it’s correct and can make you additional sales.

      And that article doesn’t address the sale of data.

      That said, I can see using them in a limited way. Something they didn’t want to do to begin with–they started as ‘all or nothing’ for venues. But all eggs in one basket, even a basket with a lovely interface, isn’t in our best interests. We’ve gotten past where we need to get all our sales data and pay via one bottleneck, an agent, and I don’t think it’s a good idea to volunteer for that situation. No matter what inducements they offer.

  8. They’re going to mine data from gullible indies and in four years we will be back to being locked out of publishing. When they take away all our tools (Book Bub, Facebook adds, mailing lists) we won’t be able to compete. I don’t know about the rest of you, but I am going to avoid this service like the plague. I very much like being an author and I don’t want to go back to the way it was.

    • @ Jeff

      What you envision is a locked-out publishing monopoly of some sort. I doubt that’s going to happen. The Internet, Amazon, and other distruptive technologies and entities work strenuously against that. It’s too easy for anyone to access the world and offer goods and services to anyone globally.

      The gatekeepers of the world are going the way of the dinosaurs. The tiny mammals will florish and rule.

      • True, but you still have to be careful signing any agreements/contracts that might then prevent you from using your IP as you might prefer.

  9. So, if I understand people’s view, they think Vook+ (I can<t call them by their new name as it misses who they acquired) has signed a deal with Amazon that:

    a. Existing authors can switch their books over to Vook+;
    b. Amazon will stop taking 65% of revenue;
    c. Amazon will only take 30% through Vook+;
    d. Vook+ will give every cent of the 70% directly to authors for free;
    e. Vook+ will make money from the data.

    So Amazon gave up 35 more percent to someone to offer the same service they already do directly, and loses some of their data, to create a new "supplier".

    Yeah, right. Because Amazon is in the business of finding ways to lose money.

    The only way that would make sense for Amazon is if the 35% lost was less than it cost them to run their own KU/KDP and wouldn't hurt their revenue stream OR they think that Vook+ are such low-sellers that it isn't worth their time to have them in their KDP stable.

    Why would Amazon sign such a deal?

    P.

    • “Why would Amazon sign such a deal?”

      Because from past purchases they knew the news of this would cause an increase in sales of tartar sauce …

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