Ebook Lending

Why the Public Library Beats Amazon—for Now

13 August 2014

From The Wall Street Journal:

A growing stack of companies would like you to pay a monthly fee to read e-books, just like you subscribe to Netflix to binge on movies and TV shows.

Don’t bother. Go sign up for a public library card instead.

Really, the public library? Amazon.com recently launched Kindle Unlimited, a $10-per-month service offering loans of 600,000 e-books. Startups called Oyster and Scribd offer something similar. It isn’t very often that a musty old institution can hold its own against tech disrupters.

But it turns out librarians haven’t just been sitting around shushing people while the Internet drove them into irrelevance. Over 90% of American public libraries have amassed e-book collections you can read on your iPad, and often even on a Kindle. You don’t have to walk into a branch or risk an overdue fine. And they’re totally free.

. . . .

To compare, I dug up best-seller lists, as well as best-of lists compiled by authors and critics. Then I searched for those e-books in Kindle Unlimited, Oyster and Scribd alongside my local San Francisco Public Library. To rule out big-city bias, I also checked the much smaller library where I grew up in Richland County, S.C.

Of the Journal’s 20 most recent best-selling e-books in fiction and nonfiction, Amazon’s Kindle Unlimited has none—no “Fifty Shades of Grey,” no “The Fault in Our Stars.” Scribd and Oyster each have a paltry three. But the San Francisco library has 15, and my South Carolina library has 11.

From Amazon’s own top-20 Kindle best seller lists from 2013, 2012 and 2011, Kindle Unlimited has no more than five titles a year, while the San Francisco library has at least 16.

. . . .

Over at the library, the situation is different. All of the big five publishers sell their e-book collections for loans, usually on the same day they’re available for consumers to purchase. They haven’t always been so friendly with libraries, and still charge them a lot for e-books. Some library e-books are only allowed a set number of loans before “expiring.”

Publishers have come to see libraries not only as a source of income, but also as a marketing vehicle. Since the Internet has killed off so many bookstores, libraries have become de facto showrooms for discovering books.

Link to the rest at The Wall Street Journal (Link may expire)

Kindle Unlimited and Kindle Stuffing

6 August 2014

From author Michael Bunker:

In the final days of the Roman Empire there were plenty of people still arguing (and from real evidence I might add) that the Roman Empire was still in power. The problem is that the conclusions they were drawing from the evidence was incorrect. The Ceteris Paribus fallacy had most people convinced that because the Roman Empire still ruled, then it would continue to do so for the foreseeable future. Even though the empire’s days were numbered.

I keep telling people that the days of Kindle Stuffing as a means of launching a new career are numbered. There is still a place for .99 and free books, but the days when new authors could count on cheap or free to get their names out there in a big way and to perhaps break out from the crowd… well, I suspect those days are generally over.

Authors don’t realize that readers have changed. Even this early in the e-book revolution, there has been a fundamental change in reader behavior that almost everyone is missing. In one of my last articles, I likened it to what happened with dollar stores. Anytime a once rare, pricey, or difficult to acquire commodity becomes abundant and inexpensive, buyers will gorge on it… for a time. Set a hungry man free in a field of strawberries and see what he does. But have that man live in a field of strawberries – where there is no scarcity, no seasons, and no cost – and you’ll see that he behaves differently in regards to strawberries. Sure, he’ll still eat them now and then, but the gorging will stop. Quality and value always assert themselves when price and/or scarcity is removed from the equation.

. . . .

[R]eaders, if you take the time to talk to as many of them as I do, will tell you that they are reading fewer and fewer of the cheap and free books they stuff into their Kindles. And of the ones they do try, they are reading less of the book before giving up. In many cases they are giving the book 2-3 pages (in many cases far less than 10%) before they decide to go on to the next book.

. . . .

So how does the launch of Kindle Unlimited prove my point?

1. The fact that Amazon saw it as necessary to provide unlimited FREE book loans to readers means that they are choosing to compete in a new delivery method that is going to revolutionize how readers receive titles. More and more books are going to be consumed via these membership services. And we have evidence that will allow us to predict reader behavior.

NETFLIX

. . . .

2. The fact that, unlike the Kindle Online Lending Library, Amazon has instituted a 10% read threshold before author payment is secured, proves my point even more. Amazon knows that the more free books are available, and when scarcity is removed as an issue, more readers are going to graze shop rather than committing based on a cover and a blurb. If the reader doesn’t read past the 10% threshold, Amazon doesn’t have to pay the author. This makes sense for Amazon, but it should tell you something about reader behavior and how it has changed.

Scarcity has been removed. The binge is over. Most newbie authors who count on the 2011 method of marketing and promotion to build a career are going to fail miserably.

Link to the rest at Michael Bunker and thanks to Sharyn for the tip.

Here’s a link to Michael Bunker’s books

Library Ebook Lending Worldwide Lags Behind U.S

4 August 2014

From Digital Book World:

Major publishers have widened U.S. libraries’ access to their catalogs in recent months, but as a new background paper from the International Federation of Library Associations and Institutions (IFLA) asserts, that isn’t happening everywhere around the world.

According to the report, “the overriding ebook issues for libraries continue to be the withholding of content and the imposition of problematic and differing license terms and conditions by major trade publishers.”

While the authors of the IFLA paper make clear that the U.S. is ahead of the worldwide curve in many regards, “the situation is volatile, with the potential for improvement or erosion in ebook availability ever present.”

Link to the rest at Digital Book World

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.

Close The Libraries And Buy Everyone An Amazon Kindle Unlimited Subscription

21 July 2014

From Forbes blogs:

Amazon has launched the mooted read all you can manage service and called it Kindle Unlimited. It costs, sadly for the US only at present, $9.99 a month and gives unlimited access to some 600,000 titles. Various people have various ideas about all of this.

. . . .

HuffPo rather sneeringly argued that Amazon wants you to pay $120 a year for a library ticket. Which is true but also what sparks this little, not entirely and wholly serious, thought on public policy.

Let’s just close down the lending libraries and buy every citizen an Amazon Kindle Unlimited subscription. I’ll use the numbers from my native UK here simply because I have a better grasp of them. As a country we spend some £1 billion a year (currently around $1.7 billion) on supporting the library system. There’s some 60 million citizens meaning that we can, from that sum, afford to pay perhaps £20 (as with most numbers I use, there’s a lot of rounding here, the numbers are not meant to be accurate, just informative as to magnitude and so on) for each subscription. That’s a lot less than Amazon is currently demanding but I would bet a very large sum of money that an adequate bulk discount could be arranged for such a slug of customers.

. . . .

[P]aid subscriptions is exactly how lending libraries started out. Both WH Smith’s and Boot’s used to run lending libraries. For a fee one had unlimited access to the stock of that profit making private sector enterprise. It was the specific attributes of books as physical objects in limited supply in any one location that led to councils (ie, the State) taking over library provision. Now that the technology has changed that technological reason for State provision no longer exists. So perhaps the habit of having those physical libraries with physical books also no longer needs to exist?

And finally, the stock of books available is far larger than any physical library (other than copyright depositaries like the British Museum) has available to readers. 600,000 titles is, at a guess, some 550,000 greater than the library system of my native Bath and North East Somerset purchases with its share of my council tax (that is a guess by the way).

Link to the rest at Forbes blogs

Kindle Unlimited: The Key Questions

21 July 2014

From David Gaughran:

Amazon launched Kindle Unlimited on Friday, giving self-publishers a big decision to make.

The long-rumored subscription service will allow users to download unlimited books for $9.99 a month, and reader reaction has been, from what I can see, overwhelmingly positive – especially because they will be able to test the service with a month’s free trial. Writers have been a little more cautious, for all sorts of reasons I’ll try and tease out below.

The main stumbling block for self-publishers is that participation in Kindle Unlimited is restricted to titles enrolled in KDP Select – Amazon’s program which offers various additional marketing tools in exchange for exclusivity. Author compensation will be similar to borrows under the Kindle Owners’ Lending Library – a percentage of money from a fixed pool. The only real twist is that payment will be triggered when 10% of downloaded books have been read.

. . . .

How much will we be paid for borrows?

There’s actually no way of knowing right now. Authors had the same questions when KDP Select launched in December 2011, and I remember estimates ranging from $0.30 to $2. In the time since, borrow payouts have averaged $2.19. It seemed like Amazon was always keen to keep the rate around $2, adding and subtracting money from the fixed pool each month to keep things at that level.

It could be the case that KDP Select and the Kindle Owners’ Lending Library was (at least in part) a giant experiment paving the way for Kindle Unlimited, and it could also be the case that Amazon will maintain borrow rates at around $2, but we can’t be sure until it happens. It’s possible that Amazon could let borrow rates slip and hope that increased volume makes up for it. We’ll have to wait and see.

Will this cannibalize paid sales?

This is the big question. It seems safe to assume that paid sales will be cannibalized to some extent, but Kindle Unlimited could also grow the pie. We don’t know how popular it will be with readers, but I’d be very surprised if it was a flop.

So which kind of readers will it attract? Will it be all the bargain-hunting readers that swamp sites like BookBub and make limited-time 99c sales so effective? Will it gobble up the freehunters that make permafree such a winning strategy? Will it wean the power readers off box-sets?

. . . .

Don’t Oyster and Scribd have better terms for writers?

For most self-publishers, the only way into Oyster and Scribd is via a distribution service like Smashwords, where you will get 60% of your list price every time that 10% of your book is read. Unless you are writing lots of very short/cheap books, the terms there can be much more lucrative (assuming Kindle Unlimited borrow rates do indeed come out at around $2 – which is still an open question).

However there’s a flipside to that. There’s no way in hell that the terms that Oyster and Scribd are offering are sustainable. Obviously, both companies are happy to eat the losses today in exchange for market share tomorrow, but those compensation terms will have to deteriorate at some point. The only question is how much. I have issues with Amazon’s compensation model – I hate the fixed pool on principle, and I don’t like not knowing what I’ll be paid in exchange for my work – but it’s definitely more sustainable.

Link to the rest at David Gaugran and thanks to Donna for the tip.

Amazon Unveils E-Book Subscription Service, With Some Notable Absences

19 July 2014

From The New York Times:

After months of speculation, Amazon on Friday introduced a digital subscription service that allows subscribers unlimited access to a library e-books and audiobooks for $10 a month.

The service, Kindle Unlimited, offers a Netflix-style, all-you-can-read approach to more than 600,000 e-books, including blockbuster series like “The Hunger Games” and “Diary of a Wimpy Kid,” nonfiction titles like “Flash Boys” by Michael Lewis, as well as literary fiction and classics.

So far, however, none of the five biggest publishers appear to be making their books available through the service.

. . . .

And because many authors publish with more than one house, subscribers may find that they can download certain books by, say, Margaret Atwood or Michael Chabon, but not other titles by the same authors.

. . . .

 Among the imprints making their books available to the service are Scholastic, which published “The Hunger Games” series, and Houghton Mifflin Harcourt.

. . . .

Scribd has some 400,000 titles and charges subscribers $9 a month.

Oyster has more than 500,000 titles available and gives readers unlimited access for $10 a month.

With similar pricing models, the competition among e-book subscription services could come down to content and what books and authors are included.

Scribd’s subscription service includes books from more than 900 publishers, including Simon & Schuster, HarperCollins and Wiley.

Oyster offers titles from six of the top 10 American publishers, according to a company representative.

Publishers receive payments whenever one of their books is downloaded and a certain percentage is read.

. . . .

Russ Grandinetti, a Kindle senior vice president, said in a statement that Kindle Unlimited was “by far the most cost-effective way to enjoy audiobooks and e-books together.”

“You can easily switch between reading and listening to a book, allowing the story to continue even when your eyes are busy,” he said.

Link to the rest at The New York Times

What’s So Interesting About Kindle Unlimited?

18 July 2014

From regular TPV commenter, Will Entrekin:

Big news today: Kindle Unlimited.

Ten bucks per month for unlimited access to any Kindle book in the program, on any device.

Who’s got two thumbs and started his free trial within ten minutes of the announcement? Yeah, this guy.

Let’s be honest: from a reader perspective, this is awesome. Ten bucks per month? Hell, I’m lucky if I don’t spend three or four times that every first of every month on the Kindle Monthly Deals.

From an author perspective? A publishing perspective?

. . . .

According to my KDP page, by enrolling in KDP Select, my books can be part of Kindle Unlimited. And when a reader reads 10% of my book, I’d get paid. It’s not clear how much, but my guess is that, as with the Kindle Owners Lending Library, authors get an equal share of a fund dedicated to all participants eligible to get paid.

Is that more or less than I get from the 70% I get now? I’ve no idea. It may be less per book but ultimately more overall, depending on the success of the program and my hypothetical book’s performance within it.

. . . .

Netflix? Spotify? They worked with studios and labels to get the content their platform would use. Which I think prompts a question, and maybe a couple: How much do the artists get paid? How much do the labels get paid?

I don’t know the answer to that question. I’ve heard that it’s a low number–for some reason, 11 cents sticks out in my head. But I may have just made that up.

Point is, though, in the case of Spotify, authors make their royalties based on their agreements with their labels. The labels pay Spotify. [PG thinks Will meant "Spotify pays the labels."]

You probably see where I’m going with this.

What’s brilliant about the way Amazon did this is they didn’t have to talk to anyone beforehand. They didn’t have to go to the corporate publishers. They spent years building this awesome digital reading platform, and then they spent more years attracting some terrific authors, and offering incentives to those authors to go all-in with them. “Let us be the only place people can buy your ebooks,” they said, “And we’ll make it worth your while. We’ll give you free promotions. Countdown deals. We’ll let people borrow your book.”

“We’ll make you part of Kindle Unlimited.”

. . . .

Now, I don’t know for sure they didn’t talk to the corporate publishers, but I do know they didn’t launch with any.

That’s huge.

. . . .

This may just be the largest endorsement of independent authors and their work . . . pretty much ever.

Link to the rest at Will Entrekin

Amazon Isn’t Killing Writing, The Market Is

18 July 2014

From TechCrunch:

Amazon’s war on publishers reached a crescendo yesterday with the leak of Kindle Unlimited, a subscription plan that would allow readers to pay $9.99 per month for unlimited access to the Kindle ebook library. No longer content with simply demanding steeper discounts from publishers like Hachette — which is locked in a bitter fight with the e-commerce giant over book prices — Amazon is finally reaching its end goal: the complete dissolution of the traditional book business model through a vertically integrated publishing platform, from writer to Kindle.

The idea of a “Netflix for Books” has been a popular startup theme for a while, and Kindle Unlimited certainly enters a crowded field. Oyster raised $17 million of venture capital over its two rounds of financing, and Scribd recently pivoted from hosting documents to a book subscription service. Yet, only Amazon currently has the scale to see such a plan become an industry standard, where it dominates ebook sales with an estimated 65 percent market share.

As a writer, I am supposed to feel wary of this turn of events. By capping the total price paid per month for books, Amazon is theoretically limiting its upside revenue from book sales. Adults in America either read a lot of books, or not that many at all, which you can interpret in the statistics from the Pew Research Internet Project.

An unlimited plan is expected to put a ceiling on a reader’s total expenses for books, therefore capping the costs of the most lucrative customers. Readers will spend less, writers will be paid less, books will disappear, and the Earth will hurtle toward the sun due to an increase in fiber from the decrease in paper pulping.

. . . .

These business models do apply to a very small handful of writers, who can option their weird vampire dramas or pubescent magic dramas to make a fortune. But unlike up-and-coming artists in video or audio, the plot twist for books is that there are almost no alternative revenue sources for writers.

Nearly all the work a writer does in marketing and external relations is to sell actual copies of books. Book talks and lectures are generally unpaid, and contributed articles to magazines and newspapers to market a book often pay a low fee if they pay one at all, and rarely if ever share in advertising revenue. The only alternative publishing model is around consulting, using a book as a customer acquisition strategy. That only works in the business and psychology section of the bookstore, and isn’t that useful for the rest of the aisles.

And that ultimately is the part of Kindle Unlimited that is perhaps most ominous, and why authors have been so passionate about the issue of ebook prices. Driving the prices lower isn’t likely to expand the market of readers, since book prices don’t seem to be the deciding factor on whether someone reads a book (time is). But those lower prices directly shrink the incomes of authors, who lack any other means of translating their sales into additional revenue.

Link to the rest at TechCrunch and thanks to William and others for the tip.

Why Amazon’s ‘Netflix for books’ might be doomed before it starts

18 July 2014

From The Verge:

“The everything store” was never the extent of Amazon’s ambition. Jeff Bezos has built a business that is, ultimately, about offering every kind of access to every kind of thing. You can buy shoes and coyote urine, subscribe to periodicals and deodorant, stream music and movies and TV shows. Oddly, books have been the holdout, as Amazon’s fights with publishers have largely kept it from experimenting with new forms of packaging and distribution.

That’s what’s so exciting about Kindle Unlimited, the $9.99 / month subscription reading service Amazon appears to be ready to launch. It’s the “Netflix for books” idea that a number of companies have tried, all to middling success: pay one price, read as many books as you like.

. . . .

Netflix is so successful that it seems any “Netflix for X” would be popular. But there’s some evidence that it won’t work in every market. In 2013, the average person spent 2.8 hours watching TV every day, nearly half of their so-called “leisure time.” (Some age groups spent more than four hours.) All Netflix had to do was take some of that time away from cable, and without changing anyone’s habits it became immensely successful.

The statistics on reading are comparatively damning: no age bracket spends an hour a day reading, and most read much less. The average 25- to 34-year-old spends exactly six minutes reading every day, and younger age groups are somehow even worse.

. . . .

Research firm CIRP found that Kindle owners spend $443 more per year at Amazon than those without a device. So while the potential audience might be small for Kindle Unlimited, or at least smaller than Netflix’s, it’s extremely lucrative. And Amazon, which owns 65 percent of the ebook market, according to theThe New Yorker, already has it cornered.

. . . .

And, most importantly, if it can find enough people ready to trade binge-watching for binge-reading. That might turn out to be the hardest part.

Link to the rest at The Verge and thanks to Will for the tip.

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