Royalties

Why Do Authors Feel Hard Done By?

14 November 2018

From Publishing Perspectives:

I was struck by a comment on my last column about measuring commercial success in publishing. It came from Ryan Jones who is, I imagine, an author. He wrote: “Publishers pull in billions of dollars yearly and yet few writers can even make a living. What’s wrong with that picture?”

I thought it might be worth examining this widely held sentiment.

Of course he has a point, and I’m sure the various organizations supporting and representing authors would agree. There was a recent spat between the UK’s Society of Authors, the Authors Licensing & Collecting Society, and the Publishers Association, about this very subject.

. . . .

Per Saugman was a distinguished medical publisher, the force behind Blackwell Scientific Publications, the sale of which to Wiley is the reason that the UK still has a high-quality academic and trade bookselling chain, Blackwell Retail, in spite of the many challenges. Saugman explained to an author why he would not increase his royalty rate: “I’m not paying you the royalty, the purchasers of the book are. The higher the royalty rate, the more we shall have to charge and the less enthusiastic they will be to reward you.”

The royalty system is a fair one. It links an author’s income not to any abstract notion of worth but to how much the reading market will pay for the author’s efforts. Successful authors are hugely well rewarded and I’m sure would prefer the current system to any other. JK Rowling, Danielle Steele, Stephen King, and many others have built fortunes from their books and frequently are able to deploy those fortunes generously and properly.

And then one should consider why writers write. It’s not always (or even usually) for money. There are many motivations.

For instance, a lawyer might want to write the ultimate book on her subject of expertise. It’s a way of establishing her credibility and hence the value of her professional practice. A few hundred or thousand dollars either way will be of little consequence but what she wants is a publisher whose brand carries weight, whose editorial support systems and marketing reach are first rate.

. . . .

The main complaints seem to come usually from so-called midlist authors whose income is almost certainly in decline. But that’s not from publishers taking more. It’s simply the case that general fiction (the bulk of this sector) is more widely split than ever between the bestsellers and the not-so-good sellers. Public library sales, which were the bedrock of midlist hardback sustainability, are in decline. Paperback sales have been eroded by lower-price ebooks. Fewer retailers are willing to dedicate space to any but the top 100 or so novelists. Self-publishing has created a tsunami of digital fiction, thus deflecting sales from the traditional market.

None of that is of any comfort to the professional writer seeing his or her income decline. Nor does it help that publishers seem willing to pay large advances to unknown new authors in the hope of finding the next big thing after a massive twelve-way auction. The trouble is that every now again the next big thing is the next big thing and it is the big things that keep general publishers in business.

. . . .

Yes, the publishing industry is big. A survey conducted by the World Intellectual Property Organization and the International Publishers Association estimated total global sales of US$41.9 billion in 2016.

. . . .

The industry also employs many millions of people worldwide. And pays taxes. And creates markets.

But as I said in my previous column, sales don’t represent profits.

Publishing is highly competitive. Margins in certain sectors at certain times can be high. An unexpected bestseller can transform a business. Finding a new niche or a new market can generate profit and cash, but in the normal course of events, a publisher is happy to make a 10-percent return on sales (trade authors typically receive 10 to 20 percent of the publisher’s sales) and to generate enough cash to stay in business.

Publishing is a good business and an important one for all sorts of reasons, but publishers are not the greedy sharks they’re sometimes portrayed to be, nor are their companies out to prosper at the expense of authors. If authors’ incomes are in decline, the solution is to find a larger cake, not to argue about the size of the slices.

And Stanley Unwin’s famous quotation still holds true: “The first duty of any publisher to their authors is to remain solvent.”

Link to the rest at Publishing Perspectives

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Are Electronic Course Packs Fair Use?

28 October 2018

From The Authors Guild:

For the past ten years, in the Cambridge University Press v. Albert case, publishers have been battling with Georgia State University over whether the University’s providing its students with digital course packets that include excerpts (often full chapters) of books constituted “fair use.” Under court rulings in prior cases, the law was clear that providing photocopied course packs without a license was not fair use. In this case, however, the district court has already twice sided with Georgia State University, finding fair use on all but a few excerpts, and now the appeals court has again sent the case back down to it. On October 19, 2018, the Eleventh Circuit Court of Appeals vacated the district court’s second decision that the vast majority of Georgia State University’s digital excerpts were fair use, with instructions for how to get it right this time.

. . . .

This case has been closely watched by authors, publishers, and universities as a measure for when excerpts for classroom use need to be licensed or not. In the intervening decade, many universities appear to have stopped paying for these types of electronic classroom uses. Authors who used to regularly receive licensing income from classroom use report that that revenue source has dried up in recent years. A favorable outcome in this case would put universities on notice that they should start paying for those uses again.

. . . .

One of the major errors that the Eleventh Circuit failed to correct is the district court’s analysis under the fourth factor. The law describes the fourth factor as: “the effect of the use upon the potential market for or value of the copyrighted work.” As such, a fair use is one that should not replace a current or potential market for the work. The Supreme Court instructs courts conducting this analysis to look at the impact on current and potential markets if the use were to become widespread and unrestricted.

Instead, the lower court looked at whether the publishers already had electronic licenses available to universities in 2009 for excerpts for the specific works—an extremely narrow view of an existing market.

. . . .

Moreover, the court’s rule that the taking must be so great that the copyright owner no longer has the incentive to write or publish was created out of thin air and would make pretty much any particular use fair use. Few individual uses will be so great that they will be the deciding factor in whether to publisher or not (or write for that matter); it is the cumulative effect of these free uses that makes it increasingly hard to publish material that is not highly commercial.

Of greatest concern to authors and other creators is the fact that the Eleventh Circuit failed to remind the lower court to consider the impact on potentialmarkets from widespread use, and to remember that the relevant market to be considered is broader than a particular format. Whether the publishers had already made the particular works available for e-licensing for e-course packs should be irrelevant – yet the district court chose to focus on that point. Under the court’s analysis here, uses of copyrighted material that eliminate potential markets entirely—and thereby eliminate potential income for the authors as well as the publishers—may qualify as fair uses.

Link to the rest at The Authors Guild

Fat horses & starving sparrows

28 October 2018

From Overland:

In the last major survey, conducted by Macquarie University researchers in 2015, Australian authors were found to earn an annual average of just $12,900 from their writing work; the median, at $2,800, is even more concerning. In the UK, which has better longitudinal data, earnings of professional writers have dropped 42 per cent in real terms between 2005 and 2017, according to the Authors’ Licensing and Collecting Society. In that same time, the proportion able to make a living solely from writing work fell from 40 per cent to 13.7 per cent. The jobs at newspapers and magazines that used to so often be relied on to bolster book earnings have largely evaporated. Many of us know people who have lost their writing jobs, or who are just barely clinging on.

. . . .

Let’s start with ‘free is not fair’, the catchy slogan of a campaign led by the Copyright Agency, which has been used to argue against the proposed adoption of a ‘fair use’ exception to copyright. For those who haven’t been following, there has been fierce debate over whether Australia ought to adopt a flexible exception to copyright infringement that would permit, without payment, any kind of use, so long as it’s ‘fair’. This is already the law in countries such as the US, with ‘fairness’ determined by taking into account all relevant factors, including the effect of the use on the potential market for or value of the copyright material.

Many people claiming that ‘free is not fair’ know a lot about copyright. They know that our law has permitted, for over a century, fair use for purposes such as research, criticism/review and news reporting. And, unless you think you should pay for every use of every copyrighted thing – for example, every time you access a webpage, use a search engine, forward an email or retweet a photo – you know free can be fair. The slogan even contradicts itself, since under a fair-use exception, if the use of a work for free is not fair, it wouldn’t be permitted. That is the entire point. Thus ‘free is not fair’ is textbook bullshit.

. . . .

However well intentioned these claims might be, they sell authors short. The reasons why can be found in the two fundamental rationales for granting copyright in the first place. The first is to incentivise the creation of works, thus helping achieve the social benefits that flow from widespread access to information and culture. On top of that, copyright aims to reward authors: to secure them an additional share of the benefits arising from their creations, in recognition of their contributions of personality and labour.

To give effect to these aims, authors and publishers should be able to share between them the rights necessary to incentivise their investments in creating and distributing cultural works. But the rewards share – everything beyond that – is justifiable only for authors: the people who actually created the work.

Right now, Australian copyright law is designed to make it as easy as possible for investors to extract the entirety of authors’ copyright interest – not just the incentives component, but the additional rewards part as well. We call this a laissez-faire approach, French for ‘let people do as they choose’, but here better described as the freedom to sign away your rights, before anyone knows what the work is worth, often in exchange for not much at all.

I know a woman, ‘Kate’, who recently sold her book to a Big Five publisher for less than $1,300. The publisher extracted every right to every payment, worldwide, forever, leaving the author with zero entitlement to future royalties (even if the book becomes a surprise bestseller), or any licensing fees that might be paid for use of the book in schools or universities. Kate even lost her statutory right to compensation for use in libraries, since one’s claim to these payments depends on having an ongoing right to royalties.

That such a deal would be offered and agreed to won’t surprise anyone who has worked in or studied creative labour markets. As cultural economist Ruth Towse explains, commercial players in creative industries take advantage of the structure of artists’ labour markets and exploit their willingness to create. A surplus of creatives, coupled with a culture of short-term, project-specific contracts, puts artists in relatively poor bargaining positions when dealing with investors. All this explains how such a big share of copyright’s rewards can end up being transferred to others.

We see from all this that authors have a moral entitlement to the fruits of their labour, but a hard time holding on to them. Outside Australia, many countries have taken steps to even the playing field. In France, publishers have an ongoing obligation to market their books: if they fail to do so, authors can readily regain their rights. They can also terminate an agreement if, at least four years after publication, no royalties have been paid for two years in a row (publishers are required to provide accurate royalty statements too). Canada automatically reverts rights to heirs twenty-five years after an author’s death (as did the UK until 1956 and Australia until 1968). Authors can terminate their contracts in the US after thirty-five years. The Netherlands and Germany both have ‘bestseller’ clauses, entitling authors to a bigger share of the windfall gains that come from unexpected commercial success.

. . . .

Australia’s current approach to protecting authors is a manifestation of trickledown economics, that theory of horses and sparrows: feed the horses enough oats and some will fall through to feed the birds. There are plenty of oats. By 2016, according to their own publicly released data, publishing behemoths Penguin Random House and Simon & Schuster had seen their profit margins grow to 16 per cent. Yet a recent study, The Contribution of the Publishing Industry to the UK Economy, estimated that just 3 per cent of earnings went to the authors from whose minds sprang those rivers of gold. In other words, we have fat horses and starving sparrows.

. . . .

We should also be demanding greater transparency around the distribution of revenue from the statutory licences that pay for uses in schools and universities. Those are the revenues that, in Australia, are collected by the Copyright Agency. Australia’s schools pay far more to use copyrighted works than their overseas counterparts – almost $17 per student, compared to around $3 in the UK and NZ. This would be laudable if that money went to supporting authors, but as far as we can tell from the Copyright Agency’s reporting, publishers again take the lion’s share.

Link to the rest at Overland

Universal Music Settling Big Class Action Lawsuit Over Digital Royalties

6 September 2018
Comments Off on Universal Music Settling Big Class Action Lawsuit Over Digital Royalties

From Billboard:

An important chapter in the legal history of the music business may be coming to conclusion soon as Universal Music Group is close to submitting a settlement resolving claims that it cheated recording artists of royalties from digital downloads.

The putative class action from artists including Chuck D. of Public Enemy, Rick James (by way of trust), Dave Mason of Traffic, Whitesnake, Andres Titus of Black Sheep, Ron Tyson of The Temptations, among others, alleges that record labels should be treating digital download income off of venues like Apple’s iTunes as “licenses” rather than “sales.” By accounting the other way, the artists get about 15 percent of collected income rather than 50 percent they allege is due.

. . . .

The monetary value of UMG’s coming settlement haven’t yet been disclosed, but The Hollywood Reporter has learned that it will likely cover EMI, which was acquired by UMG in 2012 and has been dealing with its own litigation on the digital download front. Following settlements by Warner Music and Sony, UMG’s deal if approved would mean that all of the record majors have resolved claims following the 2010 appellate ruling in F.B.T. Productions v. Aftermath — dealing with Eminem songs — which suggested that “licenses” rather than “sales” were the more appropriate accounting treatment in an era where record labels no longer spend huge amounts on packaging physical CDs.

According to sales data released this week by the RIAA, digital downloads is the top revenue producer in the music industry. Download sales are at $2.64 billion, which beats physical music sales of $2.27 billion.

. . . .

As streaming gets closer to dominating downloads, the litigation may shift likewise as well.

The digital downloads cases may be on the precipices of conclusion, but scrutiny may follow as to whether record labels are cheating artists on money collected from outlets like Spotify. For instance, on Tuesday, a judge refused to reject claimsthat Sony breached agreements and good faith dealing with 19 Recordings — the label of former American Idol contestants Kelly Clarkson, Carrie Underwood and Jordin Sparks — by allegedly mischaracterizing income from streaming services as as “sales” or “distributions” rather than as “broadcasts” or “transmissions.”

Link to the rest at Billboard

Starting several years ago, PG blogged about this issue before in the context of book publishing agreements. For a great many years, standard publishing contracts included royalty provisions that paid a much lower royalty for books that were sold than for books that were licensed.

PG hasn’t surveyed Terms & Conditions for online ebook sellers for a long time, but the last time he did, the major online retailers all said something to the effect that the publishers were licensing ebooks to readers, not selling them.

Here’s the relevant portion of Amazon’s current Kindle Store Terms of Use, located in Paragraph 1, “Kindle Content”:

Kindle Content is licensed, not sold, to you by the Content Provider.

If you pull up a publishing contract that’s more than ten years old and search for the royalty rates payable when the publisher licenses the book, you may well find that, like the music business, Big Publishing paid much higher royalties for licenses than it did for sales.

To cash in on Kindle Unlimited, a cabal of authors gamed Amazon’s algorithm

16 July 2018

From The Verge:

On June 4th, a group of lawyers shuffled into a federal court in Manhattan to argue over two trademark registrations. The day’s hearing was the culmination of months of internet drama — furious blog posts, Twitter hashtags, YouTube videos, claims of doxxing, and death threats.

The lawyers carried with them full-color exhibits of the trademarks in context. First up, two shirtless men with stethoscopes, embracing a woman, with the words Her Cocky Doctorsboldly printed below. Next: two shirtless men flanking a woman in a too-big firefighter’s jacket, with the words Her Cocky Firefighters emblazoned in the same font.

“What is in the content of Her Cocky Firefighters?” asked the judge, surveying the exhibits.

“It appears to be a male-female-male romance,” said a lawyer for one of the defendants. “Beyond that, I imagine it involves one or two of the male characters is a firefighter.”

The judge looked over Her Cocky Doctors. “Two male figures. One seems to be wearing a stethoscope, indicating he is a doctor, but he is stripped to the waist.”

“Doesn’t look like my doctor, your Honor,” said the lawyer drily.

They were gathered there that day because one self-published romance author was suing another for using the word “cocky” in her titles. And as absurd as this courtroom scene was — with a federal judge soberly examining the shirtless doctors on the cover of an “MFM Menage Romance” — it didn’t even begin to scratch the surface.

The fight over #Cockygate, as it was branded online, emerged from the strange universe of Amazon Kindle Unlimited, where authors collaborate and compete to game Amazon’s algorithm. Trademark trolling is just the beginning: There are private chat groups, ebook exploits, conspiracies to seed hyperspecific trends like “Navy SEALs” and “mountain men,” and even a controversial sweepstakes in which a popular self-published author offered his readers a chance to win diamonds from Tiffany’s if they reviewed his new book.

Much of what’s alleged is perfectly legal, and even technically within Amazon’s terms of service. But for authors and fans, the genre is also a community, and the idea that unethical marketing and algorithmic tricks are running rampant has embroiled their world in controversy. Some authors even believe that the financial incentives set up by Kindle Unlimited are reshaping the romance genre — possibly even making it more misogynistic.

A genre that mostly features shiny, shirtless men on its covers and sells ebooks for 99 cents a pop might seem unserious. But at stake are revenues sometimes amounting to a million dollars a year, with some authors easily netting six figures a month. The top authors can drop $50,000 on a single ad campaign that will keep them in the charts — and see a worthwhile return on that investment.

In other words, self-published romance is no joke.

. . . .

Qhen author Dakota Willink attended the Romance Writers of America conference last year, she didn’t know anything about the “cocky” trademark. She hadn’t heard of Faleena Hopkins, the self-published author who registered the mark, or of Tara Crescent, the other author whom Hopkins is now suing.

The RWA conference is the beating heart of the romance industry, a business-first trade conference with editorial pitch meetings and marketing workshops. It’s also the center of the warm, accepting, and woman-focused culture that the romance community is so proud of. In an episode of This American Life in 2003, reporter Robin Epstein expresses surprise at the environment she encounters at RWA. “What the hell is going on here?” she asks herself rhetorically. “The famous writers are nice, the editors are nice, and this is the publishing business.”

This was Willink’s first time at RWA, and she was spending much of her time with her new personal assistant, Lauren Valderrama.

Valderrama is also the personal assistant for several other successful romance authors — names that frequently dominate the romance charts on Amazon. In the world of self-published romance, a personal assistant does anything from formatting books to handling social media and publicity to sending out advance review copies. It’s enough work that it was a little unusual for Valderrama to be handling so many top-ranking, prolific clients. But that track record was appealing when Valderrama had originally reached out to Willink, professing to be a fan and suggesting that they work together.

According to Willink, over the course of RWA, Valderrama told her about certain marketing and sales strategies, which she claimed to handle for other authors. Valderrama allegedly said that she organized newsletter swaps, in which authors would promote each other’s books to their respective mailing lists. She also claimed to manage review teams — groups of assigned readers who were expected to leave reviews for books online. According to Willink, Valderrama’s authors often bought each other’s books to improve their ranking on the charts — something that she arranged, coordinating payments through her own PayPal account. Valderrama also told her that she used multiple email addresses to buy authors’ books on iBooks when they were trying to hit the USA Today list.

The Bookclicker chat group exists on Ryver, a clone of Slack (internal chat software for businesses). It was founded by a USA Today best-selling author named Chance Carter, known to some as a “notorious Kindle Unlimited abuser.” Carter’s name came up in half a dozen interviews as a pioneer of questionable and highly lucrative marketing practices. In the middle of reporting this story, almost of all of Carter’s very popular books were removed from Amazon, for reasons that remain unclear. A spokesperson for Amazon said that as a matter of policy, the company did not comment on individual cases.

. . . .

It’s not clear if these early book-stuffers moved onto the self-publishing romance scene, or if some of the self-publishing romance authors began to pick up on these tricks. Either way, book stuffing plagues the romance genre on Kindle Unlimited, with titles that come in at 2000 or even 3000 pages (the maximum page length for a Kindle Unlimited book). That’s approximately the length of Atlas Shrugged or War and Peace.

Book stuffing is particularly controversial because Amazon pays authors from a single communal pot. In other words, Kindle Unlimited is a zero-sum game. The more one author gets from Kindle Unlimited, the less the other authors get.

The romance authors Willink was discovering didn’t go in for clumsy stuffings of automatic translations or HTML cruft; rather, they stuffed their books with ghostwritten content or repackaged, previously published material. In the latter case, the author will bait readers with promises of fresh content, like a new novella, at the end of the book.

. . . .

Of course, you might be wondering if any readers actually read through all 3000 pages. But authors deploy a host of tricks in service of gathering page reads — from big fonts and wide spacing to a “link back.” Some authors would place a link at the very front of the book, to sign up to a mailing list. The link would take them to the back of the book, thus counting all pages read. It’s not clear whether any of this actually works. A spokesperson for Amazon told The Verge that Amazon uses a standardized page count that won’t take big fonts or wide spacing into account. A June blog post by the Kindle Direct Publishing Team assured authors that the KENPC system (Kindle Edition Normalized Page Count) recorded pages read with “high precision” and that the company was constantly working to improve its “fidelity.”

. . . .

The stereotype of a Kindle Unlimited author is someone who is “pumping out short, pulpy reads,” in the words of best-selling romance writer Zoe York. But even if you write well, write prolifically, and cater to the market, it still doesn’t mean you’ll find success. “That skill set of finding a cold audience, getting them to hook into your product, and then consume through your product backlist, that’s harder than it sounds,” says York. The people who do succeed have that skill set. “They’re not good writers, but they’re great marketers.”

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

Rapper pays $18.5m for work at auction but the artist gets nothing—is the system in need of reform?

2 July 2018

From The Art Newspaper:

There was much fanfare last month when the US artist Kerry James Marshall “obliterated the glass ceiling of prejudicial art pricing”, as the dealer and art commentator Kenny Schachter put it, with the record sale of his painting Past Times (1997) in a contemporary art sale at Sotheby’s New York.

The work, depicting a pastoral scene that features black suburbanites instead of white aristocrats, was bought by the rapper Sean “P. Diddy” Combs for $18.5m ($21.1m with fees), making Marshall the highest-paid living African-American artist at auction. But Marshall didn’t receive a cent from the sale.

Under European legislation, Marshall could have earned $14,700 (royalties are capped at this comparatively paltry sum), but in the US, artists are not entitled to a cut on works sold on the secondary market. The state of California recently suspended the collection of royalty payments due to ongoing litigation.

. . . .

Although records continue to tumble in the contemporary art market, reports suggest that artists are getting poorer; the majority of artists in the UK earn less than £5,000 a year after tax, and less than $10,000 in the US, according to the online marketplace Artfinder. In such a polarised climate, should auction houses and dealers not pay their dues to the artists from whom they profit?

The strict enforcement of global resale rights, or an entertainment industry-style model of residuals, would be one way to ensure that artists are afforded a basic income. Another option is to introduce a system whereby artists retain a stake in their own work.

If Robert Rauschenberg had kept a 10% share in Rebus (1955), he would have made $575,000 from its sale at Sotheby’s New York in 1988, according to a paper published in February by the scholars Amy Whitaker and Roman Kräussl, titled Democratising Art Markets: Fractional Ownership and the Securitisation of Art. It is a hypothetical situation befitting of the artist who famously accused the art collector Robert Scull of ripping him off after a 1973 auction that earned Scull $2.2m off the back of cheaply acquired works. “I’ve been working my ass off for you to make that profit,” Rauschenberg berated the taxi tycoon.

Link to the rest at The Art Newspaper

PG can think of some interesting ways for an artist to try to attach a security interest to personal property such as a piece of art to support a continuing contractual obligation attaching to the art for each owner to pay the artist a royalty consisting of a portion of the owner’s profits upon the sale of the art.

He suspects the typical young starving artist would not have the bargaining power with an art auction house or wealthy purchaser to obtain such a royalties arrangement, however. Presumably if an artist’s works are generating large purchase prices on the secondary market, that artist’s new works would sell for a lot of money as well so it’s arguable that the benefits of an ongoing royalties arrangement would mostly go to financially successful artists.

However, PG suspects what amounts to an ongoing artist’s royalty payable upon each sale of an artist’s work would have the effect of reducing the amount a buyer purchasing art as an investment would be willing to pay for a work, thus reducing the amount of money the artist receives upon the initial sale of the art. That might not be what a young artist is really looking for.

Additionally, if an art-loving purchaser wanted to acquire the artist’s work because the purchaser really wanted to have the work in their home or business for their own viewing pleasure (instead of treating it as a speculative investment) and had no intention of ever reselling it, the artist would be unlikely to receive any future income from the piece. Similarly, if the purchaser donated the artwork to a non-profit public museum, presumably, the artist would not be entitled to an additional payment for such charitable transfer.

Selling Out: Going Wide or Going Exclusive to Amazon

24 May 2018

From The Book Designer:

When most new publishers think of selling ebooks, the first place they think of is Amazon’s Kindle Direct Publishing (KDP) program.

This makes sense — after all, Amazon represents somewhere between sixty and eighty percent of the world English market for ebooks. Who wouldn’t want to have their book sold in the biggest storefront of all?

Amazon has created a program — KDP Select — that rewards publishers for offering their titles exclusively through the Kindle Store. A lot of publishers — and not just new ones — decide to put all of their eggs in the Amazon basket. They make some compelling arguments for why they do so.

I don’t — do so, that is. With almost all of the books that I publish, I sell wide — that is, at as many retail and distribution outlets as possible, in addition to the ‘Zon.

. . . .

Before we discuss the relative merits of selling wide or sticking exclusively to Amazon, we need to look at what the KDP Select exclusive program actually entails.

First of all, it’s a fully voluntary, opt-in program — just because you’re selling on Amazon doesn’t mean that they get exclusive rights to sell your ebook. You have to enroll each title — just because you’ve got one ebook exclusively at the Kindle Store doesn’t mean you can’t sell another on the iBooks Store, the Nook Store, Kobo, Google Play, and hundreds of other retail sites.

. . . .

Once you’ve signed up, whether at publication time or after, the title is locked in for a term of 90 days. In order to have the title remain enrolled, you have to keep that box checked — which it will until you go in there and change something.

In order to remove your title, on the other hand, you have to uncheck the box, and then wait until the term expires.

. . . .

By the way, just in case I haven’t made it clear, unless you sign up your book for KDP Select, you get no benefit at all out of selling exclusively on Amazon.

. . . .

Back when I first started selling ebooks, eight years ago, there were some nice benefits to enrolling in KDP Select. Although Amazon has added and subtracted over the years, there still are.

The current list of benefits includes:

  • Making your title available through the KindleUnlimited (KU) subscription service
  • Offering promotions:
    • Free
    • Countdown
  • Increased royalties in some non-US markets

That’s about it.

. . . .

KindleUnlimited

This is Amazon’s ebook subscription service — a “Netflix for ebooks” setup.

The reader can “borrow” up to ten KindleUnlimited titles at a time, all for the low, low price of $9.99/month. For folks who read in bulk — the folks who are our bread and butter — this is a very nifty deal.

From the publisher point of view, here’s how it works:

  1. Amazon estimates the number of “pages” based on the wordcount of your book. (They call this count the title’s Kindle Estimated Normal Pages or KENP.)
  2. When a reader checks out the book, Amazon keeps track of the highest-numbered page that the reader has reached. — You can keep track of “page reads” on your KDP sales reports.
  3. Each month, Amazon announces how much money all of the KU-enrolled books will share. (It’s usually a bit over $20 million.)
  4. That war chest gets divided by the total number of KENP “read” during the month — that’s the share each KENP earns that month.
  5. Amazon multiplies your total number of KENP for all titles that month by the share, and adds that to your royalties.

. . . .

Because the total amount of money that Amazon splits for a particular month is fixed, this has made it particularly vulnerable to scamming, and particularly maddening for the honest publisher — your only recourse in order to earn more is to raise the total number of pages read, which means either marketing the heck out of every title you’ve got enrolled in the program (which you were hopefully doing already), offering more titles (possibly pulling them off of other retailers to qualify them for KU), or offering longer books. But as more and more and longer and longer titles go up on KU, the value of each KENP share goes down.

. . . .

There are two types of promotions — Free and Countdown. In either case, you can offer the title for up to five days in a 90-day enrollment period, though during that period you can only offer one or the other of these promotions — not both.

Also, you can only offer them (at the moment) on Amazon.com and Amazon.co.uk (the US and British sites). These won’t help you on Amazon’s sites in Canada, Australia, or India, for example.

. . . .

The countdown promo is fun; it offers you one or more promotional price over the period of the promo — and keeps a countdown timer going that announces just how much time readers have before the price goes up. This is a classic marketing ploy to take advantage of customers’ fear of missing out (the famous FOMO effect).

One other nice thing about the countdown promo: it’s the only way you can get a full 70% royalty for a title priced (temporarily) under $2.99.

. . . .

The Benefits of Going Wide

Back in 2014, when Amazon instituted the new KENP system for calculating KU earnings, I had about 50% of my titles enrolled in KDP Select — most of them short stories that earned incredibly well per borrow, and that served as “loss leaders” that lost me, in fact, nothing. Folks would read a short story by one of my authors (earning us both a royalty), then read one of the longer works, netting us more. Nice.

This lovely symbiosis disappeared with the KENP setup and its emphasis on longer KU titles.

Since then, I’ve stopped enrolling titles in the program, and over the past year I’ve slowly been letting the enrolled titles lapse. At this point I have just one KDP Select title.

The rest of my titles — about eighty by twenty authors — are offered wide. That is, they’re available on Amazon, but also on Apple, Kobo, B&N, Google, Overdrive, ScribD and many, many more.

. . . .

Unlike the KDP Select program, the three benefits here are really simple:

  1. I can earn more money.
  2. I can please more of my readers.
  3. I’m not encouraging monopolistic behavior.

. . . .

Most “wide” indie and self-publishers report that sales on Amazon represent 60%–85% of their ebook revenue. Myself, last year, I earned 62% of my ebook royalties through Kindle sales. In my most Amazon-slanted years I’ve earned about 80% of my ebook income from Jeff Bezos’s company.

That’s a lot.

However, I do wish to point out that that leaves 20%–38% of my income that wasn’t earned through Kindle sales.

I’d also like to point out that, while Amazon holds all but a monopoly on US ebook sales, outside the country it is a far, far less dominant market. The more my sales have gone international, the more I rely on channels like Kobo and Apple, and on distributors like Smashwords, PublishDrive, and Draft2Digital.

Link to the rest by David Kudler at The Book Designer

PG excerpted more than he usually does from the OP because he suspects Mr. Kudler operates in a different manner than a lot of indie authors do.

That said, PG thinks it’s a good idea not to run any business on autopilot, so he will be interested in the comments of others about the decision between Amazon with additional benefits vs. using everyone.

Spotify’s Big Lie, Streaming Habits Mirror Purchasing Habits

24 April 2018

From Trichordist:

One of the biggest lies told by Spotify is that streaming will provide more revenue over the life of a record because every play will be monetized. This as opposed to the one time payment earned from a transactional purchase where all the revenue from the purchase of the record is paid at once. There is however, a very big problem with this theory, which is that the consumption curves of streaming match the consumption curves of transactional sales.

So, what about that so called long tail? Well, it doesn’t exist. Not for music consumption. Or we should say, it doesn’t exist any different for streaming than it did has for transactional sales. What do you think is more profitable in generating revenue? Is it the album sales of artists catalogs, or is streams?

Keep in mind, streaming is a fixed cap market. So it does not matter how much the market grows in actual consumption, the revenue is capped by the amount of revenue earned by the hosting provider. If consumption doubles, but revenues stay flat, every stream is worth half of what it was previously.

. . . .

We’re already seeing this trend as we noted earlier this year that Spotify per stream rates appear to be dropping steadily by about 8% per year.

Link to the rest at Trichordist

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