19 October 2014 - 8:07 pm

Amazon vs Big Publishing: Kindle Scout: motives revealed

Part of the Amazon is not your friend series. 

I have been speculating about Amazon’s business plan for a while. You may have read my thoughts over the other posts in this series, and there’s a lot more to come yet. The post series may be new, but this is an issue that has been percolating in my brain for many months now, rife with suspicions and hopes and cynical sighs.

Recently, I received an email that made it all click into place. Those suspicions that I had been harbouring and finally dared to write down, the thoughts that I was afraid to express in case I was being unfair or maybe just misinformed, all of it seems justified now.

Maybe I am still joining the dots the wrong way, but the patterns are so strong that I’m pretty sure I’m not. Amazon wants a monopoly. It wants to crush traditional publishing out of the picture. It wants full control of the book industry.

Why am I so sure now? Because Amazon has just announced its new publishing program: Kindle Scout / Kindle Press. Here we see it setting itself up as direct competition to publishers, the entities it is trying to strangle into a very Amazon-favourable contract.

In this new program, authors will be able to submit for the chance to win a traditional-style publishing contract with Amazon (Kindle Press). Their submissions will go up publicly, to be voted on by anyone who chooses to weigh in (Kindle Scout); the top-voted submissions get a contract.

On the surface, it sounds great. But with everything Amazon does, you have to ignore the surface and look further to see what it really means. They have a pretty skilled marketing department and they are ruthless: both of these things are cause for suspicion.

Spoiler: this is not a good deal for authors. Every time I look at it, there’s something new that gives me the urge to skitter far, far away. Read on for why…

 

Kindle Scout

Let’s start with the submission process. This sounds like a wonderful process. Readers get to vote on what books get published! And when something they voted on does get published, they get a copy for free. How awesome is that?

Well, let’s see.

Firstly, yes, it is nice to see a publishing contract not being controlled by gatekeepers. I like the model of people voting for stories they would like to read in full. However, it’s not quite that straightforward: Amazon are only committing to considering the highest-voted books, and there are gatekeepers between top votes and publication. So not quite a win there.

You’ll probably see people whining about how this will lead to less ‘quality’ books being published. Well, I say bollocks to them: traditional publishers have always been interested in what sells, not what’s quality (look at Twilight and 50 Shades of Grey, and many other books with errors and fallacies and inconsistencies in them; quality is not a defining factor of gatekeepered (yes, that is a word – now) fiction).

However, from the few details that Amazon have released about this program already, I have reservations about how effective this will truly be. The key point for me is that voters get a free copy of books they vote for. What does this mean? It means that they are encouraged to vote for what they want to read, but not for something they would be willing to pay for.

For many, this might be the same thing. For others, they can go in, vote for loads of random stuff, and wait for the freebies to turn up on their Kindle. Do I care about people gaming the system? No.

Amazon is using Scout as a way to predict what books will sell. But it’s not asking voters to put their money where their mouth is. Also, it’s giving away books to people who might otherwise pay for them, robbing the author of that chunk of income.

Really, Amazon? I get that you need to entice reader into the system to vote for books, but couldn’t you have offered them half price copies? Compromised?

Once again, I see Amazon offering very delicious rewards to enter into a system they want to build up quickly. And once again, I am dubious of the outcome of it all.

Then let’s think about the type of books that are likely to get the popular vote. What about niche books? Genre? What are the chances of this giving us a slew of new Twilights?

Actually, I’m not sure I want to think about that at this point. Let’s move on.

 

Submissions

All right, let’s say you want to give this thing a go. What do you need to do? You need to provide a book that is complete and ready for publishing. What does that mean? Here’s a list:

• Fully edited manuscript ready to be published
• Cover
• Bio and photo of you
• One-liner for the book
• Blurb for the book
• Other related marketing materials

In short: you have to do everything a self-publishing author has to do. Put another way: Amazon are providing nothing as part of the publishing deal to prepare your book for publishing. The cost of all of this is yours, and the quality is all dependent on you.

(Note: consider the usual breakdown of who pays for what in a contract situation. This is flexible, depending on your contract, but be aware that these are all things that can be negotiated on and they all influence the money side of the deal. Or, they should!)

This is an important point. Why? Read on.

 

The Publishing Deal

Okay, so let’s say you’ve won the public over and got the contract in your hot little hands. Awesome! So, what do you get?

A $1,500-dollar advance. Sweet! According to Jim C Hines, this is on par with a very small publisher’s advance, not mainstream or traditional-level publishing. Hmm, it’s a little sweet.

50% royalty for ebook sales! That’s way better than a traditional deal! Right? Actually, it could turn out to be a lot worse. Reputable publishing contracts offer royalties on the sale price of the book (gross); this is the norm for traditional contracts. Amazon, however, is offering royalties on the profit from book sales (net). The distinction is crucial.

For me, this is the chief factor that means this is a bad contract for authors.

Writer Beware has a thorough write-up of why this kind of deal is not good for writers. Let’s hit the main points of contention:

• Royalties from gross mean publishers have to manage their own costs and sell the books at a sufficient price to pay the authors their fee and make a profit for themselves. Traditional publishing agreements are more like partnerships.
• Royalties from net mean that the publisher isn’t a partner; the author is their customer. The costs reduce what they have to pay the author, and they are making profit twofold: from the sale of the book and from the sale of their publishing services to the author. It is not in Amazon’s interests to keep the costs low, but rather to inflate them. The author has no visibility or control over this.
• The author has no control over the price of the book. (This is stated in the Kindle Press terms and conditions.) This means that Amazon can price the book any way they like, discount it, or just plain reduce it to cost if they like. It is very easy for them to squeeze an author’s royalties down to nothing.

Be suspicious. Be very suspicious. Authors can easily wind up with very little return for their work, while Amazon has the scope to make all kinds of profit from the sales.

(Side note: Random House tries this tactic in early 2013 when they brought out their Alibi and Hydra imprints. Respected sources like Writer Beware and John Scalzi advised writers to run away then. This is scarily familiar.)

(Other note: this isn’t the first time that Amazon have offered net royalties. They also did this on their Kindle Worlds scheme to publish authorised fanfic.)

Also, the offered royalty rate is lower than the KDP one. KDP Select and some KDP sales earn 70% on the list price. My first question is: why?

In traditional contracts, lower royalty rates are a trade-off in exchange for publishing services: editing, cover art, marketing expertise, etc. However, in this contract, Amazon is asking authors to do all of that themselves (see the Submission information above). They already have an engine to automatically convert files into ebooks for free. So what are they doing to earn their 50% of the profits?

Marketing? Advertising? Possibly. However, the contract is vague on this point and makes no firm commitment.

Basically, authors are expected to do everything a self-published author would do, but pay Amazon like it’s a traditional publisher. This is the sort of thing that makes me wonder if I’m missing something.

On top of that, the contract also offers 20/25% royalties on audio and translation sales. However, Amazon make no commitment to making those publications actually happen The contract is unclear just who would pay for the audio to be produced or the text to be translated. Given what they expect for the initial manuscript, why would we assume they’re willing to outlay any money at all? If so, how do they justify such low royalties? How is a book in French any different to a book in German, when it comes to digital files and royalties?

(Note: I don’t know the normal kinds of royalties for audio books. If anyone can give me some insight, please do!)

Compared to their own KDP Select program, I’m struggling to see what kind of advantage an author would have as part of the Kindle Scout program.

In a publishing deal, it is expected that both sides take a risk. The publisher invests capital to get the book published and out there, and the author trusts the publisher to help make their book a success, and not let it languish in licensing rights hell for years on end, never to see the light of day. Risk on both sides, resting on the faith that this book that both parties are investing in will sell well.

Apart from a measly initial outlay of $1,500, Amazon are taking no risk at all. And considering the millions they’re pumping into the KDP Select program right now, that hardly seems like a drop in the bucket. The risk is all on the author.

Those are the scariest parts of the contract. There are many more items in it than that, and I encourage you to take a look.

 

Preying on Inexperienced Authors

This is a big concern of mine. I consider myself fairly savvy, and even I’m surprised about just how brazenly unethical and disreputable Amazon’s terms are.

I worry that writers won’t question those terms enough. Amazon is doing a good job of spotlighting the parts they want people to see. It’s easy to be dazzled and tempted by everything that a publishing contract has to offer. It’s easy to assume that Amazon is good to authors (after all, look at the awesome success stories that have come out of KDP Select, and that was all Amazon, right?). It’s easy to assume that this contract must be a standard publishing one, because why would they offer anything else?

Publishers of all sizes and types offer dodgy contracts all the time. Amazon is not blazing new ground here; part of why I jumped on this so quick is that it is sadly familiar. Reputable sites will tell you that the kind of things I have pointed out are not good for you, your books, or your career.

It’s the inexperienced authors that are most at risk to tactics such as this. First-time authors with dreams in their eyes. I know, I get it; I’ve been there, and sometimes I still feel that way. But please, please, don’t let it blind you.

Beware, my friends. Always get a professional opinion on a deal like this – any deal, Amazon-born or otherwise. Publishing contracts are a minefield and while it’s tempting to skip on through it with delight, because hey, publishing contract, stop. Stop and check and demand a good deal, because you deserve it.

I don’t think any authors deserve what Amazon is offering them.