16 October 2014 - 6:54 pm

Amazon vs Independent Authors: KDP Select and exclusivity

Part of the Amazon is not your friend series. 

To start us off, I thought we’d delve a little into the history of publishing with Amazon. Namely: the KDP Select program and its impacts.

KDP Select is the main tool Amazon has been using against independent authors, and one of the key ways it is trying to build a monopoly in the ebook business.

What’s that? I’m crazy, do I hear you say? Independent authors who are part of the KDP Select program are making reams of money. It has helped some authors break into the mainstream; helped authors feed their families; built careers; opened doors.

That is true, for a small number of authors. Making money – never mind a living – from writing books is hard. And I’m pleased for them! I always love to hear a good success story. (For the purposes of this post series, I will refer to KDP Select program members as Amazon authors and non-KDP Select authors as indies, because the exclusivity means that Amazon authors are not truly independent.)

Don’t let yourself be distracted by the shiny promises, though: KDP Select is not the gift horse that many will claim it to be. I might even go as far as to say it’s dangerous. Why, you ask? Because in order to be a member, you have to give Amazon exclusive rights to your work (specifically, to every book you make a part of the program). You cannot put any books enrolled in the program out through any other store. Amazon wants them all to itself.

Let me pause here to make this point: this is not a publishing contract: it’s a distribution agreement. Distribution agreements for books are not exclusive with any other distributor or store (traditional publishing contracts are exclusive and that’s normal, but as I said, that’s not what this is). This, if nothing else, raises a red flag.

What does this mean for an independent author? One who wants to have their books available in every store on the planet, to reach every possible audience, on every device? One who doesn’t sign up to be exclusive? It means you are severely disadvantaged in the Amazon marketplace. Increasingly, independent authors are being excluded from the distribution that Amazon has to offer. It is a carrot-and-stick methodology.

When I first published my ebooks with Amazon, I saw no real reason to join the KDP Select program. Sure, I missed out on a few bumps in marketing and exposure, and wasn’t included in their lender’s library, but the trade-off with having access to more stores (and potential readers) was worth it (I publish through Smashwords to a whole heap of book sources, including the iBookstore, Barnes and Noble, Sony, libraries, Oyster, etc, as well as through KDP). I had access to the same royalties as KDP Select authors, so it was all good in my book.

Oh, how things change. Since then (2010), Amazon has changed the rules of the game. Every time it opens a Kindle store in a new country, indie authors are no longer allowed the same royalties as Amazon authors. Instead of the competitive 70% royalty, we’re restricted to only the 35% royalty for sales through those stores. It hasn’t taken away the 70% royalty available in a handful of stores, but still, 35% and an invitation to KDP Select is what we get for almost half of the available Amazon Kindle stores now.

In addition to this, KDP gives all of its authors (Select and non-Select) only 35% royalty for any books under $2.99 and over $9.99. What does this mean? It means that the most lucrative price points (around $1.99 – $3.99, according to the latest Smashwords analysis), and the books with the biggest returns (because their prices are larger) pay authors the least money. I don’t know of any other store that does this. (Side note: it’s not unusual for non-fiction ebooks to be over $9.99, so it’s possible this hits non-fiction indies more than fiction.)

I know of no other store that puts such restrictions on its pricing, and I can see no good reason to do this. Delivering a $10 ebook costs no more than delivering a $5 ebook, so why does Amazon suddenly need more of the list price?

Let me be clear on this: Amazon’s 35% is the worst royalty offered to indie authors for ebook sales. The next lowest that I know of is 60%: almost double what Amazon is giving indies. (If anyone knows of a worse rate, please, I’d like to know!)

Allow me to add another bit of context: in recent communications (which another post will go into detail on), Amazon is claiming to want to give authors more ‘fair’ royalties for ebook sales. They’re not so willing to back up this claim by offering a royalty that is even remotely fair or competitive themselves, however.

There are other services that indie authors are excluded from. The Kindle library is one, and lately Amazon have added Kindle Unlimited, their new subscription service. Only KDP Select books will be available in this service, tying authors more and more tightly to the Amazon banner.

(It also doesn’t live up to its name. Unlimited? They’ve limited it to exclusive books. Fail, Amazon, fail.)

Do I believe that Amazon should allow everyone the same advantages? No, I don’t. This isn’t some whine about why Amazon authors have all the cool toys. What it does with its store is its choice, but let’s be clear on what this all means:

• Indie authors are disadvantaged in their store and services.
• Amazon claims to want to promote a good reader culture and have everything available at low prices, but actively excludes books from its services.
• Amazon claims to want authors to get a better slice of royalties, but refuses to give a rate even close to the standard to indie authors.

Amazon is shameless in demanding exclusivity in a way that no other store would dare. And let’s remember: Amazon is a store, not a publisher. It only supports one e-reading device, too, which has implications all on its own. It’s like a movie only being playable on a single brand of Bluray player, or an mp3 album that only plays on a single brand of smartphone.

It’s an outrageous demand. In single cases, this might happen, but the KDP Select program is much larger than this. It is becoming the rule, not the exception.

How is Amazon getting away with this? Because it’s big enough and aggressively muscling other stores aside. The more people who sign up with the KDP Select program, the more support and weight Amazon has. The reason that it has so much power is that we – indie authors – are giving it to them. This doesn’t look good for the long term.

Not convinced? Check out the Smashwords opinion of what exclusivity will do to the market and for indie authors. Mark Coker says it way better than I have!

So am I telling authors that they shouldn’t join the KDP Select program? I believe it is completely each author’s choice, and I believe in arming those authors with the most complete information I have available. The KDP Select program is a good source of income for many writers, and it’s an easy route to having some success with your book. All those enticements it offers are good for those who take part – for now. All I ask is that authors are aware of the cost. Be aware that exclusivity hurts other book stores and supports Amazon’s monopolistic strategy.

Be aware of what you’re signing up to, what you’re signing away, and what it all means in the long run, and then decide what is most important to you.

Personally, I can’t in all conscience sign up to the program. I have been tempted many times, but the more I see of Amazon and the big picture looming before us, the more I shy away.

More on all this soon!