Amazon Unlimited scams hit authors

Amazon, the behemoth that started out as an online bookstore.

Amazon, the behemoth that started out as an online bookstore.

Part of the Amazon is not your friend series. 

In 2015, Kindle Unlimited (KU) changed how it was determining how much to give authors who were part of the program, moving from a ‘per borrow’ system to a ‘per page’ one.

At least one of their motivations for doing this was to prevent authors from trying to game the system by turning out lots of short works. Per-page payments meant that authors of longer works should, theoretically, be paid more.

Over a year on, and I think it’s safe to say that Amazon didn’t achieve their goal. In fact, they seem to have made the scamming problem worse: it got to a point where scam books were taking over the bestseller list and utterly devaluing KU for non-scamming authors.

The Big Flaw

How did they do this? Because, despite the paranoid reactions about Amazon being big brother and collecting all kinds of data on you through your Kindle (including mine!), they can’t tell what pages you’ve read. We gave them way too much credit. They can only tell the latest page in the book that you have viewed. From there, they assume that you’ve read everything from the front cover up to that page.

Hyperlinks are a common – and required – element of an ebook. If you click one that takes you from page 20 to page 300, KU records that you’ve read 300 pages (and pays the author accordingly), rather than the actual 21 pages. There’s also the front matter (copyright statements, etc) that everyone skips past but still counts as pages read.

How the Scammers Scam

You’re probably already seeing how easy it is for scammers to game the system. Where some people said that this would make authors write better stories, to keep people reading page after page, instead you have scammers creating ebooks with links at the start of the book to offers and competitions on the last page, to make them get paid for the entire book’s worth of pages even if you haven’t actually read them.

In the middle, scam books typically have junk. There might be enough legitimate, story-like text to fill up the 10% preview to entice readers to borrow it, but the remainder of the book (usually thousands of pages) is trash text, or repeated copy-and-pastes of that first preview section.

If the text isn’t entirely trash, there might be translations of the story at the front, making readers click past pages and pages of Google-translated gibberish to find the English version.

Or, similarly, ‘bonus content’ at the front of the book (instead of the back, where it typically goes in a print book), so readers who want to read the story they’re there to read click past it, racking up a chunk of pages that no-one has read. (This can be used legitimately, because readers can react negatively to a story ending 70% of the way through the book and the rest is ‘bonus’. One author specifically moved her bonus content to the front to respond to feedback and improve reader experiences.)

Another tactic that scammers have used is to put the table of contents (ToC) at the back of the book. As it’s a useful navigation tool, it’s common that a reader would use it, and record a full book read without reading a single page of the story. (It’s worth noting that this could be invisible to the reader; they’re not going to care where they are in the ebook, as long as they know what to read next!)

A ToC is a required part of an ebook, but its location is at the discretion of the author. Many (legitimate) authors move it to the back to reduce the noise at the start of the book, because the beginning section is used as the preview. The preview an important tool for enticing readers to read or buy a book, and they want potential readers to get to the story as quickly as possible. So, having the ToC at the back of the book can aid sales and support readers; it’s not necessarily a sign of a scam.

So, it’s easy for scammers to rack up huge numbers of page views with very little effort. They’ve been so successful at it that scam books started to take over the bestseller lists on the Amazon site, because Amazon factors in the ‘borrows’ and likes to pump up books in the KU/Kindle Select program.

Real authors are the ones who have been paying the price. Because the money paid out to KU authors is a fixed amount, and the portion given to authors is determined by their percentage of the total page views for the month, it means that authors found their incomes dropping at a startling rate.

Amazon’s Response

Unfortunately, Amazon’s response to this issue has been in typical Amazon style: wild and indiscriminate use of the ban-hammer. They went on a campaign of ripping books off the shelves if their ToC was in the rear of the book, despite this being used for legitimate reasons by real authors. The backlash against this was so huge that they wound up back-pedalling on it and allowing rear ToCs. However, by then, the damage for many was already done.

The impacts for legitimate authors are huge. Due to the way Amazon’s algorithms work, books that were removed from the store lost sales ranks and visibility. It takes a lot of work and money to recover the sales position of an affected book. Due to the timing of the bans, at least one author wasted a whole bunch of money on a promotion that coincided with his book’s removal. This has real impacts on visibility, saleability, and future earnings. In short: it hurts authors’ livelihoods.

For some authors, it has been worse than that. One author, Pauline Creedon, had all of her books removed from Amazon, lost all outstanding royalties, had her account cancelled, and was banned from ever selling through Amazon again. The reason? Some of her KU borrows came from ‘systematically generated accounts’ – the type of system a scammer might use to artificially inflate page read numbers.

While it’s great that Amazon is cracking down on this type of behaviour – paying click-farms to bulk up your page reads – it’s clear they’re hitting legitimate authors as well. Pauline says she did not pay anyone to do this, and it’s not like authors can prevent click-farms from going nuts on their book. The spike that she – and other legitimate authors like her – received wasn’t enough to earn her a significant amount, either. Speculation says that click-farms attempt to hide their scammy activities by clicking through ‘real’ books, which is why Pauline is not the only author to be hit by this accusation and ban-hammering. Pauline’s case was a little while ago now, but I saw another report of a legitimate author being punished for this reason just this week – it’s clearly an ongoing issue.

This seems like a particularly extreme response on Amazon’s part (banning for life? on an unsubstantiated violation?), especially when compared to their actions towards real scammers.

Because, on the flip side, when books are reported as scams, Amazon takes a long time to respond. When they do, they might take down an individual book, but do nothing about the account. These accounts typically have a massive catalogue of scam books. Let’s be clear: these scams are not very well hidden; a quick, cursory glance is enough to confirm what is or is not a scam, but Amazon simply aren’t bothering to do anything but the bare minimum.

They are quick with the automated ban-hammers, but slow and minimalist when responding to reports of real problems. It’s pretty clear that their focus is on the quick, easy action rather than solving the real problems.

Since mid-2016, chatter has grown quieter over KU and Amazon’s shenanigans. But nothing has changed: authors must still be on their guard at all times, and we’re still getting reports of legitimate authors being banned out of hand. One particular blog post suggests that authors should query any spike in sales with Amazon, to get ahead of accusations of fraud, rather than simply celebrating a book doing well. It’s pathetic that this is probably good advice, but even that isn’t working for authors who try to do the right thing.

I remain sure that I will not be making my books exclusive with Amazon any time soon, nor will they be available through KU. Amazon has a long way to go before their service is anything other than a waste of everyone’s time and effort.

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Amazon vs Authors: Review policing

Amazon, the behemoth that started out as an online bookstore.

Amazon, the behemoth that started out as an online bookstore.

Part of the Amazon is not your friend series.

Any author, whether traditionally or independently published, will tell you that reviews are important when it comes to exposure and sales. They directly influence our bottom line. It’s to be expected, then, that any threat to an author’s ability to get reviews – particularly positive ones  – will cause a stir.

When word started filtering through the internet about Amazon removing legitimate reviews from books, it’s not surprising that authors got upset and vocal about it.

Let’s take a walk through Amazon’s recent review saga.

How it started

Amazon actively encourages reviews from its customers, so that other customers can know how good (or not-good) a particular product is. In 2012, a debacle about unethical reviews and sock puppets occurred: authors were caught paying for reviews, and review providers were creating multiple accounts to leave multiple reviews for the same book. Some authors cut out the middleman and created the sock puppet accounts themselves to spoof good and bad reviews on books, depending on whether the author was a competitor.

As Writer Beware points out, late in 2012, Amazon changed its review policy (and started to enforce it more stringently) to try to stamp out unethical and paid-for reviews. The review criteria are pretty clear (if you know where to look, which is not clear) about reviews being disallowed from anyone who has a financial interest in the product’s success. It also excludes those with a familial or ‘close personal relationship’ with the author.  Amazon appeared to interpret these guidelines pretty broadly when winding up the ban-hammer and aiming it at reviews.

This led to a slew of criticism and complaint, because fans and fellow authors were finding that their reviews were being removed or rejected. Inquiries received a response that stated the review was a violation of the terms and conditions. Pushing the issue (which could mean just asking for more information) resulted in a threat to remove the book from Amazon entirely.

On top of this, there were obvious fakes who were not affected by the wildly swinging ban-hammer (that’s my name for it, and I’m sticking with it).

The situation today

After the end of 2012, the furor died down and it has been pretty quiet since then. Recently, the issue has reared its head again, as more fans and authors trip over this problem. It’s hard to tell if this is a resurgence of the same issue, or if Amazon are enjoying a fresh spree with the ban-hammer.

Some criticism has emerged about the original complaint that brought this issue back into the limelight. However, it’s not an isolated incident. I think there’s enough history and additional instances of the problem that it’s worth taking a look.

It seems that Amazon’s interpretation of ‘close personal relationship’ can mean anyone who has interacted online (it’s impossible to say for sure, because Amazon isn’t telling). Authors who have never met but have exchanged e-words online have had their reviews on each others’ work removed. Fans who chat with the author too much (or at all?) also suffer.

There are a couple of things about this that deeply disturb me. First (and probably least), Amazon is gathering a lot of information about its authors and customers, in order to be able to identify these relationships. It’s unclear if this data-mining is done purely through Amazon’s site (and links from author pages to blogs, Twitter feeds, etc), or if it casts a wider net. Just how much is it watching us? (Though this is hardly surprising in light of what we know it can scrape off its customers’ Kindle devices.)

Secondly, this behaviour from Amazon means that the relationships that make being an author awesome are under fire. Indie authors, in particular, do well because of their interactions with their readers, with being accessible and visible. We enjoy great communication with our readers, and I think they enjoy being able to talk with us. (The same is true for traditionally-published authors, but usually to a lesser degree because they have more marketing options and support available than indie authors. However, it’s not my intention to under-value the impact on them; it affects all authors.)

Amazon is actively discouraging this. They’re punishing authors and readers alike for talking to each other by removing legitimate readers’ reviews. How is this good for sales? At the very least, Amazon is a business and should care about this. Fans who love a book or an author’s work are more likely to seek out contact with that author, so this could potentially remove an author’s most fervent support. Fans and readers don’t have a financial interest in the success of a book, so I don’t see how this violates the terms of service. Since when was it wrong to support something you love?

Similarly, this review ban-hammer affects authors who have had contact with each other. The author community is supportive and lacks the competitive viciousness of many industries. This is part of what I love about being a writer. We interact online. We swap notes and advice; we help promote each others’ work, because we know that a sale for other authors doesn’t mean less for me. And we know how important reviews are, so we like to leave them for the work we enjoy. Now being part of a community is wrong, too?

I’m not sure why Amazon thinks it’s a good idea to target these reviews. Direct review swaps between authors may be common, but does that mean that the reviews are any less honest? Of all the nefarious behaviour that has been identified around reviews, this has not been mentioned as being a problem, and it only covers a fraction of reviews by authors on another authors’ work.

Interestingly, the Amazon ban-hammer could lead to an unfortunate side effect: in order to be able to review books, reviewers are likely to create new (anonymous) accounts. So, instead of getting rid of anonymous sock-puppet accounts, Amazon is actually encouraging the practice, making it even harder to spot the ‘real fakes’ that caused the original problem. (This is an unverified prediction so far – has anyone seen this happening? Would you do it?)

Well done, Amazon, well done.

Thirdly (and possibly the saddest of all), they’re targetting the wrong reviews. There have been cases pointed out where obvious fakes are being left alone, while legitimate fan or fellow author reviews have been removed. On top of that, Amazon only seems to be targetting the positive reviews: viciously negative one-star reviews don’t seem to be affected. The revenge or false-negative review has been identified as being just as much of a problem as the false/fake-positives. So what’s being done about that? Nothing that we can see.

What this all means is that the quality of reviews isn’t being improved by the ban-hammer. It also means that the average star-count for books is being destabilised, because even if Amazon was removing the right (false-)positive reviews, it’s not removing the false-negatives.

So what does it all mean

It’s hard to know what to take away from all of this. Certainly, Amazon doesn’t understand the author-reader relationship, and it doesn’t understand the author community. It definitely doesn’t support these things. It’s one of those things that makes me very nervous about Amazon’s attempt to build a monopoly in the book industry, because if it succeeds, it won’t even have to pretend to care any more. It barely seems to give a crap now.

I don’t like that authors feel like they have to create anonymous accounts to leave reviews; that might be a natural reaction to the issue, but it’s a step in the wrong direction in my view. I hope this isn’t happening, or the sock puppet issue will only get harder to eradicate.

I think we should keep in mind that shoppers are pretty savvy these days, when it comes to reviews. They’ll ignore the obvious too-good and too-bad reviews, and look for the ‘honest’ ones. So why should Amazon headache about it like this? It feels like a badly-aimed reflex in response to the reported problems and abuse.

What do I think Amazon should do? Whatever algorithms it is currently using are clearly faulty. Stop it. There is a facility to report something that looks dodgy, so let people report dodgy reviews and investigate them properly when they’re identified. Identify the markers of actual fake reviews and step on them. Make the criteria clearer for what qualifies as a ‘close personal relationship’ (the mechanism they use to assess it might be intellectual property, but the basic criteria it has to meet should not be). Stop using lazy measures that annoys everyone involved (including our customers!).

One thing all of this has meant is that there is now a petition accepting signatures to appeal against the review ban-hammer at Amazon. As of this posting, it has over 15,000 signatures. Indie author Jas T Ward explained the petition’s intent in an email to Amazon CEO Jeff Bezos just a few days ago.

If you feel strongly about this issue, I suggest you sign the petition. If you have had a review wrongly removed from Amazon, shout out about it! Affecting the direction of a behemoth like Amazon might be a difficult task, but that doesn’t mean we shouldn’t try.

I am going to be writing up some reviews in the near future (less writing means more reading time for me!), so I’ll be curious to see if the ban-hammer swings in my direction. I’ll be posting the reviews in multiple places (including here), so they won’t be able to remove all of them!

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Amazon vs Independence: Kindle Unlimited

(Picture: not mine)

(Picture: not mine)

Part of the Amazon is not your friend series. 

I’ve had this post percolating in the background for a while now, quietly collecting feedback and opinions, and ruminating on what I think it all means. As much as the name of this series might suggest a bias, I strive towards objectivity.

(I have to say: Amazon have yet to prove the title of this post series inaccurate.)

Let’s start at the beginning, then, and look at the path that the Kindle Unlimited program has trod.

How it started

It opened around the middle of last year: a shiny new subscription service for Amazon customers, whereby customers could pay just US$9.99 per month to borrow as many books as they wanted. It’s only available to KDP Select authors (that means only books exclusive to Amazon), and it is paid for out of the KDP Select Fund (which I have written about before).

How authors are paid is interesting, and has changed recently (more on that below). Originally, it was paid per ‘borrow’, which Amazon determines to be whenever a customer has read more than 10% of a book. At the end of the month, Amazon would tally up all the borrows in the KU program and Lenders’s Library, divide the total KDP Select Fund amount by that number, and then divvy out the money according to how many borrows each author had that month.

Sounds fair and logical, on the surface. But there were a lot of concerns raised about what it would do to the book market, and what it would mean for authors. A few months into the program, Smashwords’ Mark Coker raised the important question of: was this devaluing books? The amounts paid out per-borrow were proving to be very low, and not related to the value of the book in the paid market: it could be a 5,000-word short story or a 100,000-word novel; it could cost 99c or $9.99 to buy; regardless, borrows were all paid the same (typically, much less than they’d get paid for a sale of the same book).

Some authors saw an increase in earnings, but many were abandoning the program due to the massive drop in earnings they experienced, some as much as 75%. The success stories remain the exception to the rule, just as any success stories in publishing are.

KU has other problems as well. Its navigation is poor: customers have to search for regular, paid books, and then navigate to the KU version (if it has one). There’s a general feeling that the listings are too limited, which may be partially caused by the Big 5 publishers’ backlogs not being included, and partially by the KDP Select (and its exclusivity) requirement. (Sources: this review of KU, and one subscriber’s reasons for cancelling).

So, authors are being short-changed and readers aren’t having a great experience. The New York Times attributed at least some of this to loss leading:

“Amazon, though, may be willing to forgo some income in the short term to create a service that draws readers in and encourages them to buy other items. The books, in that sense, are loss leaders, although the writers take the loss, not Amazon.” (source; emphasis mine)

(I predicted this a while ago; they are like a supermarket in that way.)

Then there are the impacts of the pricing model, and the publishing behaviour that it started to drive. Authors are paid per-borrow, no matter how much their book is worth or how long it is. So, it was encouraging authors to turn out a lot of short books or chop them up into serial offerings to get more borrows.

The new KU

Recently, Amazon changed its pricing model for KU. For subscribers, nothing has changed. For authors, the story is quite different.

From July, KU now pays per page read, not per ‘borrow’.

This is expected to reward writers of longer works with more money, and thus curb the impetus to create more shorter works to ‘game’ the system.

Some claim that this will encourage writers to write better-quality stories, so that readers will stick with them for longer, but I think that’s somewhat hopeful. Writers should already write the best stories they can, so that readers pick up more of their books. I can’t see this making a huge difference in this regard.

There has been a lot of speculation about what this change will really mean. More money for authors! Less money for authors! Personally, I think both of these predictions are useless: not because they’re wrong (they’re actually both wrong and both right), but because they miss the fundamental truth that the amount of money being paid out to authors isn’t changing; only how it is being split up between authors.

It doesn’t help that Amazon used a really ridiculous example of what the payout would mean when they promoted this to authors. Their example used the price point of $10 per page. Predictions state that a more realistic figure is 1c per page, but it’s actually likely to be much less than that. It’s also likely that the KU borrows will still not produce anything like the revenue that an actual book sale would, too.

Amazon has also standardised what a ‘page’ is, to make the new payment system fairer. This is the only way to make the system work. I don’t think it’s worth worrying overmuch about what the exact definition of what a ‘page’ is, because what authors end up with is still a relative percentage of a fixed pot of money.

Some sources have questioned the ethos behind this move, likening it to only paying for the amount of a meal you eat at a restaurant. Others say that it means authors should earn every page read they get (i.e. write better stories). It’s also worth pointing out that, by making authors split a fixed amount of money, Amazon is limiting the amount that any author can earn from their work, and they’re forcing authors into direct competition with each other.

Something that I love about writing communities is how supportive and non-competitive they are. Encouraging readers to read more is never a bad thing, even if they aren’t reading our work. Amazon’s system doesn’t enable a supportive community: it does the opposite. It enables a competitive market, where to get ahead means pushing someone else down; to gain more, you have to take from someone else. That’s a sad turn of events in my mind.

This also harks back to a concern I’ve raised before: the KDP Select Fund is an arbitrary amount that Amazon decides to allocate to the program. It’s not tied to sales, subscriptions, or any other part of their actual business model. That means it’s not sustained by the book market, and is an artificial limit that Amazon have placed on authors’ revenues. This isn’t good for authors, any way you look at it; it’s good for Amazon. As Amazon encourages more readers to read more, the limited fund is splintered even more. Great for Amazon, but where’s the authors’ payout? It’s especially concerning when coupled with the fact that Amazon has never made any actual money: so, how can it be sustainable?

(Note: other subscription services like Scrib and Oyster tie their payments to their subscription income, and so their success is dependent on their business model. The royalties to authors are also a percentage of the sale price of the book, not an arbitrary amount. This is an ‘open’ system, where the more readers they have, the better for everyone. Amazon is a ‘closed’ system, where the success of the subscription service doesn’t flow through to the authors at all.)

So why all this fuss over the payment model? Why did they change it? Speculation seems to be on the side of Amazon trying to counter the ‘gaming’ of the 10%=borrow system that encouraged more short books. I suspect that’s true. On the surface, it produce a fairer system for short books vs long books.

But what about different genres that typically earn different amounts? Erotic shorts, for example, tend to be higher-priced than non-erotic shorts (if you buy the book outright rather than borrow it). This move doesn’t attempt to address the disparity between the value of the actual book and the revenue returned to the author. There have also been concerns raised about how this might impact non-fiction books, which may not be typically read from cover to cover, and choose-your-own adventure books.

What I find most disturbing about this change is that it’s proof of how much information Amazon is collecting about its customers. Not only do they know what books we have in our library, but how many exact pages we’ve read of them. What other data are they collecting?

(Interestingly, several of the authors I’ve read blog about this subject have said that the exclusivity requirement means they won’t go into KU any time soon. This is also my position.)

The rumblings that I’m hearing on the grapevine indicate that authors are becoming increasingly disillusioned with KU and leaving in numbers. The big publishers opted out before it started. I can’t see this particular change having any impact on this trend.

As far as I’m concerned, Amazon is a leopard that hasn’t changed its spots: it’s still a wild thing interested only in its own survival. Use with caution and look after yourself!

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Amazon vs Authors: the Hachette battle

Part of the Amazon is not your friend series. 

Just what does it mean? (Picture from litreactor.com)

Just what does it mean?
(Picture from litreactor.com)

Isn’t this battle just between two companies? You may be wondering how the Hachette battle with Amazon could be interpreted as being Amazon against authors. Sit back and allow me to explain.

This is two-fold.

First, there are the Hachette authors. The press about the battle between these two companies has been rife with Amazon’s tactics to disadvantage Hachette’s books. The books have been taken off promotional lists, discounts have been removed, and shipping date predictions have been in the 4-6 weeks band, claiming there weren’t any in stock. Book pages have also been updated with suggestions that customers might prefer books by other (non-Hachette, of course) authors.

(Note: now that the matter has been resolved, these measures have not all been lifted. Some speculate that this is Amazon’s way of passive-aggressively punishing Hachette for not giving in to their demands. Really, Amazon?)

Through this whole battle, Hachette authors were reporting a huge downturn in sales through Amazon. It’s a powerful enough store that they can easily see the difference in their royalty reports.

Throughout the embargo, Amazon made several overtures to Hachette, offering to lift the sanctions if the publisher agrees to ridiculous temporary royalty agreements. These include giving all profit from the book sales to the authors or donating the profit to charity. Basically, they wanted Hachette to give up any money they might make on the book sales for the duration of the contract negotiations.

(In at least one of these ‘offers’, Amazon have been prepared to give up their share of the profit as well. It is only fair to note this. I have no visibility of what this would actually mean to Amazon, though; what percentage of its revenue comes from books, I wonder?)

It’s no surprise that Hachette turned all of these ‘offers’ down. They are so obviously ridiculous and a propaganda ploy designed to cast the publisher in the role of villain, because it’s forced to refuse in order to protect its bottom line. Let’s not forget that this went on for months; not an insignificant chunk of the financial year for any company.

Whoever is right or wrong, the authors are the ones being put in the middle. Amazon may claim differently, but that’s what they’ve done. (Amazon actually says that Hachette was the one using authors in this battle, but no, I’m sorry, Amazon is the one who put the sanctions in place.)

There has been a lot of outcry against Amazon’s tactics, to the extent that over 900 authors put their money together, signed a petition, and put a full-page ad in the New York Times, imploring Amazon to stop its stupid tactics. Known names like Malcolm Gladwell, Michael Chabon, Scott Turow, George Saunders, Philip Pullman, and Nora Roberts were a part of this.

What was Amazon’s reaction to the ad? To move the other section of authors at its disposal into the middle of this debate: the KDP authors. This brings me to the second part of this issue.

In August 2014, Amazon sent out an email to all of its authors. It wasn’t just the KDP Select authors that it tried to call to its side: all KDP authors were contacted, including me.

The email is a beautifully-crafted piece of propaganda. It combines fear-mongering, just enough of the truth to justify itself, and sympathy-evoking images and tactics. I was astonished when I read it, and quickly angry. It is the most despicable thing I have had someone send to me.

There are some very good analyses available on the email and its content, and I encourage you to check them out. I’m not going to go through it all when others have said it so much better than I could. I’m just going to touch the salient points for this post:

  1. Amazon sent this out to authors who had nothing to do with the battle.
  2. It’s clearly an attempt to rally indie authors to their side.
  3. In the email, Amazon asks us to spam the Hachette CEO with hate mail. This is the entire purpose of this email! They included his name and email address, and asked to be copied in so they could see.

Great. Because what this world needs is more people sticking their oar into something that doesn’t concern them, and more hate being spread around. Right.

This email is what ultimately prompted me to start writing this post series (I know, it has been a long time in coming!). I didn’t want to get involved and there are lots of informed and informative blogs around who are speaking up on this. But Amazon involved me directly by trying to draw me into the debate. Well, maybe I’m slow, but I get there in the end, and I don’t have much patience for that kind of tactic.

Amazon have shown their true colours. They are ruthless, they have a skilled marketing department, and they’re not afraid to throw you under the bus if it will benefit their cause.

So I’m raising my voice. I’m writing these posts. It may have taken me months to get to it all, but this seems too important to stay silent any more. The Hachette battle may have concluded but the story is far from over.

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Amazon vs Big Publishing: the Hachette Battle

Part of the Amazon is not your friend series. 

Just what does it mean? (Picture from litreactor.com)

Just what does it mean?
(Picture from litreactor.com)

The battle between Amazon and Hachette went on for months, finally coming to a resolution in November (2014). The big boys were duking it out, and neither of them came off particularly well.

I’m no big fan of big traditional publishers. Just like Amazon, they are a business first and support readers/authors/books second, if at all. They have a bad track record with embracing ebooks and the digital side of the industry. They don’t give authors good royalties for ebook sales. Their contracts are minefields that can hobble an author’s career unless you are very careful or very lucky.

However, they are more dependent on a healthy book industry, as it’s the only industry they’re in. Amazon does not have this focus (this will come up later).

When I read something about this battle, I go into it with no particular bias; both sides are businesses and they’re looking after their own interests. I aim to be objective. (I know that the name of this series might imply otherwise, but being disturbed by Amazon’s actions in the book industry doesn’t mean that I support big publishing.)

They key here is to figure out which one will benefit books, authors, and the industry as a whole, in the long run. And as far as I can tell, if Amazon had got what it wanted, it could well be a disaster for the book industry.

Why should we care at all? It’s just one company against another, right? Well, yes and no. This battle might have been between Amazon and Hachette, but the future fallout is much broader than one single distribution agreement.

The crux of the battle was Amazon trying to change the terms of the distribution agreement it has with the big publisher. The timing was driven by the contract with Hachette being up for renewal. In the near future, the contracts with the other big publishers will also come up for renewal and they’ll have the exact same battle on their hands (I believe Simon and Schuster snuck in and renewed their deal while this battle was going on). What happened with Hachette set the pattern – the precedent – and makes it difficult for a different outcome to occur in subsequent negotiations: if Hachette had fallen, so will all of the big publishers. That’s why this section is ‘Amazon vs Big Publishing’, not just Hachette.

Why would that be a bad thing? Well, that all depends on what Amazon and Hachette are demanding.

Let’s talk for a moment about the Book Depository. What does that have to do with all of this? Bear with me and I’ll explain.

The Book Depository was an online bookseller (of physical books) that was built on the basis of supplying really, really cheap books direct to your door. It undercut standard book prices and made no profit whatsoever, but because it offered such cheap prices, it gained a massive market share. It sold for silly amounts of money (to Amazon, who was protecting its market share, but that’s actually beside the point here).

The man behind the Book Depository had no interest in books, writers, or readers (he came out and said as much). His business practices threatened to crash (paper) book prices and reduced the royalties that made their way back to writers. He never made real money from the business itself. It was never intended to be a sustainable business model: the sole purpose of the business was to build up a big enough market presence to make it a saleable company, and to make a small fortune from it. This is exactly what he achieved.

There’s nothing illegal about what he did. It’s a legitimate business tactic, as long as you don’t give a crap about the industry you’re playing with. It’s still reprehensible in my book, where irresponsibility like this can rob hard-working people of their income. You come in, you make a mess, then you skim off enough proceeds to make the millionaire list and leave the fallout to those left in your wake.

Disturbed? You should be. (This is how the current Western economic difficulties happened: irresponsible and unethical use of legitimate business tactics.)

Now let’s look at Amazon’s history with the big publishers. It signed distribution agreements with the big publishers several years ago, with a certain set of terms. These terms were most likely to be pretty favourable for the publisher, because Amazon was building its market presence at the time and needed to make those deals for its online bookstore idea to become competitive in the market. It undercut the market to grab customers looking for good deals.

Fast-forward a few years to now and Amazon is well-established. It doesn’t need to make concessions to entice a publisher into a distribution deal any more. It can go toe-to-toe with the big fellas in the industry – and it is. It can make its own demands and rewrite the deal for its own benefit.

It’s a success story for Amazon. Is Hachette just being stubborn because it enjoyed a favourable deal all this time and doesn’t want its toys taken away? Maybe. I don’t know all of the details of the deals, past or present. But I am sure that it’s not that black and white. This is no hero and villain scenario.

I do know some of the contention between the two companies. Part of what Amazon was demanding was to control the price of ebooks. It also wanted to dictate how much of an ebook’s price goes to the author.

Both of these things are bad.

Firstly, dictating an author’s royalties? Quite frankly, this is none of their business. An author’s royalties are contracted with their publisher and Amazon has no need to even know what that rate is. Amazon’s interface is entirely with the publisher; that’s part of what a publisher is for.

Big publishers do offer terrible royalties for ebook sales, this is true. It’s one of the reasons that I have a lukewarm opinion of traditional publishing (for my own work), because I’m not sure I’d put up with it. However, I don’t expect an external company like Amazon to stick their oar into my personal contract negotiations, especially ones that have nothing to do with them.

This sounds like pure propaganda to me: Amazon trying to get the authors on their side. It could also be a move for Amazon to control a publisher’s internal finances; after all, if they can dictate how much is going to the author, they are also dictating how much the publisher is getting. What company would give another company that kind of power over their finances?

Controlling the price of ebooks is a bit less straightforward. On the surface, it sounds a lot like businesses protecting their bottom line: Amazon want to offer ebooks at lower prices to make more sales, and make everyone more money; Hachette want to be able to keep their higher-priced ebooks to make more per sale. Amazon are also making a lot of noise about how ebook prices will create a better experience for readers (more on the source of this later).

Underneath that, there’s more to it. Smashwords does a good job of explaining what this control of ebook prices could ultimately lead to. John Scalzi also wrote a post that had an interesting point: publishers like Hachette might want to keep ebook prices higher than average to avoid crashing the paper book market. It’s not in their interests to damage the paper book market: fewer paper book sales mean fewer bricks-and-mortar bookstores, which means fewer avenues to get their books to readers. It could effectively cut off a whole chunk of their market.

Amazon doesn’t have this concern. It is only concerned with one bookstore: itself.

Let’s also think about the impact of lowering ebook prices of traditionally-published books and well-known authors’ work on self-published authors. As Scalzi points out, lowering the ceiling on ebook prices means compressing ebooks into a much smaller price range. One of a self-published author’s key selling points can be that they can undercut the more well-known names in the business; readers are more likely to try an indie author if they’re cheaper than the big names. A smaller selling range means less wiggle-room to do this.

Add on sales and discounts, and it’s even harder for a self-published author to stand out from the crowd. Other less concrete factors could also come into play, such as the perception of value. If everything is $9.99, how do you know what’s good quality? What about new releases? If the new Stephen King is available at $9.99 on release day, how many people will be willing to buy his backlist at the same price; if it’s older, it should be at least a little cheaper, right? Buyer expectations will drive other prices down, compressing the gap in which an indie might shine even further… you can see where I’m going here.

Amazon’s dedication to the $9.99 price ceiling is particularly interesting when considering non-fiction books, because they’re commonly much more than that. How will this impact them? It’s another concern.

There are a lot of things to consider about whether low prices across the board are a good or bad thing; these are just some of the things we should be thinking about. Ultimately, Amazon is claiming that it’s better for everyone. If that’s true, if it means more money for everyone in the industry, why would Hachette fight it so hard? They’re a business looking after their bottom line too, right?

It’s just not that simple. Amazon is asking for control, which could have all kinds of (potentially unpredictable) impacts on Hachette and the other big publisher. Who, in their right mind, would hand control of their business’s bottom line over to another company?

This is where I come back to the Book Depository case. Amazon have done everything in their power to build their market presence and footprint. They’ve built themselves up by offering low prices and making little to no profit. Now, their teeth are showing.

Amazon itself is not up for sale, so this is not the short-term money grab that the Book Depository was designed for. So what is its goal?

Books are not the only kind of merchandise that Amazon sells. That might be where it started but it’s so much more than that now. I struggle to think of something I can’t buy on Amazon these days. It’s a megastore – or, more worryingly, you could call them a supermarket. And the danger with a supermarket is loss leading: selling certain items at such low prices that people are enticed in, and making the real money off everything else those people buy once they’re in the door.

In the UK, loss leading in supermarkets force pig farmers to sell their meat at a loss just to get it sold at all. Milk farmers are in a similar situation, where the prices demanded by the supermarkets are so low that they are barely making any profit, if any. But if not for the supermarkets, they’d have no business at all.

Are books the milk on Amazon’s shelves, drawing the punters in so they can be dazzled with tasty electronics and toys?

This is conjecture on my part, but it’s where I see it leading. Their dedication to lowering prices makes me highly suspicious of this sort of tactic. I see no reason for Amazon not to do this, if it can get its way. Dictating prices is just the tip of the iceberg, and if we want a healthy, thriving book industry, catering to all tastes and price points, we can’t give control to an entity as self-serving as this company.

Luckily, the stand-off came to an end a couple of months ago, with Hachette retaining control over its book prices and author royalties, and Amazon adding incentives for lower prices. For me, the key point is that Amazon did not get the control it was looking for. But the reactions still have dire overtones: will this battle happen again the next time the contracts are up for renewal? Will the big publishers eventually be worn down? How else will Amazon try to get its way? What will that mean for those of us who work in and enjoy the industry?

Personally, I want to see Amazon’s power grab cut off at the knees, because I don’t think it will end well for anyone except Amazon if it’s allowed to continue. And I want to see the other big publishers follow suit, support Hachette. I suspect their authors already do.

Which leads me neatly to my next post. Watch this space!

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Amazon vs Independent Authors: KDP Select Fund

Part of the Amazon is not your friend series. (Sorry for the delay – catching up on a backlog of posts here.)

Some writers have done well with KDP Select. How does it fit into the big picture?

KDP Select Fund: will it always be your friend?

I have already talked about the KDP Select program and why its exclusivity requirement is a problem for indie publishing. A big chunk of program incentive that is waved in front of an Amazon author is the KDP Select Fund, and it’s worth thinking about in its own right.

Every month, Amazon pumps hundreds of thousands of dollars into a fund, which is split amongst the KDP Select authors depending on their books’ performance (mostly linked to the lending library). This is a valuable source of income for some Amazon authors. Lately, the amount put aside in this Fund has reached up into the millions of dollars.

I chose not be part of that system and I didn’t give the Fund its own heading to complain about not getting a slice of this particular pie. That was my choice and I don’t regret it. I want to talk about the implications of this fund.

It’s a very nice incentive. I congratulate every author who has benefited from it, and it has been part of what has tempted me towards the KDP Select program.

The more I think about it, though, the more dubious I become. This Fund can’t last forever. Amazon is supplementing authors’ income, bulking out its ebook royalties and paying for borrowed books with this fund. Amazon is the only ebook venue I know of that does this (are there any others? Let me know!).

Recently, it has added the Kindle Unlimited book lending to the fund. However, there’s no indication that the subscription money earned by KU is going into this fund. It started out as just a chunk of money that Amazon offered up to authors and that’s what it still looks like.

There is no indication that the Fund is in any way self-supporting. Lending library fees don’t appear to be funding it, nor any other traceable revenue from Amazon’s ebook services. This, for me, is a big warning flag. Why? Why would they hamstring their bottom line like that? That’s a chunk of their profits they’re giving away, which seems strange for a business.

(A little side note: authors have always been paid by libraries for their books – this is a normal part of a traditional contract – so this doesn’t represent any kind of revolution. The libraries somehow figure out how to make that work, and other ebook library services (available through distributors like Smashwords) have figured out how to do it. It’s only right that authors should be paid for library lending of their work. My question is: why is Amazon supplementing it this way?)

Amazon is a business, not a charity, and don’t kid yourself that there’s anything altruistic about the Fund. It’s not a favour for its authors, nor for its readers. We need to think about it in terms of business goals. It’s clearly not there to make money, so what else is the company gaining?

You. Amazon authors. It’s an incentive to tie authors into the KDP Select program, which means more books going exclusive with Amazon, which means fewer books available in other stores. Which has knock-on effects into the book industry as a whole, all of which benefit Amazon. (See also the previous post and associated links about exclusivity.)

What happens when it no longer needs to entice authors into the program? When it has so much of the industry that the other stores can’t compete any more? That fund will dry up. When it has achieved its goal, it will have no reason to keep paying it out, so why would it?

But Amazon promised, it’s in the agreement. Right now, it is, yes, but that agreement also includes a clause that allows Amazon to change its terms at any time, with no notice or consultation. There is a clause allowing them to make a bait-and-switch.

Authors can withdraw from the program at specific, select intervals (currently, every 3 months), so they could just leave, right? But by the time Amazon no longer needs to pay for the Fund, there won’t be any/many alternatives available. We’ll have to wait until an alternative rises out of the ashes of the old, if it is still possible by that point (I’m sure there are plenty of people who have speculated on this).

I consider the Fund a temporary measure at best, a short-term tool. I can see it drying up, maybe slowly, maybe quickly, as Amazon cements its market domination and ceases to need it so much. I can see them using excuses like ‘market pressures’ or ‘business protection’ or ‘government/tax impositions’. What I am sure about is that once Amazon get the monopoly it’s pushing for and it’s no longer necessary to maintain that Fund, it’ll fall by the wayside. It just doesn’t make sense to maintain it: in business terms, that’s profit they’re giving away.

Perhaps this is a cynical view. Perhaps it won’t happen soon. And maybe it’s okay to milk the cow while the calf is young. But when someone offers me a juicy deal, I have to ask what’s in it for them, what their goals are, and what it’s going to cost me at some point.

Without the Fund, what is the KDP Select program is really giving you? Some promoted exposure? I think about the knock-on effects in the industry, the audience you’re not getting to and the bookstores that are struggling as a result, and I have to ask: is it truly worth it? Is it worth the cost down the track?

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Amazon vs Big Publishing: Kindle Scout: motives revealed

Part of the Amazon is not your friend series. 

It's shiny, it's new, it's bedazzling.

It’s shiny, it’s new, it’s bedazzling.

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.

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Amazon vs Independent Authors: KDP Select and exclusivity

Part of the Amazon is not your friend series. 

Some writers have done well with KDP Select. How does it fit into the big picture?

Some writers have done well with KDP Select. How does it fit into the big picture?

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!

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Amazon is not your friend

Amazon, the behemoth that started out as an online bookstore.

Amazon, the behemoth that started out as an online bookstore.

There’s a lot going around about Amazon right now: in the press, on social media, blogs, forums, etc. Anyone who loves books would probably have to work hard not to hear about it. I’ve been meaning to react to it for a while but haven’t been able to get to it. I think it’s time I put my thoughts down here.

Let me start with a simple statement: Amazon is not your friend. I don’t care if you’re a reader, a writer, or a customer who buys gadgets from the megastore: Amazon is not your friend.

Amazon is a business. It cares about its bottom line (and it has historically struggled to turn a profit) and it cares about keeping its shareholders happy. That’s it. It does not care about books, the book industry, or those who create it. It doesn’t care about the ‘reader community’. It doesn’t even care about its own employees.

It is claiming the opposite. Don’t believe a word of it; this is an underhanded tactic to excuse its business practices and tactics. They’re trying to get you on their side so you don’t look too closely at what’s really going on.

From everything I’ve seen over the past year or two, Amazon is attempting to build itself a monopoly in the book industry. This is a bad thing for everyone involved in the industry, from creators to publishers to distributors to stores to consumers. There are reasons why there are laws against monopolies.

But the law would stop them if that was the case, right? Well, clearly it hasn’t yet. I’m putting together a lot of pieces and seeing a pattern, but it might not be formed enough for formal proceedings yet. I’m not sure. I’m most worried about where current actions are heading, and the damage that is being done in the meantime.

The more I think and write about this, the longer this post gets. To make it easier for everyone to digest, I’m going to break this down and post the chunks individually.

Here are the chunks I have so far:

  • Amazon vs Independent Authors: KDP Select
  • Amazon vs Independent Authors: KDP Select Fund
  • Amazon vs Big Publishing: the Hachette Battle
  • Amazon vs Authors: the Hachette Battle
  • Amazon vs Big Publishing: direct competition

Watch this space (and the Amazon tag); I’ll try to keep these pieces going up regularly.

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Amazon’s slice of fanfic

I searched for 'fanfic' pictures and this was the most disturbing one I found. Ta-da! You're welcome. (Picture by masivefaddy)

I searched for ‘fanfic’ pictures and this was the most disturbing one I found. Ta-da! You’re welcome.
(Picture by masivefaddy)

You may have heard about Amazon’s latest stride into the fiction publishing world: Amazon Kindle Worlds. This is the new service that allows writers to publish and receive royalties for fanfic written in the worlds of publishing houses that have signed up and given permission.

Wow, that sounds great! Fanfic writers can now get permission to publish and they get paid, too! How awesome is that?

Not as awesome as it sounds.

I’ve been watching the reactions to this subject for a few weeks now (while I waited to get some time to write this post up), and overall, the feeling I get about this is unsettled.

Terms of the Deal

Let’s start here and see what the Kindle Worlds page has to say about the deal you’re signing up to if you decide to publish your fanfic through this shiny new service.

The main draw of this service is the fact that you get paid for your fanfic, so let’s take a look at the money stuff:

  • The rights holder gets royalties from your fanfic. This is fair enough; you’re using their intellectual property, so they should get a slice. How much they get is unstated. Note, however, that Amazon has signed up publishing houses, not writers; I have to question how much the authors of the original work will actually get out of this (if anything). That’s likely to depend on their particular deal with their publisher, but it’s worth being aware that you could be lining a publisher’s pockets, not your favourite author’s.
  • Royalties are paid at the lower rate of 35%. This is the worst self-publishing/ebook royalty on the market (that I’m aware of), and you’re nailed into it here. No choice. This is a continuation of Amazon’s policy of pushing authors towards the 35% royalty rate.
  • Worse: for short stories (5,000-10,000 words) are paid an even lower rate of 20%. The reason? Amazon’s credit card fees. Bullshit. They don’t buffer other small item prices for this reason and there’s no excuse for putting it on ebooks. I’m concerned about what this will mean for writers publishing through Kindle Direct Publishing (KDP) – are they going to expand this new, crappier level of royalty to those books, too?
  • No control over pricing. Amazon does it all for you. A good thing? That’s up to you, but I don’t like that they’re taking this control away from the author. This is seeming more and more like a traditional publishing deal, and not in a good way.
  • Royalties are paid on net, not gross. That means you get a percentage of the profit on the ebook, not the sale price (so, after Amazon’s expenses have come off and potentially even the rights holder’s royalties too). There’s no clarity about exactly what they’re taking off before it gets to ‘net’. This is different to all others ebook deals that I’m aware of. Even traditional publishing deals give you a percentage of the ticket price, not the profit, because the publisher’s percentage is supposed to cover their costs.

So it’s not a great fiscal adventure. Amazon are pretty much reaming you as much as possible while presenting a passable deal. Okay. But something is better than nothing, right?

Let’s keep looking and see what else is going on here. Time to examine copyright stuff:

  • You own the copyright to any original elements you put into your story. Characters, events, etc. (The copyright of the original work/world you’re writing in remains with the rights holder.) Seems fair enough on the surface. Except that you don’t get any choice about what happens to that copyright, nor any chance to capitalise on it.
  • Amazon gets full, exclusive license to your story and all its elements for the life of the copyright. What does that mean? You cannot sell or use that copyright anywhere else. Ever. (The life of copyright is your lifetime + 70 years.) You can’t publish your story anywhere else, not even for free on your website. You can’t use any characters from that story in another story anywhere else (but you could use them in another story on Kindle Worlds). You can’t use them in a screenplay, or make pictures out of them (so fanart of your original character is a no-no). You see where this is going?
  • Amazon or the original works owner can use your copyrighted material and you will get nothing for it. So if they pick up and use that shiny idea you had, you get a nice, warm, fuzzy feeling but not a cent of the money from those movie franchises, or book sales, or anything else they might choose to flog to the masses. Hell, if another fanfic writer likes your ideas, they can ‘build on them’ (read: use and abuse) however they like, and get crappy royalties through Kindle Worlds for them, too.

As publishing deals go, this sucks balls. This is the kind of deal that, for original works, everyone in the business would be telling you to RUN RABBIT RUN, and the fact that this is fanfic doesn’t change that in the slightest. John Birmingham said that pretty much (only with more words and some helpful examples of what this all means), and John Scalzi wrote an unsettling post about it, too. The OTW (Organisation for Transformative Works, who work largely in the fanfic space) had a similar reaction to this deal.

So, it’s a deal with crappy (no) rights attached and a pretty poor financial recompense offering. Not the best publishing deal.

But is that all that this program will do? No. This is the first time fanfiction has been legitimised in this way and there are many rumblings about the potential ripples it will cause.

Fanfiction Impacts

Whoo-hoo, they said fanfiction is okay! We’re allowed to write it and make money from it! That’s a good thing, right?

Well, only if you write the kind of fanfic they’re looking for. Not too graphic, not pornographic, no cross-overs, and only written in the worlds they have licensed.

But what about the rest? There are fears that writers who choose not to publish through Kindle Worlds, or who want to continue to offer their work for free on mainstays of the fanfic world like fanfiction.net, will suddenly get cracked down on.

Fanfic has long fought to be allowed to exist without fears that the rights holders will object to their use and misuse of copyrighted material, and it seems that only in the last few years, free fanfic has been allowed to flourish relatively unmolested. It has become acceptable (as long as the fanficcer isn’t making money off it), or at least tolerated. The exceptions to this are increasingly few and far between.

Should Amazon choose to enforce its newfound ‘world’ licenses, they could crack down on free fanfic and start that fight all over again. They’d be completely within their rights to do this. This is not to say that they will, but it’s a distinct possibility (and considering how money-grabbing they appear to be, it wouldn’t surprise me or many other commenters on this subject; it is a common fear).

Of course, I suspect that would blow up in their face. They’d enrage the fanfic community and authors would turn away from the Kindle Worlds program in droves (at least, I hope they would!). But just because it’s stupid, doesn’t mean they won’t do it anyway.

In another vein, will the KW program reduce the amount of free fanfic available for readers, because writers are all going to go get paid for their writing? I doubt it, if only because of the restrictions on it. Fanfic is all about the freedom to do whatever the hell you want, and there will always be those who want to write outside the boundaries of the program. For example, the ‘no porn’ restriction will keep the slash in the unofficial venues where it currently exists. And I’m sure there are plenty of writers who just won’t want to go the KW way.

Also, I have to ask, is there a big market for people paying for fanfiction? How likely is it to pull readers away from free fanfic? (I’m not convinced that it’s entirely the same audience.) Are fanfic readers likely to pay the prices that Amazon is going to charge?  These aren’t questions I can answer yet.

Authorised/Tie-in Fiction Impacts

Authorised books in licensed domains already exist; this part isn’t new. Some writers make their living writing tie-in novels in copyrighted worlds they don’t own, like Doctor Who, Star Wars, Warhammer, and so on. How will this affect them? Will this legitimised form of fanfic replace these authorised lines of novels?

I would like to doubt it, but it will depend on how the rights holders consider this new program. Could KW be a cheap, low-fuss way for them to get spin-off novels done? Yes. But the fanfic options are, by nature, not canon, not edited, and not vetted. Quality and content will vary widely. One would hope that the right holders of big chains like Star Trek, etc, would want more from their lines. But how likely are they to care that much? Would they just pick and choose the fanfic offerings they like and put on a stamp of a approval, and call it good?

John Scalzi sums it up perfectly: “If I were a pro writer who primarily worked in media tie-in markets, I would have some real concerns.” Yup, me too.

The Author Side

What does this mean to authors producing worlds that might tumble under KW’s banner? Well, I’d keep an eagle eye on your publishing contracts and exactly what rights you’re signing away. You may not get a choice in being part of the program if you hand those reins to a publisher. Previously, authors may not have worried too much, assuming that those particular rights would have been used for authorised tie-in-type material. Opening it up to fanfiction, however, is a different kettle of fish.

Should you be negotiating with your publisher on these grounds, specifically? Yes, if you care about it, and if not, for the fiscal side of things. It’s definitely something to keep in mind if you’re looking at a publishing contract. If you’re not sure, get advice!

For those who already have contracts, you may be open to this program already. It’s probably worth checking with your agent/lawyer/publisher (again, at least for the fiscal issue, if you don’t care much about the fanfic itself).

And it’s not just traditional publishing that is affected. There’s also talk of this option being available through Kindle Direct Publishing (KDP), which I’ve used to publish the Apocalypse Blog ebooks on Kindle/Amazon. I could license fanfic in the AB world! Yay?

Personally, this whole thing makes me uncomfortable. I don’t think I’d want to sign those particular rights away (even for tie-ins). I’m a bit jealous of my babies that way*. From what I’ve seen, I don’t want any part of KW, from either side of the deal. As nice as it might be to make a bit of money that way, I couldn’t in all conscience support such a program. Too many skeevy parts for my liking!

Over on the Web Fiction Guide forums, there has been an interesting discussion about most of these points, too, between writers of various types of web fiction. It seems that a lot of authors have a view about Kindle Worlds.

This is touching many people and I am concerned about many of its knock-on impacts. It seems to me that Amazon has made an unsettling move that could set the scene for more action in the e-publishing world that won’t be good for creators. It is part of a larger, disturbing pattern in Amazon’s shaping of the publishing of Kindle ebooks.

Back at the beginning of the year, Smashwords predicted that Amazon will be kicked out of the number-one ebook seller position. Increasingly, I hope that this is so, for the sake of authors everywhere. In the meantime, I will be watching the KW situation with curiosity, from way over here where it won’t touch me.

(*Note: This doesn’t reflect my attitude towards free fanfic; that’s another post entirely, but the short version is that I don’t object to it and would be flattered if someone did it in one of my worlds.)

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