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Tuesday, July 22, 2014

Kindle Unlimited: A Brave New World or The End Of The World As We Know It?

Most of us knew this was coming. The rumors have been buzzing around the net for a couple months. The only questions were: Are they really going to try it? And if so, how? Well, now we know. On Friday, Amazon introduced their new Kindle library program, Kindle Unlimited. For those of you who haven't heard, Amazon will now let you borrow unlimited e-books for a measly $10/monthly fee. You're limited to 10 books at a time, but as soon as you "return" them you can download more. As long as you read 10% of the book, the author will receive a payment (this is where it gets sticky... more to come...) Some people have called it the "Netflix of books." They may be right, but at the moment it's a still a bit mind-boggling for me. As a reader, I think this is absolutely amazing. My wife and I have already signed up. How can you even hesitate to sign up for a deal like this? As a writer, I'm still not entirely sure how I feel. This is why:

There are a few catches with Kindle Unlimited. One is that authors don't get paid a normal fee. They get paid an equal percentage from a monthly slush fund that's been set up by Amazon. Usually, the payments amount to about $2 per borrow, but it varies a lot, and this could prove to be a very unstable arrangement with the number of readers Kindle Unlimited is bound to attract. Also, writers are required to be enrolled in Kindle Select because the two programs have essentially been rolled together. -For those who don't know, Select is the program that lets authors give a book away for free for 5 days out of every 90 day enrollment period. This is a nice promotional opportunity, but the program requires exclusivity. Authors are not allowed to sell these titles anywhere else... Unless you're a traditionally published author or publishing house. If you're one of "those guys," you don't have to be exclusive. And you also get paid your standard royalty rate. At least, that's the way it works now that we have Unlimited.

Also interesting: according to a few reports, Amazon seems to be tweaking their algorithms once again, this time placing a greater weight on KU borrows than sales. This causes books in the KU program to have a better ranking than they would otherwise, essentially knocking better-selling books out of their way as a sort of favoritism. This can boost sales (or borrows) for these titles by giving them greater visibility on Amazon's charts. (When Select began, giveaways carried the same weight as purchases. Amazon quickly decided those free books were dominating the charts and changed the algorithm so that a free book only counted as a small percentage of a sale, thereby minimizing the sudden jump in rankings after a free run. And also reducing the effectiveness of a giveaway.)

So, to recap, Indie authors must be exclusive to Amazon, and can only get paid their share of a slush fund. Legacy publishers are apparently more equal , and they not only get paid the full amount, they also can sell their books anywhere they want. Which begs the question of what will be left in that slush fund once Harry Potter and Hunger Games have taken their toll? Once again, Amazon has handed us a unique opportunity, but Amazon giveth with one hand and taketh with the other. I have a few other concerns. For instance, I know someone who once very proudly explained the fact that she and five friends all share an Amazon account so they can get each other's books for free. Amazon knows about this practice and, as far as I can tell, has done nothing to quell it. I can only wonder how many of my sales were not a sale to one person, but five or six? I don't mind people sharing my books with friends, but there's something sleazy about people intentionally gaming the system so they can steal books.

Likewise, Amazon did very little to stop the fake sock-puppet reviews that were happening a couple years ago. Some writers set up fake accounts at Amazon (and other places) to post false 5 star reviews of their own books, and to slam other writers whom they considered competition. Until the situation gained major media attention, Amazon just ignored it. Then they removed hundreds of reviews, even some legitimate ones, just to shut up the criticism. But even now, if I email Amazon about a bad review that describes things that don't even happen in one of my books, they simply recommend that I vote the review down as "unhelpful." Umm, the reviewer is lying about my book, misrepresenting it purposefully, and you won't even take a look? Talk about unhelpful.

Many writers have "exchanged" reviews of books, a process that's supposedly against the T.O.S. but continues to this day. And now, with the introduction of Kindle Unlimited, I've witnessed authors talking about downloading their friend's books and skimming through the required 10% to make sure they get paid even though the books aren't read. Well intended no doubt, but still gaming the system, and something Amazon will eventually have to deal with. Last but not least, some Amazon customers buy books on Kindle but then convert and side-load to a different device. How will Amazon know if that book has been read, and whether the author should get paid? Answer: They won't. For some authors, these inconsistencies could lead to thousands of dollars worth of underpayment or overpayment, depending on the circumstances. Does that make it a wash? Maybe, if it happened equally across the board, but that's not how real life works. Some authors are going to lose a lot of money this way, and no one will ever know it happened.

Now, here's my situation:

I've been in Select for a couple of years, and the reason I did it was because I made more money in borrows from Select than I was making in sales from other e-book retailers (Apple, Sony, etc.). I used Smashwords for distribution back then, and I often found their service frustrating. Getting books properly formatted for different devices was next to impossible, and getting an answer from the service department took days, if not a week or two. Select was an obvious choice. All I had to do was pull my books from the other stores and go exclusive with Amazon. In return, I got to give my books away for free now and then, and also reaped the benefits of getting lots of borrows. But times have changed. 

As sales dwindled earlier this year, borrows did, too. And I realized that it might be time to try some of those other booksellers again. After all, things have changed a lot in the last two years, and I just might be missing a real opportunity. So I made up my mind to pull all of my titles from Select and start re-publishing in mass distribution. Many writers have found success by making the first title in a series free, or "perma-free" as we Indies call it. I have several series going, so I decided to try that. I opened an account with a new distributor (not Smashwords - more on that in another post) and began the process of converting my books, and of course waiting for my Kindle Select periods to expire. But just as my books began falling out of Select, Amazon changed the game. Again. 

So I took a long look at Kindle Unlimited, the benefits it presented, and how that might affect my plan. I tried to look at it critically, from a businessman's perspective, rather than an author's or a reader's. Here's the way I see it: Kindle Select/ Unlimited still presents a great opportunity for exposure and promotion. For the right person, this might be a great way to make sales and build a stronger platform. Alternatively, the program has some problems, and some authors might lose a lot if they aren't careful. I had been all-in with Select, and that was not healthy. There are better, albeit more hands-on approaches. Thankfully, to Amazon's credit, since they enrolled all Select books into Unlimited without giving us a choice, they allowed publishers to pull our books from Select without waiting for our 90 day commitment periods to expire. I did just that. However, I left most of my short stories enrolled and I have the ability to re-enroll my novels at any time. By taking this approach, I have given myself the maximum latitude possible.

In the meanwhile, my books are slowly but surely becoming available in iTunes, Kobo, Scribd, and other places. Over the next few days, my books will finally be available just about everywhere (a relative term for e-books, I know...). I will monitor sales, both at Amazon and in the rest of the big wide publishing world, and observe the changes over the next few months. If it seems prudent, I may put a title or series back into Select just to see what happens. But at this point, I would be very reluctant to put my entire catalog back into Amazon's basket. Instead, I'll take the hands-on approach of moving things around and seeing what works best for each book and/or series. On the bright side, my ability to do this is a huge advantage over traditional publishers. On the down side, this is very exhausting work, and will distract from other things, like writing. But hopefully at this point in my career, I don't have to publish 4-5 titles a year to stay competitive. 

Not that I won't try anyway :-) 

If you're still reading, thanks for your patience with this long-winded post. Keep an eye out, because I will post links as new distributions become available, and I will update with my experiences and conclusions. Also, Shadow Rising is free this week. It's the only novel I still have in Select, and it won't be there for long. Grab a copy, spread the word!