Indie Corner: Amazon KDP Select - An Overview

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Indie Corner:

Amazon KDP Select - An Overview


J.A. Marlow

Copyright © 2012, J.A. Marlow, All Rights Reserved

J.A. Marlow's Website



Amazon has announced a special ebook lending library for Prime subscribers. In the past several days they have sent emails out to the authors and publishers who use their KDP (Kindle Direct Publishing) platform inviting them to join.



"We're excited to introduce KDP Select - a new option dedicated to KDP authors and publishers worldwide, featuring a fund of $500,000 in December 2011 and at least $6 million in total for 2012! KDP Select gives you a new way to earn royalties, reach a broader audience, and use a new set of promotional tools."



At first it sounds like a great idea, as a way to get added exposure for ebooks. That is, until we start looking at the details...


Borrowing Details and Ebook Pricing


Each Prime member can borrow only one ebook per month. If you, as a Prime subscriber, could borrow only one ebook and you had a choice between a $.99 ebook and a $12.99 ebook, which would you borrow? Or even $2.99 and $12.99?


The better value from the borrower's point of view will be the higher priced ebook. Lower priced ebooks (which are typically Indie) have a disadvantage in this program.


The Select borrowing program might be a way to target the Prime demographic through the browsing area, but unless you are lucky or already have a following don't count on a large number of borrowers or making money...




Amazon has set up a monthly 'fund' from which to pay for any ebooks borrowed. Please note that no money goes to an author or a publisher for simply enrolling a ebook. For December, this fund is $500,000. Amazon has dedicated "at least $6 million" for 2012 which averages out to $500,000 a month.


How much is paid out on a specific enrolled ebook depends on what percentage of the total overall borrows aremade on a particular ebook. (The TOS for the Select program also includes an unexplained passage about Amazon deciding "the criteria for determining which borrowing events qualify for this calculation." You would think a borrow is a borrow. Apparently not.)


For instance, if your book accounts for 1.5% of the total loans for December, then that ebook would earn $7500. Sounds like a nice chunk of change, right?


There are already tens of thousands of books included in the program. The more ebooks that are borrowed, the more ebooks it will take to make up a decent percentage. Start doing the math. It gets ugly very fast.


The problem is the sheer numbers of other books also in the program and the fact that each Prime member can only take out on loan 1 book per month. Only one! Yes, you might be one of the lucky ones to get a high percentage of loans for a particular month and receive a good payout. Most likely, you will get a pittance.


"I have to go where the money is," is something I've heard mentioned. Remember, there is no guaranteed payout per book, and for this you are are forced to give up diversification of distribution. At this point no one knows if there is money in this yet for the average enrolled book.


Which brings us up to...





"When you include a Digital Book in KDP Select, you give us the exclusive right to sell and distribute your Digital Book in digital format while your book is in KDP Select. During this period of exclusivity, you cannot sell or distribute, or give anyone else the right to sell or distribute, your Digital Book (or content that is reasonably likely to compete commercially with your Digital Book, diminish its value, or be confused with it), in digital format in any territory where you have rights."



For those curious, the above is an exclusivity and non-compete clause all in one. (Please note that I am not a lawyer nor am I giving legal advice. This blog post contains only personal opinion) First we'll tackle the Exclusivity:


If you enroll an ebook for the Select program it is for 90 days. No backing out early unless you want a lot of trouble. 90 days in which that particular book is available to no one else who may need or want .epub or some other ebook format. This 90 day exclusivity contract automatically renews unless you opt out ahead of time.


I have an issue with this. I have readers all over the world, some of them in areas where Amazon charges a $2 surcharge which Amazon keeps to itself. As a consequence, I sell on venues such as Kobo, Apple, and Smashwords. Unless I am being compensated for not serving those customers, I have a huge problem with leaving them out.


I truly believe that diversification is good for the author (eggs not all in one basket) as well as for the readers. It prevents business strangleholds. It allows the ebooks to be seen by different demographics and geo-locations.


Amazon is asking for an exclusive license on a copyrights. FOR FREE. You would be losing money and exposure from other channels, and the only compensation is a lottery-type setup where you might be a big winner, but most likely will get nothing or a small token ‘winning’?


Think about it.


When a publisher asks for exclusive rights to a specific book, there is typically an exchange of money. You are no longer able to make money from it in that specific area any longer for the term of the contract. There should be compensation for the granting of that license to that portion of your copyright.


If Amazon wants to pay me for the exclusive right to use a portion of my copyright, I might consider it. It would depend on how much they offered and the terms.


I don't like the payment method Amazon has set up. Instead of providing at least a guaranteed token amount for each ebook loaned out, Amazon is instead limiting their money liability by creating one big pool of money each month that cannot be counted on to come to you individually. All while, at the same time, preventing you from making money or gaining visibility elsewhere.


By the way, I've seen some suggest adding something to the end of the ebook or adding a deleted scene and call it a 'new edition' that can be enrolled and leave the old version for sale through other retailers. Don't do this. Really. The contract language gives Amazon all the power here, and you don't want to give them the right to close your account and take all your owed royalties.


Non-Compete Clause


Authors, have you heard of the outcry among authors and the warnings from people like Dean Wesley Smith, The Passive Voice, Writer Beware! and so many others about avoiding career-crippling non-compete clauses in publishing contracts?


Well, Amazon has one of their own:



"During this period of exclusivity, you cannot sell or distribute, or give anyone else the right to sell or distribute, your Digital Book (or content that is reasonably likely to compete commercially with your Digital Book, diminish its value, or be confused with it), in digital format in any territory where you have rights."



There is much concern over this clause, as it's rather open-ended. This could mean other works in the same genre or sub-genre. It could mean anything in the same series or the same universe. It could only disallow 'special editions' that add content to the ebook. Or prohibit collections or omnibus or anthologies. Or, or, or...


Oh, and if you interpret it wrong? Amazon can close your KDP account and you forfeit any monies owed. Ouch.


Please note that I am not a lawyer nor am I giving legal advice. I only thought I would point out this particular item, and it's something that I personally as a publisher and author am worried about. (Yes, I know I've said this twice. It's important.)


Amazon Select: The Good


An enrolled ebook to go to free on Amazon for 5 days out of the exclusive 90 day period. This can provide exposure and a ranking boost to titles. As it's fully controllable, it also allows for strategic marketing and promotion campaigns.


It has now been confirmed that each 'borrow' counts as a 'sale'. There are people not in the program that are upset about this because in their view a 'borrow' should be more like a 'free giveaway' as there is no set money coming to the author in payment for that borrow. In any case, it is boosting the ranking of borrowed books in the Amazon paid categories as if the 'borrows' were 'sales'.


As mentioned before, the Select borrowing program could be used as a pure promotional tool targeting the Prime demographic through the browsing area. A Prime user might then go and buy your book, or possibly borrow it.


Amazon Select: The Bad


The sneaky and annoying redesign of the KDP dashboard. Authors and publishers, be careful about what you select and boxes you check! Amazon is making it too easy to mistakenly sign up. If you want to opt out, you are in for more time and hassle when putting up a new ebook.


The exclusivity of distribution and selling limits an author or publisher from making money elsewhere. Amazon is using the Indie Author's copyright to better their Select program, with no upfront fee or advance given in compensation.


The overly-broad non-compete clause. Who knows if this will be used, or how, but it would be wise to tread carefully.




Overall, this is a good move for Amazon ONLY. The KDP Select program is for increasing the numbers of books available to Prime members which is another advertising point to use for their Prime program. They needed to do something after the big publishers started opting out and raising a ruckus if they were included without their permission. They limited the amount of money they are going to pay out for the Indie books, which is good for only their accounting.


Not ours.


Never forget that Amazon is a huge business who is dedicate to making money. For good or for bad, this means they will tailor any deals towards helping themselves. They have to. They are a business. With Kindle Direct Publishing, the needs of Amazon and the Indie Author and Publisher coincide, for now. Do not make the mistake of believing Amazon has the small guy's best interest at heart all time.


Amazon is a business. Keep repeating those words to yourself.


However, don't ever forget that we also are a business. A business of building our careers as writers and possibly Indie Publishers. Just as Amazon has to look out for themselves and their bottom line, so do we. As with anything, look at the small details, the contract clauses, and make a logical choice if this makes good business sense for your business and career.


In another 3 months, I would love to hear the experiences of anyone who participates. It would be a nice surprise if more than a few handful do very well at it. Who knows, it might have unexpected benefits. It would be wonderful if it did, since it would help off-set the minuses to the program.


For me, for now, I will continue to make my books available to everyone I can, no matter what retailer they prefer to purchase at or what ereader they prefer to read on.



Amazon contract terms are copyright Inc