I've been busy the last few months with medical issues (not my own), so this post is delayed. Delayed, but important.
Amazon has a program out for publishers called Amazon Select. They're offering participants this month $600,000 in bonus money (divided up by how many downloads a book receives) if they will agree to publish only through Amazon for 90 days. I've read some statistics and on the surface, this looks like a good deal. Authors who are participating in the program are making higher royalties.
I've read some widely circulated articles on why every author should be participating in this program.
Why don't I recommend jumping into this seemingly peaceful jungle pool? Has no one ever heard of piranha?
I grew up in Silicon Valley. I've watched big companies fight over profits, and I've seen a lot of little companies and individuals get eaten.
I have no doubt that the short term gain for authors from participating in this program will be significant.
But -- why is Amazon doing this? Why would they want authors to publish only on the Kindle and not on...oh, say iPad, Nook, Sony or any of the other generic e-readers out there? Because the content from the Select program is free to readers who participate in the Amazon Prime program.
I seriously considered signing up for Amazon Prime. Free shipping. Streaming videos that might let me discontinue Netflix. The bottom line looked really good for my budget. And then they came out with Amazon Select.
I guess Netflix gets to keep getting my money.
Because this is Amazon.
Have you ever had to work with Amazon's customer service? I have. The result was a shocking, "we don't really care about an individual sale" attitude. I'd given someone a gift certificate to Amazon. The end result was: Amazon had the money and my friend never got their gift. Whenever possible, I buy from someone else.
Amazon Prime and Amazon Select are excellent tools for Amazon to devour their competition.
A $2.99 ebook I sell on Amazon's regular program nets the author about $1.83 after the 30% discount and delivery fees. The same ebook sold on Barnes and Noble nets the author $1.94 because while they charge a 35% discount, they do not charge a delivery fee. Apple pays $1.92 through my reseller. When I sell to a generic e-reader through my reseller, the author gets $2.24.
The differences are small, but they add up. If you are buying your ebooks through Amazon, the authors are getting a smaller chunk of the profits, even though Amazon advertises having a lower discount rate. Why? Extra fees.
Amazon has a huge chunk of the market on the Kindle. Imagine what will happen once they've pushed the big competition under a rock. Is there any question they'll lower royalties and increase their discount rate? We're talking about Amazon.
Self-published authors are being forced to make a choice. Publish to Amazon Select and earn higher profits on a bunch of sales. Or, earn lower profits but allow customers more freedom to buy books through any retailer they choose. I'm recommending that authors give their readers a choice to buy their books in any format they wish, from any company they wish. Yes, this may initially mean slightly lower profits on some books. (I'm not recommending avoiding Amazon altogether, just avoiding the Select program.) In the long run, however, I think we'll be giving Barnes & Noble, Apple, etc. a chance to respond to this attack.
And I suspect the results will be interesting.
Interesting. As in the old curse: May you live in interesting times.
As writers and publishers, especially independent writers and publishers, we do live in interesting times.
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