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What should independent authors do about Kindle Unlimited and other predatory platforms?

By Blog, Industry

This post originally started out as a comment on Mark Coker’s blog post about the demise of Oyster, but it has actually been brewing for a long time, since the launch of the Scribd and Oyster ebook subscription services and the appearance of Amazon’s predatory Kindle Unlimited subscription plan. I’ve decided to expand my thoughts on the In 30 Minutes blog and seek feedback from writers.

I have long thought that in the battle of the platform marketplaces and their business plans, the content creators — whether they be musicians, filmmakers, or authors — seldom get a seat at the table. We have seen this happen with Spotify, where artists get scraps while the platform owners and investors (including the big music publishers) grab money and control. Following the launch of the Oyster and Scribd ebook subscription plans, I wrote:

“As for the venture-funded book subscription services, I’ve taken a look at Scribd and read some of the recent news about Oyster, too. I find it very telling that Scribd.com heavily promotes unlimited books for readers, and offers resources for publishers and partners, yet there isn’t a single page in their support section that explains to authors what they will be getting from the service. Clearly, authors are not a priority.”

Amazon Kindle Unlimited buffet - Depolo_cc_2-0_attribution_flickrAlthough Coker was eventually able to get a reasonable rate from Scribd and Oyster for authors participating in his Smashwords distribution service, it was overshadowed once Amazon decided to jump in with the Kindle Unlimited subscription plan. It’s cheap, fully integrated with the Kindle, and absolutely terrible for most participating authors. Just like the $10 buffet at the local Chinese restaurant, the cheap, all-you-can-eat subscription plan that Amazon launched requires cheap stuff in order to work. It’s great for readers, it’s great for Amazon, but for the authors and content creators? Not so great. Authors who participate (via Amazon’s KDP Select self-publishing service) are getting crumbs in the form of a per-page reading rate that is the same for all ebooks. In the long run KU is terrible for authors, except for a tiny minority who can achieve scale. This will reduce the size of the pie and leave a lot of talented authors struggling or even giving up.

I think it’s time for indie authors to look at the music and film industries to not only see where things are headed, but what can be done to preserve or strengthen our collective power. Withholding the best content from marketplaces (as HBO has done with Netflix and Amazon Prime, and some artists have done with Spotify) is one strategy, although it’s unclear how effective it can be unless lots of content is withheld and there are viable alternatives for audiences to turn to.

Sharing data and shining a light on the ugly reality of treatment of content creators is another, as artists have done for years with Spotify and Taylor Swift did most recently (i.e., Spotify’s claim it had paid out $2 million, vs. Swift’s revelation that it was 1/4 that figure).

However, one thing artists and filmmakers have been unable to do — in part because of the industry structure involving studios and publishers with misaligned interests — is band together to demand a seat at the table, and fight for their rights. In the publishing world, while some author organizations have taken a stance against Amazon, they represent relatively small numbers of authors. I think there is a huge opportunity to unite the population of indie authors (including self-publisher authors and professionals) who are not represented by these organizations, and are not beholden to the large publishing houses. With a strong voice, the ability to shine a light on the good and bad players in this industry, and the power to issue recommendations, it may be possible for independent authors and other content creators to finally get a seat at the table or take action when platforms behave badly.

What do you think? Is this an effort worth pursuing?

(Note: This post reflects my views only. I welcome dissenting views and discussion in the comments below, but please be respectful)

Image: Chinese Buffet, Steven Depolo/Flickr, used under Creative Commons 2.0 Attribution license

Amazon’s Kindle Unlimited subscription plan screws self-published authors

By Blog, Industry

Amazon just announced its Kindle Unlimited subscription plan for ebooks, and boy, does it look great for readers and traditionally published authors. Readers get access to hundreds of thousands of titles for a low monthly price of $10. If you’re a big-name publisher, traditionally published author, or an author published through an Amazon imprint, the terms are great for you, too, according to Publisher’s Marketplace. As long as a reader reads just 10% of your book, you get 100% of what you would get as if the book were a standalone download . Competing subscription plans, such as the one offered by Scribd, don’t come close.

Sounds great, doesn’t it?

Wait a minute. What’s the payout for authors and publishers who are using Amazon’s exclusive self-publishing platform, KDP Select?

Well, you are out of luck, because Amazon’s terms aren’t nearly as generous. I quote from the email Amazon out to KDP members last week:

KDP authors and publishers who enroll their books with U.S. rights in KDP Select are automatically enrolled in Kindle Unlimited. Inclusion in Kindle Unlimited can help drive discovery of your book, and when your book is accessed and read past 10% you will earn a share of the KDP Select global fund. For the month of July we have added $800,000 to the KDP Select global fund bringing the total to $2 million.

In other words, self-published authors in KDP Select are getting paid … who knows? It’s certainly not the 100% enjoyed by traditional publishers and authors on Amazon imprints. It can’t even come close to the 70% that all KDP authors (including those who are not in KDP Select) normally get for a single digital purchase of their book, because the “global fund” simply isn’t big enough to cover subscription reads and the free reads that are part of other KDP Select promotions.

So we have a situation in which one group of authors is getting the gold standard — 100% of what they would get as if they sold the book individually. And then there are the self-published authors in KDP Select, who are providing the bulk of the current Kindle Unlimited catalogue. They are getting some lesser fraction and cannibalizing full-priced digital downloads to boot. On Kboards, some of them have begun to mildly object to this unfair treatment, which surprises me. Self-published authors are getting screwed and they should be vociferously protesting the second-class treatment and terrible terms offered by Amazon.

KDP Select has other issues, too. As described in “Is KDP Select worth it?”, I dropped out of KDP Select after running some experiments and finding paltry sales and reimbursements, and a negligible rankings boost. I also object to the monopolistic exclusivity requirements — authors in KDP Select cannot publish their book on any other platform thereby limiting the ability of their books to reach audiences on those other platforms. The new subscription plan and its lopsided reimbursement plan gives me another reason to steer clear of the plan — and warn other self-published authors to consider doing the same.

Image: The email I received from Amazon about the Kindle Unlimited subscription program:

Kindle Unlimited terms for authors

What’s missing from Mark Coker’s Indie Author Manifesto

By Blog

Last week, Mark Coker of Smashwords published a 10-point manifesto, celebrating indie authors and the values we hold dear. It’s a great document that has moved many writers who use self-publishing platforms. The manifesto is quoted below, but there’s something missing. Can you spot it?

Mark Coker’s Indie Author Manifesto

We indie authors believe all writers are created equal, that all writers are endowed with natural creative potential, and that writers have an unalienable right to exercise, explore and realize their potential through the freedom of publication. I hold these truths to be self-evident:

  1. I am an indie author
  2. I have experienced the pleasure and satisfaction that comes from self-publishing
  3. I have a right to publish
  4. My creative control is important to me. I decide when, where and how my writing graduates to become a published book.
  5. Indie does not mean “alone.” I choose my partners.
  6. I shall not bow beholden or subservient to any publisher. In my business relationships, I seek partnership, fairness, equity and mutually aligned interests.
  7. We indie authors comprise diverse writers unified by a common purpose to advance, empower and celebrate writers everywhere.
  8. I am a professional. I take pride in my work, and I strive to improve my craft to better serve my readers, myself, my fellow indie authors and the culture of books
  9. My writing is valuable and important. This value and importance cannot be measured by commercial sales alone.
  10. I celebrate the success of my fellow indie authors, for their success is mine, and mine theirs. Together we are pioneering a better future for books marked by greater quality, creativity, diversity, choice, availability, affordability and accessibility.

The missing element is in #6. I’ve added it below, in caps:

6. I shall not bow beholden or subservient to any publisher OR PUBLISHING PLATFORM. In my business relationships, I seek partnership, fairness, equity and mutually aligned interests.

When promoting the rights and interests of indie authors, the hardware and software publishing platforms operated by Amazon, Apple, Google, B&N, Smashwords, and others must be addressed. They have not only made it possible for writers to bypass the old publishing gatekeepers, they wield enourmous power over what we do now and in the future.

Mark surely recognizes this. He regularly (and rightly) questions the power that Amazon has over the marketplace. But he has other interests at stake in the world of platforms. Coker also leads a small (but important) publishing platform. I know he respects and understands indie authors, and the interests of Smashwords is generally aligned with that of the authors it serves. However, I am skeptical of some of the other platforms in the marketplace. They include Bowker and its predatory ISBN monopoly, iUniverse’s self-publishing paperback service, and more recently, the subscription book services Scribd and Oyster (see Scribd’s ebook subscription service: Why authors should be skeptical).

These last two platforms’ interests are not aligned with those of indie authors — instead, it’s all about building market share (and the profits of their VC investors), sidelining Amazon’s digital downloads model and cutting deals with big publishers and ebook distributors (including Smashwords). As I noted in Authors as an afterthought in the ebook subscription marketplace:

I find it very telling that Scribd.com heavily promotes unlimited books for readers, and offers resources for publishers and partners, yet there isn’t a single page in their support section that explains to authors what they will be getting from the service. Clearly, authors are not a priority.

I just checked the Scribd FAQ, and three months after I wrote that post there is still no information about the benefits for indie authors, the size of the cut they’ll receive, etc. Indie authors are clearly an afterthought.

So, in summary, I welcome Coker’s Indie Author Manifesto. But by adding three simple words — “or publishing platform” — the manifesto would be so much stronger.

I welcome your comments below.

Authors as an afterthought in the ebook subscription marketplace

By Blog, Industry

Last October, I wrote a blog post titled Scribd’s ebook subscription service: Why authors should be skeptical. The post generated a lot of interest. However, I was limited by a lack of information — at the time, neither Scribd nor Oyster (a competing ebook subscription service) revealed what the payout would be for authors. Since then, more information has come to light, including payout percentages for a subset of authors. However, far from making subscription services a slam-dunk for authors, the plans reveal a business model based on naive assumptions about reader behavior and what authors want from digital distribution platforms. The plans may not be sustainable, and authors — whose hard work is required to make subscription services like Scribd work — may end up getting tossed under the bus when financial realities kick in. In this post, I’ll elaborate on these points. As usual, I welcome feedback from readers, authors, publishers, and the subscription services themselves.

Let’s back up a little, and look at the universe of digital subscription services that provide digital media (music, games, video, etc.) to consumers through Internet and mobile connections for a monthly fee. Once they reach a critical mass of content and users, subscription services are great for consumers and ultimately for the people or publishers who control the platforms. Netflix and Spotify are two well-known examples. However, for the content creators, the artists or musicians or actors or writers or whoever, the formulas typically leave them with a very small piece of the revenue pie. Sometimes, it’s just crumbs. That’s because the subscription services usually deal with middlemen – the big publishers, partners, and rights-holders. Their needs get addressed first. As for the content creators, they are seldom given a seat at the table when these models are being worked out.

In the case of ebook subscription services, supporters suggest that the people creating the content (i.e., the authors) care mainly about exposure, or would like data about how readers are consuming their books. Wrong. Authors want sales, and they want to be paid fairly — as they should, considering the content creators are the ones providing most of the value to audiences.

Amazon gets it. (Not anymore: See Amazon’s Kindle Unlimited subscription plan screws self-published authors) They’re not a subscription service, but they created a formula which gives Amazon’s original digital downloads formula gives a fair payout to authors. For every $5 Kindle edition of Google Drive & Docs In 30 Minutes that Amazon sells to U.S. customers, the formula works out so Amazon keeps 30% (about $1.50) plus a digital delivery fee that’s a little over 40 cents per sale. My company i30 Media gets the rest, which works out to just over $3, or more than 60% of the price.

When I think about the problems that book subscription services might encounter a few years down the road, I look at Spotify. The music subscription service is a global hit with consumers, yet recording artists get a fraction of a cent per play. There’s a reason why some bands are refusing to join, or severely limiting their catalogues — they’re not getting fairly paid, and it cannibalizes sales elsewhere.

As for the venture-funded book subscription services, I’ve taken a look at Scribd and read some of the recent news about Oyster, too. I find it very telling that Scribd.com heavily promotes unlimited books for readers, and offers resources for publishers and partners, yet there isn’t a single page in their support section that explains to authors what they will be getting from the service. Clearly, authors are not a priority.

One thing these platforms need right now is content. So the subscription services are going to the middlemen — big publishers and other platform owners. Mark Coker, the CEO of the independent self-publishing service Smashwords, cut a deal that places its premium authors in the Scribd service. On his blog, he said that Smashword authors “will earn 60% of the list price on all sales” as long as 20% of the title is read (note that it’s not clear what other authors and publishers are being offered by Scribd).

I have a lot of respect for Mark, yet he admits that the model only works “if most readers read in moderation.” What if they don’t? What if readers pile onto the service, and are heavy consumers, just as they do with Spotify and Netflix? If that’s the case, Scribd can kiss its margins goodbye. Then the pressure will be on from investors to rejigger the payout formulae. Guess who will get the short end of the stick in that scenario?

Oyster books

Oyster was profiled in the NYT a few weeks ago, and they suggested that an “easier” reading experience will attract readers. Baloney. Superior content attracts readers. And an easier reading experience on an app is only a competitive advantage when there is no competition. The problem is, there is a lot of competition. Device makers (Amazon, Apple), other platforms (Scribd, Nokbok, etc.), and other app developers will quickly catch up.

Another thing these subscription platforms haven’t considered is the impact on digital sales elsewhere. If I’m telling audiences through my marketing and distribution channels that they can buy a half-dozen of my ebooks through Amazon for $25, or they can get access to all of them plus a couple thousand more for $9 or $10 per month, which do you think they’ll choose? Oyster is even offering a free trial right now, which gives another reason for readers not to buy those titles that happen to be in the Oyster catalogue — why should they, when they can read the book they want for free, and then cancel the subscription? While authors should receive a payout for each read or partial read on the subscription services, a model based on free giveaways and binge reading is not sustainable. If readers come to expect unlimited books for $120 per year, it reduces the size of the digital books pie and will take sales away from digital downloads elsewhere — just as Spotify takes away business from iTunes digital music library.

So, my advice to any authors considering putting their work in Oyster or Scribd: These services target readers, and ultimately seek to ensure large payouts to investors, platform owners, and large publishing partners. Authors have been treated as an afterthought. I don’t see any compelling reason why authors should rush into any agreement with services that threaten to cannibalize digital and print sales and are unsustainable if consumption habits or subscription revenue fails to meet expectations.

I welcome your comments below.

Scribd’s ebook subscription service: Why authors should be skeptical

By Blog

(Updated) Inc. magazine just published a blog post titled Why Are E-Book Subscription Start-Ups So Hot? It mentioned Scribd, the PDF-and slideshow-hosting service which has just added a $9 per month subscription service for ebooks. Writer Stephanie Meyers concentrates on the tepid response from large publishers, but I wanted to highlight another view — what independent publishers and authors think about their ebooks appearing in a subscription-based catalog. I’m the founder of In 30 Minutes guides, and have authored many titles, including the just-released Twitter user guide, Twitter In 30 Minutes. I have some opinions about this topic, as well as some questions about how Scribd’s scheme works for ordinary authors.

scribd subscription authors

First, it’s worth asking what authors will make from the service. It’s not clear. Scribd’s website urges readers to “support authors. Your proceeds go to writers” but the Scribd FAQ on the subject only says this:

Are authors being paid when I read books this way?

Yes. Scribd’s subscription service operates legally through agreements with authors and publishing partners. Revenue that Scribd earns from monthly subscription fees is paid out to the original authors of the included titles, ensuring that they can continue to write great books.

GigaOM dug a little deeper, but no hard figures emerged:

Scribd — like Oyster — is a bit vague on how authors are being paid. Payments currently “vary a bit by publisher,” Adler told me, and said Scribd “[plans] to eventually be public about the terms.” But HarperCollins CEO Murray told Publishers Lunch, “We have negotiated very hard, to the point where if the whole business went this way, we and our authors would be very pleased, because the economics are more favorable…[it’s] the exact opposite of the music industry’s subscriptions models. The revenues that go to our authors is up, somewhat significantly.”

Murray is apparently referring to Spotify and other subscription-based music services, which are famous for paying content creators next to nothing. NPR reported last year that independent artists were getting $0.004 per play on Spotify, and many large artists refuse to place their music on the service. The same article reported that large music companies give artists less than a 20% royalty.

Think about that for a moment. Spotify and the labels get most of the money from subscribers and advertisers. The artists get the scraps. I’m very suspicious that HarperCollins’ arrangement with Scribd, far from being the “opposite” of the music industry’s subscription agreements with labels, will actually be very similar: The platform and the middlemen will make most of the dough, while the content creators get pennies.

So, Scribd, how much will authors get per read under your subscription plan? If it’s pennies per read, and it’s cannibalizing book sales, why would I ever sign up for such a scheme?

Update: See my follow-up post on this topic, Authors as an afterthought in the ebook subscription marketplace