Books written by Ray Sullivan

Thursday, 24 July 2014

Should Amazon Drop Exclusivity Clause?

There are a lot of people in the US trying out Amazon Kindle Unlimited (KU) right now.  So they should, it's free for the first month.  Not sure what the get-out clauses say, mind.  I often politely decline 'free trials' because I'm always a little suspect that it may be problematic to back out.  As I'm based in the UK this doesn't apply to me, the service is US only at the moment.

But assuming the option to stop isn't too onerous, it may be worth US book readers taking a look.  It isn't the only ebook subscription service going, mind, there's Oyster and Scribd that have been going for a while.  It may be the future of eBooks from a consumer perspective, but it's not gold all the way.

Like the other subscription services Amazon is charging a set monthly fee, in their case nearly $10 a month, to let you loan a set number of books - you can only have so many live at any time.  Probably what the more voracious readers have been waiting for.  However it's only a good deal if it holds the books you want to read.  Both Oyster and Scribd have done deals with the big publishers, so there's a good chance you can get to read many of the bigger sellers.  There's been some moaning on the Amazon boards that many of the big sellers aren't on there yet - that'll be down to Amazon's negotiating/bullying techniques.  I expect they are well developed right now.

What Amazon have got that the other two subscription serves don't have is all the KDP Select titles, the books the self published authors agreed to sell exclusively through Amazon.  Regular readers will know I'm not a fan of KDP Select, new readers only have to wander a little through my postings to see exactly where I stand.  Before I continue, I guess I should ask the question - do self published books make a difference? Well according to one report, self published books now account for one third of Amazon's total sales - these are conscious purchasing decisions made in the millions by ordinary people.  Considering self publishing doesn't have the marketing back up of the big league, that's impressive.  By the way, some of my books were in that third of all sales, so obviously there's an element of class in the buying public too.

So let's reverse the above question.  What do the other subscription services have that KU doesn't? Well, pretty much the remainder of the self published works world-wide, including many of the books that formed part of Amazon's third of self-published sales.  Mine are in there, somewhere. Hundreds of thousands of books - some good, some not so good, many sourced via Smashwords.  With exactly the same checks and balances in quality that the KU list have, which unfortunately is mainly formatting orientated. But self publishers know they won't sell many books if their stories aren't up to snuff, and I reckon there's a load of great self published books out there right now. There are probably a fair few dogs, too, which is where a subscription service comes in.  The reason these books aren't in the KU list is because the authors haven't agreed to exclusivity, so although most are for sale on Amazon, none are in KU.  Coupled with the wait for the big publishers to allow their books in that must make KU looking a bit patchy in some genres.

There's another big question to be asked about the subscription services in general.  Are they the future?  Possibly, maybe only if Amazon gets its way and somehow forces everybody who has a book worth a damn to sign up.  Probably not, though, because the way the royalties are calculated at present across all subscription models is unsustainable for the long term.  Of course Amazon and the others are relying on inertia to kick in - once signed up, subscribers will often find they go whole months without downloading a single book.  However the subscription service will not forget to draw down the monthly sub, because that's their business.  But if only the above mentioned voracious readers sign up long term, then I don't see the models working.  The only way that could work is for authors to practically give their work away for ever, regardless of how popular they are.  Most of us are giving our books away pretty much now to gain traction.  All those $0.99 books you bought recently will have reaped the authors, at most, $0.60.  If you bought them from Amazon, the author will have earned $0.35 (all before paying income tax, of course).  It takes a lot of sales to make a significant difference in an author's life and I suspect subscription will make that difference all the more elusive medium to long term.

And the authors are getting edgy, too. When KU was launched, despite it being relatively late to the ebook subscription market, there was a lot of debate on the various kindle and ebook related boards. Initially it looked like Amazon were in line to persuade a lot of authors to sign up for three months' exclusivity with them. But then there was a backlash, mainly from authors who had participated in KDP Select and had felt the service left them feeling underwhelmed. Following on, many would be KU authors have publicly decided against it. Sure there is going to be a number who will try it out, and the first month is likely to see raised transactions as subscribers try to milk the service before becoming liable for a month's fee. Certainly some Kindle authors who clearly have regular sales have noticed a dip.

For the avoidance of doubt I will not be allowing my books to appear on KU while it insists on exclusivity. As before I don't believe Amazon needs this business model - if they drop the anti-competitive approach they'll fill KU with books currently absent and will probably kill Oyster and Scribd in the process, which would be a shame. There may, however, be space for one or the other - every Coca Cola needs a Pepsi, that's capitalist 101. Maybe Scribd and Oyster will merge to create a larger opponent to Amazon, however the real challenge is likely to be Apple. Apple have stepped up in the last year, championing self publishers and maintaining competitive processes. Sure, they manage a virtual monopoly with their devices and eco-system, but it's a monopoly consumers enter out of choice. And Apple have the clout to face Amazon down. On the side-lines also sits Google, quietly trying to build its ebook service. Google don't appear to have tapped into self published books to any great degree yet, but my guess is that they will soon.

So subscription is likely to be a buoyant market for the next one to two years, but my guess is that it could be heading for some turbulent water soon. If you're an author, hold tight.

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