I want to make clear that I have no problem with authors and publishers who choose to use the KDP Select program. I understand why. What I am bothered by is Amazon's program itself. Since people make a large percentage of sales through Amazon, they’re often going to be tempted by the higher royalty rate, or rather, seek to avoid the punishment of the 35% royalty rate. There are other benefits as well, such as five days of being able to offer your ebook for free download (though Amazon has nerfed the impact of that by changing the visibility of the top free books list) and members' books are available for free borrowing by Amazon Prime members, which may net more reviews and definitely nets a share of money.
In a fascinating article by Eoin Purcell, he compares KDP Select's desire for exclusive content to Netflix’s production of exclusive content. The point that sticks out the most to me is that it reduces user churn. In other words, Netflix wants to keep its current viewers as much—if not more—than it wants to attract new ones. It does this in part by producing and purchasing content that only appears on Netflix. Netflix then promotes this content and funnels it to viewers' eyeballs.
While we have no direct evidence of this one way or another, it makes a lot of sense that Amazon may be trying to do something similar. It wants to keep people paying for Amazon Prime membership, and one of those benefits is free borrowing of ebooks exclusive to Amazon Kindle. It’s no-overhead income for Amazon. Indeed, retaining subscribers is a big moneymaker for pretty much anyone who does subscriptions. While Purcell contends that Amazon is getting this exclusive content without paying for it, I’d argue that it's paying for it with higher royalty rates. Still, they’re not paying publishers and authors what they probably should be given the extent of the benefit to Amazon, and given that all the work of writing, editing, layout, marketing, advertising, and publicity falls squarely on the creators and publishers.
Purcell raises another interesting point when he says that Amazon also gets to see how self-published authors sell during this exclusivity period, which gives them an edge in possibly offering publishing contracts for Amazon Publishing, and of course scads of general sales and marketing data, all paid for (in many ways) by publishers and writers.
One thing that was previously difficult for creators and publishers to control was the timing of promotional pricing. It was hard to predict exactly when it would kick in. Now Amazon has introduced Kindle Countdown, which lets one set parameters of timing. But, naturally, one has to sign up for KDP Select to use it, creating yet more pressure for exclusivity, when someone really ought to be able to schedule the dates and pricing anyway.
How big is the benefit to creators? Many argue that it’s not worth the exclusivity to limit yourself. I myself don’t have any experience that is definitive one way or another. Two publishers I’ve worked with prefer to go this route, but others don’t. I can't argue with the ones who like it when they feel they get a consistent benefit from it, after all. Still, both publishers are fairly young and neither had large marketing and publicity campaigns (of which I am aware, anyway!) prior to doing the exclusive arrangement.
This piece by Jane Litte over at Dear Author raises a really good point that gets to one of the reasons I feel uncomfortable with exclusivity. It starts to feel (to me, not in Litte’s words) a bit like the “company store” phenomenon. What Litte does say is that it can be dangerous because with all your eggs in one basket, what happens if the bottom drops out of the basket? Remember when Amazon removed lots of erotica? What if they come for what you write next for some reason? I know that’s a long shot, but exclusivity gives them complete control over that if they choose to exercise it. What if they decide to change terms in some other legally-covered way? You’ve undoubtedly agreed to a host of terms and conditions when you go with KDP Select, and Litte points out that Amazon changes terms at other times writing, “Just recently they increased the amount you have to buy in order to get free shipping from $25 to $35.” Do you fully understand what you signed when you joined KDP Select?
She also argues that exclusivity harms readers, too. Litte says that by reducing or eliminating competition, some of the drive for innovation—and thus perks for customers—disappears. If Amazon has no competition, they don’t need to win your business. They’ll be the only game in town, then we’re back to the company store of books. Again, though, I can’t blame people for doing it. When most of your sales come from Amazon, and Amazon sweetens the deal, then what’s a struggling small publisher or self-publisher to do?
In any case, many people have looked at this more closely than I have, and authors have generously written about their experiences. You can read, in addition to the above, the below interesting posts, and I am certain that a quick search will net more.
- CJ Lyons on Jane Friedman’s blog: Amazon KDP Select: Is It Worthwhile for Authors?
- M.A. Demers of The Global Indie Author: Kindle Countdown – just another example of Amazon extortion? (An inflammatory title, I know, but I thought there was good info in this.)
- James Calbraith on his own blog: KDP Select – a week later. The price of one’s soul.
To sum up, on a purely theoretical basis I encourage people not to use Amazon’s KDP Select/exclusivity; but, in the pragmatic sense, I understand why people use it, and I still gladly work with publishers who are part of the program. We all have to work with the resources at hand, and when money is tight (and when isn’t money tight for a small publisher?) then we take what we can.
I am really interested in your experiences and I can even do a follow-up post about what readers are willing to share. Contact me at email@example.com if you want to discuss your KDP Select experiences. I imagine there is a wealth of experience out there!
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Remember, I am on blog hiatus until the second week of January. Happy New Year, everyone!