If you are interested in blogging or want to promote your book, please contact E. B. Davis at writerswhokill@gmail.com

Our April author interviews: Perennial author Susan Wittig Albert--4/5, Sasscer Hill, horse racing insider--4/12, English historical, cozy author, TE Kinsey--4/19, Debut author, Susan Bickford--4/26.

Saturday Guest Bloggers in April: Heather Baker Weidner (4/1), Christina Hoag (4/8), Susan Boles (4/29). WWK Saturday bloggers write on 4/15--Margaret S. Hamilton and on 4/22--Kait Carson.

Congratulations to our writers for the following publications:

Warren Bull's new Lincoln mystery, Abraham Lincoln In Court & Campaign has been released. Look for the Kindle version on February 3.

Shari Randall's "Pets" will be included in Chesapeake Crimes: Fur, Feathers, and Felonies anthology, which will be published in 2018. In the same anthology "Rasputin," KM Rockwood's short story, will also be published. Her short story "Goldie" will be published in the Busted anthology, which will be released by Level Best Books on April 25th. In addition, our prolific KM will have the following shorts published as well: "Sight Unseen" in Fish Out of Water, Guppie (SinC) anthology, just released, and "Making Tracks" in Passport to Murder, Bouchercon anthology, October 2017.

Margaret S. Hamilton's short story, "Once a Kappa" was published as a finalist in the Southern Writer's Magazine annual short story contest issue. Mysterical-E published her "Double Crust Corpse" in the Fall 2016 issue. "Baby Killer" will appear in the 2017 solar eclipse anthology Day of the Dark to be published this summer prior to the eclipse in August.

Linda Rodriquez has two pending book publications. Plotting the Character-Driven Novel will be released by Scapegoat Press on November 29th. Every Family Doubt, the fourth Skeet Bannion mystery, is scheduled for release on June, 13, 2017. Look for E. B. Davis's interview with Linda here in June!

Cross Genre Publications anthology, Hidden Youth, will contain Warren Bull's "The Girl, The Devil, and The Coal Mine." The anthology will be released in late November 2016. The We've Been Trumped anthology released by Dark House Press on September 28th contains Warren Bull's "The Wall" short story and KM Rockwood's "A Phone Call to the White House." KM writes under the name Pat Anne Sirs for this volume.

James M. Jackson's 4th book in the Seamus McCree series, Doubtful Relations, is now available. His novella "Low Tide at Tybee" appears February 7 as part of Lowcountry Crimes: Four Novellas, which is available for order.

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Sunday, July 5, 2015

Is Amazon Unlimited Fair to Indie Authors

Taylor Swift made Apple blink. Apple introduced a subscription music service (Apple Music) in June and, since they are late to the game, offered the first three months free to those who sign up. Good news for music listeners, for sure. Swift’s complaint: Apple decided since it would not be paid during those three months, it wouldn’t compensate independent artists (and others who would earn royalties from their songs: writers, producers, etc.) during that period. In a blog, Swift called on one of the world’s largest and most profitable corporations to pay artists fairly.

What is fair in a subscription service? Apple thought fair meant that if it wasn’t paid it did not need to pay those whose creative works it was using. Swift called them on it and they backed off.

For books, the latest trend has been for unlimited subscription services. For consumers these subscription services offer a clear proposition: for typically about $10.00 a month you can receive unlimited electronic book downloads, with two caveats. You may be limited to the number of downloads you can have at any given time, and (more importantly) the books have to be available within the subscription service.

Publishers negotiate terms for their books; indie authors take the terms offered or their books aren’t included. Now, let’s zero in on Amazon. There is no Taylor Swift of the publishing world to make Amazon blink, so let’s go back to basics and build a model of fair compensation and see how Amazon’s methods compare.

Fair compensation for books

The author offers an ebook on Amazon and sets the price. Amazon determines what royalties will be (which depend on the price of the book and whether or not the book is available elsewhere). The indie author can take those terms or not have their book available on Amazon. Let’s assume the author accepts the terms. When a customer buys the ebook in the usual fashion from Amazon, the author is (eventually) paid the royalty amount.

It seems to me that when Amazon sets up a distribution system that parallels their online bookstore , the starting price for fair compensation is the amount the author would have received had the book been purchased from Amazon.

Reasonable so far? Good. However, let us recognize that there is additional recordkeeping required to keep track of subscription customers, even though much of that is automated. Just as Amazon charges a very small delivery fee for an ebook sale, it is reasonable they should charge a very small fee for each ebook delivered through subscription and that this fee should be a bit higher, because the process is a bit more complicated. I’ll stipulate the author should perhaps receive a few cents less from a borrowed book than a sold one.

Now, one problem with unlimited downloads is that there is no reason for people not to download any book that looks even somewhat interesting. In order to set a reasonable monthly price for the service Amazon only wants to pay authors for books subscribers actually read. Unlike a direct purchase, where Amazon does not care whether the book is ever read, with a fixed-price subscription service, that sounds reasonable and fair to me.

What if someone finishes part of the book, but not the entire book? Until July of this year, Amazon’s policy was that if someone read 10% they counted it as if the whole book was read. Effective July 1, they changed so to get full credit, the subscriber must read all the pages. I’m okay with that with fiction. If a fiction reader stops reading, presumably it was because they stopped receiving value.

However, consider a nonfiction book might be 250 pages of text and 50 pages of detailed footnotes documenting all the research and giving links to further material. With that kind of book I am unlikely to read but a fraction of the footnotes, but knowing the footnotes are there does have value to me even if I do not read them. Some nonfiction authors may not be compensated appropriately for their work. Since I do not write that kind of book, I’ll let others suggest a solution. I’ll use novels as the basis for our continued discussion.

Summary of fair:

[ (Retail price) X (royalty rate) – (small transaction fee) ] x (proportion of book read)

Hit me in the comments with your objections.

Here is Amazon’s proposed structure starting July.

(1) Set aside a pool of money each month (which they alone determine).
(2) Divide the pool by the total pages read by subscribers during the month.
(3) Multiply that result by the number of pages read for each author, and voilà we have the author’s payment.

How Fair is That?

Let’s start with the good stuff. The revision recognizes the number of pages read. Heretofore two authors, one of a thirty-page “book” and the other of a 1,000-page book, were paid the same amount if a subscriber read at least 10% of each. This new methodology recognizes there are different value propositions given book size.

There is no recognition that one author may price his 250-page book at $1.99 whereas another prices her 250-page book at $5.99. Amazon treats them the same: 250-page commodities. (Pages are determined based on an Amazon standardization process, so authors can’t game the system based on huge fonts, etc.)

Under the Amazon system authors must take on faith that Amazon will treat its content producers well. There is no history to believe this has been or will be the case. For example, Amazon unilaterally reduced royalty payments for Audible. The prior system also relied upon Amazon determining the size of the pool, but compensated authors equally for every book read (at least 10%). Below is a chart showing the author’s payment per downloaded (and “read”) book. It started almost 30% higher than when it ended.





If you had a book listed for $0.99 you did REALLY WELL under this program since you were compensated more for a borrow than a purchase. At $9.99, not so much. Last month Kindle Press released my book ANT FARM at $3.49. I have a contractual 50% royalty rate for sales. In recent months the equivalent payment from Kindle Unlimited would have been about 40% of that royalty.

To the extent that price is a rough approximation for number of pages, its elimination from the equation would be reasonable. (Although given payments are all determined through computer programs, why is it necessary to make that assumption?) But in reality price is not a proxy for length.

The Fatal Flaw in Amazon’s Payment Platform

For me, the biggest bugaboo is that Amazon determines the size of each month’s pool. It “adds” extra dollars each month and uses that as an opportunity to pat themselves on the back with a glowing press release. As the chart above illustrates, there is nothing to stop Amazon from reducing rates.

The big-five publishers all negotiated whether Amazon can include their books in Kindle Unlimited, and if so with what compensation Amazon must pay them. Indie authors can take or leave Amazon’s offer.

Is it fair? Let me know what you think in the comments.


~ Jim

5 comments:

KM Rockwood said...

Thanks, Jim. You've done your usual thorough analysis and shared it with us (although I have to admit my head is spinning and I will need to go back & reread it before the whole thing makes sense to me. So I printed it out.)

Amazon is the big guy on the block. We can only hope it doesn't act like a bully. And to be fair, it's not exactly making a fortune right now for its investors,(I think it has yet to make a profit) and it is a business, so it's not exactly in a position to disregard its own financial interests.

Shari Randall said...

Lots of great analysis, Jim. I'm going to have to ruminate on all this.
Remember "widgets" from Econ 101? Books are just widgets now - or actually pages are widgets. Seems to me that books are one of the most remarkably UN widget like things humans produce, since they contain magic ;)

Gloria Alden said...

Like KM, Jim, you left my head spinning. I'll have to print it out to think about it. However, I think we're in a bind here. Amazon is the biggest book seller for Independent authors so we may have to suck it up and be grateful for the checks we do get. Unlike Taylor Swift, who has a big audience and makes money singing at concerts, etc. I don't see that we have any other option.

Kait said...

Good post, Jim. It seems that just as soon as an Author 'gets' the system Amazon changes the playing field! Yikes.

Ellis Vidler said...

I've been traditionally and self published. So far I've benefited from Amazon's programs and have been okay with them. I've done much better there than I would anywhere else.
I see Amazon's KU program much like having your books in a library, but you get paid something for the books read through Amazon's library. You get more exposure, and of course you hope people will want to read your other books. I do wish Amazon would include the number of books borrowed in the reporting.
How we offer books is entirely up to us. We can have one book in the Select program and eligible for borrowing and leave the others out, hoping readers will buy the others, or we can leave them all in Select and rely on Amazon's payout for borrows. I'll have to see if I make enough per page to make keeping all my books in reasonable.