[REALITY CHECK] - “Amazon Ate My Ebook!”: The Truth About What Amazon Can and Can’t Do With Your Ebook

When you're an author, not only do you have to stay on top of your craft, you have to stay on top of the market and the publishing industry.

As I've said several times on this blog, the publishing business is a business. Being a published author isn't all writing, social media, cozy coffee shop book signings, and royalty checks, it is a business.

It's easy for authors to get bogged down inside their own heads and miss what is going on in areas that can directly affect them and their writing future. Another thing that's easy for authors to do is jump on bandwagons and join lynch mobs, especially when it comes to one company we love--and love to hate.

Amazon.

I know it's hard to stay on top of industry news and trends. Many of us turn to trusted news outlets, blogs, and pundits for their information, but sometimes you have to be careful and consider the source. There are two sides to everything and a horror story for every success story.

This week, I've asked my trusted source--my hubby Jim Brown--to provide some information to help you wade across the demilitarized zone between the latest volley between pro-Amazon and anti-Amazon forces.

Read on and then you decide. Please do comment below because we'd love to hear your opinions, thoughts, and experiences with Amazon.

“Amazon Ate My Ebook!”

The Truth About What Amazon Can and

Can’t Do With Your Ebook

By Jim Brown

©2014

 

There’s a lot of Amazon bashing going on.... Everyone needs to know the truth about the relationship they may have as authors and/or publishers with the retail giant, and not the hyped up, information-shy vitriol that is pumped out in the media. So let’s look at the hard facts about the Amazon ebook publishing setup: what’s good about it, what’s bad about it, and how you can turn it in your favour.

 

A number of years ago, I wrote a short article about ebook publishing for a group I belonged to. I wrote that Amazon’s introduction of the Kindle ebook reader was going to change the publishing industry, and that ebooks would be mainstream very soon. I added that, with the inevitable competition, it would be readers who drove the market, not publishers or booksellers.

 

Fast forward to today. Amazon grabbed the lead, almost forcing the likes of Apple and Barnes and Noble to join the fray for fear of allowing Amazon to grab the entire market. As it turns out, Amazon almost certainly has the lion’s share. Incidentally, it was Sony who, of the global  names, had the early decent e-readers (I still have my metal-case Sony ebook reader), and an ebook store—all before Kindle. But sadly, Sony never did anything with that initial lead in the ebook race and has all but dropped out now. Ebook prices have dropped as approximately 3000 new books enter the market every week, and self-publishers desperately fight for sales. With so much choice, it is now very much a buyer’s market.

Let me, at this point, say that I am neither a supporter, nor naysayer, of Amazon. I simply view Amazon as a tool that can be used to sell products. Amazon is huge, and as a result, there are a lot of Amazon-haters, but Amazon is just a reseller, that’s all. They offer to sell your product based on terms and conditions just as any reseller anywhere in the world does. In fact, their terms (actually, their choice of terms) for publishers and authors is far better than it has ever been in the publishing industry. This is a revolution, and Amazon is leading the way, like it or not.

 

People’s biggest, current complaint about Amazon is that they are allowed to do too much with your ebooks: give them away, lend them, allow others to let friends read them. When you see headline-grabbers like that, it’s easy to just jump on the Amazon-is-the-Devil bandwagon and ride along with it. Recently I had to write two posts on Linked-In to correct some misinformation about Amazon’s terms and what Amazon can or can’t do with your ebooks. One of these misinformed posts was from a HarperCollins employee. Hmmm...

 

The truth is you can restrict, almost completely, what Amazon can do with your product, and all within Amazon’s terms and conditions. Remember: they actually give you a choice of terms. Amazon would like to use your product (or, to better explain it, ebooks as a whole) to persuade more and more people to stay with Amazon and their Amazon Prime feature. How do they do this? Well, under their specific terms, you give Amazon the right let Prime users borrow and read your book for free in the Kindle Owners’ Lending Library. But Amazon also does something similar for digital video. Prime users get to watch some programs for free.

 

There’s also the new Kindle Unlimited subscription program. Subscribers can read as many Kindle ebooks as they want for their subscription, and authors/publishers can be rewarded through the Global Fund that Amazon has had set up for a long time now; essentially taking a share of that fund depending on how often their ebooks are read.

 

But you might be reading all this and think, “No way. I do not want Amazon to have this much control over the books I publish.” Well, you don’t need to! That’s the beauty of Amazon’s terms. They aren’t as predatory as some people would have you believe, and this is where a lot of (sometimes deliberate) misinformation exists. If one is going to consider Amazon as a viable reseller of ebook product, then one has to act like a business and do what suits one’s business model. After all, that’s what Amazon is doing. So why shouldn’t you?

 

Here’s the important breakdown of the three choices you have as an author/publisher of ebooks:

 

Amazon’s 70% royalty option

This is what Amazon would prefer you to choose. It’s a juicy carrot. For every dollar in sales, you get 70 cents. That’s a sweet deal, but it’s under this deal that Amazon gets to use your ebooks for their own business benefit.

  1. They can offer your ebook at discounted prices and pay you 70% of that selling price, not the list price.
  2. Ebooks are automatically enrolled in the Kindle Owners’ Lending Library.
  3. Prime users do not get access to your books for free reading. 

 

Amazon’s 35% royalty option

This is the option that gives you, the book author/publisher, the most control over your product, hence the lesser “reward.”

  1. Amazon can discount your ebook but has to pay you the royalty based on the list price, not the selling price.
  2. You can choose to opt-out of the Kindle Owners’ Lending Library.
  3. Prime users do not get access to your books for free reading.
  4. You may not be allowed to sell your books in some parts of the world at this royalty level (does NOT affect US, UK, Canada, Europe, or Australia).

 

Amazon’s KDP Select program

Amazon would be in heaven if everyone chose to utilise their exclusive KDP Select program. THIS is where the anti-Amazon brigade get their information from. It is this program that allows Amazon the most control over your ebooks—but you are not forced to use it.

  1. Prime users do get free access via the Kindle Owners’ Lending Library.
  2. Subscribers to Kindle Unlimited have free access.
  3. Amazon have exclusive rights while ebooks are in the Select program (your ebook cannot be sold anywhere else).
  4. Authors/publishers can gain a share of the Global Fund ($2 million per month at the time of this writing).
  5. Authors/publishers have access to some marketing campaigns like free download periods and Kindle Countdown Deals.
  6. Full access to all worldwide Amazon platforms at the 70% royalty level. 

Are things starting to look a little clearer now? Amazon wants to get the best business benefit from your product, so they offer something in order to get it.

 

That’s called business, people.

 

It would be far different if Amazon only had one set of Amazon-favourable terms. But that is not the case. You have choices in your role as author and/or publisher. If you want to retain almost full control over your product, choose the 35% option, opt-out of the Kindle Owners’ Lending Library, and don’t enroll in KDP Select. Amazon can’t allow anyone to read it for free and has to pay you based on the list price. The other options allow various levels of control to be handed over to Amazon.

The cold, hard fact is that Amazon has played the game very intelligently. The publishing industry, as a whole, has been stuck in the same setup since the Great Depression. Amazon saw a huge gap in the market for ebooks (and print books) while the others were laughing at “the amateur” ebook industry. Amazon opened it up to the world.

 

It’s up to you to choose what is best for you. USE Amazon’s terms to suit your business model.

 

Next month I plan to publish another article that centres around Amazon and print books.

------ 

Jim Brown is the founder/owner of JimandZetta.com providing customized publishing services for individual authors and publishing companies since 2008. He has personally converted over 8,000 manuscripts into various ebook formats. Jim has been a publisher of ebooks since 2003 with his publishing houses LL-Publications and Logical-Lust Publications. Former secretary, and vice president of EPIC (the Electronically Published Internet Coalition), in addition to his publisher services, Jim is available for guest blogs, speaking events, and industry consultation.

Got a [REALITY CHECK] about the publishing life to share? If you would like to be a guest on my blog, please friend me on She Writes with a message! :)

 

©2014. Zetta Brown is an editor and the author of several published short stories and the erotic romance novel Messalina: Devourer of Men. She also provides editing services through JimandZetta.com. If you like this post, then stop by her editing blog Zetta’s Desk or Zetta’s House of Random Thoughts.

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Comment by Cate Warren on August 7, 2014 at 7:59pm

Super! Please let me know when that's available. I've "googled" the subject, but on pages from Canada they keep routing users to a government website for small businesses, one that quickly steeps your brain in material suitable for an accountant--necessary evil, but a bit overwhelming for the early stages. But they also offer some grant options, etc.. Canada and the US are very similar in some areas, so I'm sure whatever information you and Jim present, as you both appear savvy and brimming with know-how, will be invaluable. I look forward to reading your book! Best of luck and great success to you both!

Comment by Zetta Brown on August 7, 2014 at 12:35pm

You're welcome, Cate. FYI - Jim and I are working on a book about starting a publishing house on a low budget, especially from a digital publishing POV. :) 

Comment by Cate Warren on August 7, 2014 at 10:53am

Thank you, Zetta and Jim for being so generous with your knowledge. I assume this applies to the traditional publishing route? (meaning what Zetta said about no borders--and I hear you on News Corp...too many cold-blooded fingers in too many pies, but that's another story...). Having glanced at the market for literary agents alone, the US has at least 3 times what we have, (I'm thinking when I take a closer look that number will be much higher), and that was just a quick look--makes sense as the US has 10 times more people than we do, and most of our actors/artists/writers, etc. leave Canada to make a living as few can make here it on those careers alone!

You're absolutely right: research, and research again, and then, when you think you're done, research some more. I will leave no stone unturned, even though I'm more drawn to traditional publishing--I'd even like to start my own publishing house based on the business model of a truly revolutionary record company started here in Canada at a time when record companies were crashing (around 2001). They found a way to up-end the "traditional" business model and cater to artists, and have become more successful year after year, (without becoming a large, evil corporation), which is sort of the opposite of the music industry reality. I see what's happening to the publishing world now as parallel to what happen to music with Napster and other downloading sites, and now bands are taking control and releasing online direct to fans, cutting out that often greedy corporate middleman. There's a new wave coming; we just don't know which way it's going to go yet.

My writing has elements of literary fiction, so that makes me think traditional publishing is the way for me to go now, but I'm not ruling out hybrid publishing, or (especially) smaller publishing houses. I'll have to do my homework.

Many thanks again. You two are a goldmine and a big help to someone who is so green I could change my name to Kermit without anyone batting an eye! CW

Comment by Jim Brown on August 7, 2014 at 9:34am

One of the main stumbling blocks for non-US authors is the lack of a US presence. Take Apple for example - you have to have a US Social Security number, US bank, and US address. Amazon don't require that since they can allow you to use your Canadian details. Being Canadian doesn't stop you self-publishing worldwide, because the POD printer Lightning Source will allow you to use them for printing and their parent company Ingram for distribution. There's some limitations to not being in the US, but it doesn't stop you completely :)

Comment by Zetta Brown on August 7, 2014 at 7:54am

@Cate - borders don't have to be a barrier. I know there are indie Canadian publishers who publish in the US and Harlequin Romances is based in Canada...despite their buyout by News Corp...ewww...

We have authors in the UK, US, and Australia. Just because you live in Canada doesn't mean you have to publish with a Canadian publisher, either.

With digital publishing for POD books and ebooks and the rise of self publishing, you don't have to be limited by borders. But like with everything, you need to do your homework and decide what's right for you. 

Comment by Cate Warren on August 6, 2014 at 9:30pm

I checked out that blog post "Kindle Unlimited: Worth It or Not", and aside from giving me fodder for some formidable nightmares when it comes to the Amazon publishing spectrum, it also sparked a question I've often wondered about. I am a Canadian writer living in Canada (though I can see New York state across the St. Lawrence River and pick up AT&T on my iPhone). Does this mean that I can only try to publish traditionally, or otherwise, within Canada--kind of a notoriously difficult, who-you-know industry here. We also seem to be covered by a glass dome, as few of our writers see any success on the world stage, unlike writers from the UK, Australia, and the US. (our music industry has the same problem!) I wondered if either you, Jim or Zetta, might know if a Canadian, or other nationality, can skip their native land and try to publish in a larger, perhaps more open-minded, less cliquey market, in another country?

Comment by Kathryn Meyer Griffith on August 6, 2014 at 11:01am

Oh no...I hope Amazon doesn't ever lower that 70%. But I'm afraid you're right and they might. Someday. I will face that then when it happens. Sigh.

Nice post Jim.

Comment by Jim Brown on August 6, 2014 at 10:27am

With any new industry ('new' in a mainstream sense, since ebooks have actually been a flourishing below-mainstrem industry since before 2000), many entities will try to build a customer base quickly to provide the foundation for the future. So terms can be very good while this happens. It's later, when the growth slows right down and entities start to re-evaluate their business models, that we can start to see changes, terms being tightened up and so on as profits slow down or even start to fall. Amazon have led the way, with terms that really are against the norm for retail. I can think of no other industry where the supplier/producer can earn 70% of the selling price of an item. It's actually amazing, and I don't think that can continue, at least not without Amazon requiring more and more rights to the item (as is happening now) in return for it. My personal belief is that the 35% royalty is the ideal reward-point. That's why you have almost complete control of your product at that option.

Comment by Kathryn Meyer Griffith on August 6, 2014 at 10:06am

I agree with you Jim, time will tell. I was extremely lucky to get 19 of my ACX audio book contracts in and approved BEFORE the March 2014 deadline , so 19 of my Audible.com audio books are still at the higher royalty cut (for me) for seven years. I've been waiting (dreading) Amazon perhaps cutting their royalty percentages for authors as well. I really hope that doesn't happen. I like getting 70% royalties on my eBooks there. After years and years of 4-18%, I feel like I'm truly lucky to get 70%. As you said...time will tell.

Comment by Jim Brown on August 6, 2014 at 9:18am

Hi Kathryn,

Unless your books are in KDP Select they will not be available for Kindle Unlimited. I'm not certain that Kindle Unlimited, as it currently stands, will affect sales much. The choice people have for $10 a month is pretty poor. Amazon says 600,000 books will be available but that is a really a drop in the ocean of the total numbers of books listed on Amazon (over 1 million were added last year alone), so choice is poor and as I stated there won't be mid-list and best-sellers on Kindle Unlimited. I can also see many publishers pulling books from KDP Select because of Kindle Unlimited. We do have to wait and see, but your comments about the Audio Books is very interesting, and a little disturbing. I've warned everyone to keep an eye on all vendors, not just Amazon. Terms were wonderful to begin with, but was that just to grab market share before the screw starts to tighten? Time will tell...

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