Why I’m the exclusivity contrarian

Exclusivity is one of those words that conjures up images of fashionable, stylish clothes, of expensive shopping, of status symbols. It also conjures up images of being part of a carefully selected group, of prohibiting the unworthy from entering.

Thing is, that first type of exclusivity, the one that conjures up designer clothes and shoes, exclusive clubs, requires a barrier to entry–usually price. Sometimes there’s value to go with it. Sometimes there’s not, just a polished turd with fantastic marketing. Those tend to fade away pretty quickly. The things that stand the test of time tend to be well-made as well as well-marketed, although the most exclusive need not advertise at all. It’s a bit of that “If you need to ask the price, you can’t afford it.”

Then there’s the type of exclusivity that sounds great, but isn’t. It’s the type of exclusivity that’s all about limitations–you cannot leave, you have no say, the other party can alter the deal at any time. You may have entered into the agreement willingly, but if you can’t withdraw consent, you’re at their mercy, aren’t you? If you’ve ever entered into a bad deal, whether in real estate or in a personal relationship, you have a good idea of how things can turn for the worst, and unfortunately, often do.

So now, let’s talk about Amazon’s Kindle “Unlimited” (KU) program. Although readers pay $9.99 a month to be in it, the amount of times it’s referred to as “free” tells me that people have conditioned themselves (and others) to think of this subscription service in a flawed way. It’s the same mentality that some people have that that tax refund at the end of the year was not their money in the first place; they don’t realize they’ve given the government an interest-free loan all year. While it’s called Kindle “Unlimited” it does NOT mean that you can read all the ebooks in Amazon’s inventory. Quite the opposite. If anything, it’s a limited program rather than an unlimited one.

To be clear, I’m going to focus on this from the perspective of an author, not a reader although my own experience as a reader was negative as well. The KU selection was limited mostly to people I didn’t read and the few that I read, it was cheaper just to buy their books, which I did.

 

The subscription model is not the issue. The exclusivity requirement is.

 

KU might well dominate the market without the exclusivity requirement because it’s convenient and it eliminates an extra click. Yes, folks, it has literally come down to one extra click making the difference between whether or not someone will buy or “borrow” your ebook (because borrowing is what they’re doing in KU). The exclusivity requirement serves only one purpose: to choke off competition.  Right now, it’s for ninety days at a time, although there is nothing to prevent that from being extended and I predict that as Amazon gains market share that it will expand the time frame.

As more and more authors get snared into going exclusive, the reader’s choices dwindle. If you want to read that author’s work, you, as a reader are forced to go to Amazon. This is very good for Amazon, who is not stupid. They have trained millions of authors to drive business to their website. After all, if the consumer is already there to download that book, why not buy some socks and some batteries and who knows what else.

Problem is, the authors aren’t getting any compensation for driving business to Amazon (they might get some royalties if they sell their book, or if someone in KU actually reads more than the sample of pages they might end up making maybe even a few pennies) or training their readers to borrow rather than buy their books. Many authors were fine with this since being on Amazon gave them some product placement via “Also Boughts” or discoverability based on rankings and reviews.

However, it’s now clear that Amazon is changing its strategy, no longer “giving” but charging authors for product placement and discoverability. Russell Blake has a great post about the changes here. The takeaway is this: the same authors who drive business to Amazon for free, who’ve trained their readers to borrow via KU, now find themselves in the position of needing to also buy ads in order to survive. Neat, huh?

Next, let’s talk about the dangers of monopoly. Amazon has a huge chunk of the ebook market (70%-80% depending on whom you ask). Authors look at that and go, yup, that’s where I want to be and I’m willing to give up all the other markets since there’s not enough of a payoff for the effort. While this may be a great tactic, I think it’s an awful strategy.

For all those that sing the praises of the beneficence of Amazon’s golden heart, I guess I need to remind you that it wasn’t until Apple got into the game that Amazon raised indie author royalty rates from 35% to 70% (for some, not all, price ranges; and then they tacked on delivery charges too, so that everything was as clear as mud). Ask yourself what will happen once Amazon stands as the ONLY choice for indie authors and you have nowhere left to go. Go ahead, tell yourself someone will rise to compete with the behemoth that all the other ebook venues in existence now could NOT take down.

There is a level of opacity in KU that is astounding. Authors have absolutely no insights into how many people have downloaded their book or how many people are reading their material. All they get is the number of pages read. A thousand page-reads on a 333.3-page novel may be three readers reading the whole book or a thousand people reading one page, or anything in between.

KU also makes it impossible to do an apples-to-apples comparison across vendors because a series in KU cannot exist elsewhere. The best they can do is put a different series in the other venues and see how it does. Unfortunately, there’s a lot of factors that go into the results, including the fact that the venue is smaller, that they’ve not been on it long enough to develop a presence/following, and that the series that’s there may not be as good as the one they have in KU.

Sometimes the transparency in the other venues shows authors things they don’t want to see, i.e. we may all scream that we want transparency, but not when it shows us that out of the 100 people that downloaded our free book, only one thought it good enough to read it all the way through and buy the next one. That’s a 1% conversion rate. It’s disheartening. The easiest conclusion to draw is that that other venue’s readership is the problem, i.e. they only wanted a freebie. That may be true. But it’s also true, that due to a lack of transparency you don’t really know your KU conversion rate either. And that time is also a big factor. How long have you been on one platform vs another?

KU has another problem. Because of the way it works (i.e. it pays out for pages read) scammers flock to it with ways to get around the controls. It takes time for Amazon’s best and brightest to catch up with these scams and by the time they do, the whole thing has cost innocent authors money. It costs them money because they are paid out of a pool of money reserved for KU, so any time someone unfairly dips into that pool, there’s less for everyone else to go around.

Another way it costs them money is when they are caught up in the scam run against Amazon even though they did not participate in it. The easiest way to “catch” all the suspects that might be scamming KU is to have an algorithm go after similar patterns, even if those patterns, like a sudden increase in readership, are due to a marketing campaign or book launch. Authors then have to prove themselves innocent and the process can be long and difficult. All that time you’re on with customer support (hours and days of it) is time you’re not writing. And since you’re not the only one caught up in the whole big mess, there’s potentially thousands if not hundreds of thousands of other authors dealing with the same thing, overwhelming resources.

Being wide eliminates the chances of getting caught up in these scams run against KU since you’re not in KU in the first place.

Then there’s the issue of brand loyalty. Who is your reader loyal to? Your brand? If they are a KU reader their loyalty is to KU, not to you. Why would I build Amazon brand loyalty by driving readers into their program while at the same time buying ads from them for product placement? I’m not stupid or blind. I know they are the biggest market, but I’m also going to keep my options open by going and staying wide. I like choices. I like having them and I like my readers to have them as well. Not every reader out there is wedded to the Kindle format, the Kindle reader, or even Amazon itself. Whether they prefer Nook or Kobo or iBooks, they should have that choice. I’m not going to take it away from them by insisting that if they want to read my stuff they must go to only one place. If I was that kind of person, I’d insist they only go through Bookfunnel and buy from me directly.

The other complaint I see about “going wide” is the time involved. So I ran a test during my latest launch last night. I had one window open for Amazon’s uploading service, called KDP, and a second window open for everyone else. It took me longer to complete Amazon’s KDP upload than it did to upload my book to Kobo, Nook, Draft2Digital, iBooks, Bookfunnel, and Smashwords COMBINED. I only worked the other uploads while KDP was churning away on every little bit of data I was typing in or sending it. And, by the way, Kobo approved it within hours, as did Draft2Digital and Smashwords. It’s not unusual for Amazon to take three days or more to approve anything, including the most minute changes after your initial upload.

There’s other issues with Amazon, whether you’re doing KU or not. You must obtain permission (yes,  permission) to put your book on sale. There is no way to give people discount codes. And I’ve heard other author’s horror stories about how they are not even allowed to buy ads for their books on Amazon because their covers have been deemed x-rated even though the covers feature fully clothed people who are not even touching. Nice, huh? Can you imagine having all of your IP (intellectual property) in the hands of an algorithm or a bot that decides what is or is not appropriate?

Let me also share with you the big–and I mean astoundingly HUGE–money we’re talking about. On a $0.99 ebook this is what your royalties come out to:

Bookfunnel: $0.99 (100%) You do have to pay for the ability to sell off your own site (like WooCommerce) and a yearly fee for the service, so in the end, it may end up costing you more than you make, but I use it because it allows me to sell directly and should I ever find that my inventory was pulled because someone lied about my content (yes, I’ve seen this happen too) and it takes me weeks to clear it up with whatever platform, I still have a way to keep selling.

Draft2Digital: $0.58 (59%)  + library distribution. Here is one of my main reasons for going wide. Libraries. For many, many years, the library was my refuge, my only escape. I became a writer not only to sell, but to provide escapism. I can’t get my ebooks into the library system if I’m in KU.

iBooks: $0.68 (70%) At the introductory price point of $0.99 which many authors use as the entryway into a series, you’d need two sales on Amazon for every sale on iBooks. If you wanted to make your book free on iBooks, it’s really easy. You just set it to zero.

Smashwords: $0.46 – $0.58 (47%-59%)

Kobo: $0.44 (45%)

Nook: $0.40 (40%)

Amazon: ($0.35) 35%

Don’t get me wrong. I’m not in this for altruism (except for the library thing). I’m in this to make money. Most of my sales DO come from Amazon, but even if all the revenue from the other venues came to a big fat stinking ZERO, I would not abandon them and go into KU. I’m not going to be used as a loss leader for the world’s biggest ebook vendor as they build a monopoly and take down their competition.

But that’s just me.

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