Amazon on the Warpath or a Different Type of Conflict Diamond

While I was recovering from surgery over the past six weeks, Amazon cracked down on a few people scamming their Kindle Unlimited (KU) service.

(For those new to the world of indie publishing, a publisher can place their books in the Kindle Select program. While this gives the publisher access to special promotions, the books must be exclusive to Amazon and are automatically enrolled in KU. Readers pay $9.99 a month for KU, and they can read as many books as they wish within the program.)

From the advent of indie publishing, people have tried to con Amazon and/or readers. Private label rights was a big issue right from the beginning. Amazon yanked that crap pretty damn quick.

Since the start of KU, folks have been gaming the system to make the most bucks possible. Now, I don't have a problem with people making a buck or two. But I prefer doing it by writing an entertaining story that people want to read. Not by cheating readers, or retailers, out of their hard-earned money.

During the first iteration of KU (referred to as KU 1.0 by most indie writers), Amazon paid the publisher the full retail price once the customer read 10% of the book. Indie writers quickly figured out shorter works hit the threshold faster, triggering the payout sooner. Which meant a lot of short scenes that didn't even qualify as flash fiction were published on KU and irritated the hell out of readers.

Within a year, Amazon ditched the first version of KU for KU 2.0, a system that allegedly counted the number of pages read. Oh, the howls of outrage from the short story writers.

Until they figured out that Amazon COULDN'T actually count the number of pages the customer read. The number of cons to get the maximum amount of money by getting the readers to click to the end of the books exploded. Hell, I'm not even going to try to list them all here.

But Amazon couldn't ignore one major scam any longer. To do so would make them internationally liable.

It has to do with sweepstakes-style contests. Many countries have very strict laws governing these type of contests. In many more, these contests are very illegal. And since entrance was through Amazon's online store, they could/would be held equally guilty as the indie publisher.

A few indie writers went too far. It's one thing to offer a free e-book when a customer signs up for your newsletter. It's another when a indie writer offers to give away diamonds.

*facepalm*

Yeah, the diamond trade is pretty heavily regulated on an international level. I don't know what this author was thinking.

Or he wasn't thinking. He just wanted his readers to make money for him by clicking to the end of his books.

Amazon pulled everything he had down: e-books, print books, and audio books. All that potential income--gone. Just because someone got greedy.

So when someone offers you a sure-fire way of making thousands of dollars through e-book publishing, think twice, do your research, and read the terms of service on the retailer's webpage.

Because screwing people over may not bite you in the ass today or tomorrow, but one day, Karma will and she'll take a bigger chunk than a megalodon.

Data Guy Strikes Back and Other Important Info

I was going to talk about my projects this morning, but Data Guy released the Author Earnings Report for May 2016 yesterday.

HOLY FUCKING CRAP ON A CRACKER!

If you want or have a career as a writer, you need to read this report. It shows the marked changes in the publishing industry.

Another important blog to read is Kris Rusch's current series on contracts. There's lots of scary (and career ruining) contracts these days, and indie writers aren't immune. She focuses on some problems with the now-defunct Booktrope.

To top off the recent spate of writers not getting paid, Barnes & Noble's NOOKPress managed to fully fuck up payments for the month of May. I've counted nearly 300 indie writers including myself who did not receive payment on May 31st. And these are just the folks who bitched. Goddess only knows how many others are in this boat.

Sadly, it took B&N over forty-eight hours to issue any kind of statement. I'll update this post if/when I receive my payment.

Needless to say, I've pulled all of my books from B&N after this fiasco. I'd previously pulled my books from Smashwords, Apple, Kobo, etc. in preparation for the new book covers and updated back matter. Now, I'm wondering if I should try Kindle Unlimited since I have a fresh slate. I'm already researching some other retailers like All Romance eBooks.

The whole incident really bums me out because the original Nook was a decent product. But no, the short-range thinking of Len Riggio, his board of directors, and B&N executives torpedoed their potential before they even got off the ground. And they wonder why Amazon is crushing them.

After all that, I promise more positive news next week!


UPDATE: My payment from B&N/NOOKPress arrived in my business bank account this morning. I received an answer to my e-mail I sent to them on Tuesday at noon today.

Unfortunately, this fix doesn't alleviate my deep concern over B&N/NOOKPress's professional behavior of late, or their lack thereof in this case. This isn't the first time they've had a problem paying authors who indie publish through them. Therefore, my e-books will remain unavailable through Barnes & Noble's website for the time being.

Which means I need to spend tomorrow updating a zillion links. URGH!

Amazon Lied and Legit Writers Are Paying the Price

In case you actually had a life over the weekend, Amazon got caught with their pants down.

And on fire.

They swore up and down that they knew how many pages a reader read on their apps and Kindles when calculating pages read for Kindle Unlimited (KU) payouts. Turns out, they can't. And a number of scammers exploited that ginormous loophole to an estimated tune of $3+ million dollars in January of 2016 alone.

So what are they doing? Adding a "CLICK HERE" button at the beginning of the book to send you to the back of the book. With Amazon's fucked up system, it looks like the entire book has been read. If you don't take the bait and try to read the book, you'll quickly find out, the story is not what you thought you borrowed or bought.

If you want to see a good example of what I'm talking about, check out A Duke's Arrangement, using Amazon's Look Inside feature. In addition to the other bullshit, the title itself is loaded with keywords which is supposed to be a no-no under Amazon's TOC.

Selena Kitt has a rundown with her experience talking to Amazon, along with graphs and numbers of how this mess has affected the author community.

David Gaughran explains what Amazon is doing to rectify the problem, except their solution punishes legit authors and doesn't really plug the hole in KU 2.0.

The worst part of the problem as I see it? Amazon is ruining their rep on these scam books in KU, but they won't do anything until readers stop signing up for it.

I get that books are no longer Amazon's prime concern (pun intended), but their number one concern has been customer service. Where does that leave writers in this wasteland of scraped junk books?

Up the proverbially creek.

And people wonder why I didn't jump on the KU bandwagon two years ago.

UPDATE: Amazon finally answered, and it's pretty much the "Fuck You!" I expected.

The Long and the Short of Writing through Amazon's Kindle Unlimited.

The KU drama continued over the course of the weekend. Once again, I'm flabbergasted by the rudeness and the shortsightedness of some of my fellow writers.

After the last eleven years, hell, out of the last fifty years, I shouldn't be surprised by human behavior. But I still am.

First of all, what works for someone else's career may not work for yours. Screaming at the person who notes that X works for him does nothing for either of you. If X doesn't work for you, that's fine. Turn around, walk away, and go do Y, which works for you. But X may work for someone else. You don't know about the third party, and you're not saving him by insisting that he do Y. Let the third party make that decision. Ask yourself this--do you really want the third party to scream at you the way you scream at the first person?

Then there's the argument of what's better--novels or short stories. Why is this even a question now?

For a long time under the 20th century publishing structure, a writer could sell novels to the big publishing houses or short stories to the magazines. There wasn't a whole lot of in between areas for things like novellas. Most of these strictures were based on the optimal return on investment for the paper the stories were printed on.

Now? With electronic publishing, the writer can write whatever length they please. Except now, I see a bunch of writers yelling at each other over who's getting screwed the worst over the recent reimbursement changes to KU?

There's one teensy problem with their analysis. They are equating "buy" reimbursement with "borrow" reimbursement.

WTF?

Under the pre-digital system, a library paid for a book ONCE. Patrons of the library could borrow it as many times as they wished. Likewise under the old system, the buyer bought the book ONCE, and she could read over and over again. Or trade it in at the used book shop. In none of these cases, did the original author see an additional penny of income.

Now? Now, we can get paid for nearly every borrow through Amazon, which is FANTASTIC! But it's also where the bitching comes in.

A lot of folks gamed KU 1.0 by only listing shorts and chopped up novels, so they received far more money for borrows than for sales. Now with KU 2.0, Amazon pays for pages read, which means if you don't write a damn good story, regardless of the length, the writers will be lucky to get a penny or two out of the deal.

Contrary to popular belief, this isn't about length, or getting screwed by a big company. It's about giving the reader a quality experience. Something I think a lot of my fellow writers have forgotten.

Have E-Book Subscription Services Shot Themselves in the Head?

There's been a lot of shouting over the recent change to the Kindle Unlimited ("KU") payment plan. On the heels of Amazon's announcement came the news late yesterday that Scribd has eliminated all romance books from their subscription service. Apparently, the only exception are free books.

Why? Because romance readers are some of the most voracious readers of books in all forms. I know folks who can go through a book or more a day.

Think about it. If a subscriber only pays $9.99 a month, and they read 30 books a month, how can Scribd possibly pay each author their full retail amount? Even if the reader only read books that are in Scribd at $0.99, that's still a $17.70 payout to the writer/publisher after Scribd's and the distributor's fees.

I have to wonder if Scribd has notified their subscribers yet because I haven't heard a hue and cry from the readers. The news first broke late yesterday afternoon from publisher Bob Mayer from Cool Gus Publishing who got the news from their distributor D2D and from Mark Coker of Smashwords, another e-book distributor.

So what does this all mean?

It depends on why you put your books into a subscription service like KU or Scribd to begin with. In my case, I haven't put anything into KU because it requires exclusivity with Amazon, and I'm the rare indie author in that I make far more through other channels than I do Amazon. As for Scribd, or its major direct competitor Oyster, I only entered my Bloodlines and Secret of Magick series into their programs. It was an effort to promote them since my erotica/romance books under Alter Ego were doing just fine on sales at the time.

In my opinion, and this is only my opinion, I don't think Scribd or Oyster can be viable in the long run without lowering payments to writers/publishers, which is exactly what Amazon has done to keep KU going. If a writer depends on only one retailer or one methodology, such as borrows, for their income, I think they will be screwed in the long run. As always, YMMV.

***
Edit to add: Here's Scribd's announcement. There's been a little grumbling on Twitter, but mainly from authors. Same on FB. It'll be interesting to see how the rest of the day goes.

Edit to add 2 11:15 pm EDT: Still more screaming from authors than readers about Scribd's changes on social media, but I did notice a handful of readers who are ticked about Scribd charging for free books. #Scribd

KU and Wanting to Be Read

Last Wednesday, I posted my initial thoughts on KU. Over the last week, I've read several other writers' thoughts on the matter. I'm surprised how many writers don't care if they are read; they just want to make money from their books.

I have to admit that this sort of thinking boggles me. Fiction publishing is delicate balance between art, entertainment and widget selling. It's a little bit of all three, so believing it's all one thing turns into a self-defeating mess.

Why? Because if the art doesn't entertain, it will not be borrowed, much less bought by the populace. If my first book doesn't entertain, then the reader will not pick up the second, or third, or fourth, etc. I will not continue to make money because I disappointed the reader, and the reader will most likely share their opinions with their friends.

Now granted, it's impossible to please everyone, but writers should hit with a good chunk of their target market. This is where word-of-mouth kicks in. As readers talk about your book, more of their friends and relatives start reading your books. In return, you make more money.

However, some writers just want to be bought, or borrowed under the old KU system. They make money on the appearance of entertainment, not on actual entertainment. It means instead of only polishing the first 10% of a story, they need to polish the whole damn thing in order to for the book not to be returned, or to earn money on the revised KU system.

This is what Kris Rusch was talking about when she referred to gaming in her column last week. It's not about short story writers vs. serial writers vs. novel writers. It's not about genre vs. genre vs. litfic. It's about giving the reader the experience they desire when they read. Which means a quality product for that particular length and genre. That means wanting to be read.

Not throwing up random words. Not posting cut/pasted stories or articles. Not putting in a bunch of filler to pad the content.

Write a great story that has your reader's coffee grow cold. One that makes her forget to move the clothes from the washer to the dryer. One that makes her miss her subway stop.

Write a story they can't forget. That's the way to make money on KU.

And Then Kindle Unlimited Exploded...

[With all due apologies to the writers of GalaxyQuest for paraphrasing their wonderful words!]

On Monday, Amazon announced that they were changing how indie authors will be compensated if they belong to the Kindle Select and their books are borrowed through the Kindle Unlimited (KU) program and Kindle Owners' Lending Library (KOLL) program.

Before I get into the specifics of the change in compensation, I'm going to list a glossary of terms because I see way too many people confusing them:

1) Kindle Direct Publishing (KDP) - Once an indie author has uploaded their file and the ebook is on sale on Amazon, they are part of this program.

2) Kindle Select (KS) - An indie author may chose to enter the KS program while they are uploading their file, or any time thereafter. To be in the KS program, the indie author gives Amazon exclusive rights to that particular book. In other words, that particular book can only be sold by Amazon and no other retailer. In return for exclusivity for that particular book, Amazon gives the indie author certain perks. Amazon asks for a minimum 90-day commitment, renewable at the end of the term. The indie author does have the right to leave KS at any time. However, if they leave the KS program prior to the end of each 90-day period, they lose any money earned under the KS perks.

3) Kindle Owners' Lending Library (KOLL) - Amazon Prime members who own a Kindle device are allowed to borrow books that are part of the KOLL free of charge. (Actually, the cost is included in their Prime membership fee of $99 per year.) They are limited to one borrow per calendar month of their Prime membership. Indie authors who opt in to KS are automatically enrolled in KOLL. They cannot pull their books out of KOLL without taking them out of KS.

4) Kindle Unlimited (KU) - For a fee of $9.99 per month, a reader can access any book in the KU library without needing a Kindle device. There is no limit to the number of borrows. Like KOLL, indie authors who opt in to KS are automatically enrolled in KU. They cannot pull their books out of KU without taking them out of KS.

Got all that?

Previously, indie authors were given a pro-rated share of a pool of money from Amazon based on the number of borrows each book received, regardless if the borrow was from a KOLL user or a KU user. For example:

There is $3,000,000 in the pool for June. There was 3,000,000 total borrows during the month of June. The per borrow rate is then $1. Your book(s) were borrowed 300 times so you received $300. The total number of books available to loan was irrelevant (though some people would make the argument that discoverability was an issue.)

There were a couple of problems with this system for writers. The per borrow rate had already been slowly shrinking. It plunged when KU was introduced. Short stories were awarded the same amount as ginormous epic fantasy novels. This made authors do one of three things: pull their full-length books out of KS, add short stories only to KS, or chop up a longer work and feed it into KS serial style. Sometimes, the indie authors did all three.

Then Amazon had readers who couldn't find anything but a chopped-up jumble of works. In other words, the garbage disposal instead of the tsunami of swill. *smile*

So starting July 1, Amazon is introducing a new reimbursement system. Indie authors' pro rata payment will be based on pages read, not the number of borrows.

And the indie world erupted!

Here's my understanding of the new compensation system:

First of all, instead of reading 10% of a book to trigger the borrow compensation threshold, the reader must read 15% to trigger the page compensation threshold.

Let's say the pool remains at $3,000,000 for July. Readers read 300,000,000 pages. The per page rate is $0.01. Assuming I entered a 300-page full-length e-book into KS and if the reader reads all 300 pages, I'd get $3.00. If I enter a 20-page short story and the reader reads all 20 pages, I 'd get $0.20.

But what happens if the reader only gets through the first 30-pages of my hypothetical novel? I get nothing!

If the reader makes it to page 5 of my short story, it triggers the page threshold and I'll get $0.05.

As a result of these changes, folks who've been submitting only short works to KS may see a substantial drop in income. Under the old system, my hypothetical short story would have earned $1.00. Under the new system, it will earn $0.20 at most.

On the other hand, an indie author can just as easily put 15 20-page short stories into KS and earn as much as a 300-page novel.

Please remember, these are not hard numbers, people! These are examples! It will take a few months for indie authors to see how the numbers will truly  work out.

But the new system would encourage indie authors to re-enter the KS ecosystem with their novels. It will also encourage us to put out very best work. Let's face it--we want readers to finish our stories no matter how long they are.

* * *
Now, let me be perfectly honest--I don't have a dog in this fight. I have been making more moola through Barnes & Noble, Apple, etc. than I have from Amazon. I've had no reason to enter KS that won't severely curtail my income through other retailers. So far, I entered one short story, "Love, War and a Bulldog", back in 2013 as an experiment. I wasn't impressed, so I haven't gone back.

However, I plan to publish two new series soon, and I'm considering entering one of them in KS to see how I do as far as borrows go.

The only thing I can really say is don't be afraid to experiment to find YOUR sweet spot!

Why Kindle Unlimited Isn't Going to Matter in the Long Run

As I've said previously, I wrote very little and published only one thing in 2014. That doesn't mean I haven't been keeping up with industry news. By participating for little, I've gained a different perspective.

Some stuff I already knew. Like the fact that the publishing industry runs on fear. When you let fear overwhelm you, you're not going to make the best decisions.

Have you ever watched It's a Wonderful Life? At one point, the Bedford Falls bank is on the verge of failing. Potter, the richest man in town, bails out the bank. When the financial panic spreads to George's building and loan, Potter offers to buy the B&L's shares for fifty cents on the dollar.

George: "Don't you see what's happening? Potter isn't selling. Potter's buying! Why? Because we're panicking and he's not. That's why. He's picking up some bargains."

Amazon's launch of Kindle Unlimited (KU) has engendered a lot of fear in writers. There's all kinds of rants online about how Amazon turned its back in indies. There's a lot of glee from the Amazon naysayers too, in the form of "I told ya so!"

Let's break the business side down.

1) Amazon already had a lending function for the Kindle, i.e. if I buy an ebook from Amazon, I can lend it one time to one friend or family member for a maximum of two weeks. The writer/publisher only got paid for my initial buy, but it was a way for me to share really good books.

2) Amazon then started the Kindle Lending Library as part of their Amazon Prime program (currently $99). I can borrow one book per month from writers/publishers who put their books into the KLL program. In return, writer/publisher received a pro-rated payout based on the total borrows per month if they were in the KDP Select program. Bigger publishers that Amazon convinced to be included in KLL would receive their normal retail share per borrow.

3) In 2013, two companies, Scribd (which was notorious for pirated books and is trying to go straight) and Oyster, created subscription services. I could borrow as many books as I wanted for $8.99 to $9.99 per month depending on which service I choose.

4) Never one to be outmaneuvered, Amazon enfolded KLL into the newly created KU last summer. Amazon Prime members are still restricted to one borrow per month unless they cough up an additional $9.99 for unlimited borrows. Non-Prime members can enroll in KU only for the same $9.99. Again writers/publishers in KDP Select are paid from a pool of money and their share is based on their borrows vs. total borrows for the month.

I have no doubt that Amazon's creation of KU was in response to Scribd and Oyster's new revenue stream.

So, there's a number of concerns and fears:

1) Are subscription service viable in the long run?

That really depends on the readers. I currently have five novels in both Scribd and Oyster via Smashwords. The retail price of each novel is $2.99. If a reader borrows all five from Scribd, then Scribd pays out $2.09 per novel or a total of $10.45, which is more than their monthly fee from a reader.

Both Scribd and Oyster are gambling that each subscription holder will borrow less than that per month. In fact, in a recent press announcement concerning the $22 million on venture capital Scribd raised, the CEO stated that Scribd subscribers borrow less than one book a month.

Amazon took a different approach by pro-rating writer/publisher income shares that ensures that they make money regardless of the number of borrows.

2) Why do writer/publishers view borrowing and buying as equals?

Honestly, I really don't get this one because they are not equal. Just because someone borrowed or bought another book doesn't mean they will buy yours. A lot of readers are on limited incomes. If they perceive the subscription service as a better deal then they'll pay for that. For that matter, they may go to the library.

3) Is participating in a subscription service worth it?

I weigh the exposure I get from each retailer or service versus the payout I receive versus my time and money dealing with that retailer or service. I've donated books to libraries at their request. I have put my books in some subscription services and not others. I have put my books in some retailers and not others.

There's no right, and definitely no perfect, answer for every writer. I experiment because I've found I do well in areas where others don't. YMMV.

4) Is the income subscription services receive worth alienating the vendors?

I do think Amazon made a critical mistake in their rush to jump into the monthly subscription venue. They didn't raise the payment pool significantly when they went from one book/month/person to unlimited books/month/person. A lot of writer/publishers saw a massive drop in their per book share of income.

5) Is the drop in book sales over the last six months due to KU?

Yes, there was also a drop in book sales at that period, but I don't think it was all KU. KU launched in late July of last year. For the last four years that I've been publishing, my sales crash with the start of school in late August to Thanksgiving. That's because (1) my primary buyers (women) are busy as hell between kids and holidays, and (2) the BPHs release what they hope to be their bestsellers through Christmas. I'm not saying KU didn't affect sales, but I think its a minor reason for what is the normal seasonal sales slump.

6) Can putting only shorter works in KU help raise a writer's income?

There's been public statements from writers that they are pulling their novels off KU. if not pulling out of KU entirely.

In theory, shorter works would bring in more income, but the question you have to ask yourself is can you do without pissing off the readers. Too many folks are breaking up a larger work in order to make more money through more borrows. There's already a backlash in book buying with the numerous writers who end a novella or novel with a cliffhanger. Readers feel tricked into buying the next book, and many times will refuse to read that author any more.

Short stories are doable in KU, but again, are they complete and fulfilling?

* * *
I think the real problem is that too many writers/publishers rely on Amazon (and Amazon's exclusivity requirements) as their only means of income. Going all in with one source of income is never a good idea as a business. Often, these same people are ones howling the loudest about Amazon's switch from KLL to KU.

I also think that we need more data to determine how KU, or any subscription service, is affecting the market. There's also the factor that the BPHs are signing up with Scribd and Oyster, but not KU.

What else is going to change in the publishing arena in 2015? I don't know, and quite frankly, anyone who says they know are either lying or smoking some primo weed. KU isn't the end-all-be-all in publishing, so saying it's ruining the industry is right up there with e-book sales are stable at 25%.

I think all subscription services are going to help expand readership if used judiciously. If you don't like what they are doing, then there's always the option of removing your books from them.

Provided you can't because you signed away all your right to begin with.