Thoughts on the Amazon Select Lending Library

Amazon has announced a special ebook lending library for Prime subscribers. In the past several days they have sent emails out to the authors and publishers who use their KDP platform inviting them to join.

“We’re excited to introduce KDP Select – a new option dedicated to KDP authors and publishers worldwide, featuring a fund of $500,000 in December 2011 and at least $6 million in total for 2012!  KDP Select gives you a new way to earn royalties, reach a broader audience, and use a new set of promotional tools.”

At first it sounds like a great idea, as a way to get added exposure for your books. Until you start looking at the details…

Borrowing Details and Ebook Pricing

Each Prime member can borrow only one book per month. If you, as a Prime owner, could borrow only one book and you had a choice between a $.99 book and a $12.99 book, which would you borrow? Or even $2.99 and $12.99?

The better value from the borrower’s point of view will be the higher priced ebook. Lower priced books (which are typically Indie) have a disadvantage in this program.

The Select borrowing program might be a way to target the Prime demographic through the browsing area, but unless you are lucky, don’t count on a large number of borrowers or making money…

Money

Amazon has set up a monthly ‘pot’ from which to pay for any books signed borrowed. Please note that no money goes to an author or a publisher for simply enrolling a book. For December, this fund is $500,000. How much is paid out on a specific book depends on what percentage of the total overall loans are made on a particular book. (The TOS for the Select program also includes an unexplained passage about Amazon deciding “the criteria for determining which borrowing events qualify for this calculation.” You would think a borrow is a borrow. Apparently not.)

For instance, if your book accounts for 1.5% of the total loans for December, then that book would earn $7500. There are already tens of thousands of books included in the program. Start doing the math. It gets ugly really fast.

The problem is the sheer numbers of other books also in the program and the fact that each Prime member can only take out on loan 1 book per month. Only one! Yes, you might be one of the lucky ones to get a high percentage of loans for a particular month and receive a good payout. Most likely, you will get a pittance.

“I have to go where the money is,” is something else I’ve heard said. Ahem, there is no guaranteed payout per book, and for this you are giving up diversification? No one knows if there is money in this yet for the average enrolled book!

Which brings us up to:

Exclusivity

“When you include a Digital Book in KDP Select, you give us the exclusive right to sell and distribute your Digital Book in digital format while your book is in KDP Select. During this period of exclusivity, you cannot sell or distribute, or give anyone else the right to sell or distribute, your Digital Book (or content that is reasonably likely to compete commercially with your Digital Book, diminish its value, or be confused with it), in digital format in any territory where you have rights.”

For those curious, the above is an exclusivity and non-compete clause all in one. (Please note that I am not a lawyer nor am I giving legal advice. This blog post contains only personal opinion) First we’ll tackle the Exclusivity:

If you sign up a book for the Select program it is for 90 days. No backing out early unless you want a lot of trouble. 90 days in which that particular book is available to no one else who may need or want .epub or some other ebook format. This 90 day exclusivity contract automatically renews unless you opt out ahead of time.

I have an issue with this. I have readers all over the world, some of them in areas where Amazon charges a $2 surcharge (which Amazon keeps to itself). As a consequence, I sell on venues such as Kobo, Apple, and Smashwords. Unless I am being compensated for not serving those customers, I have a huge problem with leaving them out. Heck, even with a good wad of money involved, I have a problem with it.

I truly believe that diversification is good for the author (eggs not all in one basket) as well as for the readers. It prevents business strangleholds. It allows the books to be seen by different demographics and geo-locations.

Amazon is asking for an exclusive license of one of my copyrights. FOR FREE. I would be losing money from other channels, and the only compensation is a lottery-type setup where you might be a big winner, but most likely will get nothing or a small token ‘winning’?

Think about it.

When a publisher asks for exclusive rights to a specific book, there is typically an exchange of money. You are no longer able to make money from it in that specific area any longer for the term of the contract. There should be compensation for the granting of that license to that portion of your copyright.

If Amazon wants to pay me for the exclusive right to use a portion of my copyright, I might consider it. It would depend on how much they offered and the terms.

I don’t like the payment method Amazon has set up. Instead of providing at least a guaranteed token amount for each ebook loaned out, Amazon is instead limiting their money liability by creating one big pool of money each month that cannot be counted on to come to you individually. All while, at the same time, preventing you from making money or gaining visibility elsewhere.

By the way, I’ve seen some suggest adding something to the end of the ebook or adding a deleted scene and call it a ‘new edition’ that can be enrolled and leave the old version for sale through other retailers. Don’t do this. Really. The contract language gives Amazon all the power here, and you don’t want to give them the right to close your account and take all your owed royalties.

Non-Compete Clause

Authors, have you heard of the outcry among authors and the warnings from people like Dean Wesley Smith, Passive Voice, and so many others about avoiding career-crippling non-compete clauses in publishing contracts?

Well, Amazon has one of their own:

“During this period of exclusivity, you cannot sell or distribute, or give anyone else the right to sell or distribute, your Digital Book (or content that is reasonably likely to compete commercially with your Digital Book, diminish its value, or be confused with it), in digital format in any territory where you have rights.”

There is much concern over this clause, as it’s rather open ended. This could mean other works in the same genre or sub-genre. It could mean anything in the same series or the same universe. It could only mean the story itself and this clause disallows ‘special editions’ that add content to the ebook. Or prohibit collections or omnibus or anthologies. Or, or, or…

Oh, and if you interpret it wrong? Amazon can close your KDP account and you forfeit any monies owed. Ouch.

Please note that I am not a lawyer nor am I giving legal advice. I only thought I would point out this particular item, and it’s something that I personally as a publisher and author am worried about. (Yes, I know I’ve said this twice)

The Good

About the only real carrot I see is the ability to allow the book to go to free on Amazon for 5 days out of that 90 day period. Could this lead to a crackdown to those of us who use the price-matching feature to get books put up for free in order to make the service more attractive? Who knows at this point, but it’s possible (I fully admit that is a bit of a doomsday thought, but decided I would say it anyway).

As mentioned before, the Select borrowing program could be used as a pure promotional tool targeting the Prime demographic through the browsing area. A Prime user might then go and buy your book, or possibly borrow it.

The Bad

The sneaky and annoying redesign of the KDP dashboard. Authors and publishers, be careful about what you select and boxes you check! Amazon is making it too easy to mistakenly sign up. If you want to opt out, you are in for a lot more time and hassle when putting up a new ebook.

The exclusivity of distribution and selling, limiting an author or publisher from making money elsewhere.

***

Overall, this is a good move for Amazon ONLY. They are increasing the numbers of books available to Prime members which is another advertising point to use for their Prime program. They needed to do something after the big publishers started opting out and raising a ruckus if they were included without their permission. They limited the amount of money they are going to pay out for the Indie books, which is good for only their accounting.

Not ours.

In another 3 months, I would love to hear the experiences of anyone who participates. It would be a nice surprise if more than a few handful do very well at it. Who knows, it might have unexpected benefits. It would be wonderful if it did, since it would help off-set the minuses to the program.

For me, for now, I will continue to make my books available to everyone I can, no matter what retailer they prefer to purchase at or what ereader they prefer to read on.

____________________

J.A. Marlow

Coffee Cup Dreams

She wasn’t supposed to wake up when dead…

During what should have been a simple operation, Tish Douglas died. And yet, she also awoke… in what the doctors called a ‘psi event.’

Despite having no memory of the incident, it means she’s required to go on a life-time course of debilitating drugs designed to reign in her supposedly new psi gifts. She’s left with the option of existing on Earth in a drug-haze, or leave the planet.

When an opportunity for a good paying job on a space station known as Redpoint One is offered, she jumps at the chance. Even though she doesn’t have any experience as a ‘maintenance engineer.’ Even though the station sits in the middle of nowhere, a still-operating construct of a long-gone alien species.

Between pirate attacks, intelligent repair robots, and maintenance emergencies, Tish must find a place for herself.

All complicated by a growing attraction to the one person on the station she can’t have: boss Arthur Getty.

A stand-alone 48400 word, 193 page (approximate), science fiction romance novel.

Amazon | Barnes & Noble | Smashwords

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6 comments on “Thoughts on the Amazon Select Lending Library
  1. Yes, sneaky to add check box to new listing entry form in dashboard. I thought it normal since I put my first story up after they added the checkbox. I ticked it and continued. Then when dashboard list arrived, it had a button at end to add to lending area. I read about excluding all other sites and just ignored the button.

  2. zette says:

    I have seen too many people leaping in, saying what a good deal this is for authors. This isn’t for authors; it is for Amazon.com to do their best at cutting out any competition. That’s what a business does. They should not mistake it for anything else. Amazon does not care about you as an author any more than any other big publisher would.

    And isn’t this why we are Indie Authors? Aren’t we out here because there is diversification and we can make our own choices? Amazon wants to limit those choices.

    Let’s say this is a huge success. What could the future be like? Other places, like Smashwords, might close or dwindle down to nothing. The Nook from Barnes and Noble might no longer made. It would now in Amazon’s hands. How long do you think the rules would favor authors at all? (Do any of you remember the problem between with a big publisher a while back? Amazon took their books off the site. How did that help the authors trying to make sales and survive?)

    So looking at the long run besides what J. A. Marlow has written, this is not a good deal for writers in general.

    We’ll have to see how it goes.

  3. I’m absolutely against this program. I’m sure it’s illegal in Germany at least. We call it a “Knebelvertrag” (adhesion contract?), and companies have been sued for that kind of thing.

  4. BTW, has anyone calculated the readers side? The Prime subscribers pay 79 USD for leanding 1 book a month. If they buy Indie books for 6,58 USD, they would get 3 or 4 titles (different length and price ranges). To me, it seems a bad bargain on either side.

    • JA Marlow says:

      Several people have done the math on it. The conclusion has been that this program is not what is going to drive people to subscribe to the service. The figures just don’t make sense. It’s pretty much only an advertising bullet-point saying, “Oh, and you also get THIS and THIS and THIS with your subscription!”

      So, I agree with you. A bad bargain on either side if you think about it unless you are already signed up with Prime for a different reason like the free shipping on orders.

1 Pings/Trackbacks for "Thoughts on the Amazon Select Lending Library"
  1. […] KDP Select has been controversial in the self-publishing/indie book world. Plenty of people have joined and some are seeing results, while others like myself are skeptical. Here is a post by Scott Nicholson in favour of KDP Select and one by J.A. Marlow against the program. […]

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