Diversify Your Publishing: Why Amazon’s ACX Royalty Change Matters

I know, I said I wouldn’t talk publishing. BUT IT’S MY BLOG AND THERE’S NOTHING YOU CAN DO ABOUT IT HA HA HA HA *noisily eats a Hot Pocket, turns the TV on real loud, opens the chimpazee cage, hands the chimpanzee a beer and a power drill*

Ahem.

Let’s see, here.

Amazon has reduced the royalty rate on ACX audio for self-published authors.

So, let’s just clear this up:

Amazon is not your friend, author person.

Amazon is a giant corporation. It serves itself. You might think, It serves its customers, which is only true in that to serve itself it generally has to serve its customers. And this is entirely fine and normal. To reiterate: Amazon is not your friend. Its job is not to be your friend. Amazon is a great disruptor. Amazon is a powerful business. Amazon has done wonderful things for the World Of Books. Hell, I love Amazon Prime. I love that I can order chimpanzee chow, 9mm ammo, and drill bits at 3AM in the morning and have them in two days (though, hey, Amazon — your Prime shipping times are slipping, just between you and me). Amazon is also the publisher of some of my young adult books through its imprint, Skyscape. My experience there has been wonderful. Great editors, great attention, strong promotion, and they give me input and allow me to have control over the work and input over things like the cover. Amazon does a lot of cool things.

Amazon is still not my friend. Nor is it yours.

Amazon is actually a many-headed creature. Some of those heads do awesome things. Some of those heads might run Draconian warehouses that feel a little like working in the belly of some kind of giant-sized prison robot.

None of these Amazon heads are your friends.

The attachment the self-publishing community has long held to Amazon is understandable — Amazon somewhat single-handedly delivered value and opportunity to that community. That community bought all the way in, and one could argue that the robust creative and intellectual investment has created a kind of momentum that has led to more self-publishers finding that space and joining it (sometimes exclusively) and has led to more people buying Kindles.

But for a while now, some folks (including myself) have been saying all along, “Amazon might change your royalties” (which are of course not really royalties at all, but that’s a semantic issue). And those warnings were often thought of as doomsaying. When I caution, “don’t put your eggs in one basket,” you might reasonably respond with, “Hey, if Amazon starts acting up and casting shenanigans about like an alcoholic chimpanzee with power-tools, I can just go somewhere else.”

And that’s true. Totally true.

But here’s the problem. Amazon isn’t the chimpanzee. It’s the 8-million-pound gorilla. And it didn’t get that big on its own. It got that way by people investing so completely in that ecosystem.

That’s true for folks who do all their shopping there.

It’s true for folks who buy all their e-books there.

It’s true for folks who publish all their e-books there.

So. Let’s say Amazon decides to limit advantages to self-publishers.

Sure, you can jump to B&N or Kobo or iBooks.

But we all know that Nook is shitting the bed. For now, at least.

And getting on iBooks is a lot harder than getting on Amazon.

I have heard of late a lot of people finding success at Kobo, which is nice.

But anybody who has a Kindle cannot use those platforms. And a whole lotta people have Kindles.

And we helped make that happen.

It is often the mode to chastise what The Big Five Publishers do, and understandably — they are sometimes very good for authors and sometimes not so good for authors. And the reason they can be sometimes not so good for authors is because they do not have a great deal of competition.

That should sound familiar.

Because that’s Amazon.

Amazon has very little competition in the e-reader space.

And what competition it has is dwindling.

We’ve said: “Big publishers are bad because they do not care about their authors but Amazon is good because it does. And so here, Amazon will surely handle all our eggs much better than those naughty publishers — with great love and care. So we should give all of our eggs to them.” And then we gave our eggs to them and watched as other egg-carriers started to wander around, confused, starving where they were standing (because remember, they have no eggs) and then now Amazon’s starting to teeter and totter and drop some of our goddamn eggs. And we’re like, “Yo, that’s not cool,” and Amazon’s like, shrug, “Whatevs, take your eggs elsewhere, it’s no skin of my GNASHING ROBOT GORILLA TEETH,” and then you realize — uh-oh. Nobody else is really around to carry those eggs anymore. Our eggs don’t go anywhere else.

See, when you concentrate a great deal of power in the hands of a single company, that company will maximize its profits and start taking more of its share.

It does this because, say it with me:

Amazon is not your friend.

Think about how you seduce readers with a lower price point.

Then, when they’re invested: you increase the price on that book or its sequels.

Smart business. The “drug dealer” trick — first taste is cheap or free.

And that’s what Amazon is doing here.

A good deal now. You get invested. Then a not-as-good deal later.

Maybe not a terrible deal. Maybe still better than what you’d get elsewhere.

But maybe not.

You don’t know because:

*screams it from the rooftops*

Amazon is not your friend.

The things you think Big Publishing does to hurt authors? Amazon will do it, too, soon as it can.

Because that tends to be how big businesses work.

Small businesses? Not so much. Because it’s harder to be a dick when you’re four guys in a room. It’s a lot easier when you’re a faceless Borg Cube with thousands of employees.

The bigger you are, the less human you become.

The takeaway?

Amazon has not yet decreased your take from self-published works.

They have done some things that suggest they might, however. Decreasing ACX payments, for one. Increasing Prime, for two (and increasing the threshhold for free shipping). Talking very publicly about increasing their profit margins, for three. (It’s important to note here that Amazon, despite being big as it is, has not been making much actual profit over the years, which is a trend that ostensibly will need to change.) Given that there may be a backlash against the Prime increase, Amazon may look to find other ways to secure greater profits. I assure you, they’d be more comfortable dinging self-publishers than the entirety of the Prime subscription base.

Further, indicators exist outside the purely economic. We can all pretend that Amazon isn’t a gatekeeper, but like I said before, Amazon doesn’t want to be eBay. They want to be Netflix, not YouTube. It lets most folks through the gate, but when it feels the need, it’ll remove Monster Erotica or Baboon Fart Story from its ranks without the courtesy of a complimentary reach-around. That fist may tighten. Either in terms of restricting content or gouging author-publishers (through royalty reduction, most likely, though possibly also through increased fees).

They’ll do this because:

Amazon no es tu amigo.

So. What do you do?

You diversify.

Spread those eggs around, man. Give some to B&N. To Kobo. To iBooks. Sell your works directly! (If you’re so keen to remove all barriers between you and a reader, there’s your way forward, by the way.) But it’s also worth considering publishing your work with a publisher, too — big, small, medium-sized, short story, novella, whatever. Point being, to protect your career, cleave toward a diversification of efforts. You have many eggs — so find for them many baskets. That way, to play out this metaphor to its ludicrous (and not to mention obvious) conclusion: if one basket falls on the sidewalk and breaks, you still have other, unbroken eggs.

Amazon isn’t your friend. It also isn’t your enemy. Big publishers aren’t, either. I love Amazon for what it’s done for books. I love big publishers for what they’ve done, too. But remember: these are companies. Corporations. Business entities. They’re like bacteria, or rabbits, or grass — they’ll grow wherever they can and if they suffer no competition they’ll invade and take over an area. And then it gets a lot, lot, lot harder to dig out an entrenched species. If you’re really an independent author — then be truly independent. Don’t be dependent on a single company for your livelihood. Just as an ecosystem thrives on diversity, so should you, as an author and a publisher.

70 comments

  • One thing that I don’t know if you mentioned (I tend to skim at times) is that they haven’t changed the royalty of those who already have projects completed. I suppose they are obligated by contract, but I had a similar first thought when I got the news: They aren’t making enough money, so they can use as they will. The supply line is plenty. *(they did increase their new user bounty program, which is really just amazon self-serving). I would love for you to write more on audiobooks in general. I just got into the game, and it was not only so much fun, but the units seemed to sell by themselves (at least initially) and much more quickly than the kindle version.

  • Great post, Chuck, very timely, thanks.

    I made a conscious effort to avoid the big A in publishing my first book, even though I’ve been published in anthologies published via Createspace. I sourced a local publisher and local printer instead. I may not have a spare room for the next twenty years as I try to sell the 500 copies I’ve ordered, but it means I’m independent of the big machine and if it works…I’ll do the same again.

  • Why is it when something changes from extraordinary to good people freak out? Look the old royalty rate when from 50% – 90%. It was an introductory rate and pretty amazing. Did anyone really think that would last forever? The way I look at it is is “Wow, good for the people who got in early and locked in those rates.” I’m actually amazed they lasted as long as they did. So now the royalty is 40%. Would I like it to be higher? Sure. But is the ACX royaty still the best game in town? You betcha.

    Consider the following:

    * For the books I sold through Orbit audio was a subsidiary right which I have to split with them at 50%. They resold the rights to an audio producer who gets their cut so for every download on audible under those contracts I get….4.3%. Hmmm 40% is almost ten times more.

    * For books I sold directly to Recorded Books, I cut out one of the middle men and get 8.6%. Double my Riyria contracts but I still get 4 times more with the REDUCED ACX rate.

    * I have audible offering me a high advance for my next book and they are offering me 20% royalty. That’s more than 4 times what I make with Orbit and more than twice as much as I get from Recorded Books. But it’s still half that I get if I go through ACX.

    So yeah the rates have been lowered, and yes I would prefer something more akin to ebooks which is 70% / 30% split. But audible files are much larger and their storage and bandwidth charges are much greater. So I’m not nearly as upset about this than most, as I have to take into consideration other alternatives and given those out there ACX is still looking like a pretty good deal to me.

  • Very well said, Chuck. A lot of people forget: businesses are in it to make money. Yes, there may well be some broader mission about making the world a better place, some founding principle or ideal behind it, but in the end, the business has to make money or it can’t do those other things.

  • “Amazon might change your royalties.” – No kidding. It’s something we all know, but are we going to stop selling on Amazon? Doubtful. I’ve been in ebooks for a very long time – and remember when the royalty rate was 35% across the board. The royalties changed…they doubled. Do I think they’ll go down in the future? Probably. But there are things I can control, and some I can’t and the best thing for me to do is concentrate on those things I can effect change on. Focus on having a direct relationship with your authors and a way for them to buy direct from you. I’m selling more pre-orders of Amazon from my website then Amazon is at the moment – and they get none of that cut.

    As for them “not being my friend.” I don’t need them as my friend. I need them as a business partner and they have been a good one. But the really great thing about them…is that we each have something the other wants. Amazon wants my content to sell,and I want their distribution network. But the great thing about Amazon…is if I don’t like their terms, I can vote with my feet..I don’t have such flexibility with a traditional publisher who signs my content until I die + 70 years. When I don’t like what they are doing, I’m stuck.

    So, yes, by all means diversify. Have your books on multiple platforms, in a plethora of stores, as well as direct from you. But this doesn’t mean the sky is falling, that Amazon is the great Satan, and the world as we know it is coming to an end. It’s still a great time to be an author, and the reduction in royalty rate on ACX was rolling back from an incredible introductory rate. At least that’s how I see it.

    • “As for them “not being my friend.” I don’t need them as my friend. I need them as a business partner and they have been a good one. But the really great thing about them…is that we each have something the other wants. Amazon wants my content to sell,and I want their distribution network. But the great thing about Amazon…is if I don’t like their terms, I can vote with my feet..I don’t have such flexibility with a traditional publisher who signs my content until I die + 70 years. When I don’t like what they are doing, I’m stuck.”

      I agree entirely that this is not a SKY IS FALLING MOMENT. But I consider it a little overwrought to suggest Amazon is your business partner. They’re a marketplace, and they work very well for that. But they have literally no investment in what you publish, how you publish, or when you publish. They will do nothing for you that isn’t already part of their algorithm — excepting maybe the rare chance to be a Kindle Daily Deal.

      I don’t mean that as a bad thing — but they don’t want YOUR content to sell. They just want CONTENT to sell.

      A traditional publisher is actually a business partner. Sometimes a good partner (when they offer a solid contract that comes with capable and attentive services like marketing, editing, etc), sometimes an abusive one (bad contracts, clumsy services, etc). Amazon is in no way anybody’s partner unless you’re published under one of their imprints. (And in this, they’ve been a great partner for me, to be clear. I sold a lot of books and they’re very forward-thinking and pay very fast and so on and so forth.)

      As for the reduced rate from extraordinary to good — well, yeah, if they were to cut self-pub royalties from 70 to, say, 50%, that’s still really good. But it also reduces the chance for an author to make an actual living and means they have to work harder. Folks said ANY reduction would not or could not happen. A drop to 50% would be serious. If I have a $2.99 book and I want to make $25k a year on that book, at the 70% rate I’d need to sell ~12000. At the 50% rate, I’d need to sell ~17000. That’s not a tiny gap. That’s a big jump.

      “Best game in town” is the problem (sorry, referring to your other comment) — because if everybody still buys all into the best game, pretty soon it becomes the “only game in town.”

      — c.

      • I’m agreeing with both of you here, which is why I love this blog and when Michael comes on to speak. Getting all sides is a great way to pull the whole picture into clearer detail. Best game in town and all eggs in one basket isn’t always the best way to go. Neither is settling, which is what I’m fighting over right now. But I do like the line Michael mentioned about being able to walk from Amazon whenever you want. I sold a novella that I’ll really never get back. Ever. It’s gone. Oh, sure, I may get the occasional royalty check, but as sales dwindle on it I’ll be lucky to see a couple dollars a year. Stupid boilerplate contracts. Lesson learned.

        Now I’m actually trying to fight for some rights and clauses, but I don’t see it happening. If it does, great, but from all I’ve heard, this place doesn’t stray too far from contract.

        After reading all the comments, I think my next work may still go to Amazon (and Kobo and such if I can), and the royalties will still be far and away better than what the place my work is with now is offering even at 50%. So I’m willing to take that chance, but, as you say, I’m not going to have my eggs all in one basket. Hell, sometimes they’re in my wife’s purse! ;)

        • Thanks. I get frustrated when I hear people say, “Everything is negotiable…you just have to have a good agent and you can get a “good contract.” When it comes to the big-five there really isn’t “good” just “ones you can live with.” They are always going to slant the contracts in their favor -they are the ones writing them, and there is an almost cartel-like similarity from one house’s contract to another. Yes, you an keep movie rights…and yes you can sometimes get rid of basket accounting. But there are some things that mere mortals won’t get movement on – like royalty rates, fixed-term contracts, and reasonable threshold levels for reversion.

          My audio sales are HUGE and the amount I’m getting is depressingly small. My guess is if I demand to keep my audio rights or walk – I’ll find myself on the pavement. We’ll see. Sometimes it takes people fighting and walking to get movement on clauses. The way I see it, the old ACX royalties were unrealistically slanted to the author – they did this to get the program up and running. Now they’ve adjusted it to a more realistic number. Personally I think it should be 60% or at least 50% instead of 40% – but it is still so much more than I get when the publisher gobbles up the right. If there are authors out there who have been successful at keeping audio while still selling print and ebook I’d be interested to learn when those contracts were signed, and how easy/difficult it was to manage that.

      • Oh I agree they are not interested in “my work in particular” but they do need content creators and they earn well from the self-publishing horde that uses DTP so to make business decisions that would piss off a large percentage of that population isn’t in their best interest.

        I don’t think there is anyone running around saying that no reduction in royalties is possible (at least I’ve never heard that from anyone). 50% is still much more than 14.875% which is what you get left with in traditional publishing after Amazon takes their 30%, your publisher takes 75% of what remains, and your agent takes 15% of that.

        As far as “best” or “only” game – well when it comes to audio books that’s already a done deal. I make something like 95% of my audio income from audible downloads and just a very little bit from sales to libraries and CD’s. So since audible is the distribution network the question is what company do you use to get on audible…and ACX at 40% is much more than the 4.3% I get when the traditional publisher insists on keeping that right.

        • Any time previously I’d said, “Amazon COULD actually reduce your royalties, y’know,” I was met with surprise from many corners suggesting exactly as you do now — they don’t want to piss anybody off, so why would they when this gravy train is still running? Which doesn’t really stand up, unfortunately, because of how small the book market is for Amazon, and how slim their actual profit margins are. If they can get more? They’ll get more. Particularly if they have no incentive — meaning, usually, competition — to keep the favorables high.

          • Since this royalty raise thing came up – I have now seen some authors who are shocked and thought it would never happen, so yeah I guess were people out there in that camp – I find it boggling – because to me change is a given. The best thing for an author is to be agile when it comes along.

          • “The best thing for an author is to be agile when it comes along.”

            Yes! And part of that means being agile all along. Which, of course, you’re clearly an author who demonstrates that agility.

            — c.

    • Could Amazon change the royalty rates? Of course. Will they? I have no idea. For ebooks, Amazon increased their rates from 35% to 70% in most markets while publishers decreased theirs from 50% to 25%. I’m not going to panic about it, either way.

      I sell on the other platforms. In fact, I currently sell best on B&N for reasons I cannot fathom. Most indie authors sell on all platforms. That’s hardly a new thing. But I can’t make the other players do a better job of competing with Amazon. That’s on them, not me.

      This issue of “OMG Amazon might cut the royalties!” is no different than working for a company and being afraid of getting downsized or laid off. Life and business happen. Job security is rare pretty much everywhere.

      • ‘This issue of “OMG Amazon might cut the royalties!” is no different than working for a company and being afraid of getting downsized or laid off. Life and business happen. Job security is rare pretty much everywhere.’

        True, but worth noting why being an author right now is so awesome — BECAUSE we have so many choices and aren’t married to a single institution/structure/company.

        Best to take advantage of that rather than hope for one ring to rule them all.

        — c.

    • If I remember correctly, Amazon didn’t change its royalty rates until after they had serious competition. When the time comes they have no competition, expect the royalty rates to drop once again.

      • Oh, one more thing about competition. The other retailers need to step up their game. You can’t blame indies for going to Amazon, when Amazon appears to be the only player that knows what they’re doing.

  • It always blows my mind when a newbie author tells me they signed with someone because “they’re my friend.” I’ve seen more friends get screwed by other “friends” in this business.

    I don’t want my publisher to be my friend. I want them to intelligently run their business in an honest way, but in a way that makes me MONEY. This is a BUSINESS. If someone is in this for “art” or “fun” there are countless venues for them to distribute their work for free. I was in business for years, running my own business, so I come at this from a different point of view than some writers do. I can make unemotional business decisions about the business end of this, and I’m comfortable taking questions to my publisher (indie, not Big 5) when I have them. I’ll get questions from fellow authors, and it BLOWS my freaking mind that the question they’re asking is…ready? RIGHT IN THEIR CONTRACT. When I ask if they actually READ their contract before they signed it, many of them admit no, they really didn’t.

    *head/desk*

    I love what I do, and I’m glad I get to do it, but I’m realistic and know that if I want to keep working at home, with a job where pants are only required if the exterminator or UPS guy is showing up that afternoon, then I have to make business decisions. Am I in this just for the money? No. I’m in this becaus I LOVE writing. It was always my dream to be able to claim “writer” as my evil day job on my tax returns. Now, I can.

    However. The deal Hubby and I made was that he could retire when I got to the point I could replace his income. (He’s older than me.) I desperately wanted to make that happen so MY dream could come true (writing full-time) and HIS dream could come true (retirement and staying home). I’m lucky he handles all the daily stuff around here now so I, literally, have nothing to worry about except writing.

    BUT, that’s a lot of hard work. A lot of pressure. Anyone who envies me, don’t. I really felt your blog a few months back when you talked about your wife quitting to stay home and work (and yes, being a stay at home spouse to a writer is a LOT of work LOL) and needing health insurance. I couldn’t GET insurance until the Obamacare act kicked in because I have fibromyalgia. (Another reason I DESPERATELY need to keep this writing gig working, because with my screwy health, I literally could NOT handle a job outside the home because there are days I spend writing in bed because I’m in too much pain to get out of bed.)

    So, yes, I’m a writer because I love to write. Because it’s all I ever wanted to do from when I was a teenager. I’m doing what I dreamed about doing, and I give thanks every day I can.

    HOWEVER. It also means I cannot turn a blind eye and make stupid decisions about my career, either. I HAVE to keep the business end in mind, because this is now my full-time day job. I cannot afford to do otherwise, literally, and it’s terrifying sometimes. (Most of the time. LOL)

    There are so many authors who might be great as writers, but their brains just fall right the frak out of their heads when it comes to business decisions. It’s like they shoot themselves in the foot every time they try to take a step forward. They will accept terms and conditions and make decisions that, if it was their day job, they’d never accept from an employer.

    I wish B&N hadn’t gotten in their own way, but they did. Kobo, meh, their platform is okay, but the publishing back-end still needs some work, especially in terms of reports. Smashwords–I won’t even go there but I have multiple issues with them. I also use AllRomanceEbooks and they will also distribute to iBooks if you have an ISBN, and they’re pretty good (they also do non-romance). We’re losing Sony (but they were always hard to get into directly for self-pubbers). I used to self-sell some things from my website (mostly non-fic tutorials) but maintaining the backend of a webstore is a PITA becaus you spend as much time doing upgrades and security maintenance as you do writing. But yes, there are lots of options out there for self-pubbing as well. I have an indie publisher for most of my stuff, and I self-publish a few things that don’t fit within my publisher’s niche.

    I’m also realistic that the playing field can change at Amazon’s whim. Over 75% of my sales through my publisher and probably closer to 90% of my self-pubbed sales come through the ‘Zon. Have they made me a lot of money? Yeah. But they aren’t my friend. I have an expectation of them not cheating me out of my sales and not cooking the books, but other than that, the ‘Zon isn’t my friend.

    Any writer who wants to be able to make a living with their writing cannot afford to be anything less than a businessperson when it comes to career decisions. If I was selling a physical project, I wouldn’t limit it to one store or even one chain of stores. I would get it out to as many stores as I could. So why do some writers think a digital product is any different? Just like I don’t understand the writers who “hate” the ‘Zon and refuse to list their books there. They’re ignoring the largest retailer out there.

  • Excellent advice for all of us writers, and many thanks for this post. I’m left with but one question: What’s left of the living room after the chimp finishes his beer and figures out how to turn on the drill?

  • 1) Could not agree more with your main points.

    2) People with Kindles can *absolutely* read books from other publishers. I have a ton of books from Smashwords and Baen on mine. Yes, I know, you have to download it and then upload it and Tech Is Hard. But it isn’t. Ask a geek friend to show you how, or the kindly Internet itself. If you have a Fire you don’t even have to do that, just get the apps.

    3) Amazon actually makes gobs of money, most of which it re-invests so that at the end of the quarter the gobs of money are no longer just sitting around in a big Scrooge-McDuck-style money pit. (Although I am given to understand that Bezos has a small one in his basement, just because he can.) I find Bill Bonner’s description of AMZN as “The River of No Returns” absolutely hysterical, but it’s really not fair to say that it doesn’t make “profits.” It makes lots of profits. It doesn’t want to SHOW profits. Which in a way is kind of even creepier and doesn’t really detract from your point. :)

  • Something about Amazon has always bothered me, even though I get most of my sales through them, and that’s how you can’t get access to any of their promotional tools without giving them exclusive access to a book. Want to give a book away for free for a limited time? You can’t unless Amazon is the only place it’s available. And each new tool that’s come out since the start of Kindle Select is the same rigged deal. You can only play with Amazon’s toys if you promise to make them your only vendor.

    Very much agree with you that Amazon is not my friend. But then, no vendor is truly a friend. They’re just our business partners, and they’re totally looking out for themselves.

  • Also, as much as we like to think they are, books are not their primary business. My understanding is that it’s actually a quite small part of their business. And so we can flail and whine all we want and they can easily say Fuck Off We’re Doing What We Want Because We Sell More Monkey Drills In a Year Than We Do All Books Put Together with hardly a speed bump on their way to world domination. Plus, free/cheap eBooks? Just like free/cheap apps for Apple. It’s content they don’t have to produce to get people to buy their overpriced electronic gizmos. I consider my books on Amazon to be little more than a tiny piece of a huge advertising puzzle.

    • Though, I will add that I actually like Amazon as a place to do business and to sell my books. :) But I’ve no illusions about where I fit into it as a writer and a customer.

    • “Fuck Off We’re Doing What We Want Because We Sell More Monkey Drills In a Year Than We Do All Books Put Together.” This is actually the cornerstone of their new ad campaign. It’s really something.

  • Chuck, you know I love you, you have a unique and special place in my life but I feel like I ought to point out ‘consider a publisher’ may not help much in this case. Because a.) it takes two to tango (willing author, willing publisher) and b.) I think small publishers will also be kind of screwed if Amazon changes its royalty rate, yes? It’s not like ‘sign with a publisher’ automatically gets you into bookstore distribution and without bookstores, distribution-wise it’s the same river self-publishers navigate.

  • Books make about seven percent of Amazon’s income stream. But they do have a lock on certain sectors of the market. And it will be hard for the e-book market to develop further if they maintain market shares of 65% for e-books and 90% of author published e-books. Amazon is steadily squeezing publishers for all sorts of fees and increases in their share of the monies, the smaller presses the worst because Amazon is a bigger part of their sales. Author publishers were good advertising for the Kindle and those who published with Amazon bought stuff from Amazon, which is where the real money came in. Nonetheless, they still take 30-50% of income as fees for minimal services. It will be interesting to see how much more in fees they feel are warranted now that they have a publishing house (again,) and the e-market is established, and e-book prices keep dropping.

    I’ve never really understood the constant comparisons between Amazon and publishers. Amazon is, unless you are working with their new imprints, a distributor, not a publisher. The business relationship is entirely different. You give Amazon a cut of your proceeds for distributing your product. So if that cut is up for audio, then your business costs for distribution have gone up. Amazon does not charge all the fees and co-op fees for services that it does to publishers, large and small, as yet, but if they have increased the fees for audio service, then they may be starting to do this.

    As for the Kindle, the issue isn’t whether Kindle customers can buy titles from elsewhere, but will they bother. The Kindle’s success is based on ease of use, which has been Amazon’s advantage. Now that Amazon is moving on from e-readers on numerous fronts into the tech and media worlds, e-books are already in the back seat of their attention. But then, that’s books in general. The other issue is that if a company does well coming up with some other ease of use approach to e-books, Amazon will either try to buy it or wipe it out of existence.

    For Amazon, selling books was never much about selling books. It’s about collecting data on customers, which can then be used to sell them other products that bring in much more money, and which can also be sold. That’s why they bought Goodreads — for the member list, not to sell them books. So if the author publishers are not bringing in enough new data, and if their customers aren’t then also buying a lot of other stuff from Amazon, that may effect how much they charge author publishers in fees in the future.

  • As usual, when I come to Den of the The Beard seeking wisdom, I come away with wisdom.

    I’m on the query-go-round right now because I can be.

    The one thing all Harvard law grads have in common is that they filed an application. I didn’t graduate from Harvard, but I did graduate from law school. 100 bodies for each slot on a good day. I do get it.

    I am under no great and grand illusions about my chances. I have one full request out and a tidy stack of “not for us you unwashed heathen” notes. If I hit a wall that is made of business rather than quality, I will set the book afloat on the river. I’m a lawyer, I can read a contract. I also have a series of shorts tailored directly at the ‘Zon.

    No, Amazon is not your friend. Just like eBay is not your friend. I have also been a picker for years and people just threw their businesses at eBay. Begged eBay to become their sugar daddy. Wore eBay hats and strutted around going “IMA POWER SELLER.” Personally, I’ve grossed almost $600K through there and still get treated like crap.

    It almost destroyed the collectibles market. And then fees went up and up and service went down and down and all other venues (except Amazon) were essentially destroyed. Trade shows are just starting to rebound after 15 years of the shadow of the eBay Death Star. Amazon could do the same thing to the fledgling Indie industry if everyone lets it.

    Will Amazon tighten up its standards and likely lower its rates? Oh hell yes it will. Perhaps even become gatekeepers (although the Baboon Fart travesty was inexcusable.)

    Amazon ain’t your friend. You don’t want Amazon as your friend. Amazon is a venue. And venues raise their rent.

  • A quick question, as an author directed me, recently to Audible to listen to a free book and Audible seemed to start ‘asking’ me questions…(I don’t have an Audible account and I also noticed and questioned Audible’s ‘sign-up and get one free audible’–I checked to be sure that’s NOT what I was doing.)

    Do ALL Audible writer/book publishers get this “bounty” I just read about here on Hugh Howey’s post:

    “The other wrinkle here is the doubling of the bounty for new customers who sign up for ACX. For top-name authors, these bounties can add up to more than what they earn from royalties. Expanding the bounty program ensures that the rich will get richer while the self-published ACX authors hoping for more visibility will be left out in the cold. Rather than making up for the reduced royalty rate, the extra bounty adds insult to injury.”

    And wouldn’t my writer KNOW that?

    I’m suddenly feeling like a writer, who offers me a free download of a book, MIGHT have been pulling a fast one, doing some pattern matching (they go to websites easily to download books, they’ll do the same, without question, with Audible audio books and I make some money on it.)

    That would piss me off if this is what this author tried to do. Though I doubt it.

    In fact, writers should ADVERTISE this fact to their true fans, if that IS the case; one more way for writers to make a little cash.

    And doubling ‘bounty’ for signups, couldn’t this apply to anyone who gets ANYone to sign up to Amazon? Or is it strictly the writer and his ‘fanbase’?

    Thanks.

    Heather, as always, looking as process

  • I will be reblogging this. Because it’s spot on. But my worry is this. My books are available on Kobo, iBooks, Barnes & Noble and a whole bunch of other places either direct or through Smashwords. But nobody buys my books from there. Even my friends who have iPads and iPhones use the Kindle App to read books. I don’t know how to diversify, I don’t know how to find those customers and frankly, if anyone has any ideas as to how we grow those markets I’d like to hear from you.

    Cheers

    MTM

  • Going with a traditional publisher is not diversification. It’s exit. You don’t have your eggs in a lot of baskets with traditional publishing – you have sold your eggs.

    • That’s one of those way oversimplified and paranoid ideas about traditional publishers. Some contracts are abusive. Many are not. And you don’t sell your eggs to a publisher — you license them. If that licensing arrangement is favorable to the author, then it’s a good way to diversify.

      And it is diversification. It means being in places your self-published books cannot go — which can help feed your self-published releases, and vice versa.

      — c.

      • As I understand it, typical term for a grant of rights is equal to that of the copyright itself – life of the author plus seventy years. The ‘license’ is exclusive – you can’t sell it again. If I don’t get the rights I ‘license’ back (unless I come back to life after 71 years), by my reckoning that is selling them. I hardly think this is a paranoid or oversimplified way to view it.

        If those aren’t the typical terms, OK, then it might be more like licensing.

    • I’m not exactly sure what your larger point is, Eric – as it seems to break the aphorism along the way.

      I still see trad pub as another avenue you can take with your work, as a compliment to self-pub on retailers, direct sales, crowdfunding, etc. Traditionally-published works offer a payment up-front, and a lower rate of payment later, assuming a work earns out. It’s still a way of getting work to market and getting paid. It also grants an author connections and creates relationships that can apply across to other works, yielding professional utility beyond the advance/royalties. It’s still “diversification of efforts,” as Chuck says above.

      • You can’t both self-publish and traditionally publish the same work, so including it in the discussion is not the same sense of diversification. Conflating distribution diversity (Amazon, Kobo, etc) with publication is not helpful, in my opinion.

  • I agree with MT McGuire above. Most of my 9 books’ sales came from Amazon so I went exclusive with them and went back and forth. Now I’m going to diversify again and would love to know how to effectively increase sales on the other sites.

  • I’ve got steady sales for my novella on Kindle, compared to maybe 5 total on Nook, and Zippo the Zed on Smashwords. Anecdotal to be sure, but it’s an anecdote I keep seeing others repeating. I’d love to see Nook and some competitors get some juice, but for the moment Kindle remains the big dog in e-books.

    • They most certainly are, but on the anecdotal side, I get about 20% of my sales from other venues (the majority on SW) and I know personally at least two authors who for whatever reason get the majority of their sales on BN. (I mean authors who sell significant numbers of books. If you sell ten a month total then yeah, one little blip on B&N and you’re all like SCREW AMAZON!)

  • Same experience as MT MacGuire. I agree completey re amazon and blogged along the same lines two years ago – but the bottom line is that amazon sels my books. I have a sense of deja vu re audio books – as with kindles at the start the amazon platform restricts audiobook production to those who have US addresses and bank accounts. I live in France and it’s so frustrating not to be able to publish NOW. I suspect it will happen but – as alays – those in at the start will do best.

  • Part of the problem with trying to diversify self-publishing through other problems, for me at least, is that for example B&N doesn’t yet allow non-US authors to self-publish. They’re starting a pilot program in a handful of EU countries, but leaving most of the world out of it while Amazon has been taking in at least most of the world for years. Kobo seems to be more amenable to international authors but I haven’t had a chance to get to know their terms very well yet.

    The same happened with e-readers. Back when I was buying my first e-reader, I was all set to buy a Nook but Amazon was pretty much the only only one I could buy from without jumping through a whole lot of hoops, most of which would have been against TOS. Then a few years after that when I was buying an e-reader for my husband I did consider getting him another e-reader but the same still held true. There were more contenders by then but none that would sell to my neck of the woods.

    The world may be getting smaller, but it’s taking an awful lot of time for the e-book retailers to notice.

  • It’s a good thing I’ve never thought of any publishing company, Amazon or the Big Publishers as my friend. Unfortunately, I don’t know of too many places that can spread and spit out my books as far as Amazon can. Barnes & Noble, I’m somewhat worried about their future existence.

    I should probably look into other places to publish my books, too. I haven’t done my homework in that department.

  • Wow, well said. A lot to think about here going forward. I was never under the illusion that Amazon was my friend (luckily) but I’ll have to put a lot more thought into diversifying.

  • Thanks for helping establish some perspective. Those who seem to be our friends today could be our worst nightmare tomorrow, and those who seem to be total scum today may turn out to be helpful on the journey–it is not likely, but it just may happen…

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