History Repeats Itself: KDP Select Is Amazon.com's 'Payback For Playback' 70
New submitter brennanw writes "Anyone who was active on mp3.com during the late 90s/early 2000's will find Amazon.com's KDP Select awfully familiar: authors who make their works exclusive to Amazon compete for a pool of money. Any time someone 'borrows' one of their books, they get a cut of a monthly sum (700K in January, 600K for February) based on how many of their books were checked out vs. how many other author's books were checked out. This is almost identical to the 'Payback for Playback' service MP3.com provided musicians a little over a decade ago. Payback for Playback effectively destroyed the original MP3.com artist community, and I don't think KDP Select is going to be much different for the self-publishing community that is growing on Amazon."
Re:Why destroyed? (Score:5, Informative)
People basically had bots (or a bunch of their friends) play their songs over and over allow them to rack up large play numbers.
I believe Amazon charges a significant fee to use their borrowing service (IIRC you need Amazon Prime) and puts limits on the number of books you can take out in a given period of time, so this shouldn't be an issue with them.
Re:Why destroyed? (Score:5, Informative)
The main thing to understand about PfP was that it was a fixed pool of money that never changed. It was one million dollars a month, which is nothing to sneeze at, but in the beginning (before they required you be a premium member) there were a LOT of artists on MP3.com who were eligible, and that one million dollar pool started looking pretty shallow. So in order to increase their returns, some artists began to game the system:
- get their fans to download PfP songs over and over again to maximize their count
- coordinate with other artists to pool their fans, increasing downloads for both
- a few tried to start PR campaigns against some of the more popular PfP artists in an attempt to reduce their downloads
Essentially by putting all these artists in a fixed pool, it turned a community of allies into a community of competitors, and it got pretty nasty. There wasn't much left of the original community once that started.
As a KDP Select Author... (Score:5, Informative)
As a KDP Select author (I wrote Lacuna: http://www.amazon.com/dp/B006RZNR3Y [amazon.com]), I have to say I'm a huge fan... and the borrows are just a nice perk.
Essentially what happens is this. Amazon puts $X in an account, your payout is that sum divided by total borrows, times by your borrows. So if there's $500,00 in the pool, and 500,000 borrows total, and you have six, you get $6. The cost of your book or its popularity don't matter.
HOWEVER... not everyone can borrow. The only people who can borrow are Amazon Prime members ($79 a year), and they can only borrow one book a month. Prime's main attraction for most people is the ability to get free priority shipping (as I understand it). The book borrows are just a perk and from what we've seen so far most Prime members aren't even using that feature.
Over January there were a lot of borrows because Amazon gave anyone a one month free trial of Amazon Prime. That's why they upped the amount from $500,000 to $700,000 in January. For reference, the borrows in December paid out about $1.70, which equated to a pretty good deal for those who publish at $0.99 since the 35% royalty meant those people were getting $1.70 per "purchase" rather than 35 cents.
Rumour is that Amazon felt that $1.70 was still too low, that's why the pool in February is $600,000 (up from $500,000) even though the free month has expired. Since we're expecting a lot fewer borrows this month, it's anticipated that borrows are going to be worth a lot more. My own borrows have dropped off a fair bit even though sales have picked up.
All that said... the main benefit of Select is not the borrows. The borrows are just a nice perk. The main benefit is the KDP Free Days... you get 5 days per 90 days where you can set your book as free ($0). Doing so gives you a huge publicity boost since in every way (aside from pay, and paid rankings), Amazon treats these as paid sales. That means that if you push a lot of free books you get on the "movers and shakers list" and for people who bought your free book and something else, your book has a good chance of appearing on that other books "Customers Who Bought This Also Bought..." list, which is a fantastic way to get a lot of publicity.
KDP Select has been a huge boon for unknown authors and in fact has encouraged the community over at www.kindleboards.com to grow substantially; there is now a massive so-called "MEGA THREAD" regarding KDP Select free days results and it's one of the most popular threads around.
For reference, I usually sell about 1-2 copies of Lacuna: Demons of the Void a day. Post free-days I get a massive boost, usually in the order of 10-50x more sales, usually 2-5 days after the free periods end as that's when Amazon does their "also boughts" recalculation.
KDP Select is awesome and the exclusivity of it doesn't matter to me since Amazon is the 300kg gorilla in the eBook market. It's important to note that the exclusivity does NOT apply to paperback versions of the same book, and in fact in the "Welcome To KDP Select!" email you get they actively encourage you to use various non-Amazon paperback publishing services.
All my works (including some shorts published under a pen name) are all in KDP Select and for the moment I'm sticking with it. The borrows are just a nice little garnish... the real benefits, especially for lesser known authors, lies elsewhere.
Re:Such a dumb move (Score:5, Informative)
They don't pay out based on the retail price of the "borrowed" book so the pool isn't going to "run out." The payout is your percentage of "borrowed" books times the monthly fund amount, like this:
[your borrowed books] / [total borrowed books] * [monthly fund]
Amazon has stated that the program will receive at least $12 million in funding for 2012. Whether that means that they'll provide at least $500,000/month or if they'll dip lower (considering they're up to $1.3 million already) later has yet to be seen.
One point that the original article seems to be missing is that KDP Select titles can only be borrowed by people who a) are Amazon Prime subscribers and b) own Amazon Kindle devices. While this doesn't completely inoculate the service from the sort of "gaming" that he refers to on MP3.com, that's a much higher barrier to entry than signing up for an account and downloading a file for free. Additionally, each account can only borrow one book a month and only the first borrow for each title from an account counts toward the bounty.
Re:As a KDP Select Author... (Score:4, Informative)
Here's another author with a similar experience. [blogspot.com]
Unlike payback for playbacks, Amazon's got a solid monetization plan behind KDP. It's also difficult to game too.
Exclusive to one distributor isn't that new (Score:3, Informative)
All of the national book chains have long had "exclusive to x" lines. Granted, it's been more common for distributors to do exclusive editions but exclusive titles are not all that rare. Usually, but not always, the exclusive titles are of poor quality: cook books, how to books, coffee table books, et cetera.
Re:Such a dumb move (Score:4, Informative)
It would be a dumb move if that was the only financial pool authors could draw from - but it's not; it's only there for the lending/borrowing. Sales via the normal channels are still sales that you obtain money from directly - it's the best of both options. The KDP-Select "free" days are a nice addition, it gives you a chance to release a new book with minimal barriers of adoption - though the uptake rates are dropping significantly from the original "tens of thousands per day" when KDP-Select free was announced - however, it's still useful for a product launch.
We recently moved a couple of books to KDP-Select strictly for the free days and it has helped (easier than managing coupons!), though after 90 days we're putting our books back to normal KDP and then sharing the eBook editions out via LightningSource/INGRAM.
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