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Books Businesses

How Amazon's Ebook Subscriptions Are Changing the Writing Industry 250

An anonymous reader writes: Amazon is now offering an ebook subscription service — $9.99/month gets you access to 700,000 titles, both self-published and traditionally published. The funds are gathered together, Amazon takes its cut, and the rest is divided up based on how many times a given book was read.

Some authors like it, and some don't, but John Scalzi pointed out that this business model is notable for being different from how the writing industry has worked in the past: "[T]he thing to actively dislike about the Kindle Unlimited 'payment from a pot' plan is the fact that it and any other plan like it absolutely and unambiguously make writing and publishing a zero-sum game. In traditional publishing, your success as an author does not limit my success — the potential pool of money is so large as to be effectively unlimited, and one's payment is independent of any other purchase a consumer might make, or what any other reader might read.

In the traditional publishing model, it's in my interest to encourage readers to read other authors, because people who read more buy more books — the proverbial tide lifts all boats. In the Kindle Unlimited model, the more authors you and everyone else reads, the less I can potentially earn. And ultimately, there's a cap on how much I can earn — a cap imposed by Amazon, or whoever else is in charge of the 'pot.'"
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How Amazon's Ebook Subscriptions Are Changing the Writing Industry

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  • Rubbish (Score:2, Insightful)

    by Gorobei ( 127755 )

    "Absolutely and unambiguously make writing and publishing a zero-sum game"

    Um, no - the more readers, the more money. It's not zero sum at all from the writers' point of view.

    Of course, back in the old days, people often curled up in a chair and read eight good books simultaneously; writers didn't compete with each other for readers' time and dollars at all.

    • Yes, as you get more readers there is more money to share between the authors. However if you get people that read a lot of books then the money is split between more authors (unless they binge on a particular author). So they are hoping for lots of people to sign up that read books slowly.
      • by AK Marc ( 707885 )
        I'm always interested in the edge cases. What happens to the guy that paid $9 for a month, but ends up not reading a single book? How about the guy that reads exactly one? I can tell you how I'd do it, but I'd be more interested in hearing how Amazon would split up the money in those cases.
    • by gwolf ( 26339 ) <gwolf@gwolf. o r g> on Monday December 29, 2014 @08:55PM (#48693505) Homepage

      Authors have long suffered the publishers pay them a misery compared to what they earn. I have published very little, and via my university (which means, very little distribution but relatively very good terms). I get 10% of the sales. In the "real world", maybe a third of that is normal.

      Now, Amazon is continuing to pay the authors the same 3%. But not only no exchange of tangible goods happens, now we the readers also pay Amazon for the book-of-all-books (that is, the Kindle). Yes, some people will use the Kindle store to read on the computer, tablet or whatnot, but it's definitively a lesser experience.

      So anyway, Amazon is still paying something to the publishers (except, of course, for Amazon Direct published works). But given the goods themselves "cost" no money, they are getting *way* more than by selling books — Of course, the authors would prefer their income to increase proportionally as well.

      Not shrink proportionally.

      • by AK Marc ( 707885 )
        The complaint is that the authors will make more money, but Amazon will make even more money. Rather than focusing on the amount you make relative to Amazon, focus on how much you make relative to today. Amazon indicates it will be a net increase for almost every author under current projections. If they are committing fraud by overly optimistically assigning example numbers, then that's something for the authors to settle in court for the fraud of signing them up. But, based on the information released
        • by Hodr ( 219920 )

          Wasn't there some kind of study that when people were presented with a positive choice that favors someone else, and a negative choice that is "fair" they choose the negative (e.g. I will give you a dollar, but I give all of your friends two dollars, or I give no-one any money).?

      • by dbIII ( 701233 ) on Monday December 29, 2014 @11:49PM (#48694035)
        I had a lecturer who found that not only was he getting zero for his cut but his textbook only came in hardcover and was well over $100 even back in the early 1990s. He photocopied it and handed it out to his students so they would not have to buy it - still illegal despite it being his work from content right down to the page formatting in TeX.
    • "Absolutely and unambiguously make writing and publishing a zero-sum game"
      Um, no - the more readers, the more money. It's not zero sum at all from the writers' point of view.

      Actually, it always was a zero-sum game within any given pool of readers. Each individual has some amount of money that they are willing to spend buying books, and if they buy one author's books, it reduces the available funds that can be used to buy another author's books. The subscription model that Amazon is adopting changes the model by paying authors , not when their work is purchased, but when it is read. This changes the way a book is valued by its author; previously, once the book was sold, the aut

      • by dbIII ( 701233 )
        I disagree since people tend to buy books as "extras" instead of out of a fixed pool. For example, one year $X, next $X-50, next $X+50 - all over the place.
    • Scalzi sounds like a moron who should stay away from game theory - selling books has always been a zero sum game. He just doesn't understand that for the old method the sum was the sum of all money that all readers spent on all books. It was a unknowable total to be sure, but it was still a finite sum.
      • *headdesk* Scalzi is certainly smarter than you.

        Readers read more. The more you get somebody to read, the more of their income they're probably going to spend on books. I've seen it, I've lived it. So encouraging people to read other, similar authors is good for you too! They'll probably buy more books in total, including yours. Maybe would have just bought one of yours. Now they buy three of somebody else's and two of yours. That's a win for you!

        In the end, all of life is a zero sum game. But in context,

    • by N1AK ( 864906 )

      Um, no - the more readers, the more money. It's not zero sum at all from the writers' point of view.

      I think you missed his context. He was saying that in the past encouraging your own readers to check out other writers works benefited the whole market, whereas now it will dilute the fixed contribution that reader is making over more authors. I have trouble believing that a subscription model is going to bring more people into reading. If someone doesn't read are they really likely to start with a $10 subscr

      • by Hodr ( 219920 )

        I think you are glossing over a not insignificant group that reads books, but doesn't pay. Netflix, Hulu Plus, and Spotify have proven that if it is cheap enough and convenient enough, many people who previously chose illicit methods can be converted to paying customers.

  • by raymorris ( 2726007 ) on Monday December 29, 2014 @08:18PM (#48693335) Journal

    In another industry I was closely involved in, this approach significantly increased total revenue. Instead of saying "buy my book for $20", the author can say "get my book and 70,000 others for just $20". Which do you think generates more sales?

    In the very successful implementations, the amount paid out was based not just on which content was most viewed, but which generated sales via something like an affiliate code. There may be smaller content which many people will click if it's free, but nobody bought a subscription in order to see that content. Others, such as TAOCP, may have fewer viewers, but those viewers bought the subscription specifically to read TAOCP. TAOCP would be rewarded for bringing buyers.

  • Look at Us! we have more for the same amount of money/time. instead of 70 stores at your mall, there's 700,000 at Amazon. soon to be 7,000,000,000...well, you get the idea.
  • by Enry ( 630 ) <enry@nOSPAm.wayga.net> on Monday December 29, 2014 @08:39PM (#48693443) Journal

    How is Kindle Unlimited any different from Spotify or any of the other online streaming music services in terms of how royalties are paid?

  • Given a choice, I would prefer to read the best stuff. This encourages writers to provide the most entertainment for their readers, rather than just encouraging their readers to buy popular stuff because they recommend it.
    • by BarbaraHudson ( 3785311 ) <barbarahudson@gm a i l.com> on Monday December 29, 2014 @08:56PM (#48693513) Journal
      This move discourages quality. People will download indiscriminately since the cost is fixed. Which means that crappy writers make as much of the "pot" as good writers, so why strive for quality when you can write 6x as much crap and get paid MORE than the person who writes 1 good book. Good writers shouldn't subsidize crappy ones.

      Remember the saying "bad money drives out good"? People will horde their genuine currency and try to pass off counterfeits as quickly as possible to the next sucker. Same as people now are selling Rubles for Euros and Dollars.

      • I know we don't RTFA arounf here, but authors don't get paid when the book is downloaded, they get paid when someone reads at least 10% of the book.

        • How many books have you read, how many tv shows and movies have you watched, that started out good but then didn't live up to their hype or initial promise, but you continued reading / viewing for a while in the hope it gets better because you had already invested time into it before finally throwing in the towel? 10% is too low a minimum. I'd venture that anyone who gives up half way is saying the book is crap.
          • by germansausage ( 682057 ) on Monday December 29, 2014 @10:17PM (#48693745)

            Fair enough. However, lets say I just bulk downloaded 25 books by Mr. Hack Writer, and I read enough of the first book to determine it is, for me, crap. I'm still going to delete all 25 books, and one read is all he will score from me. On the other hand, if I like an author I tend to plow through a bunch of their books. Good military sci-fi (don't judge) seems to come in series and I will often read a dozen books by one author. The bad writer will not get zero, but the good writer will still get a much greater reward.

            • Good military sci-fi (don't judge)

              Who on /. hates good sci-fi? Fantasy, on the other hand ...

            • I think they should distribute on a combination of word count read (with page count used to estimate word count so illustrated works and non-fiction get weighted fairly) and subsequent star rating for pot distribution.

              You shouldn't pay out more for getting your 5 100 page books read than you do for a read of a 500 page epic. If anything it should be the epic that gets the higher payout. It takes longer and is more difficult to write a quality epic novel than a few quick reads.
        • by goose-incarnated ( 1145029 ) on Tuesday December 30, 2014 @02:58AM (#48694461) Journal

          I know we don't RTFA arounf here, but authors don't get paid when the book is downloaded, they get paid when someone reads at least 10% of the book.

          Parents point still stands: I published on Amazon. I've still got a collection of short stories on Amazon. To game this system all I have to do is publish all my short stories as different books. Instead of one 40k word book that might get read 10% through, I can have 7 smaller "books" that will almost certainly hold the reader for 10% of each book.

          The flat fee incentivises the wrong thing - it provides an incentive for crappy authors and/or crappy books to join en masse. The payoff is so small that any popular author (Stephen King, Pratchett, etc) will be stupid to join. The popular authors *are* the draw, and people who have paid the flat-fee will still shell out extra to get the popular author's latest work if it isn't in the flat-fee library.

          So, this model incentivises crap being included and masterpieces being excluded - why do you think that you will see anything different in practice?

          • by Hodr ( 219920 )

            I imagine if I were a "popular" author I would put my older, lesser producing works into a service like this. Let someone who recognizes your name but has never read your books read something that represents your style, but isn't your current top moneymaker. Then if they decide "hey, this Stephen King fella is actually pretty good" they can buy your other works individually.

            • I got hooked on a fantasy series by somebody I'd never heard of because they made the first book available for $0. "Meh, for free, I'll give it a whirl!" After that I paid full price for the other 5 books.

      • by Hodr ( 219920 )

        Was it mentioned if an author has to put ALL of their books into this service? I can't tell you how many times a friend loaned me the first book in a series and I bought the rest. If you put 1/3rd of your catalog into a service like this and people are exposed to your work, then they may buy the stuff that isn't in this service. It's just another form of advertising, only this one pays you instead of the other way around.

  • I suspect unlimited will function like a current libraries, much like Netflix is an alternative to blockbuster not the theatre or purchases. Similarly Unlimited probably won't have the latest and greatest, rather slightly older books and series before a new one is released. (Series often sell for $1.99 or even free to promote the newer books)
  • In the traditional publishing model, it's in my interest to encourage readers to read other authors, because people who read more buy more books â" the proverbial tide lifts all boats. In the Kindle Unlimited model, the more authors you and everyone else reads, the less I can potentially earn

    Under the traditional model, how are those readers reading other books? Library? Purchase?

    If it's the library - the reader isn't paying for the other book, but probably not the author's book either. These readers don't matter.

    If it's purchased ... well, that's $5~10 that's not spent on the author's own books.

    Even without KU, there's less "potential earnings" when recommending other authors. So KU does not make the book market more or less zero-sum.

  • I don't see why authors should feel threatened by Amazon's subscription model for books? In the case of books and other publications, our government has been funding repositories for the physical printed works so anyone can read as many of them as they like at NO additional cost -- and this has been the case for many, many years.

    As a general rule, I think people who actually buy their own copies of books only do so with a very select group of them they consider so good, they might want to read them over an

    • According the the New York Times (http://www.nytimes.com/2014/12/28/technology/amazon-offers-all-you-can-eat-books-authors-turn-up-noses.html), authors who make their works available via Kindle Unlimited are experiencing income drops some in excess of 75%. So unless Amazon changes the model, authors' income is threatened and KU is doomed to fail. The exodus has already started and Amazon really has nothing more to entice authors to allow their works to be distributed through it.

      • If 1/50 people write one book in their life, and 1/50 of them are good, and all of them get published because there is zero barrier to entry, we would have so many more books that were good than we do now.

        People have more free time and better access to distribution than before. You're not entitled to your streetlamp lighting job, you know.

    • Libraries have scarcity built in. In the case of physical copies, this is obvious. If they want more of a popular book, they have to buy more copies. I've definitely gotten sick of waiting in the past and just bought the book I was waiting for.

      Even the digital library systems have artificial scarcity and time limits built in. At least the ones I've encountered. But as the library is effectively the customer of books, they've always had to pay for them. The writer and publisher always got their cut.

      Amazon is

  • Invalid logic (Score:4, Interesting)

    by shaitand ( 626655 ) on Monday December 29, 2014 @11:05PM (#48693887) Journal
    The cap on the pot is not imposed by the one controlling the pot, the cap on the pot is a function of the number of subscribers. It is still in your interest to promote the books of others because more quality and varied content means more subscribers and therefore a larger potential pot.

    It does change the industry. It is no longer a function of publishers to pick the winners but a function of readers. Everyone can publish. I don't know if Amazon considers reader ratings in their pot distribution but they should.
  • "Tradition?" (Score:5, Interesting)

    by Anonymous Coward on Tuesday December 30, 2014 @12:01AM (#48694077)

    Writing has changed a lot over the years.

    When Homer (or at least whoever copied him down) and Plato and Vergil and Cicero wrote, an author published (divulgavit = made common or public; publicavit = threw open to the public, also used of public confiscation of private property and of prostitution; in lucem edidit = gave into the light of life) by making a work available for anyone to hear, listen to, or copy. It wasn't paid through sales, but rather supported for by patronage (the rich supported the arts) or own's own income from other sources. It wasn't about profit, and making copies (and making copies available) was a virtuous endeavor also supported by the rich. Manuscript subscriptions (like "Emendavi ego Dracontius") tell scholars who in late antiquity edited copies and recopied them for the benefit of others. This virtue continued to be practiced by monks through the middle ages, who copied older works and wrote new ones and disseminated both across Europe through networks of borrowing and lending that were the key to sustaining and maintaining written culture: we would have no literature from antiquity or the middle ages without the Church's non-profit model of supporting literature through copying and patronage. While books became precious commodities as writing materials grew scarce (while papyrus, bast, and other writing materials were used even for wrapping fish in antiquity, it took a flock of sheep to make a physical book in the middle ages) the "intellectual property" was not regarded as such, but rather as the common inheritance of humanity (the patrimonium humanitatis). Carmina (songs and poetry) and prose alike were no one person's intellectual property: the author could be praised by name, or he could hide under a monk's anonymity, but it wasn't even conceivable that he could restrict the further publication of his works. The Church could try to burn heretical material, just as Roman emperors had tried, but copies often survived somewhere and were recopied; but restricting intellectual property wasn't even a consideration.

    Then, in the late middle ages, came Cathedral schools and the first universities, and students began paying to copy books themselves for classes. When the printing press and paper came to Europe, the idea of the privilegium, or exclusive right to furnish copies, was already in place, and books could be issued under copyright. Some authors began to profit from their books, but more often publishing houses did. Songs were still common material, and people sang what they learned without fear of legal retribution. Many authors disapproved of the copyright of privilegium: Erasmus, in a 1586 letter to Jacopo Sadoleto, complains of the copyright (backed by threat of excommunication) given to the Francesco Giulio Calvo: "But since Calvo's publishing house cannot supply copies to all parts of the world, it would be a serious blow to scholarship, in my opinion, if a book of such importance could be obtained only from a single Roman publisher." Books were sometimes copied without privilegium or even against the privilegium of another publishing house, and some authors clung to the tradition of making their work truly public.

    Then came the twentieth century and the "Culture Industry" (a term coined by Western Marxists like the Frankfurt School, who despised mass or "low" culture). What had been "culture" and "literature" for ornamenting the soul and improving the mind became "content" to generate revenue streams, mass-produced by division of labor instead of genius and careful cultivation. Although electronic distribution through computers designed to reproduce and spread information meant that books and songs and new forms of art like movies could be distributed for free -- no flocks of sheep required -- nevertheless, pirating an .mp3 of Britney Spears or a copy of that new North Korea movie or some godawful e-book will get you a stiffer sentence than if you shoplifted a copy from the store. The irony is that much of what is now peddled by

    • Nice history lesson. Thank-you!

      I will say that Amazon has a long history of being self-interested scuzzes. The work involved in creating a decent book can be measured in the tens of hundreds of hours, and it is not at all unreasonable for a hard working author to want to receive enough compensation from his or her work to at least offset the cost of living, -like any other working person.

      I have no problem with that.

      If information wants to be free, then that's fine, but at some point if the tens of h

    • Mr. Coward, that was excellently written and informative. Thank you!

    • Re:"Tradition?" (Score:4, Insightful)

      by david_thornley ( 598059 ) on Tuesday December 30, 2014 @02:58PM (#48698557)

      Not bad, up to the last paragraph. Scalzi is used to competing with other demands for the readers' money, and is not asking to be paid for nothing. He'd like to be paid every time somebody buys "Redshirts" or something in the Human War series. This is competition in the market. I have no idea how you could possibly have misinterpreted him that badly.

      What he is complaining about is that he would be put in direct competition with all other authors, and that the amount he would be paid would be capped by another entity. Currently, he benefits by people buying his books, whether or not they buy anybody else's. With this model, if somebody read one of his books and no other that month, he'd make $X, while if said person read one of his books and one of somebody else's books that month, he'd make $X/2. In the traditional model, he'd make $Y if somebody bought one of his books, regardless of anything else the reader did that month. Similarly, in the traditional model, if he wrote something that sold like the Harry Potter series, he could make any amount of money. (Rowling is reportedly a billionaire.) In this model, he'd make a certain chunk of what Amazon had allocated.

      In other words, Scalzi wants to compete in an open market, where he can succeed or fail along with others, and where he can potentially make a whole lot of money. That's a boat that should float, as far as I'm concerned.

  • iBooks (Score:4, Insightful)

    by Tony Isaac ( 1301187 ) on Tuesday December 30, 2014 @12:42AM (#48694191) Homepage

    This is just iTunes, but for books. The book industry was just a little slower to go digital. They will go, kicking and screaming, but they will go. And the result will be a win for consumers, and even a win for authors (maybe except for the few who are household names).

  • Where, exactly, is Amazon's Unlimited plan effectively much different from a Library? Oh other than the fact authors will be getting continuous revenue, rather than only being paid for a few copies to fill the library's shelves.

    Yet somehow writers managed to profit and thrive, even as libraries allowed anyone who wished to walk in and read all their works for free.

    Rather than turn publishing into a zero-sum game and Scalzi believes, it appears to me that Amazon has turned the idea of a library into a new r

  • by ThomasBHardy ( 827616 ) on Tuesday December 30, 2014 @02:34AM (#48694429)

    I love Slashdot and Slashdotters. But in this case I'm kind of taken back by the responses.

    Being married to an Author and knowing many, many authors, I can point out a few things:

    Most authors, beyond the "super big names" struggle to make even a moderate living off of their books. When these folks try out a new system like the Amazon plan, and they find the are making less, we're not talking about folks who used to make 3 million, now only making 2.5 million. We're talking about someone who might be making for example 30k per yea,r making so much less that they are forced to cease writing as a vocation.. It's directly impactful, and the impact is not tied to quality of the book. Rather, the impact is books with catchy titles and sales pitches getting more downloads and making more money, regardless of quality. "hey, it's free, I'll click that since there's no downside to me for doing so." This leads to other books making less of the allotted bucket of funds. When spending money on books, folks tend to check reviews, read the sample download or use various criteria to filter down their selection to what they enjoy reading. So better books get rewarded. With the new plan, shotgun approaches become the norm.

    Lets try it another way. Say tomorrow, there was one major store through which the majority of all software (personal, business, etc.) and all IT services (Ops, support, admin, etc, each treated as a service ticket item) were offered and the owners of that store decided "Forget what people pay today for software and services, we'll sell them anything and everything for $10 a month and just divvy up profits as we see fit, And we'll do it without reporting to anyone how the process works or what actual counts occurred, we'll just send them a check."

    How would you feel about that when it was your app that you worked for a year and you usually make about $50k per year. But now when another app AngryBirds sells 30 million copies, your get a check for $5 for the month for your app despite people still downloading downloading it because statistically it's insignificant?

    Or how about your IT job that you now get paid 1$ per service ticket because a billion other service tickets get processed as well? Did you enjoy working all day for $20?

    While it's easy to assume that anything cheaper is better, remember to take into account that the cheaper may be coming at the actual workers pocket. I'd expected to see Slashdotters more upset at the middleman holding the actual workers over a barrel.

    • by houghi ( 78078 )

      It is just standard mathematics. If I previously bought 2 books for 10USD each and now buy 2 books for 10USD, there is 10USD less to devide.

      I doubt that people will start spending more on books. It is just that a lot more people need to get money from that amount and that the money for the middleman has gone to a much more powerfull middleman.

  • by sirwired ( 27582 ) on Tuesday December 30, 2014 @07:24AM (#48695047)

    I'm sorry, but I don't see a problem here... Amazon has made participation in KU completely optional. If Amazon, say, made KU mandatory in order to have your book available on Kindle at all, there might be something to complain about.

    But since there IS no such requirement, if you, Author or Publisher, feel you'll make less money via KU vs. only offering stand-alone copies, then don't participate.

    The movie industry hardly seems to be dying despite the fact most movies aren't available on NetFlix streaming.

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