Amazon KDP Select Controversy: Golden Opportunity or Trap?

Amazon's KDP Select now lets indies enroll Kindle books as free on Prime: Some see opportunity, others say monopoly.
Written by Violet Blue, Contributor

Last Thursday, Amazon opened its KDP Select program to self-published authors and indie publishers. Indies can enroll qualifying books in the Kindle Owners Library program, making their books free for Prime customers to "borrow."

Controversy and debate is heated on blogs, Kindle Boards and indie publishing communities.

Some indies think this might be a great idea. Others don't, and suggest Amazon is conducting a monstrous exploitation of bootstrapped authors while harming the wider ebook market.

Enrolled books are available for Amazon Prime customers to download on Kindle for free (one at a time), as long as indies make each enrolled title exclusive to Amazon for 90 days. The exclusivity does not apply to paper-published versions of the books.

Some authors think the exclusivity clause is a dealbreaker. Withholding (or removing) titles from Apple iBooks, Barnes & Noble, Sony, Kobo, Smashwords and others is too much of a royalty gamble.

Evaluating the revenue risk, one author disclosed that her non-Amazon revenue sources total around 30%, another put revenue loss potential at %53 - while others say it's an easy decision, as their non-Amazon revenue is now less than 1%.

The books are still for sale while free on Prime. Enrolled indies get a scaled split paid out of a set royalty fund.

In the email to indies, Amazon explained:

(...) The monthly fund for December 2011 is $500,000 and will total at least $6 million in 2012.

(...)Your share of the monthly fund is based on your enrolled titles’ share of the total number of borrows across all participating KDP titles in the Kindle Owners’ Lending Library.

For example, if total borrows of all participating KDP titles are 100,000 in December and your book was borrowed 1,500 times, you will earn $7,500 in additional royalties from KDP Select in December.

Enrolled titles will remain available for sale to any customer in the Kindle Store and you will continue to earn your regular royalties on those sales. (...)

Indies also get access to Amazon's "free book" promotional tool, and can pick up to five days within the 90-day period to make their books free of charge - a known vehicle for book publicity and increased title visibility.

Indie publishers and authors are treading cautiously. Old arguments have resurfaced about free books and potential damage to the ebook sales ecosystem.

Some critics are outright accusing Amazon of monopoly tactics and anti-trust behavior.

Victoria Strauss at Writer Beware issued a strong caution about rights, non-competition clauses, and intellectual property issues - telling authors to "think carefully" before signing on.

Indie distributor Smashwords attacked the program saying it will make authors indentured to Amazon and will harm other retailers. In Amazon Shows Its Predatory Spots Mark Coker wrote,

Do you want to become a tenant farmer, 100% dependent upon a single retailer? As some of you history buffs may know, tenant farming, and the abuses of power by landlords, was a primary contributor behind the great Irish potato famine.

The new Amazon KDP Select program strikes me as a startling example of a predatory business practice. Amazon has the opportunity to leverage their dominance as the world's largest ebook retailer (and world's largest payer to indie authors) to attain monopolistic advantage by effectively denying its competing retailers (Apple, B&N, Kobo, Sony, etc) access to the books from indie authors.

Regardless, tens of thousands have rushed to enroll their books.

It's estimated that 27,000 titles were registered in the first 24 hours.

When Amazon launched the Kindle Owners’ Lending Library last month it contained around 5,000 books. There are now over 46,000 Kindle titles available on Prime.

I was among the indie publishers that got the announcement. While I have a mainstream print publisher, I've been self-publishing myself and other authors for mobile devices since 2007. I was among the first to join Kindle self-publishing (KDP) when it started.

The timing just happened to be perfect - I had just finished a book that was in production for most of the year and was ready for its release announcement that very day.

But I decided immediately that I'm one of the indies that isn't looking to get any kind of slice of Amazon's $500,000 payout pie.

My decision to enroll "Fetish Sex" was to engender goodwill with my readers and build the book's reputation - something that I've noticed pays for itself over time.

Happy readers contribute the the book's reputation by borrowing it, upping its presence, telling friends about it, "liking" it on its Amazon page, leaving reviews, and more. I currently have over 30 books in print with various publishers in nearly every distribution channel, so I have the unique position of being able to try this out with less risk than most indies.

Fetish Sex is a self-publish, and with KDP Select I could add the Prime Lending Library distribution channel to my book's reach.

And I could finally have access to Amazon's "free book" KDP Select publicity tools. Typically, when a Kindle book is free on Amazon, it shoots up in popularity.

Whenever a book is free (to "buy") on Amazon, other titles by the same author see a spike in sales - I witnessed this firsthand when my mainstream print publisher made one of my titles free and my book's status shot up to the top ten.

A lot of discussion on forums around taking a chance on KDP Select suggested that getting in early would have its advantages. However, possibly because I enrolled my newest nonfiction title within hours of the announcement, I experienced the system's overwhelm and glitches.

During the first 8 hours my title's enrollment did not appear for many Prime Kindle owners that attempted to borrow my book. Having made the book exclusive, launched publicity and positioned a key decision point for seeking out the book its free-on-Prime availability, I was not happy.

I still think that opening up KDP Select to indies is a brilliant move by Amazon and I'm glad I'm taking a chance with it.

The change in the air for self-published authors and Amazon's Kindle (KDP) ecosystem feels very similar to the way that Apple initially engaged with developers in the early stages of building its app marketplace.

Let's not forget how ready Amazon is to change the game with Kindle Fire - which comes with three free months of Amazon Prime. How many Fires will sell over the holidays?

Either way, that's a hell of a potential market - one that I hope authors and developers become determined to cash in on in equal measure.

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