Scalzi Says That KDP Select Payment Terms Suck, but He’s Missed Half of the Point

John-ScalziAmazon's announcement last week that it was changing the payment terms for KDP Select, the program used to supply books to Kindle Unlimited and Kindle Owner's Lending Library, has caused any number of traditionally published authors and legacy industry pundits to decry the change.

John Scalzi, for example, focused solely on the fiscal aspects and wrote:

This is a bad situation for the authors participating — bad enough that ultimately the minutiae of how the money is allocated is sort of aside the point, because the relevant point is: You will never make more for your work than Amazon wants you to make. And yes, just Amazon, as the work KDP Select authors put on Amazon are exclusive to Amazon.


So, yeah: By page, or by percentage, KDP Select authors on Kindle Unlimited still can’t make more than Amazon says they can. That sucks, and that’s the long and short of it.

That's not true, or at least it is not complete. It ignores the impact KDP Select has on the rest of the Kindle Store.

When KDP Select launched in late 2011, I disliked it because I didn't think it was wise for authors to give Amazon an exclusive and accept a variable payment. But many authors saw it differently, which is why the number of titles in the program continues to grow.

After reading Scalzi's post, I asked a few authors why they were in the program, and they said that they saw a net benefit to their revenues.

Scalzi complained about the payment terms for KDP Select, but what he missed was that authors might be putting their titles in the program for other reasons. For example, multiple authors have reported that an ebook's loans in KU can help boost that ebook's position in the Kindle Store's rankings. This can result in increased retail sales.

If an author is already generating most of their revenue from the Kindle Store, it could make sense to submit a single title to KDP Select and see if that boosts their sales. Sure, they have to give Amazon exclusivity, but that might not matter if the ebook is not selling elsewhere. And KDP Select does only require a 90-day commitment.

While Scalzi might have nailed his argument when viewed strictly in terms of the money from KDP Select, that is not the case when you take a step back and realize how one part of the Kindle Store affects the others.

In the larger view, KDP Select can be a net positive.

About Nate Hoffelder (11474 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

6 Comments on Scalzi Says That KDP Select Payment Terms Suck, but He’s Missed Half of the Point

  1. I’m in KDP select because it’s my first novel and I’ve got plenty to learn just about how Amazon works. I don’t have time to figure out all the ins and outs of the other ebook distributors. (And I’ve heard bad things about Smashwords.) I only got three KU sales in my first month, but I’m pretty sure those wouldn’t have been download sales if I wasn’t in it. I’m also experimenting with AMS. The real test will be how the Kindle Countdowns work.

    But I’m also in it for another reason. Contrary to the spin that’s being put out there, it’s good for each bookseller to have some exclusive titles and try to bribe writers into staying exclusive. If every book distributor knows that writers will automatically enroll, they have little incentive to innovate or offer writers anything new or special.

    We don’t know for sure what is going on behind the scenes of these companies, but I’m pretty sure that iBooks favors bigger published titles (their discovery features for indie books suck) and I’m very suspicious of Scribd and Oyster, which I also think favor big publishers works over indy books.

    The only way to get them to change is if they know they can’t get Indy books. So there has to be some ongoing threat there. It’s also good if Amazon keeps trying to innovate and outright bribe indies to be exclusive.

    The way indies will really do well is if each service competes with offers for exclusivity. That’s what the free market is all about.

    Otherwise, there is too much incentive to take indies for granted which simply gives too much power to the back room connection the big publishers have to try to make their books stand out on discovery tools.

    Now, I don’t think every writer should be exclusive to Amazon, that would defeat the point of getting Amazon to fight for indies. And don’t think any writer should make every book of a large catalogue exclusive. The whole point is for writers to try different things and be able to experiment.

    Scalzi seems to be carrying water for the big publishers once again, and sticking to their latest talking point. I think the big publishers terrified of KU, and terrified of Amazon offering perks for exclusivity. Their hope is to build up other companies to knock Amazon down to size. They can’t do that if reader know Amazon has more to offer than other services.

    And I like it better when big publishers are scared.

  2. Two key points KU critics from tradpub miss is that:

    1- KU is not a replacement for ebookstore sales, it is a complement. If anything, it is a replacement for free titles.

    2- Putting titles in KU (as well as Oyster and Scribd ) is up to the publisher. For Indies, it is a judgment call for the author. Scalzi and other tradpub authors have no say. So pretending they are qualified to judge the trade-offs that Indies make in choosing KU is disingenuous.

    Indie authors choose their price point and their distribution channels.

    Scalzi has no power to choose either and he knows nothing of the factors they consider in running *their* businesses so he has no moral authority to judge their decisions, good bad, or indifferent. You don’t see him critiquing the contract terms his overlords offer to other autgirs, do you? That is because he works *for* publishers, he is not one, and like good employees and other dependents, he happily carries water for his masters.

    Unless his contract allows him to self-publish on the side and actually does it, he should just shut up and stop talking about things he doesn’t know a thing about.

  3. I am a romance author with two series in KU, and currently make enough off KU alone to pay my living expenses. Since my books are 200+ pages, I for one look forward to the imminent change. Apart from the money, it will be highly motivating to know how many pages of my books were read every day.

  4. I sell too well in other channels to go exclusive. Exclusivity only benefits Amazon.

    Quote from Bell: The only way to get them to change is if they know they can’t get Indy books. Endquote

    No retailer cares whether they can get “indie” books unless a particular title is selling extremely well. If a title sells, they want it regardless of who published it. Amazon is basically saying here: If people read it, we will pay you. This CAN cut into sales and income for an author because thousands of books are bought and never read. THOUSANDS and THOUSANDS. Best sellers are often bought on name recognition alone, but many copies aren’t read. This has been shown in polls, tracking software used with e-readers, etc.

    Subscriptions services make money whether or not any book is read so long as they can attract subscribers. They make more money if those subscribers read fewer books/no books.

    Do retailers favor trads? Sure, and so does Amazon for the most part these days. They constantly change their algorithms so what works today might not work tomorrow. They make deals with the publishers to show publisher books, they take ad dollars from multiple sources.

    The new KU deal is likely to push popular titles to the top and pay them more. Amazon knows this. Marginal/unread titles are going to make less money. Amazon may very well be restructuring to keep popular authors in the program by paying them a larger piece of the pie–and they don’t have to SPEND more money on the program–just redistribute the money already allocated to the pie.

    I’m not judging whether this is good or bad for authors because I’m not in the program as a reader or a writer so it really doesn’t matter to me either way. I would like to see “Free” replaced as a writer, but not so much as a reader. :>)

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