Thursday, 17 January 2013

KDP Select Revisited...

I hate to say I told you so. Really, I do. But back in November I wrote a post about over-reliance on Amazon, and in particular the Select programme. I decided to put my neck on the line and make some public predictions about how I envisioned the immediate future of indie publishing.

  • Indies will sign up to Select again in droves. Amazon will sell a record number of Kindles off the strength of their ebook store. The price per borrow will decrease, despite the increased pot, because of the increased marketplace and the flood of new Kindles out there. Authors will whine and wail and whinge, but they're tied in and there's nothing they can do until March.
  • Non-Select authors will see a (small) bump in sales from other domains - notably B&N and Kobo, both of whom have expanded their markets outside the US and are aggressively advertising. Those on iTunes will also benefit.
  • There will be a flurry of free books available from mid-Jan through to the end of Feb, as indies disillusioned with a slower-than-expected Christmas season decide to try a giveaway after all.
  • Amazon will harvest the best from the indie crop via their in-house publishing arms (for thrillers and romances, the two biggest genres on the store anyway). They will also sign up a significant number of indie books to their new film production branch.
  • Weighting will move in favour of Amazon's in-house authors.


Less than two months later, let's see how that's going, shall we?

Firstly, point one. Indies will sign up to Select again in droves. Well I have no way of knowing exactly how many did, apart from anecdotal evidence from various indie communities I'm part of where it seemed that everyone was signing up. But I can look at freebies. On one randomly chosen day in December there were over forty thousand free books available on Amazon. Yeah, you read that right. And unless you made it into the top 100 then what were your chances of benefiting in any real sense? Zero, quite frankly. 

So all those people arguing that free lends visibility...not so much. Not any more. 

Then there's the number of devices to read those books on. Amazon reported that they sold over 26.5 million items on its busiest day of the last holiday season, and the Kindle Fire was #1. On Christmas Day itself, Amazon reported record-breaking numbers of digital downloads. 

They'll never give us concrete numbers, of course, but the short answer is that a lot - an awful, awful lot - of new Kindles made their way under Christmas trees last year. And each of those Kindles came with a month's free Prime membership. And it's through Prime that you can borrow books, via which people in Select get paid.

Based on an assumption that these facts would turn out to be the case, I predicted a decrease in the payouts for each Select borrow, despite the pot being doubled (amid great fanfare). Well here's a quick look back at how that's going:

September 2012 -- Select fund $600,000 -- Price Per Loan -- $2.29
October 2012 -- Select fund $600,000 -- Price Per Loan -- $2.36
November 2012 -- Select fund $700,000 -- Price Per Loan -- $1.90
December 2012 -- Select fund $1,400,000 -- Price Per Loan -- $1.88
January 2013 -- Select fund $1,400,000 -- Price Per Loan -- ???

See that? The pot is going up, but the payout per borrow is dropping. A natural result of a larger market. And on top of that, despite Amazon reporting record-breaking numbers (again), the indie community as a whole is reporting a very flat Christmas season at Amazon. Smashwords reported the same thing across their ~200 titles on Amazon.

But how was everyone else doing? Well in the two weeks immediately after Christmas, the iBookstore was 55% up on the two weeks prior. Barnes&Noble was 33% up (in sales; 35% in actual cash). Smashwords' initial numbers place Sony tentatively at 5-10% up, although this isn't confirmed.

Already, the shockwaves are reverberating around the indie community. Here's a typical reaction:

I just got my report and a lot of people including myself are going to be very disappointed when they see what amazon calls a DECEMBER BONUS! My KDP borrow amount is less than November. NOT HAPPY!

And that's the scariest thing of all - the doubled pot is indeed a 'bonus', one that is due to expire in February (Selectites have already had $1.4 million of the $1.5 million bonus amount, so February's pot will be $700,000). While I'm certain that the initial flood of people filling their Kindles will wane, and a large number will have exhausted their free Prime membership and not continued with it, I'm equally sure that the numbers for the borrows will continue to decrease to around the $1.50 mark, or perhaps even less.

With one caveat. The initial surge (and free Prime memberships) will end in January. That means I predict February will coincide with a small rise in the borrow rate because there's a smaller market sharing the (slightly) inflated pot. Which is especially convenient for Amazon as February is the month when all those three-month Select contracts end. Faced with a bump just as they're considering renewing, faith will be restored and many authors who were wobbling about renewing or not will do so. And they'll be locked in for another three months when there isn't an increased pot and their share will decrease.

My last two predictions for the market are of course longer-term than a few weeks will tell. We shall see how right (or wrong) I am there in due course. But authors, remember, free on Amazon isn't the marketing tool that it once was. Select itself isn't the cash cow you all think it is. Some will - and do - benefit from it. Enormously. I personally know several authors who have been very, very successful with it. They are by far and away the minority. The model of bestsellers and book charts is geared so that a very few make a great deal; a lot make a bit; and the majority make next to nothing. Not every author can be a breakout bestseller. 

That's not to dishearten anyone. I know a couple of indie superstars, but I know literally dozens of people who are making a full-time living by self-publishing. What they all have in common, the household names and the almost-famous among us, is that they think long term. The people who lost out with the Select gamble over Christmas are those who flit from tactic to tactic, convinced that if only they press the right button at the right time then everything will miraculously take off overnight. The people who make a snap judgement based on a vague promise of a 'bonus' without looking at the bigger picture.

I've said it before and I'll keep saying it until I'm blue in the face - you need to understand the field you're working in. Know your market. As I proved, the fluctuations are predictable - and I wasn't sat here all alone with a crystal ball, plenty of other people also predicted the same things I did. Yes, this is a field that is changing by the minute; at any moment something could come along and invalidate all my prior predictions. But unless you've got the ear to the ground you'll never know, you'll never understand the market well enough to react to it when it changes, and you'll always be left wondering why you're the one left behind when the books of authors around you start taking off.

This isn't a downer on Amazon, or even on Select. I'm not judging anyone who does or doesn't sign up for it because I've known it go both ways and ultimately we're all the architects of our own careers. But that's kinda my point. If you want to write a book for a bit of fun and maybe sell a few copies, see people reading some and get some reviews - great! Do whatever the hell you like with it. But if you want to make a living doing this; if you dream of writing 24/7, then you need to have a little bit more foresight.

Yes, sometimes it feels like trying to make order out of chaos, but this is what any person in any business in any industry has to do. You launch your start-up and you make a business plan. You look at your product and your distributors and your sales and you target for certain things, and then you need to plan how to hit those targets. People in business don't wait for sales to come to them, they don't put all their eggs in one basket without a damn good reason, and they don't get caught by surprise when the market evolves. Or if they do, they don't stay in business very long.

We can all hope and dream of hitting #1 in the Kindle store, earning millions and becoming a superstar overnight. But the truth is that dream is only going to come true for a tiny, tiny minority of people. Maybe one a year, maybe less. I'm not saying ditch the dream, I'm saying modify it. You can earn a living by writing, and you don't need to be #1 to do so. Find ways of making the dream obtainable for you, on your terms. But however you do it, you need to start with a plan and you need to at least stick to it for long enough to see if it actually works. If you constantly flit from one thing to the next, you won't get anywhere. Worse - you'll end up destroying your own market.

So do what you have to do to find your market and sell your books - don't be swayed by every gimmick that comes along. 


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Kate Aaron is the bestselling author of contemporary and fantasy gay romances.
Find all her books on AmazonAReB&N,  iTunesSWSony & Kobo

4 comments:

  1. Great analysis, Kate!

    The borrow numbers are an eye opener. If we do a straight division of payout/borrow into the toal pot for each month (probably an over-simplification on my part) we get:
    Sep 262,009
    Oct 254,237
    Nov 368,421
    Dec 744,681

    Almost a tripled number of borrows from September to December with the big acceleration in December. There are probably other factors in finding the total borrows but it does give us a good approximation.

    It certainly seems to indicate an expansion of eReader penetration. The value of being in select is quickly diminishing (as you predicted) but the value of a long term approach to selling stories as eBooks is steadily growing!

    I haven't been to the KDP boards in a while (Got tired of watching the huge fights over imagined slights) but I remember the dozens of new writers complaining that their one book still hasn't displaced 50 shades at the top of the charts, even though they tweeted the heck out of it and gave away tons of freebies.

    It takes years to become an overnight success.

    The big A needs to pin your newbie thread to the top so they can get a little perspective.

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    1. Thanks! I think the newbie post is lost, sadly; although I hope it helped some.

      The value of being in select is quickly diminishing (as you predicted) but the value of a long term approach to selling stories as eBooks is steadily growing!

      This I think is definitely the pertinent point to take from studying the market as a whole. Those who expect overnight success and lack the stamina to go the distance will come and go, but those who treat publishing like a serious business and plan for the long haul have every chance of writing for a living full-time.

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  2. Excellent post, and I'm glad someone had the heart to say it I never went KDP because I don't like some of the policies involved. It was a moral issue for me. But glad I stuck to it.

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    1. Thanks for commenting! The very nature of Select's model means that some will always benefit as long as there are borrows being made - the same as the bestseller model ensures that there will always be those who make a fortune; as with everything it's a decision that needs to be made by each individual author, usually on a book-by-book basis.

      I don't deride anyone for being in Select per se, but I think committing yourself to anything for an entire quarter on nothing more than a knee-jerk reaction in a market that is evolving so rapidly is a little short-sighted. I know people who have utilised Select as part of a wider business model and done very, very well out of it, but just expecting to press that 'free' button and have your book miraculously take off is naive to the point of madness.

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