Will self publishers be left out in the cold?
There was a short piece in the Wall Street Journal today by Jeffery Trachtenberg and Stu Woo reporting that Amazon is in talks with book publishers about launching an all-you-can-read service for a fixed fee. Book publishers are reported to be less than thrilled with the idea.
In a recent post about the future of intellectual property, I wrote about a scheme for directly compensating authors for eBooks based on the number of times they were read. The two have more in common than you might think.
Amazon’s goal is to capture and hold customers so that they do more and more business through the Amazon store. Amazon has never focused on bottom line income, they continue to be valued as and behave like a growth company. They apparently believe that enticing more and more people to join their Amazon Prime program, which includes free second day shipping and a number of other perks for a $79/year membership fee, is the best way to increase their marketshare. And providing Kindle owning Prime members with a number of free eBooks that would otherwise cost them some dollars apiece would be phenomenal perk to offer, especially for those of us who don’t watch TV.
But the interesting part from my point of view is it would establish a system for sharing a pool of money with a pool of rights holders. The WSJ article implies that Amazon would offer publishers a fee for participation, in return for which, the eBooks included in the program would be available for free to Prime members. That’s a very different model than selling one title at a time, it’s more like the licensing fees paid for broadcasting rights to a season of sporting events. Amazon would likely be generous, at least in the early years, and publishers with solid backlists who are struggling to pay their bills may be tempted.
Once established as a specialty program, the question becomes whether there’s a model for Amazon to try to set up a broader subscription program along the old paid lending library framework, where Kindle users might be offered a variety of all-you-can-read packages. Perhaps a casual reader might be tempted for $9.95 a month for a dozen titles and a serious bookworm would be willing to lay out $29.95 a month unlimited reading rights.
Publishers with a stable of bestsellers may not even be tempted to look at the economics, and it’s hardly a safe bet from Amazon’s standpoint either. There’s the risk of shifting people who spend big dollars on books or eBooks every month to a lower cost plan, while infrequent book buyers wouldn’t sign up for a monthly fee to average costs out. Amazon might still benefit on the top line from locking in more shoppers, but the bottom line damage would eventually catch up with them.
From the standpoint of the self publishing author, the greatest danger would be getting locked out of such a system. Amazon might ignore self publishers as not adding any marketing value to such programs, or they might offer independent authors terms based on the average performance of self published books on Amazon, which would prevent anybody from making a living.
If an all-you-can-read program catches on, self publishers could be in real trouble. Unless Amazon bases compensation on the number of times a book is read as I suggested in my earlier blog post, it won’t make any sense for self publishers to participate in the program in return for some small fee. Unfortunately, Amazon customers who do sign-up, and I believe the majority of voracious readers would, will be very uninclined to purchase individual eBooks outside the program after they are already paying a monthly fee for all they can read.
New authors with no sales record would either be unable to include their books in the all-you-can-read program or would only be offered a pittance to do so. And without being in the program, they’d never be able to demonstrate strong sales numbers. It’s only the established trades and perhaps a few big name self publishers who could negotiate reasonable terms based on their backlist sales.
As a reader, I’d love to be able to sign up for a program that would save me a lot of money on reading books. As a long time self publisher, I have a hard time seeing how such a program could do anything other than put self publishers out of business, unless the program bases compensation on the number of times a book is read rather than negotiating fixed fees.
I hope Amazon figures this out and ends up basing their program on dividing a pot of money between all participating publishers based on the number of reads, perhaps with some adjustment for the original cover price of the book. The size of the pot could be flexible, maybe a straight percentage split of the money received in subscription fees with some bonus money if Amazon’s goals for customer retention and engagement are met. But if Amazon basically goes over the heads of self publishers and does a deal with the trades, we’re all in trouble.