Round up #133: “Appan”, KDP select holiday bonus

Round up #133: “Appan”, KDP select holiday bonus

The ILMK Round ups are short pieces which may or may not be expanded later.

A welcome holiday “lump of KOLL” ;)

More than a week ago, I wrote about about seeing an announcement that Amazon was adding a bunch of money in December to the “pool” pay for publishers (often just an author) who participate in their Kindle Direct Publishing Select program, making their books available in the KOLL (Kindle Owners’ Lending Library).  I also wrote that the splash I had seen had disappeared. :)

Well, I’m happy to say that Amazon has now made the announcement:

press release

In December, the KOLL pool pay will get a $700,000 bonus on top of $700,000 ($1.4m for December, as I had reported).

Not only that, but an additional  $8m will be added, split between January and February of 2013.

January is a huge shopping month, traditionally because of returns, but also now because of giftcards received (although those may be spent in December to some extent).

How does the “pool pay” work?

Publishers have a share of the pool pay for each time a book of theirs is borrowed.

Let’s say that my book The Mind Boggles: A Unique Book of Quotations, is borrowed one hundred times in December. If there are a total of 100,000 borrows that month, I would get 1,000th of the pool pay, or $1,400.

That’s regardless of how much it costs for a consumer to buy the book. A ninety-nine cent book like The Mind Boggles gets just as much of a share as a $9.99 book.

I’ve written before about how this changes the economics, certainly of book pricing.

By the way, I will get nowhere near that high a percentage of the borrows: I was just keeping the math simple. :)

The press release also has some interesting information about what has happened in the first year of KDP Select, including this one:

  • KDP Select books have been purchased, borrowed from the Kindle Owners’ Lending Library, or downloaded for free through KDP Select promotions over 200 million times.

Notice how they phrase that. They say (I think correctly) that being in the KOLL increases the number of times your book is bought. They are getting that shockingly large  200 million figure including the number of times a book which is in the KOLL is acquired outside of the KOLL. A book like The Hunger Games is going to raise that number, no question, but most of the books in the KOLL are nowhere near that high profile (however, they also may not account for as many borrows).

Two hundred million in a year is huge…remember, we’re talking about books, not a TV show. ;)

They are careful to keep saying “global”…the KOLL is now available outside of the USA in some countries, which should increase the number of borrows, which reduces the value of a share. I still think it can be a great program, although I know some are skeptical of having to have their books available exclusively through Amazon to participate.

Amazon Appstore opens in Japan

Speaking of global, Amazon announced in this

press release

that their Android appstore is now available in Japan. Amazon boldly refers to their “global expansion” in the press release.

I’m always a bit…intrigued, I guess is the best word, when people post in the forum that Amazon is ignoring their country, with the implication that it’s deliberate.

I always want to say that Amazon wants to sell everything everywhere in the world…and beyond, if possible. :)

You have to be able to do it in a way that makes sense, though, and it can be complicated to get the proper systems in place. Amazon is, I am positive, not cavalierly choosing not to sell somewhere, or negligently ignoring a market, or making some political statement. If they can make it work, I think they will. Making it work includes making the local deals for content, support, and delivery that are necessary.

Here’s the Japanese store:

http://www.amazon.co.jp/apps

Interestingly, I didn’t find a way to actually see the apps there, just a way to install the appstore and promotion for it (including promotion to developers).

I wanted to see how the bestsellers differed. :) Amazon does make a point of tailoring their stores for the local market. In the press release, they mention Mushroom Garden and Yahoo! News as popular local favorites. Yahoo? I wonder if its relatively more popular in Japan than here in the USA…

Amazon expanding its traditional publishing to Europe

According to this

PaidContent.org article

(and I’ve seen it a bunch of other places, too), Amazon is, in another bid for world distribution ;) taking its traditional publishing operations to Europe next year.

I really think that if the Agency Model hadn’t come along, Amazon wouldn’t be this deep into traditional publishing by now. Yes, they might have eventually done it, but basically, the publishers wouldn’t let Amazon do what has been the traditional role of a retailer (getting product from distributors and then pricing it as it sees fit for consumers). That forced Amazon, in a way, to shake up the model, and is seeing them take over the role the publishers have had.

Certainly, there are challenges for Amazon in this. Some brick-and-mortar stores refuse to sell books published by Amazon (at least in their stores…see my impassioned advice to bookstores, as a former bookstore manager myself). That makes it more difficult for the print side to succeed, currently.

For me, the Agency Model was the biggest mistake publishers have made in this new digital world. Let’s go through a few steps:

  • Five of the biggest USA trade publishers, in some connection with Apple, institute the Agency Model, taking away pricing authority from Amazon and other retailers
  • Amazon goes around the publishers, by effectively setting up independent publishing of e-books
  • Amazon courts traditionally published authors to be published by Amazon, both in e-book form and in p-book (paperbook form)
  • Some brick-and-mortar stores won’t carry the Amazon-published books
  • The authors start finding other ways to promote their books…(speculation begins here) eventually diminishing the power of brick-and-mortar bookstores (as people increasingly buy digitally, online, and yes, reader Roger, perhaps through print-on-demand)
  • Diminished brick-and-mortar bookstore significance reduces the value of the near distribution monopoly of the tradpubs…and creates a downward spiraling relationship with tradpubs and large brick-and-mortar stores, elevating Amazon and other online/digital distributors

We’ll see how that all plays out, of course.

The article also reproduces an alleged letter from Amazon to literary agents which outlines some changes in Amazon publishing, including personnel shifts. One thing that stood out to me there: Amazon’s Children Publishing. Tablets like the Kindle Fire line can be a wonderful platform for children’s books, which have always been gadgety (colorful illustrations, pop-up books, Pat the Bunny, and so on).  Desire for a specific children’s book can also be really strong…after all, if you are going to read something a hundred times at bedtime, it better be something the adults like, too. ;) Kids love repetition: you don’t need a wide variety of books for a four-year old (although it’s fun), so each book is a bigger buying decision. If Amazon has a book your kid has to have, that’s a big strength for it.

What do you think? Did publishers have no choice but to adopt the Agency Model to combat Amazon’s discounting of the prices consumers pay? Does Amazon make decisions about where to sell for other than business reasons? What can tradpubs do to thrive? Are tablets the wrong way for little kids to experience books? Feel free to let me and my readers know what you think by commenting on this post.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

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4 Responses to “Round up #133: “Appan”, KDP select holiday bonus”

  1. Edward Boyhan Says:

    It seems to me that among some segments of our society (especially among traditional elites) that there is a developing presumption that if you are large or otherwise dominant in a market segment, then somehow you are “bad”.

    As Amazon has grown, it has not been immune from this, and among those elements almost any business move that Amazon makes is viewed with deep suspicion and paranoia. Other large enterprises (Google and Microsoft for sure; Apple IBM not so much) are subject to much the same treatment.

    Where and how Amazon elects to do business is to my mind generated exclusively by a rational analysis of what helps them best further their vision. Doing business in Japan is not easy: suspicion of “Gaijin” and the difficulties of the language are just two issues that make such difficult.

    On the Tradpub situation, this article:

    http://mediadecoder.blogs.nytimes.com/2012/11/27/simon-schuster-introduces-self-publishing-service/

    outlines the beginnings of what might be a big6 (soon to be big4?? :D ) counter-reformation to the “Amazon Revolution”. Although for most, KDP is essentially free, but what Simon & Schuster is proposing is anything but: authors will pay anywhere between $2,000 and $25,000 for the privilege — at least they are waking up to the fact that self publishing long ago has left the “vanity press” station, and is well on its way to becoming the “usual” way to get a book published.

  2. rogerknights Says:

    I think there’s one motivation you left out: pressures from chain booksellers to do something about Amazon’s undercutting them on prices. Borders, nearing doom, would have been especially insistent. If I’m right, this should have come out in discovery; it may emerge in a trial. I don’t think the publishers would have moved without that pressure, plus the temptation from Apple.

    BTW, your headline for this roundup should have mentioned your treatment of “Agency Model.”

    • Bufo Calvin Says:

      Thanks for writing, Roger!

      Are you suggesting the Agency Model piece should have been in the headline because it’s significant? I actually write the headline before I start writing the piece: once I’ve picked two round up topics, I’m ready to go. I didn’t know I was going to do that sort of analysis until I was into it.

      I like that the round ups have “hidden prizes” in the bottom of them…it’s like a box of Crackerjacks. ;)

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