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inRetro: Is Amazon Short-Changing Authors?
While we’re on vacation, inRetro takes a look back at our most popular articles since launch. A lot has changed in the e-book world since we published this piece about Amazon…or has it?
One day, publishers will mark their industry as existing between two eras: before and after the Kindle. Publishing has changed dramatically since the days when a handful of influential publishers–mostly located on the East Coast–determined what America would read. Now anyone with so much as an internet connection and a word processor can publish online whatever they want and price it however they like. Services like Smashwords, Pubit!, and Amazon’s Kindle Direct Program offer writers the chance to bypass big publishing, attract a readership, and even earn money.
Yet, it is Amazon that controls the lion’s share of the direct publishing business, with almost 80% of the market share on e-books. Some authors consider the site too powerful. Amazon attracts so many writers not only through their market share, but by offering 70% royalties on books priced between $2.99 and $9.99 in the U.S. (and a handful of other countries) and 35% for books priced otherwise, well above what most publishers offer. But is Amazon short-changing authors in other ways?
Dean Wesley Smith, an author who offers many of his titles on Amazon Kindle Direct, has only praise for the service. He writes, “Getting 70% of a sale is fantastic for an author. Period. I will be selling some stories off my web site for 100%, but, beyond that, 70% can’t be beat.” Since he first discovered Kindle Direct in 2009, Smith has published more than 200 works. He prices most of his short stories at 99 cents, and longer novels at $4.99.
The prices for e-books are far below what publishers want readers to pay. Suzanne Parrott, publisher of e-book resource Unruly Guides, writes that “Publishers tend to price their authors’ books above the $9.99 cap, much to the anger of many potential customers.” From a consumer standpoint, the Kindle saves money—yet price cuts and limited sales can hurt an author’s bottom line. Parrot mentions that some authors are angry that the 70% royalties only apply to those who price their books above $2.99, which is not always a competitive price point, especially for novice authors. The royalty remains 35% for books under that price.
Monica Jones, a writer and motivational speaker from Detroit, initially priced her first book on the Kindle at $9.99 but found sales too slow. She writes that “once I dropped my prices down to $0.99, my sales gradually began to soar…topping off at near 3000 per month.” Consumers simply expected more of a discount. While she received flack from more established authors for pricing her work so low, she writes that “even though the prices were lower, I was making more sales and more profit than I ever had.”
Royalties are not the only sticking point for authors. It is Amazon’s sheer size, as the largest retailer of e-books that bothers some. Liz Funk, a writer for inReads and nonfiction author, writes that “in similar ethical dilemmas, you can say, ‘Oh, I don’t shop at Wal-Mart,’ but especially for indie authors, you can’t say that you won’t make your titles available on Amazon because it’s essentially cutting off your nose to spite your face when no one has come up with a way to sell lots of books without Amazon.” Whether or not writers like Amazon’s policies, most do not have the fan base or the finances to shun it completely.
Upon request for comment, Brittany Turner, a spokesperson for Amazon’s Kindle Direct Program, wrote that “authors can change their pricing and royalty model on any book at any time.” Turner’s response–that the online book bazaar Amazon created for the Kindle is controlled by the sellers, not the publishers–is telling. Anyone can contribute to the site, making separating the good from the bad difficult. Bloggers have recently complained that spam is popping up in the Kindle marketplace—making it unclear what is a book and what is a flashy cover containing no content. Amazon recently created five specialty imprints, which price e-books significantly lower than traditional publishers could. In the future, could Amazon serve as the e-book’s gatekeeper, stepping into territory once controlled by traditional publishers? And in creating this new world for publishing under the umbrella of one website, have we exchanged one boss for another?
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Elsewhere in inReads: Another concern about Amazon from the customer side of things.
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About The Author:
Jon.Peters
Jonathan Peters is a freelance journalist based in Los Angeles. He graduated from Swarthmore College with a degree in history. In addition to inReads.com, he is a contributor to LAist.com, as well as Next Step magazine. He blogs about screenwriting at http://alternatewrites.wordpress.com and can be found on Twitter @jonpeters87
Andy posted on August 17, 2011
The headline is very misleading. It suggests information that Amazon isn’t playing fair with the authors. Instead, the article reads more like a commercial for the Kindle Direct program. I call shenanigans.
Jada Bradley posted on August 17, 2011
As someone who is contemplating publishing with Amazon, I agree with this-
“Whether or not writers like Amazon’s policies, most do not have the fan base or the finances to shun it completely.”
I interviewed C.M. Mayo for this website and she formed a niche publishing company of her own to produce e-books and specialty paper books, but many authors will turn to Amazon because the profit margin they offer is hard to beat.
My thought is that since Amazon is one of many avenues for publication, an author can be selective about what they publish with Amazon. One of the authors interviewed for this story indicated that he will be selling some things on his own website.
Amazon has had issues with people repurposing the content of others and selling it and breaking down the barriers does mean that there is a lot more content out there, but that does not mean people will be unable to find books they will enjoy.
We are all in new territory here, but any new frontier only stays unstructured for so long…so I wonder if, as you note, we really want Amazon to be the gatekeeper for e-books?
Jean Arambula posted on August 17, 2011
A disclaimer: Snake Nation Press does not publish e-books.
I read a Tweet recently that readers are the only ones benefiting from the e-book bonanza. It seems the pirating of music is small, compared to how easy it is to steal e-books. I must admit, we saw that coming and really have not been concerned with entering the fray. Amazon has not been a friend to the small press, so why would they be a friend to the individual writer?
Kalistri posted on August 17, 2011
@Andy,
Maybe the first two paragraphs read like that, but afterwards it swings in the other direction, and seems like an attempt to make Amazon sound evil. I mean, this quote is clearly not pro Kindle: “… in creating this new world for publishing under the umbrella of one website, have we exchanged one boss for another?”
Unless you mean that you think it’s intentionally written with poor arguements to make people interested in Kindle Direct? Even if that’s the case, I think the article scored a hit with the advertising thing… I mean, I haven’t looked at many Kindle books so I haven’t seen any of these fake books that it mentioned, but if it’s true, that is indeed pretty awful.
Kalistri posted on August 17, 2011
Meanwhile, this is ridiculous. One website will never be the “gatekeeper” for online publishing. It only takes moderate internet search skills to find online books elsewhere. Good books will get found by one of the billions of people on the internet and word will get spread, no matter where it is.
Secondly, online writing isn’t only going to be about getting people to pay before they read your work. With free downloads so easy to find, the concept of supporting the artists you love is probably one of the major reasons to pay for a book at all, and anyone who thinks about it should realise that a direct donation is more cost effective for that goal.
My point being, online publishers are nothing more than a stepping stone towards cutting out the middle man between authors and consumers.
Liz posted on August 17, 2011
Great article! And I think it’s a great jumping off point for a broader dialogue on how readers DO have the power to collectively demand that Amazon operate more ethically and fairly with the other players in the book business.
As an author of a book with Simon and Schuster and the author of an ebook that I recently published through Kindle Direct, I think volumes could be written on why Amazon, in its current conception, is bad for book publishing. They short-change everyone, whether it’s indie authors, small publishers, and large publishers. Their reader reviews are often vitriolic and amazon takes so much of the elegance out of buying books. But that’s not the major problem:
We can’t look at Borders and independent bookstores closing and say, “Oh, the economy is bad” or “Oh, people don’t read anymore.” Amazon has such a grip on the book buying market that they can tell book publishers what discount they require on books–whether it’s Random House selling a highly-anticipated hardcover or a first-time indie author publishing her first ebook. Publishers often see their profit projections decimated when amazon requires a $15 discount on every copy of a big book that was supposed to save the publisher’s quarter… and no other bookstore can require–or compete with!–those discounts.
In terms of Amazon’s work with indie authors, taking 30%–or worse, 65%!–of sales for offering place to sell an ebook (with zero technical and marketing support) is a total rip-off. When we talk about Amanda Hocking selling 9,000 ebooks a day, it sounds like she must be a megamilionaire, but she’s actually only getting $.35 on her books’ $.99 list price. The 35% commission level for books under $.99 is shameful!
Amazon is a major company and they won’t voluntarily say, “Sure, we’ll stop trying to dominate this industry and cut into our profit margins so other businesses can thrive.”
We need more awareness–and outrage–among readers, writers, and everyone who loves books about what amazon is doing to writers and publishers that makes being in the book business even more complicated and unlucrative in these untenable times.
Edward Renehan posted on August 17, 2011
Publishing Kindle editions of our books with Amazon has been a great boon to my small publishing firm. We price our Kindle editions in the $3.95 and $4.95 range, and have enjoyed considerable success/remuneration. We’re very happy with both the sales and the publishing interface. – Ed Renehan, Managing Director, New Street Communications, LLC
Theresa M. Moore posted on August 17, 2011
As an author and self-publisher I use Amazon only as a seller, and would enjoy a greater profit for my books if people bought them directly from me; but they don’t. Instead, they copy down the details and then look for a lower price on Amazon. I do not host Amazon links on my site for that reason. I do not feel the need to boost my competitors’ reach by doing so. As for sales at whatever percentage of royalties, the frequent glitches and dropoffs in service on Amazon and KDP should be a cause for concern, not celebration. Amazon does whatever it wants whenever it wants and never keeps its sellers in the loop. It behaves like it’s the only market in town; and its customers don’t care what happens to us authors.
Amy Edelman posted on August 17, 2011
Hi Jonathan,
Re: your comment that, “Anyone can contribute to the [Amazon] site, making separating the good from the bad difficult” and “In the future, could Amazon serve as the e-book’s gatekeeper, stepping into territory once controlled by traditional publishers?”
IndieReader (www.indiereader.com), the essential consumer guide to self-published books and the people who write them, was launched specifically to provide another venue for people looking for independent news and reviews on indie books.
Pls check us out and let me know what you think.
Thx,
Amy
IndieReader
Mark O'Bannon posted on August 18, 2011
I think this system allows the PUBLIC to decide what is good and what is not good. The internet is just a way to magnify word of mouth advertising. If a book is poorly written, it will get bad reviews and won’t sell. Authors need to maintain the quality of their books by writing EXCELLENT stories. Word of mouth will kill the badly written books.
Back in the days of pulp fiction, authors cut their teeth on the short story. I believe that the short story will return now and this is an excellent way to build a following and to become better and better as a writer.
More online content (short stories) = higher ranking in the search engines and greater exposure to fans.
The most important people win (the authors and readers).
Booksellers will have to adapt to survive, though physical books will never go out entirely IMHO. I think ebooks just create more readers, expanding the market.
Agents need to change what they offer as a service to authors. If an agent wants to survive, they will learn how to MARKET ebooks. I’d gladly give an agent 15% of my sales if the agent knew anything about marketing (few people do).
Just a few thoughts.
One day soon, I’ll have to write an ebook on how to market books online….
Mark O’Bannon
http://www.betterstorytelling.net/blog
charles colley posted on August 18, 2011
My take on your commentary about Amazon is- Make Hay While the Sun Shines. Belatedly, I am learning the Kindle and other e-reader systems, prepping my many novels for them, 2 in the system so far. A long life in business, from franchise ownership to real estate to selling mortgages before our “Big Bust” has taught me that nothing lasts, so I better “Strike While the Iron is Hot.” Amazon has filled a huge void for writers and readers, so, say thanks, use it and roll with changes when they happen. That is how business and real life happen. thanks for your article.
Jon posted on August 19, 2011
Thanks for all of the great comments, guys. I don’t think Amazon is good or bad–but I do think that we should encourage competition in the e-book market–80% of anything sounds like a monopoly–and I am glad to hear from so many small publishers who are doing just that.