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Doubts raised by indie authors over KU terms

Independently published authors have responded with caution to Amazon’s launch of its new subscription service Kindle Unlimited.

Concern has been raised that the move could dilute author earnings, while limiting authors’ abilities to sell their content on other e-book sites. Some have also questioned why Amazon is paying participating publishers a wholesale fee for the read of each title, while indie writers are offered a percentage of a pool of money.

There are also questions of how the subscription service will effect e-book sales on Kindle, and the impact it is already having on Kindle’s bestseller charts—with each "read" on Kindle Unlimited counted as a sale.

Kindle Unlimited launched last week with 600,000 e-books and 2,000 audio-titles made available for a monthly fee of $9.99. It competes directly with rival services such as Scribd and Oyster. So far the vast majority of titles are co-opted from Amazon’s KDP Select service for indie writers, which demands exclusivity in return for additional promotional opportunities.

Kindle Unlimited includes some titles from non-agency publishers in the US, but none from the big 5. Amazon pays the wholesale price for each book read that is published by a traditional publishers, but pays indie writers out of a pool, which Amazon has recently raised to $2m. The consensus among indie writers is that they expect to receive $2 for each read, but this is not guaranteed. In addition, Amazon reserves the right to alter the threshold—currently set at 10% of the total novel being perused—that triggers a qualifying "read".

Mark Coker, who runs the indie distribution website Smashwords, wrote in a blog post he had been won over by the subscription model since the firm began working with Scribd and Oyster, but said the requirement for titles to be exclusive to Amazon meant this was a bad deal for writers. “Indies would do well to avoid Kindle Unlimited for one simple reason: it requires KDP Select exclusivity.” He said the model was good for Amazon, but bad for the eco-system: “Most indie authors recognize the value in fostering a diverse ecosystem of multiple competing retailing options. Yet every book enrolled in KDP Select is a vote to put Amazon's competitors out of business.”

The indie writer/hyrbid Hugh Howey admitted on his blog that he was conflicted after learning his books had been placed in KU without the need for exclusivity. “Some indies, myself included, are in the program without being exclusive to Amazon. But this isn’t a permanent exemption. We didn’t even know what we were signing up for; we just knew it was a time-limited trial. We are going to have to make a decision with our books, on a case-by-case level, to leave KU or go all-in. My guess is that Amazon was forced to invite as many bestselling authors as they could get because of the difficulty in getting major publishing houses to sign on (none have). Their goal was to get top-selling books into KU, and their side hope must be that they can convince us to stay. I’m not sure how many will.”

On the issue of how Amazon was treating indie writers compared with writers published by traditional presses, Howey wrote that Amazon had a history of treating authors differently. “There have been howls over this bifurcation, with people claiming that Amazon, for the first time, is treating indies worse than traditionally published authors. But that’s not true. Amazon has often treated indies worse than traditionally published authors.” Howey said he was watching “it warily” while monitoring “his sales rankings closely”.

Indie author and blogger David Gaughran wrote that he would be prepared to experiment, but disliked the terms KDP Select imposed on writers: “I hate exclusivity. I don’t like it on principle, and I don’t like telling readers that they can’t buy my book for any reason. So I haven’t decided yet. I’ll probably throw something in there and see how it goes, but it won’t be with gleeful abandon.”

There are also separate concerns about the viability of the subscription model, with many commentators questioning how a model that pays a wholesale price for each book read, based on a monthly subscription of around $9.99, is sustainable. Howey pointed out that Amazon's model could be seen as an attempt to come up with a compromise that would work in the long term: “I feel like Oyster and Scribd forced Amazon into something that they know doesn’t work. And they are being dinged for trying to come up with a balanced model that makes it work.”

Gaughran argued that Amazon’s approach to indie writers was sustainable, if worrying: “There’s no way in hell that the terms that Oyster and Scribd are offering are sustainable. Obviously, both companies are happy to eat the losses today in exchange for market share tomorrow, but those compensation terms will have to deteriorate at some point. The only question is how much. I have issues with Amazon’s compensation model – I hate the fixed pool on principle, and I don’t like not knowing what I’ll be paid in exchange for my work – but it’s definitely more sustainable.”