DBW: Amazon's Grandinetti talks subscription, innovation

DBW: Amazon's Grandinetti talks subscription, innovation

In a predictably careful interview at New York's Digital Book World conference between DBW’s Mike Shatzkin and Michael Cader, and Amazon Kindle senior vice-president Russ Grandinetti, earlier today (Wednesday 14th January), the most important moment may have come when Shatzkin suggested that, in terms of digital disruption, “things are calming down in the business, slowing to a crawl, becoming stable,” asking if Amazon saw it that way.

“When I hear a question like that, it makes me nervous,” Grandinetti replied. “I think back to before we launched Kindle. Was there such a question?” The answer, from Amazon’s point of view, was implicit: such questions are irrelevant. A single-minded and relentless dedication to growth and change is a given.

Yes, subscription obviously appears to be one of the latest developments in the “disruption game,” as Shatzkin termed it, but Grandinetti went on to note that in a digital business that is fiction-dominant, what Amazon sees is a lot of room for opportunity not just in building subscriptions, but also in building e-book sales.

“Trade non-fiction, children’s, education – they’re all much earlier in their digital development, with much greater technical challenges,” Grandinetti asserted. “Our mindset is, what can we invent that will cause customers to go to the digital format in those areas?" What can Amazon invent in children’s to make it as fulfilling for a parent to read [digitally] to a child, as Grandinetti said his own recent experience of reading a print book by Russell Hoban was to his own child?  

In other words, anyone who thinks that Amazon has the least intention of slowing down had better think again.

Grandinetti pointed out that Amazon’s Kindle Unlimited subscription business is only six months old. “Can we get people to read more?” he asked, then said: “We measure how many books people read; how many times a week they read; the total amount of time they read. In the US, all three were up 30-40% in the 60 days after they joined [our subscription service].”

While there could be some “share-shift” away from Nook, Amazon sees “a significant amount of primary demand generation. The total money spent was up 25% in 60 days on both an a la carte and a subscription  basis. There are reasons to believe our service can be a net incremental for the business as structured today.”

“Just as it’s totally uncontroversial now that royalty rates differ for hardcovers and paperbacks, subscription will be a choice that publishers and authors will consider for the life of a book. We’re super-early in understanding how it will play out in books.”     

At the beginning of their conversation, Cader alluded to the difficulties of last year, and asked how Amazon was “rebuilding bridges.” Grandinetti repeated Amazon’s established mantra: “We’re helping authors reach the widest audience, making it possible for then to get access to BookScan data for free, with Goodreads making it possible for them to connect with readers that was not previously possible" etc.
When asked about certain indie authors’ unhappiness with Kindle Unlimited terms, he asserted again that “it’s only six months” since launch, but gave a few observations. KDP select authors enroll for three months. At the end of the three months, when authors’ opportunity to renew came up, “in excess of 95% continued to choose to participate. The total number of titles has grown by 35% in six months. Total earnings of authors in terms of a la carte sales is growing faster. When you add in the subscription service, lending library and a la carte earnings from August to December, earnings more than doubled compared to the same period in 2013. Authors only have to enroll for three months. They will hold our feet to the fire.”

On the subject of pricing in general, Grandinetti repeated the usual catechism: “When we think of pricing we think of tensions within the larger system of what customers do besides read – we have to weigh them all.”
Finally, in addressing the subject of Amazon’s own publishing programme, he saw “more approaches to publishing as pretty healthy,” pointing to publishing history and how Doubleday, Scribner and B&N also functioned as bookseller and publisher both. He got in a dig at traditional publishers by stating how proud Amazon is at paying authors “monthly” and at being “probably the leading publisher of works in translation in this country.

“Amazon publishing is super-focused – [to have] happy authors, we [have to] treat them the same way we treat our customers.”

In other words, in the world according to Amazon, plus ca change.