Hugh Howey

Bestselling author of Wool and other books. Currently sailing around the world.

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Second Class Citizens Take Two

There’s been a bit of commentary on this blog post, which is already too long, so I thought I’d make it longer. The post wasn’t about KU being bad. I’ve blogged already that I think KU is great for many authors, that subscriptions are a disruptive force, and those who are disrupted are going to complain while the disruptors do well for themselves. I applaud that. KU has been good for me. I’m just looking at ways I would tweak the structure if I were Amazon. Not to benefit myself, but to provide the highest quality experience for their customers. (Any game of suggesting tweaks for a retailer must be taken from their perspective, otherwise it’s just wishful thinking.)

The post was also not an attempt to equate abuses of KDP with indies. Or to suggest that indies who do things the right way deserve anything less than stellar treatment from retailers. It was an attempt at a pragmatic view of the entire landscape, which I think helps explain business decisions that may seem wonky when viewed from within our immediate bubble, but might make sense when seen from a greater height or another perspective.

I’m not a fan of most of what is suggested in that blog post. My ideal publishing world would look much different from the current world. But how is that useful? If we are going to demand things from retailers like Amazon, we have to take their motives and needs into account. Motives such as: The customer comes first. Motives such as: We don’t want to give away products, but we also don’t want competitors to take market share by undercutting our prices.

I’ve seen it suggested that Amazon is all for perma-free, why else do they allow it? They allow it for the reasons stated in the previous paragraph, as a response to the actions of other retailers. If Amazon was truly for a free price-point, they would make this an option in the KDP dashboard. If they thought free should be easy to attain, they wouldn’t have limited us to 5 “Free Days” as part of our KDP Select membership. Think about that: The reward for exclusivity in 2011 was a mere 5 days of “free” out of every 90. That tells you what you need to know about how Amazon views free ebooks. Again, the fact that they price-match has to do with the fear of losing market share to competitors. We seize this as an opportunity.

When Hachette refused to negotiate with Amazon, Amazon responded by taking away pre-orders and predictive warehouse stocking. These were free features that Hachette and other publishers use to their great advantage without pausing to appreciate. Amazon pre-orders reshaped the publishing landscape. They are used to drive hype among sales staff, set print runs, and make all kinds of marketing decisions. I know, because I saw this in my publications with two of the largest publishers. They constantly updated me on how things were looking by referencing Amazon pre-orders. This was the sort of info that other companies might pay a lot of money to marketing firms or polling firms to deduce for them.

Predictive warehouse stock allowed same-day and two-day delivery of books to customers all over the country. When publishers ship books, it takes two weeks to get them (I know from working in a bookstore where I placed these orders all the time). If you go to a bookstore and place a “special order,” you’ll probably see that book in a couple weeks. That was the reality before Amazon spent billions of dollars on distribution centers and honed their predictive algorithms. Big publishers just take these things for granted. It made their negotiations with Amazon seem ludicrous to many observers. Why should Hachette expect these things, plus better margins, without offering anything in return? My blog post was simply raising the possibility that some of us fall prey to the same tendency to not see all that we are being offered — only what else we want. We fall prey to seeing how others treat us without delving into how our actions (as a group) affect others.

As I said in the original post, it is cosmically unfair for all KDP users to be lumped together. That’s the conundrum. I don’t see an easy answer to any of this, just more problems. But for me, thinking about it this way at least makes the issues observable so I can contemplate them better. I wish I could offer solutions or even hints of ideas for solutions. All I can offer is my own confusion and thoughts. For what that’s worth. :)

 

 

27 replies to “Second Class Citizens Take Two”

Well, let me put your mind at rest, then. KU is great for indies. Why? Because it potentially means new readers that may not have ventured that way. Doesn’t cost them anything more to click on some new author or some genre they haven’t tried yet. For us, indies, it simply means new readers who we may never have attracted otherwise, and people who suscribe are heavy readers or too lazy to pay book by book. If they like what they see, they’ll come back for more. It’s all benefits to everyone.

It’s a BUSINESS relationship, putting books up on Amazon. The expectation is some form of mutual profitability that couldn’t be achieved in other ways.

Behave in a business-like manner. Keep your eyes and mind on the ‘mutual’ part of the profitability. Sign contracts when that sets up a mutually-beneficial business arrangement; refrain when it doesn’t.

Educate yourself about the business.

Be prepared to make the best decision possible with limited information.

The CUSTOMER – the reason you are both in business together – makes the ultimate decisions by buying or not buying the product. Neither you nor Amazon can predict the future; both can guess, and then adjust.

It’s no different from selling your frozen pot pies at ShopRite.

Hugh:

I always enjoy your thoughtful posts, and your willingness to tackle the issues in indie publishing head on. To put it mildly, I’m a fan.

But man o’ man, do I not get where you’re coming from on the permafree thing. Or maybe I just don’t understand what it is that you’re trying to say.

Permafree is a system, and this is the way the system works I don’t see it being my responsibility to worry about whether or not it gives Amazon a sad, because they are the retailer, and they put that system in place. It’s there. Why wouldn’t I use it to my advantage in an open marketplace.

If they really don’t like the way it works they can change it, and it will be up to me to respond to those changes. But as a supplier with zero leverage, it’s incumbent on me to take every advantage that puts books into the hands of my (current and potential) customers.

Yes, it pays to understand how it REALLY works, and what the effects are, but outside of my own work, I’m not in the book distribution business. And as a business it’s inherent on me (especially in the current world of hyper-corporatism without regulation) to take every advantage that is offered to me while it is offered.

I’m not sure but isn’t Hugh saying that it is NOT a system that Amazon endorses? People don’t set something “permafree” by making a choice on Amazon; instead, they make a choice on retailers that allow it then report the “free” pricing to Amazon in order to force a price-match. Amazon doesn’t want to have free ebooks of any size or type. They want nothing to be priced under $0.99. But they value their low-price-guarantee more than they value the income from those “permafree” books.

“Permafree” is a strategy to benefit the author and publisher, and while it probably benefits Amazon in the long run for those authors who end up selling many books because someone can sample their first book free, Amazon would probably rather that the cheapest books coming out of their system are no less than $0.99. Or so I read Hugh’s take on things…

Exactly. Maybe Amazon supports permafree, but it’s telling to me that we indies made up the term. And it’s telling that Amazon doesn’t allow the setting of their retail prices to $0.00. It’s also telling that their TOS forbids setting prices lower at other outlets than they do on Amazon, and since you can’t set it to $0.00 at Amazon, but you can at Apple, and many indies (including myself) do, then we are creating a promotional tool that violates our TOS.

I saw someone point to a clause in the TOS that deals with “free promotions.” To me, the wording clearly means that there are times when titles will be lowered to free for a short period of time, and Amazon will price-match. Setting price to free and leaving it there violates the spirit of the TOS.

Again, I do this as well. Many indies do. I’m not saying they should stop. I’m saying that all the rhetoric out there about how Amazon is evil, Amazon should treat us better, Amazon doesn’t do anything for me, sounds a lot like Hachette whining while Amazon continues selling their works without a contract. Or Hachette using pre-orders to their advantage and not seeing this as a benefit they don’t pay for but profit from.

Permafree is just one of the many things we get from Amazon. There are recommendations, a review system, email blasts, marketing tools, the Associates program, Author Central, countdown deals and on and on. But I see people complaining about the 70% payout, the $1.39 KU payout, the reduction of ACX royalties.

By all means, we should ask for more. But painting Amazon as an evil entity out to take advantage of authors is bizarre. Especially when we (myself included) take from Amazon things that violate our TOS.

By Post Author

Ah, okay. I see your point far more clearly now. Thanks for the clarification.

I do agree with what you’re saying… to a point. The idea that you can label a major corporate entity as “good or evil” is an attempt to ascribe personality and morality to something that rarely has either. Doubly so in Amazon’s case, as they are clearly data driven above all else.

Assigning them a moral code is a sucker’s game, unless what you’re playing for is leverage. (Losing the game also problematic—as I’m sure Hachette execs have learned to their chagrin.)

At the level that Amazon is playing on, it’s good to both take advantage of everything you can, and push hard for more (while expecting less than you’re asking for). But complaining isn’t going to help. (What would be great is some kind of indie author lobbying organization, but I digress…)

Having worked on the other side of the content distribution curtain (although never at Amazon), it makes a lot of sense to me that Amazon forces authors to jump through semi-official hoops to get to “permafree”. Note that they’re leaving the loopholes open without enshrining them as policy. And they’re certainly aware of what’s going on.

As a distributor, allowing people to violate the “spirit” of a TOS is a great way to make sure that you can test things (and gather data) without without having to hear an outcry if you decide to change things later on. It’s the publishing equivalent of the software installation licenses full of clauses of dubious legal standing that we’ve all clicked without reading.

Perma-free doesn’t cost Amazon money. It makes them money. My perma-free has resulted in quite a bit of sales over the years–money that more than covers the storage/download costs of the 5K short story. Which is why we indies use perma-free, after all. Because we try it, see a significant uptick in series or overall sales, and keep doing it. If it stopped making us more money, we’d stop using it.

I believe Amazon allows perma-free because they know this, even they don’t like it. And if it really was a losing proposition for them, why not change the policy to charge us a small download fee? Or charge us a flat rate for offering a perma-free title? But no, they continue offering it for free, albeit in a roundabout way, because they know what we all do: perma-free books earn money.

I’m glad that Amazon lets me use perma-free. But they’re not magnanimous nor are they evil. It’s a business decision that happens to help me, just like KU happens to hurt me.

I think Amazon is trying to sort through the garbage with Kindle Scout. They want the upcoming good stuff so they can make more money off it. It’s definitely a step in the right direction, and I’m eying the program with interest.

Someone remarked about Scout (and the same could be said of Unlimited) that they were about to be deluged with a tidal wave of crap like the first of an angry god inside a giant robot that was also the fist of an angry god.

I think that about sums it up. :-D

I think Amazon will do more filtering in the future as we are deluged with more and more books. I think the day will come when Amazon will say you have to sell a certain amount of books in a year to remain on their site. There is a lot of garbage out there, and if you just browse titles you will die of old age before you get to the end of the list, so osme sort of sorting is okay with me.
I think they will start small, like any book that sells less than 10 copies a year either will be removed, or the author will pay a small fee to continue. I think this is fair, they are deluged now because we can publish anything for free, if it just cost ten bucks to publish a book, it might weed out some of the bad ones….

I don’t get the problem with “too many” books, and I don’t think Amazon is worried about it either. They consider it a feature, not a bug. You say you’d get old looking through to the end of an entire list? Why would you need to?

If you do a search in the Kindle store for “The Detective,” you instantly get a list of 15 top sellers, with several books called “The Detective” at the top and also “Gone Girl.” Click to the next page, and you get various detective stories. If you don’t find what you’re looking for, you can keep clicking through some 400 pages, but you certainly don’t have to. You’re offered plenty of choices if you’re looking for a detective story in general, and all the books specifically called, “The Detective.” If you are in fact looking for something specific, like book called “The Detective” by an author named Smith, type in “The Detective Smith,” and a book comes up called “The Death of the Detective” by Mark Smith. Another book comes up with a detective named Smith. I don’t get the problem. If you know what you’re looking for, there are plenty of tools to find it. It doesn’t matter how many other books there are. If you aren’t sure what you’re looking for, and want to browse based on subject and genre, there are terrific ways to do that too. Why would it be better if there were only 500 books that come up with a generic search rather than 5,000 or 50,000? In fact, isn’t it better there are more?

It doesn’t cost Amazon much to store books that don’t sell, and Amazon would generate a lot of bad will if they start charging, even small fees and even for books that never sell. (And they simply can’t as long as Apple allows free books, it would give it too big a competitive advantage.) Also, it seems highly short sighted. Say by the standard you set, an new author (busy with a day job) puts up a book on Amazon and doesn’t do any promotion. It doesn’t sell more than 10 copies over a year. What’s to say that two years later the author might not write another book, do some promotion, and that book takes off. The the other sells. Why would Amazon begin it’s relationship with a new author by notifying them that their book failed to sell so now they’re charging a fee? Seems like a bad move. The amateur author of today might become the professional in ten years. People seem to worry about the “idea” of all these bad or unselling books being out there messing it up for everyone. In reality, it’s not an issue.

This is completely separate from the issue of Amazon not wanting to give away free books, and gently discouraging perma-free. I think this has to do with Amazon wanting to train customers that books do cost money. They aren’t supposed to just be free. And, as another commenter (enabity) points out, very smartly, what Amazon doesn’t want is to offer free books that promote an author who simply makes all his money elsewhere, like from Kickstarter, or by direct sales that cut out Amazon.

Amazon is opposed to an unlimited quantity of free. Their policies support this. They put up with more than a miniscule 5 days out of 90 free, probably because they want to keep market share as has been mentioned.

The question is, why is Amazon afraid of unregulated free books? Free books push sales of other books by an author. Maybe, Amazon is worried about the pie shrinking, which is evident in their $2.99-$9.99 range where they share 70% of the revenue with publishers. However, they also have to worry about free books feeding revenue streams that Amazon won’t get to participate in. If self-publishers give away books on Amazon and get revenue through crowdfunding sites like GoFundMe or IndieGoGo and sell licensed goods through the likes of Cafe Press, Amazon could end up lending their site to promote a property they never make a dime on. This is in fact the same fear music and publishing executives have and is why their contracts are becoming so all-inclusive.

The question is, why is Amazon afraid of unregulated free books? Free books push sales of other books by an author.

The fact that a given author generates more revenue with free doesn’t tell us Amazon gets more total revenue with free.

Super slow response on my part.

You make a great point. There is a logical case that authors making more money leads to Amazon making more money, but it is only logic. That thought was tangled far beneath the surface of my point, but I wanted to be more concrete and outline a clear scenario where an author giving away their work actively takes revenue from Amazon.

It could be far worse than I suggest and Amazon could be losing revenue from competing books when an author makes their book free. I’m quite sure Amazon is concerned about this angle as well.

We fall prey to seeing how others treat us without delving into how our actions (as a group) affect others.

Interesting thoughts! I’m sorry you felt you had to redefine what you meant. I think you gave us all something to think about, which was the goal. But it is a bit difficult to discuss Amazon lately without everyone getting emotions involved and trying to come to clear conclusions (rather than just think and ponder and plan and think some more and try to see other sides).

I do however, think that this could be a bit of a problem (the sentence above) when applied outside of business. To more human relationships, like racial and class issues. It’s far too easy already for people to judge one another as a class / race than as individuals. And it’s not fair to blame the individuals who are unfairly judged on that basis for ideas others have about their whole race / class.

I.e. people making racist assumptions, assumptions about body types and all the other issues that can plague society.

I can’t see Amazon wanting many books to be free, sorry but they have to make money. I think they allow books to be free for a certain time because they know that drives business. Free classic books is what got me to buy my first kindle, so those should be free. In some cases they will allow a book to be free forever, but there are only so many resources they can devote to a part of the business that doesn’t earm income. When you look at the big picture, are the books really free? Someone alway pays for it, so if they are using profits from other sources to pay for the free books, who is really paying for them? Could they increase your percentage if they didn’t spend so much on free stuff? Worth thinking about. (Although i am sure you, Hugh, like me, would gladly give up a percentage to keep the classics free forever, lol)
But on the topic of people paying their way, do you have an opinion of Facebook thinking of charging people to promote their books? Some might argue they are only posting on their ‘private’ page (as if they had a seperate business page), but i think fair is fair. Facebook is a business and if writers are earning money by using Facebook to advertise, shouldn’t Facebook have the right to share in the profits? When M Bunker posted that Facebook was wrong, that he had the right for free advertising on their site, and I disagreed with his sense on entitlement, he promptly banned me for that one comment and left a five page reply on how I was wrong,,,although he never proved his point. So I learned two things, he doesn’t believe in hearing differing opinions, and he thinks Facebook works for him, lol.
Nothing is ever free, someone pays for it, and if we earn money off it, we have to pay.

Agreed on the first paragraph.

As for Facebook, I think they are crazy NOT to charge us for promoting our goods. It’s a powerful sales and marketing platform.

We get used to using something for free and then balk when someone begins to charge? Imagine if readers did the same with the first free book in a series. :)

By Post Author

I hear your points on FB and have a bit of a different perspective. On my FB page (not my personal page, my business page) I have 895 likes. These are people who have told FB they want to see my posts.

FB typically shows my posts to less than 30 of these people. This is my target audience, they “liked” me and FB leaves them uninformed.

I did my part. I advertised my FB page and built up this audience. FB received views on it’s ads as people visited my page to “like” it. That the current deal. I provide content and the people viewing my content see FB ads. Yet FB isn’t keeping up their side of it.

It’s leaves me rather distrustful of FB and I’m disinclined to believe that paying FB is going to improve the situation.

If FB was already showing my posts to the people who liked my page, then I might pay for more exposure to a larger audience. I would also have a clearer idea of how effective connecting with people on FB really is. At this point, the sample size is rather small…..

Agree completely with this. As a reader / consumer, I’m frustrated that content from FB pages I’ve made the effort to seek out and “like” isn’t shown to me.

Of course, FB can do what they like – it’s their business, and their decision. However, from where I stand, FB is becoming less and less valuable to me, both as a follower of others, and as a promoter of my own work. As my posts are shown to fewer of my readers, I’m less inclined – not more – to pay for further FB promotion.

If enough people start thinking like me, and turning elsewhere, FB will lose the “size and scope” advantage that’s made it so valuable.

If nobody else thinks like me, then FB’s new policies will work for them – time will tell and, as has been discussed on many other topics, each writer has to figure out what works best for his or her own work and career.

If enough people start thinking like me, and turning elsewhere, FB will lose the “size and scope” advantage that’s made it so valuable.

OK.If that happens, Then someone else will provide a better service. So what?

Have to say I agree with Hugh on this. FB is in business to make money when its advertisers make money. It’s not in business to provide a free platform for people to make money while they make nothing from it.

That you have 895 people on FB who liked your page is great. But it’s not FB’s job to pass on all your advertising to those people for free. What it’s done is given you the opportunity to pay them to post an advertising message that all those people will see. Which is a great way to do targeted marketing. I mean, those people already know about and like you. It’s not like your advertising dollars would be used to hit some blind set of targets out there of people who might not even be interested in what you are selling. So it’s well worth you money to pay Amazon for an ad that goes to those people only, with nothing wasted on random readers.

Now, if you want to show that same ad to a larger audience, that’s your money, but then it becomes a crapshoot. You need to be able to narrow the audience down to people most likely to want whatever you are selling. And I imagine FB has tools for helping you do that, which may make it worth the effort. But it’s not as if they are going to just give away the most common kind of advertising in the vague hope that you will buy more. This is not some fledgling business just starting out, trying to make a name for itself. FB is well past that stage.

IF that were how it actually worked (I pay FB and they show my post to all 895), then, depending on how much it cost to do that, it sounds like a good idea.

My most recent post was shown to 50 people.

I just pulled up my FB page. If I want to boost this post, I can pay $5 for one day and it will be shown to “estimated reach of 140-250” I can pay $20 for one day and it will be shown to “estimated reach of 170-250”

Insert eye roll and head desk. I quadruple my buy in and I get nearly nothing for more it??? They want business people to do business like this?

When I started building my FB following, there was never any indication that the set up was, “Hey get a bunch of people to like your page and then pay us so we will show them your posts!”

I understood the agreement to be, “Post quality content so that people will ‘like’ your page on FB and while engaging with that information we will have their attention to serve them revenue generating ads along with it.”

Then paying to “boost” posts was to have my posts shown to BRAND NEW EYES that FB determined would probably like what I was posting.

FB hasn’t made it clear how they go about deciding how many people should organically see my posts. They haven’t made it clear how many people will see it if I pay either. (If posts go viral, then that’s a whole different story of course.)

FB needs to do better to get my business…..

I think the obvious answer is to pay the $5 several times, to get multiple viewings of your post to a moving range of people. Virtually all advertising is a form of shooting shotguns at moving targets, hoping to hit a few choice ones.

I’m not about to pass judgement on the value of FB advertising. As with most everything, you have to give it a try and see what works, what the cost benefits are, etc.

If you started building up a business site on FB and expected it to be free forever with unlimited free advertising to those who “like” it, I can only say that’s pretty naive on your part. Unless FB put these promises in writing, they aren’t worth the imaginary pixels you thought they’d committed themselves to. If you think they don’t deserve your business, don’t give it to them. But don’t complain that it ought to be free either.

I’m not sure that ANY kind of paid advertising actually benefits self-publishers. The only thing I’ve heard of that seems worth the effort are Bookpub promotions. Paid advertising works best on bigger ticket items where a “buy” brings in some serious bucks. The payoff for a successful self-publishing sale is pretty low, so you need to have some pretty serious ROI to get useful results.

I’m not saying FB should be free. I’m saying that if FB wants my business (in the form of me driving traffic to my page on their site or me paying them) they are going to need to be much clearer about what they are offering in return.

Something like, “$5 and we show your post to 150 people who have liked your page.” Another example, “We show posts to a random selection of 5% of your page likes, if you want more, you have to pay.”

If FB was really smart, as a trial, they would show one of my posts to all 895 people and let me see what amazing engagements that can result in. THEN, I might believe in the power of the FB network and want to spend money to get that kind of access again once the trial is over.

I’m saying that if FB wants my business (in the form of me driving traffic to my page on their site or me paying them) they are going to need to be much clearer about what they are offering in return.

Perhaps they don’t really want it.

Echoing Terence, I’m willing to bet that FB doesn’t want your business under the conditions you demand. I think they’ve decided they can do pretty well without you.

Part of the issue is that people have thousands of friends, have followed dozens of people, have joined many of groups, and have liked countless pages. If even a small percentage of people post today, your feed would be like a fire hose.

You don’t even see every one of your actual FRIENDS posts in your feed. Facebook has to make choices.

In the ‘olden days’ we might have seen all the posts from pages, but few actually saw them in the blur of kittens that zoomed by.

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