Hugh Howey

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

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This is why no one should publish with Melville House. Ever.

Imagine putting your writing career in the hands of people this dense.

Over at Melville House, a publisher normally known for praising Amazon and being rational and objective about Amazon’s decisions and how they affect the industry at large, the news that Amazon will now pay KU borrows on a page-read basis has led to this absolutely insane interpretation:

What if … KU subscribers have convinced themselves that buying a book and reading a book are the same thing? Amazon will pocket the subscription rate, and KU authors will not receive a royalty if subscribers are taking out books without getting around to reading them.

The fear-mongering here is that Amazon is going to keep readers’ money and not pay authors! Bizarre. How can people who know so little about the industry not only comment on it but be allowed to participate? Amazon is paying its KU authors out of a monthly fund, which is usually in the eight figures. Every penny of that fund is paid out to authors. It will now be paid out according to how many pages are read.

Even in the absurd case where every KU book borrowed is never opened, Amazon would distribute those funds equally to every author whose book was borrowed. Here, the page-read average would be zero, so every author would get an equal number, exactly like what we had before, where the payout was around $1.30 per month. If only a single page was read, by a single reader, out of a single book, that author would get $11,000,000!

If two pages were read, one each out of two separate books, that number would be split in half, and both authors would feel like they won the lottery. But of course, that’s not what’s going to happen. Millions of pages will be read. Tens of millions. And authors will get pennies per page, just as Google pays pennies per click-through. These are New Media mechanisms, and they are being commented on by Old World thinkers.

Imagine when I was a bookseller, that I ran up to every browser who picked up a book and read a few pages, and I shouted:

“Hey! Are you gonna pay for that? The author worked really hard to write that!”

And the browser says, “Uh, sorry. Just seeing if I liked it.”

“Well, now you have to pay for the whole thing. Because I want your money.”

“I’m not even sure if I want to—”

Before they can finish, I’m rushing off to accost someone else who just touched the spine of a hardback without first plunking down their $30.

It’s crazy. Look, some books won’t be opened, and some will be read to completion. And the ones read to completion will get a larger share of the fund. But ALL OF THE FUND will get paid. Amazon isn’t “keeping” money. They are most likely losing money with KU in order to compete with Scribd and Oyster.

The fear that authors will no longer get paid to produce books that no one cares to read is amusing to me. Maybe because I’m a genre author, my knees aren’t trembling. Subscription systems are not like retail systems. Authors and industry pundits need to wrap their heads around this. A borrow is not a lost sale. Often, a borrow leads to a duplicate sale, the winning of a new fan, and more future purchases. Pundits and trad-pub editors need to learn to see subscription ebook services like webpages, where page-views on adverts equals dollars. You don’t reward a website that users don’t like to browse and never click through to the next page.

Readers don’t own KU ebooks. And readers by the millions (myself included) are cool with that. I don’t own all my Netflix content, or all the music I listen to on Sirius/XM and Spotify. I pay a small monthly fee to have access to more content than I can ever consume, to not have to manage my library, to not have to organize thousands of files, and to not have to back up my purchases. Instead, it’s all in the cloud, and I can access it at any time.

That’s worth my $10 a month. I can always find something on KU that I want to read. And yeah, that’s taking money out of the pockets of the Big 5, who refuse to participate in the program because they want to minimize the market size of their number one retail partner!

That’s a whacky decision. Then again, when you see how traditional publishers reason through the simplest of things, you can see why their decisions often make no sense. Can you imagine getting plot advice from people who can’t follow the plot?

34 replies to “This is why no one should publish with Melville House. Ever.”

I posted a few comments in various places around the interwebz in an attempt to inject a bit of reason to some areas where there clearly was none about this subject.

It was like tossing a pebble in the ocean.

I’m convinced that some people are not happy unless the world is falling down around their ears. During those times when the world refuses to comply, they help it along. The Chicken Littling that goes on every time Amazon makes a change to something is amazing to behold.

I’m thinking I’m better off just making a bowl of popcorn and watching the funny people run around with their arms in the air.

The more people who leave Kindle Unlimited because of silly rumors like this, the more for the rest of us.

Traditional publishers look to cull their lists of authors to only those few who bring in a lot of money.

Amazon doesn’t care – they’re in the business of satisfying CUSTOMERS, and they will try to negotiate with suppliers like the big publishers and set terms for smaller suppliers so they can keep giving CUSTOMERS a good deal. They know perfectly well that the writers who stick around and get better are worth having, unlike the big publishers who pull books from the bookstore after six weeks of minimal exposure, and then don’t buy the second book from that debut author.

But if people willfully misunderstand the system, more for the rest of us (us being about to include me).

Self-publishing is at the place where it can accept all those who wish to participate, but doesn’t require every author, so we don’t lose when some choose not to be part of the plan.

Maybe way back when the pioneers crossed the prairies (2005?), but not any more.

I’ve got no problem with drek not being paid for by Amazon, especially when they’re kind enough to post it on a sales page for any author with fantasies. Good authors and their pages will be read. Fine.

But can you defend the amazon insistence that the small KDP guys go exclusive with them as distributor for KU/Select while, as I understand it and correct me if I’m wrong, you and the big publishers and other favorite sons/d’s get privileged non-exclusive contracts as a lure into KU?

How is that fair?

It’s not fair. Plain and simple. But fairness isn’t what business is about. It’s important to recognize that as authors seeking to publish our own books, we are in a business, and that business is not some egalitarian democracy where everyone has equal rights. Those authors who sell the most books make not only the most money, but wield the most power. Amazon wants to woo those people into its fold, so it offers them better deals. If you don’t like that, sell more books and Amazon will try to woo you also.

Personally, as someone planning on publishing three relatively long books next year, I didn’t want to choose the KU option, because it didn’t make sense to me. Now with the new plan based on page reads, it makes a lot more sense for me to participate. Sure, I’d prefer it if I didn’t have to go exclusive to Amazon to do that, but in business everything comes at a price, and everything is a trade-off. At least I get to decide what kinds of trades and decisions get made. If KU doesn’t seem to be a fair deal in your case, there’s a simple decision you can make: don’t sign up for it.

When I saw the first comments, more like diatribes really, about the upcoming changes, I had a hard time understanding what they were complaining about. Subscribers pay into a service that is provided, funds are being allocated more evenly based on the overall number of pages being read…so what?
Short Stories – a 20 page short story makes less than a 300 page novel. Okay, and…? Even I can hammer out a short in less than a month (not any good yet, granted). Offset that against the novel which many would agonize over for many months, writing and rewriting, maybe putting out several hundreds of their own dollars for editing and cover designs, dollars and hours spent advertising their work, etc. They deserve to get paid more. At my day job when December 31 rolls around and I look back, I’d be pretty ticked if the guy next to me just started in November and got paid the same amount for one month as I did the entire year.
Quality of work – If someone puts out a work that can’t hold a reader past the first 10 pages, I’m sorry but quite frankly it doesn’t deserve to be paid the full amount. That’s the advantage of the subscription in the value to the reader. They aren’t being suckered into paying full price for substandard work. I’d see it as no different than going into a restaurant, see the chef swat a cockroach with his spatula and go back to work like nothing happened. No way am I paying for that food, and I’m calling it in to get the place shutdown if it all possible.

The only real probem I have with regard to KU and KOLL is that Amazon could choose to stop adding to the fund and cut back to the bare minimum, which would drastically reduce the earnings from authors depending on the current high level of the monthly fund. Up to 3 months revenues lost…

They could yes, but how many authors would choose to stay in the program then? KU wouldn’t be very attractive to customers if all it offered were the ridiculous How-to books and bad poetry.

And so, given Amazon’s long history of taking the long term approach to maximizing revenue, do you really think they would shoot themselves in the foot to pocket a few extra millions in the three months before the mass exodus from Kindle Select was complete? I do not worry for a moment they would do something so foolish.

Hugh:
You didn’t answer Milo’s question. Do you get special privileges from Amazon if you put your books in KU?

Hey Phyllis,

I’ve been on the road all day. Just seeing the comments now. I can answer you both:

I get no special privileges from Amazon for putting my books in KU. When Kindle Unlimited launched, Amazon allowed 20-30 authors to put their ebooks in KU without going exclusive. This was the only way they were going to get us to try KU (and to have our works available to readers). I make 6-figures a year from other outlets, combined, and I wasn’t going to give that up to experiment. Amazon knew this was true for their top selling authors, and they hoped to show us how lucrative KU would be and entice us to use KU and go exclusive with Amazon.

So we were given 90 days (if I remember correctly) to check out KU without being exclusive. After this period (which ended over six months ago), our works were taken out of KU, unless we wanted to go exclusive. I don’t know that any authors did, but I can say that I would make more money being in KU and being exclusive to Amazon than I currently am. So I do consider taking my novels down elsewhere and enrolling in KDP Select and KU. I think about it quite often.

I have some short stories in KU, because I like that readers don’t have to pay for them. Many of my readers are voracious, and they can barely afford their reading habits. I mean, they hem and haw over spending another $4.99 for a novel. For them, KU has been a godsend, and putting some of my works in there tickles them pink. But Amazon treats those works like any other.

Hope that answers the question.

By Post Author

Thanks very much, Hugh, for answering my straightforward question. There was no disrespect intended and congrats on having earned the options you are considering regarding KU exclusivity.

If I understand it, there was some truth to the rumor that there were special ‘non-exclusivity’ Select terms for certain authors, including yourself, and publishing houses, but that it was a sweetener that expired in your case.

I think it’s useful that you clarified this.

It also begs the question as to whether Amazon, which is a nimble company, will continue to create or offer special deals for favored KDP partners.

I think they will continue to try and entice bestselling authors. We have different degrees of leverage. I’ve tried to use my leverage to win concessions for all authors. A number of the bestselling authors have done this. We ask for pre-orders for everyone as soon as possible. Better reporting. More categories. All kinds of stuff.

I pressure Amazon to extend the 70% down to 99 cents for shorter works, which I think is fair. I give them hell about the exclusivity requirement every chance I get, from the bottom of the ladder to the top. I try to entice them with more works in KDP Select if it’ll mean progress in other areas. I’ve done the same with traditional publishers, going for contracts that set precedents rather than the biggest pile of money. It’s not entirely selfless, mind you. I’m fighting for a better climate for my profession, because it’s my profession. And I make enough not to be bought off by anyone.

By Post Author

Hugh,

Thank you for pushing Amazon, both for the 70% royalties for 99-cent books (I’d be happy if they only offered 60% for those), and for pushing for the non-exclusive status.

If they would eliminate that requirement, I would have ALL of my stories there. Every. Single. One. As it is, with this new pay-per-page system, I’m pulling two of my novels from wide distribution, and putting them in KU to test the waters for three months.

If Amazon didn’t require exclusivity, I would enroll everything else. {sigh}

That’s really wonderful what you’re doing, Hugh. All of those things you list matter a lot. I hope Amazon will listen to you. Especially about the 70% down to 99 cents.

Betting five bucks on that the real reason for this new policy is that some people cut deals with authors. And Amazon, who has all data knows it. I think in the past readers had to read 15% of the book so the author got paid. That might have prompted some people to make a business out of it. There are some foul apples out there… all of us know that.

it was 10% — about what Amazon provides as a preview. And yes, I have heard reports of people trying to game the system, and that probably had some effect. he new system rewards books that are actually read, which is fair, as Hugh points out.

1. There is no “pot.” The pot doesn’t exist. It’s a fiction on a press release. It has no dedicated revenue stream and is subject to no outside audit. Amazon in its sole discretion decides how much authors will be paid. It can change its mind anytime it likes.

2. “A borrow is not a lost sale.” Often, it is. Numerous authors have publicly chronicled their drop in sales when KU was introduced. Under the current system, they could see the surge in borrows right alongside a fall in units sold. Starting July, of course, they will no longer have any idea how many people are borrowing their books, but the effect will remain.

Hugh, I totally agree with everything you say in your post, except for the headline. It’s seems atypical of your usual moderation even in these heated debates. (Even when people are attacking you.) Should you rethink the headline? Do you really mean no one should every publish with Melville House just because of one stupid post one of their editors made? They shouldn’t ever?

I kind of mentally dismissed Melville House some time ago because I’m seen other posts of their’s that are equally dumb, but I wouldn’t go so far as to rule them out on everything or advise others to do so.

And while I personally enjoy people online agitating and fighting and click baiting… this stuck me as a little out of character for you. Am I wrong?

Thanks Andrew. Mr. Howey is focused. Mr. Bell needs to focus. Bell might want to read the April 11, 2011 Rolling Stone article – “The Real Housewives of Wall Street.” It’s about two chicks who got away with over $200,000 in fed funds (“some of it is probably from his tax return”) and no one has said a word the “transaction.” Regards Richard.

You are probably right. I enjoy the hyperbole, because of course I don’t mean it literally. Just as I can’t think that Melville House ever means a fraction of the garbage they post on their blog. It’s all done in the spirit of their ridiculousness. An homage, of sorts.

It’s not like I’m really upset. Bemused, perhaps. Flabbergasted, certainly.

(But would I ever publish with a house full of fools? Hellz, naw!)

By Post Author

I love hyperbole, too. I’ve just been stunned in the past at how calmly you answered back some of the very personal attacks on you (like from the New York Times), Authors Earnings and some of the more outrageous attacks on self-publishing or Amazon. This particular blog post seemed sadly disingenuous, not much more.

But yeah, only an idiot would publish with a house of fools… with a blog.

That ““Hey! Are you gonna pay for that?”-scenario sorta happened to me, some 15 years ago, and when i replied “I’m just skimming it to see if its something for me” she yanked the book from my hand and gently grabbed me by my arm and lead me to the door, whilst explaining how this wasn’t a library and i didn’t look like “the buying type anyway”. God how i wanted to be able to pull of the Pretty Woman “Big mistake!. Big!”-scene there, though i don’t think waving around a copy of “Rama 2” would have had the same effect.

I don’t know if anyone actually knows the answer to this question, but I’ll put it out there and hope for the best:

What is the actual payout per page read with the new Amazon KU system?

It would be fairly easy to calculate if we knew how many total page reads there are per month in KU. Simply divide the total payout (is that $11,000,000?) by that number, and presto.

Also, will the royalty statements from KU include a breakdown of how many page reads each of your books gets? That would be a fairly easy way to calculate the payout per page read.

Anyone know what the breakdown will be?

Also, when it comes to ebooks, how exactly is a “page” defined? By the word count? By the character count? What about illustrations? How many “pages” are there according to KU in a 100,000 word novel, say? And does the count begin with the first page of the book, or the first page of the story?

I’ve been reading similar responses to the announcement the last few days and wondering how on earth people could come up with this kind of thing and then I worked it out. This idea that an author with a book in KU should be paid even if no-one reads it could only come into the mind of someone who already does conflate buying a book with reading it; in other words people who don’t care whether the purchaser enjoyed the book but only that they bought it.

It’s no surprise to me that some traditional publishers think this way – they have long cared more about sales that reader satisfaction and relied for too long (forever) on being the only source of books while selling the idea that they have some mysterious and unknowable skill – and 90% of books fail anyway donchaknow? I don’t think Hugh’s headline is hyperbole – why would you want to publish with a company that doesn’t care about your readers’ experience?

Of course, it’s also no surprise to me that some self-published authors think this way, too, they are the ones who are now complaining that they are going to have to hold a reader’s attention all the way through a story to get their full due or adjust how they were gaming the system (no longer can they chop up existing stories – ruining the experience of the reader – instead of writing good stories appropriate to the desired length).

The only argument that I have seen against this that moves me is that based on the idea that writing a good short story can take longer than its length belies, otherwise the new suggestions seem fair to me (and would make me consider KU if it weren’t for the exclusivity requirement.)

“If only a single page was read, by a single reader, out of a single book, that author would get $11,000,000!” There’s a flip side to this happy (but unlikely) scenario: if eleven million pages are read, and one of them is yours, you get $1. Twelve million pages read? Your page is now only going to get you fifty cents.

With its “global fund” Amazon has set things up as a zero-sum game. This doesn’t strike me as good for authors, and to my mind it’s as bad as the exclusivity requirement.

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