Saturday, January 14, 2012

Is Amazon Buying an E-Book-Selling Monopoly?

Say what you will about the Kindle Owners' Lending Library, it has become a bonanza for self-published authors savvy enough to take advantage of it. The way I understand the process is that independent authors willing to give the Kindle Store exclusive rights to sell their digital work for a 90-day period can also opt to include it in the KDP Select program.  This becomes a big deal because the book also becomes part of the Kindle Owners' Lending Library, making it eligible to share in the big pot of money Amazon sets aside to compensate authors whose books are borrowed by Prime members.  There's the potential to make some good money in this deal.

Look at the numbers.  If I recall correctly, Amazon placed something like $700,000 into the pot for January 2012 payments to "borrowed authors."  Let's assume that 350,000 books are borrowed during the month - that means that Amazon will pay the author $2 each time one of his books is downloaded by an eligible Kindle owner.  If your book is borrowed 500 times, you score $1,000.  In the meantime, the book is still for sale in the Kindle Bookstore at whatever margin you have created for yourself there.  It's a sweet deal for independent publishers and writers.  Interested parties can get the details (and check my understanding of the process) here.

According to Amazon, the Top Ten KDP Select authors earned over $70,000 between them in December 2011.  Amazon also points to what seems a counterintuitive increase in sales for the most borrowed titles, creating a win-win situation for the authors in the program.

A question I haven't seen addressed anywhere yet is how all of this will impact traditional publishers, bookstores, and libraries.  Is this another nail in the coffin for the old way?  Should we worry about the long term effect on print publishing, or is this something that will have little impact on print books?  I suspect that it will impact bookstores more seriously than it will publishers, at least in the short term.

Seriously, is Amazon approaching monopoly status with writers who are likely to be reluctant to reclaim Amazon's exclusive rights to their work as long as the checks keep rolling in?  You tell me.


  1. I appreciated your thoughts. I have been wondering along the same lines myself.

    I don't have a clue how it will go. I do know that a company can seem to have a strong grip at the top one minute, and another company with some new idea and good branding will come along and oust them pretty quickly.

    Maybe I'm getting to be an old fuddy-duddy, but I get tired just trying to keep up.

    I hate to see so many bookstores going under.

  2. We live in such a fast paced world these days, Susan, that major business can come and go in the blink of an eye. I applaud the innovative style that Amazon is famous for, but I fear for the health of publishing, in general. What will happen when all the print-publishers have been crippled or ruined? I can't imagine a world without a bookstore within a few miles of my house. It's scary out there.