by Steve Laube
I know what it is like to feel the earth move under my feet having experienced the ’64 Alaska earthquake firsthand. (The above picture is from the neighborhood where we lived called Turnagain Arm.) Therefore I know the difference between a 9.2 Richter scale quake and a tremor that registers near 2.0 on the scale.
Last Thursday Amazon announced they were reducing the royalty payments for authors and vendors who use their ACX service to sell self-published audio books. The amount will change on March 12th for new contracts to a flat rate of 40% instead of the 50%-90% rate they currently pay.
No big deal, right? Sort of like a 2.0 tremor. If you blinked you missed it. And since many don’t have an ACX account to sell audio books they are unaffected. However this should be a reminder to all authors and publishers who use KDP (Kindle Direct Publishing) that Amazon can change their royalty terms at any time.
This is the danger of putting all the proverbial eggs in one basket. If any author chooses to only utilize the economic system of Amazon for their sales they can be vulnerable to any changes. I once met a man who sold the foil that was used to make the dairy creamer packets for McDonalds. He had one client. His job was to search the world for the best price on foil. And he lived in terror of losing his client.
Be very clear, I am not suggesting that this is going to happen. Amazon’s 70% royalty rate on kindle ebooks has not changed. All I am suggesting is that it could.
Imagine the outrage if Amazon decided to change the royalty structure for ebooks. In another part of their company they have already started floating the idea of changing the price structure for the Prime Membership, either by raising the price or creating a multi-tier payment for services. The change would affect 10 million or more customers who will scream, complain, and then comply. Could the multi-million dollar ebook KDP division be up next for review?
Rather than speculate on specifics just imagine ANY change Amazon would make to the royalty structure for ebooks. Authors would scream, complain, and then comply.
The incredible opportunity for an author to get their work into the marketplace has been made accessible by Amazon. It is a wonderful thing and has changed the industry. My caution is that the authors who feel so incredibly empowered right now do not see the shackle around their ankle. They have been captivated by one “ecosystem” and are vulnerable to the corporate decisions that can be made at any time.
Much of the Indie versus Traditional publishing debate revolves around the generous rates provided by Amazon for ebooks. I am not suggesting that one is better than the other. What I am saying here is that those who are vociferous in their defense of going Indie should also start exploring diversification in their sales channels. The Indie author needs to emulate the traditional publisher that has been diversified for a long time.
Unfortunately the options are limited with ebooks. Smashwords will get your work on the majority of non-Kindle platforms like Kobo, Nook, and Apple. And Smashwords receives a percentage of those sales, as they should in exchange for the service. The Sony Reader is gone, the Nook is losing steam, and Amazon’s market dominance grows. And with such growth the incentive to offer generous rates can diminish.
What options have you explored for your Indie projects?
Is a print edition of your work available? POD or print run?
Is this post just fear mongering or should we be concerned?