Tag Archives: subscription services

Numbers Game

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How delightful.

If you don’t care about the publishing industry, you can skip this post.

Last July, I wrote about Kindle Unlimited. If you don’t feel like re-reading that post, the gist of it was that while KU and similar subscription services were a good deal for readers, they were less so for writers. Amazon is about to make it better for writers*.

* No, I couldn’t type that with a straight face.

The way KU pays royalties today is simple: If a reader makes it through 10% of your book, you get paid. Less than 10%, you get nothing. Of course, you don’t know how much you’ll be paid, because what you get is a share of the “KDP Select Global Fund,” which varies every month according to a formula that Amazon keeps secret.

So if you publish a 250 page novel through KU and ten people read at least the first 25 pages this month, you get ten shares of the June pool. Mind you, your writing buddy who specializes in shorter works only needs to get ten people to read two pages of his 20 page novella to get the same ten shares, but who cares? You’re getting paid.

And here we see part of the reason why the value of a share keeps dropping. KU has been flooded with novellas, the number of qualifying reads has gone up faster than subscription income, and the per-read payment shrinks. In May, the payout was $1.37 per read.

Amazon’s got a fix. They’re going to reduce the value of a quickly-written, indifferently-edited novella. Effective July 1, payment will be made per page read. Can’t find anyone who can make it through the first chapter of your 500 page epic about Swedish worm farmers in the first century BC? Don’t sweat it, because you’ll still get paid for both of the readers who made it to page 2.

The only real question is how much you’ll get paid per page read. As far as anyone can tell, the fund will still be fed the same way as it has in the past. According to Roger Packer, Amazon has promised that the fund will be “in excess of $11 million” for July and August. The May fund was $10.8 million.

Amazon’s examples are based on a payout of 10 cents per page read; Packer points out that means authors will receive the same amount of money under the new plan if the average read is fourteen pages. Fourteen pages seems like an awfully low number, even for a pool dominated by 20-25 page novellas, but who knows, maybe it’s correct. If so, all I need is for ten people to make it through the first chapter of my worm farmer novel, and I can take Maggie out to dinner at the burrito joint down the street to celebrate.

Since Amazon doesn’t release figures on how many pages have been read, it’s all guesswork at this point. I’ve seen estimates of per-page payouts as high as Amazon’s 10 cents per page and as low as half a cent per page.

At half a cent per page, I’ll need those ten people to make it all the way through the book before Maggie and I can have that celebratory dinner. Hope everyone loves the round-up scene (“Ya! Git along there, Little Squirmy!”)

Seriously, I can’t see this working out to higher payments for anyone except the authors whose works are so awful that nobody ever made it past the 10% mark. There are probably a few–but they’re going to have to attract a lot of eyeballs to pay for the bottle of bubbly they’re buying to toast their first royalty check.

Scribd

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A couple of weeks ago, I wrote about Kindle Unlimited, Amazon’s new e-book subscription program. I mentioned that Amazon was not the first e-book seller to try the subscription model. Today I’d like to take a look at Scribd, one of the other sellers trying the subscription route.

Scribd advertises a collection somewhat smaller than Amazon’s 600,000 titles*, but unlike the big A, they have agreements with HarperCollins and other traditional publishers. In addition to “books,” whether self- or traditionally-published, Scribd also has a large collection of what they call “member-contributed documents”.

* I’ve seen estimates ranging from 400,000 to 500,000. The variation may reflect change over time, or it may reflect different ways of counting the “member-contributed documents”.

Payment to authors is more transparent than Amazon’s plan. Scribd pays nothing for browsing the first 10% of a book, the same as Amazon. Between 10% and 30%, authors will receive partial payment (10% of full royalties). If a reader goes beyond 30% of the book, the author will receive full royalties: whatever they would have received for a sale through a non-subscription distributor. Recall that Amazon’s deal is a simple “you get paid if a reader goes beyond 10%,” but since they don’t discuss how much you get paid, there’s no way to tell which distributor offers the author a better deal. My suspicion is that authors will do slightly better per-read on Scribd, but Amazon’s sheer size will result in more reads (on the average).

In order to track actual readership and percent read, Scribd subscription books can only be read on the Scribd website or through their Android and iOS apps. Reasonable, and similar to Amazon’s restriction of reading to Kindles or Kindle apps. It is, however, disappointing to anyone who has a favorite e-book reader.

In the Kindle Unlimited discussion, I pointed out that KU will live or die based on the quality of their recommendation software. The same is true of Scribd. Amazon needs to shift away from “another cheap title by the same author” to “books similar to this one”. Scribd already has a “books similar to this one” core to its recommendation engine. However, it has some problems. At one point, it failed to recognize it was suggesting multiple different editions of the same title (On one search for books similar to Dirk Gently’s Holistic Detective Agency it suggested a specific Kurt Vonnegut title (and please forgive me for forgetting which one–it may have been Cat’s Cradle–at the time, I wasn’t planning on reviewing the service, so I wasn’t taking notes) more than twenty times.)

That does touch on another area where Scribd’s recommendation engine runs into trouble. The system allows for very specific classification of books, which means that recommendations can be very close, but it also means that the number of matching titles can be limited. Let’s face it, how many matches are they going to turn up for “Private Eye Mysteries Set In Idaho”? Probably fewer than “Private Eye Mysteries Set In LA,” which is an example Scribd uses.

Scribd is aware that they need to step up their game. Today I received an e-mail from them announcing that they’ve implemented “Thousands of new categories and personalized recommendations”; the enhancements include curated collections, editor’s notes, and “top books: trending, bestselling, and award-winning”. A more human touch will certainly help. Will it help enough to allow them to survive in a market dominated by Amazon? We’ll see.

As I said, Amazon’s biggest problem is the change in the business model. Scribd’s biggest problem is one of perception. In the past, they’ve had trouble policing the “member-contributed documents”. Scribd has apparently responded well to DMCA requests to remove unauthorized books, but I’ve seen a number of authors complain that they have not punished posters or taken steps to prevent the same books from being re-contributed. That perception by authors and publishers will make it difficult for Scribd to set up distribution deals with additional traditional publishers; since that’s a key piece of their differentiation from KU, they need to make changes in that area.

To their credit, Scribd is making changes designed to improve their reputation with authors and publishers. They’ve expanded the use of their content-scanning system to make it harder for members to repeatedly upload the same work, and they have made the DMCA complaint process simpler and more visible. That has helped, but there are still authors unhappy with where Scribd sets the balance between in-house prevention of copyright infringement and requiring authors to monitor Scribd’s library and report violations.

Bottom line: The subscription model is attractive to readers. If Scribd can overcome author and publisher resistance, continue to expand their library, and successfully publicize the titles they offer that Amazon doesn’t, they should thrive despite the competition from Amazon. As with Amazon’s ability to refocus their recommendation engine, it’s a very big “if”.

Stay tuned. This game is going into extra innings.

Kindle Unlimited

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You probably figured I’d have a few things to say about Amazon’s new Kindle Unlimited service. You are correct.

For those of you who missed the announcement, Kindle Unlimited is an e-book subscription plan. For $9.99 a month, subscribers get access to a library of what Amazon estimates as 600,000 books. That’s “Unlimited Reading” according to the ads. Essentially the same deal that Oyster and Scribd are offering. As usual, though, the devil is in the details.

Sounds great for the reader at first glance (we’ll come back to the author in a couple of minutes): for the price of a single e-book purchase from a major publisher, you can read as many books as you can gobble. Assuming, that is, you can find anything you want to read.

It appears that, at least for now, the 600,000 titles are the same ones that Amazon has long offered through Kindle Direct Publishing Select–one of their e-book self-publishing programs. KDP Select requires that books only be available through Amazon. If authors want to try wider distribution through Smashwords or Barnes & Noble, they have to use a different Amazon self-publishing program.

Aside from a select few high-demand titles such as Harry Potter, the major publishers are not represented in KU. There’s no sign that Amazon is even negotiating with them at this time–though it does shed a new light on the argument Amazon is having with Hachette over e-book pricing, doesn’t it?

I’m certainly not going to take the “all self-published books are crap” line that many commentators are pushing, but let’s face it: there are thousands of self-published books lurking out there that, to be polite, could use the attention of an editor who is not related to the author. Amazon’s ability to help KU readers find the titles that will not make their eyeballs bleed or drive them to shove their Kindles into a blender will ultimately be the factor that controls whether KU lives or dies.

And that’s a big question mark right now. Under a sales model, Amazon’s success has revolved around their ability to sell in quantity. The one and two dollar books have driven Amazon’s success, because if a reader gets a clunker, they can just delete it from their library and try the next potential classic for pocket change. Under a subscription model, all books cost the same to the reader. There’s no inducement to stick with a book past the first few pages if they don’t grab you. A reader who hits a string of unappealing works is going to start thinking “Why the heck am I paying ten bucks a month for this crap?” and cancel their subscription. Amazon needs to be sure that their recommendation engine digs a bit deeper than “Another cheap title by the same author”.

And, speaking of authors, what’s the benefit of KU to the author?

Well… From my admittedly biased position, not a whole lot. According to one writer, Amazon will be setting aside a pool of money in something called the “KDP Select Global Fund”. That pool will vary in size from month to month based on “all factors that impact the KDP Select fund,” whatever that means. Every time a reader reads more than 10% of your book, you get a share of the KDP Select fund.

I don’t have any problem with the 10% or more rule. That’s twenty to thirty pages for a typical adult novel, and if you can’t intrigue readers enough to hold them that long, well, maybe the book wasn’t quite ready for release. In reality, I suspect most readers are going to make the decision to keep going within the first couple of pages, a habit picked up through browsing the shelves in book stores. If you hook them for long enough to get through Page Two, you’ll probably keep them through Page Twenty and get your payment.

My objection is to the unknown and variable amount of that payment. The typical author’s contract gives them 25% of the price of an e-book sale (although Amazon’s rates for self-publishers vary from, I believe, 70% if the book is under $4, down to 20% if it’s over $10–again, the sales model is built around selling a huge pile of cheap books). Under the subscription model, the author gets an unknown percentage of an unknown amount. How does Amazon set the size of the fund? Does the author’s share vary based on the “sell” price of the book? Only Amazon knows and they’re not telling.

The bottom line, though, is that Amazon is–as they’ve kept saying throughout the Hachette dispute–a business, and their focus is on, well, the bottom line. Anyone who thinks authors will be paid more under a new model is most likely delusional. IMNSHO, of course.

Granted, I’d rather have an unknown, ever-changing royalty than no royalty, but it’s depressing to see the legions of self-publishing worshipers crowing about how KU and the other subscription services are going to magically improve the lives and incomes of all writers everywhere by freeing them from the tyranny of the outmoded traditional publishers*. That’s a claim that doesn’t even stand up to the most cursory logical analysis.

* Don’t believe me, or think I’m exaggerating? Read through the comments on the blog post I linked a couple of paragraphs back.

To improve the lot of all writers, we need more people reading, not the same number of people reading more: a larger pie, not a new way of slicing the same, ever-shrinking pie we’ve got.