Last week Amazon announced its newest twist on their Kindle lending program, KDP select. This differs from their lending program in a couple of major ways, mostly pertaining to the rather largely printed splash across Amazon’s main page about a $500,000 fund for paying authors who offer their book through the option. There’s a lot to take in regarding the terms and conditions of the program, so lets go through the basics.

One, the Kindle Owner’s Lending Library is Amazon’s reader-counterpart to the author/publisher KDP Select program. It’s available as part of Amazon Prime, and only Amazon Prime members with a Kindle device (not app) gain access to it. Enrolling a book in the KDP Select program makes it available in the Lending Library for Prime members via their Kindle devices. Simple so far.

Two, there are a lot of conditions that should make you stop and think. Mike Coker, the founder of Smashwords.com, posted his concerns about the new KDP select program, and while I found them a little over-inflated regarding ebook retailer market competition (he references the Irish potato famine…), his author concerns parallel a lot of my own thoughts. It should be noted that of all the major ebook retailers, Amazon is noticeably absent from Smashwords distribution channels – because, as Mike notes in the final words of his post, Amazon has refused to offer them “agency terms”. You can read the post for more information, but it boils down to this: Amazon likes its pond and doesn’t see the need to play well with others.

Three, Amazon is arguably the industry leader in ebook distribution, which means their program needs to be considered seriously. Here at Crimson Melodies, we’ve got our own data supporting the facts of ebook traffic. Amazon has a larger reach than any other site, and while we’ve been enjoying equal levels of sales across multiple distributors, it’s still Amazon that sees the largest movement of our stories. Compare 12 copies of EotS sold solely on Amazon over 3 months to 14 copies via COMBINED purchases through Smashwords and its distribution sites (Apple, Sony, B&N, Diesel, etc) over those same three months. Amazon, by itself, matches them. And exceeds them, hands down, with our free stories. (Over 4,500 downloads of our free stories on Amazon versus 1,243 on Smashwords & co. in the same amount of time.)

Whether or not anyone wants to hear it doesn’t make it any less true. Amazon is the place to be – but that DOESN’T mean you should be there and only there. Because even if it takes multiple distributors to match the sales power of Amazon, those are still sales. And it would be stupid to cut yourself off from them by having your book only on Amazon where fans of other ebook retailers aren’t likely to be shopping for ebooks.

Four, Amazon KDP select terms and conditions demand exclusive Kindle content. You can’t even publish your work, or portions of your work that could fall under the broad sweeping categorization of “content that is reasonably likely to compete commercially with your Digital Book, diminish its value, or be confused with it” on your own website while it’s enrolled in the program.

The first two of Mark Coker’s “Impact on Authors” statements are ones I agree with 100%. It would be foolish to remove your book from distribution channels other than Amazon just to enroll it for an undetermined return on investment with the new KDP select program. We certainly won’t be removing Eyes of the Seer from any of them, and thus won’t be making it eligible for participation.

BUT….!

Five, Amazon requires a term agreement of 90 days (3 months) while your book is enrolled in the KDP select program. This agreement automatically renews every 90 days unless contacted by the publisher (or they find you to be in violation of their terms and conditions). During those 90 days, you can promote your book at a price listing of FREE for 5 of those 90 days to the general public – ie not just Prime members with access to the free Lending Library – something that is otherwise impossible on Amazon by itself (…without manipulation of their “report a lower price” option, anyway, and then there’s been mixed reports about being able to reverse the reduction).

With Amazon’s notation that they have 6 million dollars committed to the KDP select program for next year – which translates to $500,000 a month, matching their initial $500,000 for December of 2011 – there may be a gray area for whether or not the program is a good thing. And here’s where indie authors MIGHT not want to immediately run away screaming against dependence on Amazon (which, again, would definitely be a bad thing in the long run. but…)

Newly released books could potentially benefit from an initial period of exclusivity on the Kindle via Amazon. It wouldn’t require removing / destroying any accumulated sales movement and reputation on other distribution channels because there is no sales movement or reputation to destroy. There is no “loss” to you as an author / publisher other than the potential sales on those other channels for the three months of the agreement.

Yes, I’m still using the word “loss” for those potential sales. You would be choosing to lose them for a potential return from offering Amazon exclusive (ultimately temporarily exclusive) rights to your content.

The potential gains of course need to be weighed again those potential losses, and there’s obviously no real data yet on this front. Numero uno of those gains, though, is the possibility to put your book/story into a lot of hands, thus generating future sales even after the three month period is up as people who read a book for free via the Lending Library leave reviews, tell friends about it, etc. A quick reference back to our free download numbers: if even 10% of those people are Amazon Prime members and own a Kindle (a number I’m completely pulling out of thin air because I don’t know, on average, how many people are Prime members versus non-Prime users, nor how many of them actually own a Kindle device), that means 450 people could have “borrowed” our book versus the 12 who bought it, or maybe a more reasonable estimation would be that only 10% of Prime members own a Kindle and so only 45 people could have borrowed our book. That is still almost a 400% increase in readership. (Note: The other unknown factor here is how many of those people would still have downloaded our book for free if they were restricted to only one a month, as with the Lending Library.)

*edit* Since quite a few search results leading to this blog are about how KDP Select pays you, I wanted to add a quick run-down.

Basically, at the end of every month, Amazon will total up the number of borrows of ANY book of their lending library, then determine what percentage of those borrows were from YOUR books, and pay you that same percentage of the $500,000 pot.

For the more visually inclined:
Y= total number of borrows of ANY book in the Lending Library over the month
X= total number of borrows of YOUR books via the Lending Library program over the month

X/Y = Z
Z= the percentage of downloads your books accounted for over the month

$500,000 x Z = Your “royalties”

So if there were 1 million total downloads, and your books were downloaded 10 times…
10/1,000,000 = 0.00001
$500,000 x 0.00001 = $5

Probably a more realistic expectation than the numbers Amazon has on their description page.
*end edit*

Even if we’re paid pennies on the dollar versus a copy that could have been purchased directly, we’d still be getting paid and not having to lift a finger running giveaways or blog tours or anything else time consuming (that takes us away from more writing) to get our book into the hands of readers. I’m also assuming that while all of the borrowing is going on, Amazon’s marketing machine will be doing its thing tracking “purchases” for their customers who like this may also like that marketing they’re known for.

It’s potential exposure. And considering how often that particular opposition to an indie author’s career is wrestled with, I’d say that makes the KDP select program worth considering in the future. Not as a substitute for offering your book on multiple distribution channels, which I firmly believe is the ultimate best thing to do in the long run, but as a supplement that compares to a giveaway.

Things that I plan on researching before making any commitments (since their link to further details in section 2.2 of the KDP Select Benefits seems to be broken at the moment):
1) If a Prime member borrows the book via a Kindle device, are they able to lend the book via the Kindle lending program to a non-Prime non-Kindle member/owner?
2)  If someone currently is borrowing your book and you opt of of renewing the 90 day terms and conditions of the KDP Select program, what happens to the book? …will they find you in violation of the terms and conditions if you submit your book to other distribution sites with outstanding “borrows” from the Lending Library after requesting removal from the program? …with no due-dates in the Lending Library, are there any additional conditions for removing a book from the program before being able to distribute elsewhere?

I’m sure I’ll come up with more questions over the next few months before we have a new book to release - Rebirth of the Seer is our current WIP on that front, and we’re aiming for a May or June digital publication date.

One other final note on this, to all the author’s reading this: Don’t forget, if you’ve published on KDP and are taking a 70% royalty, your book is enrolled in the Kindle Lending program (not the KDP Select) by default – meaning there’s an infinite number of people who can “borrow” your book (for two weeks at a time) as a result of only one purchase. The KDP Select program means there’s less of a “who you know” in the borrowing of books, but you’d also be paid for it. Even if it is pennies on the dollar.

I’ll be keeping my ear to the ground for more info, but right now there’s enough possibility here that I’d be willing to let Amazon fool me once into a 3 month flirtation with their KDP Select program for a new release. But you know what they say about “fool me twice” – definitely keep track of your numbers to weigh whether or not it would be worth experimenting with again if you do decide to entertain KDP Select.

Right now, it’s all speculation, and I prefer looking toward the potential.

As always, thanks for reading,
J.R.