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Is Kindle Unlimited Bad for Authors?

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Amazon last week unveiled Kindle Unlimited, following in the footsteps of ebook subscription services Oyster and Scribd.

When I first heard of Kindle Unlimited, it sounded like a great opportunity for authors to reach readers. After reading the fine print, however, I've concluded it's a bad idea not just for authors but for readers as well.

2014-07-23-kufreedom.pngBefore I explain my thinking, I should first mention that Smashwords, my ebook distribution company, has a horse in this race. Smashwords supplies over 250,000 ebook titles to Oyster and Scribd. Oyster and Scribd are the early pioneers in this nascent ebook subscription category, and as such they are Amazon's competitors.

Oyster and Scribd are the two fastest-growing retail channels at Smashwords at a time when industry-wide ebook sales at conventional ebook retailers are anemic. In addition to Oyster and Scribd, we also supply ebooks to Apple iBooks, Barnes & Noble, Kobo, and public libraries via OverDrive and Baker & Taylor. In other words, we empower Amazon's competitors to compete against Amazon. I ask you to consider my opinions in this light.

I'm a fan of the ebook subscription models as manifested by Oyster and Scribd because I think they complement conventional ebook retail channels where readers purchase books one at a time. I think these subscription services will help make the ebook reading experience more accessible, desirable and enjoyable to a new group of readers who prefer the convenience of subscription access.

The terms Oyster and Scribd offers are author-friendly. Our authors set the list price of their own books and earn 60 percent of the list price for each qualifying read.

Scribd and Oyster hit the nail on the head by creating services that balance the intersecting interests of readers, authors, publishers, the subscription service itself and the culture of books in which we all participate.

The same cannot be said for Kindle Unlimited.

Indie (self-published) authors would do well to avoid Kindle Unlimited for one simple reason: it requires exclusivity. The vast majority of titles in Kindle Unlimited are provided by indie authors. Kindle Unlimited requires the indie author to enroll their books in KDP Select, which is an option of Amazon's KDP self-publishing platform. KDP Select requires participating authors to remove their books from all other retailers and services.

I've been speaking out against KDP Select ever since Amazon launched it in 2011 when I wrote my post, Amazon Aims to Empty Competitor Shelves of Indie Ebooks with KDP Select here at Huffington Post. Amazon partisans then and ever since have accused me of being an Amazon hater for my criticism of KDP Select, but that's simply not true. I admire Amazon. Jeff Bezos and team are freaking brilliant. They deserve massive kudos for catalyzing the rise of ebooks, and for changing the lives of indie authors.

But for all of Amazon's good deeds, it does not mean authors should kiss Amazon's feet unconditionally. Even the 19th-century Robber barrons had their redeeming qualities by bringing us greater access to railroads, steel and financial services.

Amazon's business methods are not beyond reproach. We should encourage a healthy debate about Amazon's practices and how they can do better for authors and readers. I can admire Amazon yet still oppose exclusivity. We should also recognize when Amazon's business interests don't align with interests of authors, readers and the culture of books.

KDP Select is a good example where the business interests of Amazon are in direct opposition to the culture of books. Ironically, Amazon advertises "Freedom to Explore" as the tag line for Kindle Unlimited. For Amazon, Kindle Unlimited is about captivity not freedom.

Exclusivity is great for Amazon, but it's not necessarily great for authors and readers. Exclusivity starves competing retailers of books readers want to read, which forces readers to move their reading to the Kindle platform. This is why Amazon has made exclusivity central to their ebook strategy. They're playing a long term game of attrition. If they can use their market dominance to slowly sap competing retailers of popular books, they weaken their competitors. Amazon claims to have over 500,000 books locked exclusively within KDP Select.

Most authors and readers recognize the value in fostering a diverse ecosystem of multiple competing retailing options. No one can disagree that more booksellers in the world are better than fewer. Bookstores are staffed by book lovers who spend every waking and dreaming moment thinking about how they connect great books with more readers. Ebook retailing is an essential public good that benefits authors, publishers and readers alike.

Yet every book enrolled in KDP Select is a vote to put Amazon's competitors out of business. Sony and the Diesel eBook Store are but two ebook retailers that exited the business in the last 12 months. KDP Select alone didn't pull the executioner's trigger but it certainly helped. Bookselling is a low-margin business where it doesn't take much to tip a retailer from the black to the red. For many booksellers it's a profession of passion, but passion in business can't persist forever without profitability.

Every book enrolled in KDP Select is a vote to salt the earth against innovative startups such as Oyster and Scribd. You know this to be true if you believe, as I believe, that indie authors are the future of publishing. Indie means "independent." The indie authorship movement, as I discussed in my last column about the Indie Author Manifesto, is fueled by writers asserting control over their destinies and demanding fair and equitable treatment from business partners.

In a sense, all authors today are independent. Thanks to the rise of ebooks and the democratized access to the publishing tools and retail distribution that were once only available to traditional publishers, writers everywhere have options. Authors can choose to self-publish, or they can choose to pursue a traditional publishing deal, or they can choose myriad options in between. They key factor here is that it's the author's choice. Exclusivity is now an author choice as well.

Authors must weigh the benefits of KDP Select's many enticing features against the alternative benefits of broad and diversified distribution. How does an author measure what they'll lose from either decision when missed opportunities are immeasurable? And it's fair to ask, is it the indie author's responsibility to support and sustain Amazon's competitors? Should an indie author feel guilty for giving KDP Select a try?

I don't envy authors who must make these decisions, because in the end every author has a personal responsibility to their own career to do what they think it right for them. With an estimated 60-65% of the global ebook market, Amazon is the only retailer with the power to force these difficult decisions upon authors.

Authors who cycle their books in and out of KDP Select will have a more difficult time building readership at Amazon's competitors. It can take years for authors to build readership. Readers are not a monolithic entity. They're scattered around the globe. Each retailer reaches a different audience of readers, and many retailers operate stores in multiple countries where each store serves unique micro-markets of readers that simply can't be reached by Amazon or anyone else. Apple iBooks, for example, operates stores in 51 countries.

Any time an author goes exclusive, they miss the opportunity for serendipitous discovery by new readers at other stores. They alienate fans who prefer shopping at other retailers. They risk missing those times where lightning strikes and their books break out at different retailers at different times, often for reasons that can't be identified.

Authors who go exclusive at Amazon become more dependent (the opposite of independent) upon Amazon. Just as any financial adviser will advise you to avoid placing your retirement nest egg in a single basket, indies should think twice before locking their books into these three-month, automatically-renewing KDP Select contracts.

With KDP Select, Amazon rewards authors who go exclusive and disadvantages authors who do not. That's right, Amazon is punishing regular KDP authors who refuse to go exclusive by denying them access to useful sales and discovery tools. Some of these tools are offered by other retailers offer without exclusivity. Amazon wields these tools as leverage for the same reason they removed preorder buttons for Hachette authors. If authors and publishers don't bend to Amazon's will, their books are essentially relegated to the store's dimly lit basement.

There's nothing illegal going on here. Even if Amazon's exclusivity reeks to high heaven, so what? It's Amazon's store. They have every right to cast favors upon those who comply with their wishes.

Amazon is creating a caste system within the Kindle store. The upper caste is comprised of KDP Select authors, a handful of bestsellers, and Amazon-published authors (Amazon owns and operates multiple traditional publishing imprints such as Thomas & Mercer, 47 North and Montlake Romance). These books are more visible and more discoverable. As reported by industry-watcher Publisher's Lunch, Amazon is favoring Amazon imprints and KDP Select/Kindle Unlimited titles in their on-site merchandising and bestseller lists, which further penalizes authors who don't surrender their independence to Amazon.

Also worthy of note and reported by Publishers Lunch, Amazon is paying certain bestsellers and traditionally published authors more for their participation in Kindle Unlimited than they're paying indie authors who participate via KDP Select. KDP Select authors earn an uncertain payment for each book read from a shared Kindle Unlimited pool controlled by Amazon, whereas the favored few bestsellers and traditionally published authors of Kindle Unlimited receive full payment based on their list price.

No other retailer creates such artificial constraints for indie authors. At other retailers, indie authors enjoy unlimited free pricing, greater pricing control, ebook preorders, broader global distribution and all without the handcuffs of exclusivity.

It's unfortunate Amazon is restricting access to Kindle Unlimited. It's unfortunate they're denying their own customers subscription access to the books of all indie authors who would otherwise participate if not for the exclusivity requirement. It's unfortunate that Amazon forces authors to make such a choice.

Amazon is asking authors to roll the dice and play a game of craps. A few lucky players will win big but the broader community of authors will lose. Unlike the real game of craps where the odds of rolling a seven are statistically predictable ahead of time (one in six rolls of two dice), Amazon's dice are loaded. The odds are controlled by Amazon, opaque and ever-shifting.

For indie authors who feel trapped in KDP Select, last week's announcement offers a silver lining: you now have an out. Because Amazon automatically opted all KDP Select authors into Kindle Unlimited, they're giving KDP Select authors the ability to withdraw from KDP Select early without waiting for their current three-month term to expire. The instructions, which are listed on a Kindle Unlimited description page, advise authors to contact Amazon's support team to leave KDP Select.

If you know author friends who are in KDP Select, or you're a reader, now might be a good time to encourage your your friends to cast their vote against exclusivity. KDP Select would not exist were it not for the ongoing support of indie authors. As indie authors continue to capture increased ebook market share in the months and years ahead, their decisions will have ever-greater ramifications on the future of book publishing.

An earlier version of this post first appeared at the Smashwords blog.