Tag Archives: Business

Kindle Unlimited – how’s that workin’ for you?

I really don’t know yet.  I enrolled all my books in KDP Select and Kindle Unlimited about a month ago — maybe it’s two months, I don’t know.  But I did notice that, after day after day after day of zero pages read for Kindle, my novella THE CAVE (see it over there to your right?) all of a sudden had 318 pages read over the course of a couple of days.  And my short story DEAD OR ALIVE (it’s not over there on the right, but it is part of THE STRIKER FILES, which is) had 50 pages read.

I looked, and THE CAVE has a KENPC (Kindle Edition Normalized Page Count) of 166, as opposed to its stated length of 88 pages.  DEAD OR ALIVE has a KENPC of 56.

Now, that doesn’t sound like much, but basically it’s two full reads of the novella and one full read of the short story.  For me, that’s fine.  Those sales would have earned me 35% of $0.99, which is little over a buck.  The KU reads paid me more than that; a bit less than two bucks.

(Yeah, that’s the sort of life-changing money I’m earning right now from my writing.  🙂  )

Couple that with a few purchases of THE CAVE, one of DIE 6, and one of my non-fiction DOING DISNEY quasi-guidebook, I’ll have done okay.  Maybe I’ll sell a couple of copies of my new one, THE INN, when it comes out.  Crossing fingers.  (Watch this space for announcements.)

The way I see it, the more people who grab my stories and read them, the better chance I have of actually getting noticed.

And that’s the state of the state right now.

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Subscription services for ebooks – some thoughts

When I started practicing dentistry almost 30 years ago, I became involved in a reimbursement plan called “Capitation.” It was “insurance” where families or individuals paid a set fee every month, then the company took a percentage of that fee and passed the rest on to me. Their advertising to patients stated that they ‘covered’ 100% of every dental procedure known to man.

When I first started with them, I was actually getting checks for a little more than what I would have billed for services on capitation patients that month. But very soon that corrected itself and I was getting less than what I would have billed, by about 20%. Then another provider quit and I got a large influx of new patients. I started making more money, but very soon I was doing way more work than I was getting paid for. It got to the point where I was getting only 40-50% of the work I was doing.

So I quit.

The future of bookselling, says Joe Konrath among others, is in subscription services.  No one says that books will not still be purchased, but what Joe says, if I’m understanding him correctly, is that for many readers, especially avid readers, there will be a significant economic incentive to borrow books via a service like Scribd or Amazon’s Kindle Unlimited rather than purchasing the titles.

I can certainly see how he comes up with that view.  It’s exactly what happened with my capitation participation.  As the subscribers to the plan figured out that they could get an unlimited amount of dentistry done for one set monthly fee, and perhaps just as importantly, that there was a new young dentist out there who would do the dentistry they needed (and do a good job of it), they flocked in to use their “insurance.”  Very few of them understood what they were paying for.  As far as they knew, they were paying an insurance premium and I was getting paid by the insurance company for work done as I did it.  (That IS the situation with fee-for-service insurance, which is capped at one to two thousand dollars per year but pays me for the services I perform on patients.)  Capitation was a great plan for the patients – as long as there was a provider willing to do dentistry for the amount of money he was receiving.

So, there are three distinct entities involved in systems like this.  One is the reader.  She is analogous to the patient in my capitation situation.  She wants stories to read, and a subscription service would seem to give them to her.  How many stories she reads in a month?  It’s limited only by her speed of reading and the time she has available for reading.

The second is the author.  She would be analogous to the provider, who, in my case, is the dentist.  She produces stories for the reader to read.  How many stories can the author provide?  Well, again, it depends on the speed of the author (ie, how fast she can write) and the amount of time she has to actually write stories.  It’s limited by both of those two things, just as in a dental practice.  In my case, I was limited by the number of appointments I had available for everyone, not just the capitation patients.  I was also limited by how long I took to perform a specific procedure.  Root canals took longer than fillings and cleanings.  Dentures took more appointments.  I was also limited by my own costs.  I suppose an author is limited by the costs of editing, proofreading, cover, formatting, etc etc.  In other words, in both situations there would seem to be a floor as to reimbursement.  Reimbursement needs to cover the costs of doing business.

The third is the “Company.”  In my case the company was one that provided capitation-style “insurance” to various employers so they could provide reasonably priced dental plans to their employees.  In an author’s case, the companies are Scribd and Oyster and Amazon.  The company has to balance the amount of money coming in with the amount of money going out in such a way that it covers its cost of administering the plan (in the dental example) or delivering, storing and providing some promotion for the ebooks in the lending service (Scribd, Oyster and Amazon).  Oh, and it needs to make a little profit.  (Costs would include the salaries of everyone involved in the process of acting as the middleman.)

In the case of Scribd, it seems that they were paying authors for borrows as if the books were purchased.  Voracious readers were reading a LOT, apparently, and Scribd was responsible for paying the authors as if those readers were purchasing every book.  (Almost sounds like a fee-for-service dental plan.)  Authors were paid per unit read, full price for the book.  Readers were paying a flat fee (something like $8.99 a month?) to access as many books as they wanted to.

In Amazon’s Kindle Unlimited, Amazon collects a flat fee ($9.99 a month) from subscribers, and allows them to borrow ten books simultaneously.  It then takes their subscription fees and puts them into a pool (minus whatever costs they feel they need to withhold to cover their operating costs and whatever profit they want to make), and from that pool it reimburses the authors whose books were borrowed.  (I think I understand this correctly.)  Amazon was paying authors if a reader read 10% of their book, which was great for short stories (my own shorts were in there, but I think I only had one or two Kindle borrows), not quite as good for authors of novels and such.  Now they have switched it so that writers will be paid by the actual pages read of their works.  I take this to mean that if someone writes a ten page short story and a reader finishes it, that writer is paid the same as an author who writes a 300 page novel and a reader only reads the first ten pages of it.  (Seems relatively fair on the face of it.)

So, if everything is golden, why did Scribd remove a bunch of romance novels from their service?  Apparently they did this because romance readers are reading them right into the poor house.  They’re reimbursing every author full price for the books borrowed.  If a reader is paying $8.99 for a month’s subscription, it’s easy math to see that they can read three books priced at $2.99 before the company starts taking it on the chin.  Not just no profit, but real financial losses.

I think this is illustrative of the pitfalls of this sort of model.  Because when you look at Scribd’s options, you see that there aren’t too many.  First, they could raise subscription fees.  Mark Coker suggested that perhaps there should be a tiered plan, with a basic level that allows a certain number of borrows per month, and maybe an unlimited plan for more money that allows as many borrows as the reader can read.  Any increase in costs up front to the reader will likely lead to less subscribers.  For some it would be a good deal at a much higher fee, but for others it would perhaps tip the scales in the other direction.

Second, they could pay authors less.  This is sort of what Amazon’s KU does.  There is a fixed pool of money, funded (I assume) in large part by subscription fees.  The pool is divided by the total number of pages read by subscribers, and the authors are paid by pages read.  In general, this model will reimburse authors by some amount that is probably less than the amount they would receive had all the borrowed books been purchased by readers.  I can’t say this with 100% certainty, but the math seems to make sense, especially if we’re talking about books that are reimbursed at 70%.  (At 35%, the math tips in the other direction.  All of my books are currently priced at $0.99, so I don’t make much per purchase.)  But they run the risk of having authors pull their books out of the program if they aren’t making enough money for their efforts.

Third, the company could simply take losses and hope that the subscription dollars grow as more people subscribe, and hope that not all of them are voracious readers who consume many more books than they are realistically paying for.  They run the risk of losing money and putting themselves right out of business, unless they’re a company like Amazon.

In my capitation case, the company who administered the plan had very little, if any, risk.  Their biggest concern was in getting a provider who would adequately care for their subscribers.  I know that one of the problems when I was doing it was that when I got that influx of patients due to another provider dropping out of the system, I found that they all needed a bunch of dental work.  The other dentist wasn’t doing much of anything.  Cleanings, a few fillings, and not much more.  He was coasting – sitting back, collecting checks and not doing the work because he wasn’t treatment planning it.  Many of them needed crowns and partial dentures, and I was doing them, one after another.  I had to ration out the care, because I simply couldn’t afford to do it all in one month.  I wasn’t being paid for it.  Also, I had to ration out chair time.  I couldn’t allow more than a certain number of patients with that plan per week, because I had other, paying patients who I needed to work on in order to keep the business running at that time.  The theory was that once I got a patient or a family completed, they would not need much work in the future, and I could collect their capitation fee without providing much value in the way of services.  In practice, many of the patients dropped the coverage once they got their crowns and partials, and there was no way to force them to continue to pay for it.

Some of this has implications for subscription services, some of it is unique to dentistry.  The thing with ebooks is that there are tons of providers (authors) and hundreds of thousands, if not millions, of books out there.  It isn’t a single author being forced to write stories for the masses for virtually nothing.  But in another sense, that just means that the pot (the subscriber fees) has to be divided in a lot more parts before being distributed to the providers.

There is a delicate balance here that is going to be very difficult for a company to negotiate successfully.  Amazon is experimenting with the way they reimburse authors, and they have the size and the ability to spend money in an attempt to figure out a way to do this right, to find that perfect balancing spot.

There’s more to be said on this issue, but this has gone on long enough today.  If anyone reads this and has any thoughts, please jot them down in the comments!  Thanks!

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Kindle Giveaway (via KDP Select) – Success or Failure?

So the giveaway is over.  I put two of my titles, SOLE OCCUPANT and DEAD OR ALIVE, on free promotion from Wednesday 12/10/14 to Sunday 12/14/14.  How did they do, you ask?  Well, between the two of them, I gave away 144 copies of the two short stories.  I really didn’t know what to expect as far as numbers, but it was mentioned to me by SF/Thriller author Steven M. Moore that giveaways used to be measured in the thousands and now they’re measured in the hundreds.

I piggy-backed this giveaway on the concurrent giveaway of QUANTUM ZOO, hoping for a few shares of my posts promoting both giveaways on Facebook so that I would be exposed to other authors’ fans, but the only share I got was by D.J. Gelner, the editor of QUANTUM ZOO.  (Thanks DJ!)  It did help, because instead of around a hundred people seeing my posts, close to 300 saw the first post with the links in the comments.

SOLE OCCUPANT got more downloads than DEAD OR ALIVE did, in the US by 75 to 50.  It’s a much shorter title, with two stories adding up right around 3100 words, while DEAD OR ALIVE is a single story of about 7800 words, something like that.  DEAD OR ALIVE is part of a larger “trilogy” of vampire detective stories, which I hoped might work in its favor.  SOLE OCCUPANT has a cover made by professional Rich Siegle, while DEAD OR ALIVE features a home-made cover.  I don’t think it sucks, but no way is it as good as Rich’s cover.

My hope was that perhaps I might get a paid download or three of one of the collections.  I haven’t had a paid sale in a month.  My other goal was to get a review or three.  But so far, out of 144 titles given away, there are no additional reviews, either good or bad.  I don’t know if that means that most of the downloads haven’t actually been read, so I suppose there’s still some time.

A third goal was simply to get some of my work into the hands of readers, who may or may not like it, but I figured it was worth a shot.  Tastes vary, and out of 144 tries, you’d think that maybe I might get a new reader or three.

It’s sort of depressing.  A commenter, John Ellsworth (I think) on one of my other posts suggested that I focus on writing something longer.  I have longer pieces out there, nothing approaching 80K words (the length he suggested) but maybe closing in on 50K for a couple of them.  Nothing under 23K, I think.  Mostly horror, though one of them is a mystery.

It’s sort of one of those catch-22’s, in that I want this to be a self-supporting hobby.  I am willing to pay for covers and editing, but I want to see enough earnings to suggest that it’s worth it for me to do so.  I hoped to sell enough short stories to make enough money, even if it was just a hundred bucks a month, to pay for cover art for some of these longer projects.  But it’s been a no-go.

So what should I do?  Keep writing?  (I’ll do that anyway.)  Keep publishing?  (Not as certain about that one.)  I’m dismayed by the lack of reciprocal promotion I get from authors whose works I’ve promoted on my FB page and here on the blog.  Not even a “Like” from any besides D.J. and J. Michael Major, who has also reviewed a few of my stories on Amazon.

That’s okay.  I have to admit, however, that it makes me less enthusiastic about supporting (via promotion on either here or on my FB page) other indie authors.  I’ll still support the ones I like to read by buying their books, and possibly reviewing them if the mood strikes me.

Maybe this giveaway experiment will result in sales down the road.  Maybe it will result in a few reviews, positive or negative.  But right now, I have to come down on the side of “failure” when asking myself if it was a success or failure.

*****

 

Amazon vs Hachette again?

It seems every other article on The Passive Voice and on Joe Konrath’s blog (okay, it’s every article on Konrath’s blog) is about the Amazon/Hachette dispute.  Most of them center on the 900 or so successful authors who signed Douglas Preston’s letter (I’m not bothering to link to it; it will be easy enough to find from TPV or Konrath’s blog if you want to find it) and their accusations against Amazon, who they feel is holding their books hostage, and therefore costing them money.  How it’s costing them money, I don’t know.  You can still order their ebooks at the click of a button, and you can still order their physical books as well – apparently their pre-order buttons are gone and so people aren’t able to buy their books before they’re out and then they don’t get listed as highly on the NY Times bestseller list the day their book is released and…

Well, you sort of get the idea.  They’re complaining about the fact that the dispute between their publisher and Amazon is costing their publisher sales – presumably sales that will be held against them in the future, since they’ve pretty much already been paid for their books with their seven figure advances.  I mean, Stephen King is a very rich man.  If he never wrote another book, he’d still be a rich man.  If his SON never wrote (or sold) another book, his SON would be a rich man, simply by inheriting his father’s estate (or a third of it).  Is King Koch Brothers-rich?  Probably not, but he’s so much wealthier than the rest of humanity, he certainly falls into that 1%.

But that’s neither here nor there.  The hard fact is that most people who write a book will NEVER be published by a large publisher.  Most will never be published by a publisher of any size…unless said publisher is themselves.  Who has made it possible for anyone with a book to get it published?  Amazon.  I suppose you can give some credit to iBooks/Apple, Kobo and Sony, and even to Barnes and Noble’s Nook.  But Amazon’s the big fish in this pond.

So Amazon’s publishing anyone and everyone…right?  No, not right.  The writers are publishing themselves.  Amazon (and B&N and the others) are distributing their works.  They are making it possible for a writer to reach readers.  In some cases, like mine, it might be only a couple of readers with each book.  In other cases, it’s hundreds, maybe even thousands.  In still other cases (we’re all looking at you, Mr. Hugh Howey), they sell enough to basically get rich.  Cool, huh?

Well, I suppose it isn’t cool if you’re Stephen King, or James Patterson, or Douglas Preston.  If you’re those guys, you want the club to remain closed to new members.  Only those approved by … by who? … can get in.  Meanwhile, every dollar spent on a Scott Dyson (or an Edward J. Robertson, or a Steven M. Moore, or a Bobby Adair, or a D.J. Gelner, or a J.M. Ney-Grimm, or a Lindsay Buroker (I’ll stop there) is a dollar not spent on a book by King, or Patterson, or Preston.  Maybe, instead of buying books by all three of those guys, and supplementing the purchases with more purchases by Coben and Evanovich and Child and Connelly and…, this buyer only buys two of those authors’ new books.

Plus, we write trash, swill, whatever.  We must write swill, because no agent or editor at a big publishing house, ever got to look at our work, and no one could tell us that we sucked.  Except the reader.  The readers can tell us we suck.  And apparently they do, in blogs and in Amazon reviews and such.  But they also tell King and Coben and Patterson and Preston and Evanovich and Child and Connelly and… that they also suck.  Sometimes.

Because the reading experience is subjective, what one person likes is not necessarily what another person likes.

Well, I went a little off track there.

The truth is, Amazon  is not always a publisher.  What it always is, is a RETAILER.  Just like T.J. Maxx and Walmart and Target and Macy’s and Walgreens and Michael’s and Barnes and Noble and…wait, Barnes and Noble…they’re the ones Amazon is competing with, not the publishers.  They’re a purchaser of supplied product, in this case, books.

Why is that so hard to understand?

They aren’t paying a 70% royalty to KDP writers, they are taking a 30% cut for distribution from KDP author/publishers.  30% is their margin between $2.99 and $9.99.  Above and below those numbers, their cut is far worse for the author/publisher- 65%.   But when you think about it, what is being sold at that lower number?  It’s short stories and short-ish novellas, works that were otherwise unsellable.  I’m sure they do it that way because that is how they want these ebooks priced.  So those are their terms.  As an author/publisher, it’s take ’em or leave ’em.

What happens to RHP or Hachette or whoever, when they price above those lines?  I’m not sure, but I have a feeling they’re getting more than 35% of the profit.  I really don’t know.

Nor do I care.  While it bothers me to see misinformation getting bandied about, and authors saying things about Amazon that do not appear to be grounded in actual facts, in the end, it doesn’t affect me as a writer.

I have seven short (ish) stories priced at $0.99, and three collections/longer works currently priced at $2.99.  I just would like to see myself move more copies.

As a reader, however, I can unequivocally state that I refuse to pay more than $9.99 for an ebook.  Actually, I refuse to pay more than about 6 bucks for an ebook for myself.  I might go higher for my kids’ books.  I also will never pre-order a book (or a movie or just about anything else).  I don’t see the need for it.  It’s not like there is suddenly a shortage when it comes out, and it’s not like I don’t have enough books to read.  If they are successful in pushing up the price of ebooks to the reader, I will simply buy even more independent fiction.  There are plenty of authors I like writing plenty of books I like.  I’m not all that picky when it comes to a good story.  I will buy less traditionally published fiction.  What I do buy will likely often be remaindered copies.

So there.  That’s the extent of what I can do about higher ebook pricing.

*****

 

Amazon-bashing…

No, not from me.  I’m not going to bash Amazon.  Like I said in my last post, if it wasn’t for Amazon and their Kindle Store, I would never have published.  But after a weekend of no blog reading, I came back and checked some of my usual spots and found that there was plenty of Amazon bashing, and Amazon supporting, going on.  The latest is Konrath and Howey vs. Chuck Wendig. 

I’ve been thinking about Amazon in terms of the “letter” that Douglas Preston posted, which has been signed by something like 400 major authors, including personal hero Stephen King, and the rebuttal, written by Joe Konrath and Hugh Howey and “edited” by Barry Eisler and others.  It seems that people (read:  trad-published writers) want to frame the rebuttal as an Amazon-love fest, and others (read: self-publishers) want to frame the Preston letter as a big-publishing apology.  When I read the quotes that Konrath put on his blog, I couldn’t help but agree that Preston’s letter is pro-Hachette AND anti-Amazon, but when I read Konrath’s and Howey’s “reader thank-you”, I saw a piece that mostly tried to excuse Amazon for any of the harm done to Hachette authors (like Preston, I assume, and many others).

I don’t for a minute think that Amazon and Hachette really care about the authors, any more than I think Walmart cares about Green Giant brand vegetables.  With respect to Walmart, if a producer of one of the products they sell goes under, they simply shift their sales to another similar product.  Amazon, like Walmart, is a retailer, and in the end, they don’t care about me as an author EXCEPT in terms of how much money they can make by retailing my products.  I’m a supplier to them, definitely part of the (very!) long tail because I only sell a couple units a month.  But even at that, they aren’t losing money on me.  In fact, they’re making a small amount every time my mom buys a book by me.  (I’m kidding.  My mom doesn’t buy any of my books.)  If things change and Amazon begins losing money on me and those like me, they’ll dump me like a hot potato, only faster.

On the other hand, Hachette is not a retailer.  They’re a supplier.  To them, writers are the growers of the corn and green beans that they package and ship to many retailers, not just Amazon, but Walmart, Barnes and Noble, Costco and Sam’s Club, Target, and thousands of mom-and-pop bookstores across the country.  Should they be concerned with the well-being of their suppliers?  Well, maybe not.  If farmer A fails to provide quality corn to them, they can go to farmers B and C and D.

I’m reminded of health care providers’ relationships with the insurance companies that pay them for most of the services they provide.  We have a love/hate relationship with those companies.  The best ones, the ones we most like to work with, do not try to place themselves between the doctor and the patient aside from reimbursement.  They don’t try to determine the necessity of treatments and reimburse fairly for services rendered.  Patients don’t sign up with an insurance company to get a health-care costs manager, but usually that is exactly what they get.

In my practice, we breath easier when we see patients listing certain insurance companies, and we clench our teeth when we see patients listing others that we know are hard to work with.  I hate it when an insurance company questions me as to necessity of a particular treatment.  I’d like to think I don’t recommend treatments that are not necessary.  It is just extra work for me to explain to them why its necessary.  This is always something I’ve already done with the patient.

How does this relate to Amazon and Hachette?  Well, in both cases we have to realize that the companies are primarily interested in one thing – their own bottom line.  But we also have to look at what they are providing in return for our production of the products that they sell.  And how much are they getting in the middle of the only relationship that matters – that between the writer and the reader.  It’s very similar to insurance companies in medicine.  The less they get in between the doctor/patient relationship, the more we like them.  We as doctors (and patients, possibly to a lesser extent) would be happiest if they would just shut up and pay as we believe they’ve agreed to do.  But they, in the interest of their bottom line, would prefer to monitor those out-going expenditures and make them as small as possible while collecting every last premium dollar.   We depend on insurance companies; without them few of our patients would be able to afford high level care.  But we hate them anyway.

Same with Amazon and Hachette.  We’d love it if they’d just shut up and sell our products and send the checks.  Amazon does this, for the most part, if you’re an independent publisher.  You see how many units sold, and they cut a check based on that number.  They’re pretty clear up front on the amount they’re going to pay, and you can see exactly what you’re getting.  But then again they’re a retailer.  They’re simply taking their cut out of your sale and passing on the rest to you.  (What’s the cut for?  It’s for making the distribution process simple.)

Does Hachette do this?  Most of us will never know, because Hachette isn’t interested in using us as suppliers.  Maybe their authors are happy with all of their contract terms.  Or maybe they aren’t.

But what does any of that have to do with Amazon?  Simply because Amazon isn’t pre-selling their products while they’re in negotiations with Hachette, and authors are losing sales?  Because Amazon is stating as fact that it may take longer than expected for Amazon to ship a Hachette product, because they aren’t stocking them in huge numbers because of this dispute?

Amazon’s just the retailer, or so it appears to me.  Understand that Amazon, like those health insurance companies and like Hachette, only wants to make as much money as possible and believes that the way to do so is to honor their promises to their customers, so without assurance that they can get Hachette products in the near- or more-distant future they won’t commit to advance ordering.  Just like Hachette wants terms from Amazon that will allow Hachette (not Hachette authors) to make as much money as possible.  Is Hachette changing their contract terms based on whatever happens with Amazon?  Somehow I doubt it.

It appears to me that authors’ ire should be directed at Hachette, not at Amazon.  Amazon’s ONLY the retailer.  Okay, it’s the biggest retailer, but still – there are still other online outlets for their works.  iBooks and Barnes and Noble and Kobo can still sell their works, and you can side load a Nook app on a Kindle Fire (though not on the Paperwhite – has to be an Android OS, I guess).

If Walmart stops selling your merchandise, hopefully you have a few other  ways to get your stuff to your customers .  Target, maybe?  Or Jewel?  Or even K-mart or Old Navy or whatever.  Do you direct your customers elsewhere?  “AVAILABLE AT TARGET STORES NATIONWIDE!!!”

Or do you start suggesting that Amazon is evil, their founder is the devil, etc etc, and insisting that HE and THEY cut their profits for your benefit?  Because they’re not evil…and the chances of them cutting their profit margins are about the same as Hell freezing over…

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