Thursday, November 29, 2012
Amazon The Grinch Who Stole Christmas? Amazon Doubles Down on Exclusivity
Last year, a mere three weeks before a record-breaking Christmas for ebook sales at the Apple iBookstore, Barnes & Noble, Kobo, Sony and other retailers, Amazon convinced thousands of indie authors to remove their books from the virtual shelves of all Amazon competitors.
The lure: KDP Select, an opt-in program that requires authors to make their books exclusive to Amazon for a minimum of three months. I blogged my opposition to the program here at the Smashwords blog, and in the months since also spoke out against it here, here, here and here.
The controversial program has its share of opponents and supporters. Some authors have done well with it, and others have not.
I contended, and still contend, that exclusivity is a devil's bargain. When authors go exclusive with any retailer, they increase their dependence upon that single retailer, limit long-term platform building at other retailers, disappoint fans who shop at other stores, and hobble the development of a thriving and competitive ebook retailing ecosystem.
KDP Select places authors in a difficult position. They must decide if the short term benefits of KDP Select outweigh the long term harm caused to their writing career. The potential benefits are uncertain, and the harm is impossible to measure. How does one measure a missed opportunity? One thing is for certain: When I look at the Smashwords bestsellers, they're authors who maintain non-stop, uninterrupted distribution of all their books. They're the authors who are working to build their audiences at each retailer for the long term.
This Christmas season is shaping up to be another record-breaker for Smashwords authors. In the last 12 months, sales at the Apple iBookstore have surged as Apple continues to dominate the tablet and smartphone markets, and has built the world's largest global ebook retailing network with stores in 50 countries. Barnes & Noble has expanded to the U.K. with the support of 2,500 brick and mortar retail storefronts promoting, displaying and selling the NOOK family of e-readers. Kobo was acquired by Rakuten, a global ecommerce juggernaut, and has aggressively grown its global footprint and sales for the benefit of Smashwords authors.
Amazon's response to the rise of its competitors? Today, Amazon doubled down on its exclusivity strategy. It sweetened the KDP Select lending library pot with an extra $1.5 million to be paid out over the next three months (press release here).
Undoubtedly, some indie authors will reach for the carrot and immediately pull their books from distribution, and as a result will never know what they missed out on this holiday season. It's somewhat ironic that after decades of writers bowing subservient to traditional publishers who controlled the only path to retail distribution - and after so many traditionally published authors saw their books forced out of print when retailers dropped their books - that so many indie authors will now pull their books from distribution with their own hands.
What affect has KDP Select had on the growth of Smashwords? Not as much as our detractors might think. After Amazon announced KDP Select last year, some authors speculated it would put us out of business. Quite the contrary. We and our authors have enjoyed another record year this year, thanks to growth across the Smashwords distribution network. We've enjoyed record profitability, and have grown our staff to 19 professionals, all singularly focused on creating success for the 50,000+ authors, publishers and literary agents we serve. We're reinvesting our profits to provide faster support, improve the speed and reliability of our distribution, and open up new distribution and sales opportunities (I'm writing this post from The Hague, the Netherlands, where I just concluded two days of exciting meetings with representatives of the International Federation of Library Associations). We'll end the year with nearly 100,000 new titles added to the Smashwords catalog. Last Christmas was a blowout record for us, and I suspect Smashwords authors who remained fully distributed last Christmas and thereafter benefited by the reduced competition when thousands of KDP Select books disappeared from retailer shelves. I expect this Christmas will be no different. I expect some of our authors will pull some of all of their books, and the authors who remain fully distributed will become stronger for it.
Amazon is smart to realize that indie authors are the future of publishing. If they can convince a large percentage of indies to surrender their independence to Amazon, Amazon will enjoy long term competitive advantage.
Indies have a choice to make. They can support Amazon's strategy, or reject it. I don't envy the decision many authors must now make. It's unfortunate Amazon would play indie authors as pawns in its larger battle to harm its retail competitors. I wish the best to all self-published authors, regardless of their decision.
Image credit: Wikipedia