Everything Old is New Again: Why KDP Select Probably isn’t Good for Self-Published Authors

What has been will be again, what has been done will be done again; there is nothing new under the sun.
– Ecclesiastes 1:9

If you’re at all interested in self-publishing and eBooks, then you probably know about Kindle Direct Publishing (KDP), Amazon.com‘s service that allows authors to load their eBooks directly into the Amazon storefronts. Using KDP, I’m able to sell Pay Me, Bug! through the Amazon.com website, and also directly through the Kindle application.

KDP appears to be wildly successful. There are stories of self-published authors making ridiculous sums of money (Amanda Hocking being the most obvious example) through it, and while self-publishing is still not an easy, or even obvious path to success, it seems more accessible than it ever was in the past. You’re still climbing up a sheer cliff with razor-sharp vines that dig into your flesh, and there are still pointy rocks and alligators hanging out at the bottom… but it’s a shorter climb, you know? And every once in a while you’ll come across a piton some other climber left behind.¹

Whether or not Amazon’s entry into publishing is a good thing for the publishing industry at large (and there are articles that make a pretty damned compelling case why it isn’t), it has been a really good deal for some self-published authors, and has given the rest of us another avenue to pursue that we didn’t have before. That’s signficant, it’s important, it might be revolutionary, it’s definitely meaningful to me.

Now Amazon has KDP Select, a new service that appears to trade exclusivity for free money. The basic idea: if you make your eBook exclusive to Amazon or a month–take it off BarnesandNoble.com, take it off Smashwords, take it off iTunes, take it off everything but Amazon — then Amazon will put it in a special lending library where readers can check it out for free. Every time someone checks out your book, you get paid from a pool of money Amazon sets aside every month. The payment is based on a ratio of how many times your book was checked out compared to how many times every other book was checked out, so if your books are checked out more than anyone else’s you get more money. In January the pool was $700,000, in February it appears to be $600,000.

Get paid just for having people borrow your book! It looks revolutionary, but it isn’t — it’s been done before, and based on my past experience with something similar I’m not sure it’s a good thing for authors. If you want to know why, come with me on a journey back in time and below the fold.

The year is 1997. A scrappy website called MP3.com opens to acclaim and controversy, and is quickly met with enthusiasm by a rather adventurous portion of the indie music community. The idea? The MP3 file format allows music to be compressed enough that it’s now technically feasable for people to download music online, even when using a modem, so MP3.com let you do just that. And hordes of indie bands and musicians (including me)² set up accounts on MP3.com to start sharing their music to people who would otherwise never have encountered them.

That was, without question, the most fun I’ve ever had online. MP3.com started providing tools for musicians, including the ability to upload mp3 tracks and convert them into a CD — so you could sell your CD alongside the tracks you were giving away from free. No one had ever thought of this before. It was nuts. And the best part of it was meeting other musicians.

MP3.com set up forums and the musicians would talk, trade recording tips, talk about what kind of marketing worked and what didn’t, advertise shows, and organize meet-ups in the real world. The best part was it was completely cross-genre — I was a punk/noise musician but I was making friends with country musicians, house musicians, funk musicians, metal, hip-hop, gangsta rap… you name it. And I got exposed to music I never would have considered listening to before hand. I still carry most of those MP3’s around in my collection.

The RIAA hated MP3.com and spent a lot of time trying cast it as a haven for music pirates, but it was ridiculously easy to dispel — the bands and musicians were there willingly and contributing to MP3.com’s success, because it was the most direct outlet we had. Not to mention it was a hell of a lot of fun.

A lot of us would speculate on how it might be possible to make MP3.com a great force of change in the music industry, and a number of us would write blog/forum posts on what we thought needed to happen in order for it to succeed. Michael Robertson, then the head of MP3.com, wrote an essay I still remember fondly called “The Middle-Class Musician” that raised the idea that by adopting a marketing strategy that sold directly to the audience, rather than going through store fronts, it was theoretically possible for a solo artist to support him or herself relatively comfortably by selling far fewer “units” of music than is required to have a silver, gold or platinum record (I believe at the time the number was “10,000 a year” which was laughable in the music industry in the late 90s, and is probably more so today).

Does any of this sound familiar to you guys? Can you draw any parallels to things that might be happening in the world of publishing today? It’s not a 1 for 1 translation but it’s really close.³

If you’re wondering what happened to that MP3.com, well, it went away as soon as it went public. It went public, its stock shot through the roof, and it spent most of its time trying to attract big-name talent. But it did throw the indie artists a bone by instituting a program it called “Payback for Playback.” It was a bone that effectively ended the camaraderie and esprit des corps that made MP3.com such a fun place to hang out.

Here’s how it worked: MP3.com had a pool of money set aside every month, and it was split proportionally among the artists with the most downloads.

Does that sound familiar? It’s essentially the same model, with the exception that you’re not actually checking out a book from a pool of books, you’re giving the song away. Which you were doing anyway. And the pool of money MP3.com was throwing around was, at its height, as much as one million dollars a month, so you’d think there’d be plenty to go around. Well, it didn’t work that way.

It didn’t matter how big the pool was, artists knew they were competing with each other in a clearly-defined, finite space. One million seems like a heck of a lot, but if you have 1,000 artists involved, you were potentially splitting that pile of money 1,000 different ways. If everyone did equally well, that meant everyone got $1,000 a month, which isn’t nearly as exciting… and there were more than a thousand artists on MP3.com at any given time. It was crowded.

So some artists started gaming the system. They encouraged their fans to download specific tracks over and over and over again to artifically inflate their stats. They entered into partnerships with other artists so they could effectively pool their audiences to download specific tracks over and over and over again, continuing to inflate their stats. They started waging PR campaigns against other artists who were doing well, in an attempt to blunt their popularity so that they would get fewer downloads and their portion of the pool would go down.

Whether or not these schemes were effective in the long term is debatable, but what wasn’t debatable was it wrecked the initial community. But Payback for Playback was still popular — it was so popular that eventually MP3.com started charging artists $20 a month if they wanted to be involved, and a lot of artists did. It remained popular right until the bitter end, when Vivendi bought MP3.com and killed the site.

But the community of indie musicians that had formed around it was gone, and the potential that MP3.com had was spent, and the RIAA heaved a sigh of relief. For the most part.

Now we come back to 2012. Amazon.com has KDP Select, which operates in pretty much the same way. So will the authors resort to gaming the system? Amazon.com already has problems with plagiarists abusing KDP, and “authors” scraping wiki sites to create “reference books” that they sell for 99 cents a copy with little effort or editing. What is to keep them from seeing KDP Select as another potential revenue generator? How long will it take before they start to game KDP Select?

Meanwhile, if everyone rushes into this exclusivity agreement, the rest of the publishing world suffers because they don’t get that content… and you, the author, don’t want that to happen. Amazon is, right now, the absolute best game in town for an indie author. I say this with a lot of confidence because every author I’ve talked to, read, or researched has said they make more money from Amazon than all the other venues combined–and even though I’m a pretty new entry into the field, that’s equally true for me.⁴ Amazon is king, so naturally you’re going to want to spend most of your time on Amazon making the most of that landscape… but you also have to look forward. Barnes and Noble, Smashwords, iTunes, other places I don’t even know about yet don’t do as well because the environment isn’t as friendly, for a variety of reasons… but to randomly break off into a farming metaphor, before you get a harvest you first have to plant seeds, and before you plant seeds you have to break ground… KDP Select is the equivalent of throwing salt all over the farm except for one corner and then wondering why you’re only getting crops from the one corner.⁵

All of this is to say that when I first learned how KDP Select worked I decided to stay as far away from it as possible, and my general recommendation is for others to stay away from it as well. This will be difficult to do, because the plain and simple fact is that authors will profit from KDP Select, at least initially. Some will succeed in a jaw-dropping manner. But the more popular it becomes, the fiercer the competition will become, and eventually (I predict) it will lead to opportunists gaming the system, breaking up what communities there may currently exist in the Amazon forums⁶ and making the self-publishers involved increasingly more insular. And the more popular KDP Select gets, the more it hurts the rest of the publishing world, which is where self-publishers should be trying to expand into instead of walling themselves off in Amazonland. Because if some day Amazon decides you have no where else to go, exactly how do you think you’re going to be treated?

Ask the brick and mortar stores that Amazon originally partnered with and are now trying their damnedest to kill off. I bet they could tell you a few stories.

UPDATE: Some commenters on Slashdot have pointed out that KDP Select differs from Payback for Playback in a pretty important way — the only people who can borrow books are Amazon Prime members, and they can only borrow your book once a month. Amazon Prime membership costs about $80 a year, which I agree is a fair deterrent for most of the customer-focused gaming tactics I can think of. I’m not convinced that removes the capacity for gaming, or any of the other ugliness that was associated with it on MP3.com, but it’s a valid point and needs to be acknowledged.

1. And occasionally you’ll stumble across a head stuck on a pike to serve as a warning, but you ignore them. Silly dismembered heads.
2. The Baptist Death Ray’s glory years coincided with MP3.com. This isn’t necessarily a good thing, I’m just saying.
3. The main difference is that the book publishing industry isn’t run by a pack of self-serving, greedy, money-grubbing, materialistic douchebags. There are authors who will tell you differently but they haven’t met the music industry.
4. I should also note that two months of eBook sales on Amazon.com have exceeded an entire year’s worth of ad revenue from Project Wonderful. And my sales haven’t been particularly high.
5. Note to anyone who is curious, I am not a farmer, which makes this analogy suspect. The closest I ever came to farming is listening to Neil on the Young Ones explaining “first we sow the seeds, then nature grows the seeds, and then we eat the seeds.” If you don’t know what the Young Ones is, all I can do is pity you. PITY I SAY.
6. I have to plead ignorance about this because I haven’t spent a lot of time there.