Sure, as a Kindle Direct Publishing author, maybe I’m biased on the issue, but let’s look at some facts.
People are accusing Amazon of being monopolistic. As someone who studied economics in college, like it was my business concentration, not a one or two class requirement, I know a bit about monopolies. Now the accepted definition of a monopoly is a situation where there is only one seller. I’ll get to that in a bit.
The reason monopolies are generally considered bad, and here is where you want to pay attention, is that monopolies are generally and historically used to restrict the supply of the good or goods which the monopoly has sole control over for the purpose of keeping the price up. And monopolies, by definition, restrict competition. The economics text has all sorts of terms like ‘barriers to entry’ for instance.
The book publishing industry has long been ‘difficult to break into’, because they operate under a model where very few books written actually get published. Are they the best books written, well, you have to decide that on your own. But one might argue that many of the big house published authors are more lucky than good, because they managed to wade through the minefield and got into a big firm.
What is this minefield? Many authors send hundreds of manuscripts to big publishing houses every day. They print these manuscripts themselves, either by purchasing lots of paper and printer ink (not a cheap approach) or paying a printer like you might find near a college (that may also ship packages overnight and again, this is not cheap for the author). Now, what happens to these manuscripts when publishing houses get them? It’s anyone’s guess, but the circle file is the most likely answer, whether they read a page, a chapter or simply dropped it into the recycle bin. If the author is lucky, they get a rejection letter. The unlucky ones sit waiting, hoping that no news is good news. Sadly, it’s not.
So, how does one get published by a big house? There are a few methods, but one is an infinite circle of insanity that goes something like this. To get in front of anyone at the big house, you need an agent. To get an agent, you can either get scammed by someone who will take your money and never get you in front of anyone, or you can get with a reputable agent, and get this, only if you have a sales record of success. Now, as the old saying goes, you can’t get a job without experience, but how do you get experience without a job in the first place, this is a similar conundrum. How some lucky few get through has a lot to do with nepotism, friends in the biz and so on. And yes, some get in because they persevere beyond where it would be insane to keep going (same act, expect different result and so on…). And yes, there are actually some very talented writers that manage to get their work in front of an agent, get them to see how good it is and take off from there. They are talented and successful and alas, the wee exception to the rule, but deserving of respect for their accomplishments nonetheless.
Now I’m not sure about you, but this sounds a lot like a barrier to entry. Many people with great books will never get to the top, simply because they can’t find the right place to jump onto the big publishing wheel of fortune. I would also maintain that by severely restricting the number of writers they will sign, big publishing is also restricting competition for the sake of the writers they do sign. By simply smacking down 99% of the submissions, they help the 1% they do sign have large volumes of space on the bookshelf in the local Barnes and Noble et al.
So, let’s look at how Amazon addresses these issues. As for barriers to entry, here’s how it works. Any author who can follow the submission guidelines for Kindle Direct Publishing (KDP) can put EVERYTHING they write onto KDP and have it in front of their electronic consumers on Amazon.com in 72 hours or less. Yes, you heard that right. Anyone with a story to tell, no matter how good or bad can publish on Amazon. And Amazon allows readers to return books they do not like within a limited window of time for a full refund. So, if you buy something and find so many run-on sentences on the first page that it’s unreadable, simply return it for a refund. That is how Amazon does quality control. Let the consumers decide what they want to buy and what they want to keep. Ultimately, the choice is yours, consumer, and not some marketing department trying to tell you what you should think is good.
The author has very little restrictions on KDP. One thing Amazon does ask, which is totally fair, is that the author not sell their e-book through any other retailer at a lower cost. Put another way, Amazon wants to offer the consumer the lowest price possible, in their store. So, when we think about a monopolist trying to keep the prices inflated and Amazon wanting to sell for the lowest price, that doesn’t seem very monopolistic to me.
And what was the dispute about anyway? Oh yes, Amazon reached out to big publishing and asked that they rethink the prices of their e-books and lower them closer to Amazon’s target top price of $9.99. That’s Ten bucks for what amounts to basically an email to your Kindle reader, whether a Kindle, smart phone, PC et al. You purchase, the file shoots across the airwaves and you’ve got a book. No muss, no fuss. So, what was the problem? It seems big publishing, the people who control the popular writers of their own making, wanted to charge more like $19.99 for books they cornered the industry to thrust upon you.
Here’s a little bit about how book publishing works, and yes I have my own little pub, so I know a bit here too. Printing books is expensive. To lower cost, publishers order in volume. Unfortunately, this carries a risk. If a book doesn’t sell and they have a hundred thousand copies leftover, well, trees died not only for the books, but for the money they burned printing those books. There are other cost considerations like storage, freight, shelf space in the stores and so on. It’s sort of an outdated process, which is why a hard cover can cost $35 nowadays (did you ever notice Amazon sells a lot of books at less than list! Price gouging greedophiles! Wait…).
Now, let’s look at the cost of an e-book. There is editing and art required. The book still has to have a cover, even if it’s just a picture of it on a web page. Otherwise, let’s see… I write on computers I already own, using word processors I already own. The files are about 2 MB, so storage isn’t an issue. When finished, edit, cover, package the file. Submit the file to Amazon for FREE through KDP. Amazon web page is FREE. And my cost of goods sold is literally computed by the fixed costs of editing and cover art divided by the number of books ultimately sold. If I sold millions of e-books, the cost would be fractions of a cent per book. Oh, KDP has an author tool for creating a cover for FREE, if the author is on a shoestring and wants something basic.
With a COGS (cost of goods sold) of next to nothing, because there is no physical product, everything the book sells for is gravy, right? Well, not exactly. Amazon has two royalty plans, 35% and 70%. Read the KDP literature if you want to know why everyone doesn’t do the 70%. So, roughly 70% of every sale goes back to me. And I’m reasonably sure that if I were a big pub house, I could probably bargain better than 70% given millions of potential sales. Even assuming the big pubs get 70%, they’re going to get just under $7 per $9.99 Kindle download with virtually no risk of eating product that doesn’t get purchased. Yet they’re not satisfied and want $14 for an electronic file whisked through cyberspace.
So, what we have is the big publishing companies acting like a monopoly, an oligopoly to be more correct, shouting at the news left and right that Amazon is an evil monopoly, when Amazon just wants them to lower the price to give Amazon customers more bang for their dollar. And for anyone who thinks Amazon restricts competition, look at just about any retail item and see how many ‘other options’ there are to buy that product. Amazon lets them all put their stuff up and gives the consumer the choice to purchase the item they wish to. If that’s Amazon’s product, so be it, but there is a choice.
And as a KDP author, I operate as though I have my own retail space on Amazon. Yes I pay Amazon a fee for the space I use, the accessibility of the product to more consumers, collecting the purchase price and handling that accounting part of things, but that all makes it better for me as a writer. I can spend more time doing what I love, which is writing novels, while Amazon takes care of the selling and logistics. And if they get rich doing that, so be it.
I will always be first and foremost a KDP author, because in a world of ‘no’ from the publishing industry, Amazon never even raised the question. They simply opened the door and gave me a voice. And if all I sold were a couple of copies to family members, they recouped their expenses and made a bit of money. Multiply that by everyone who has a story to tell and it’s a great bit of business. And they never have to say no to authors who are so beat down that the author may ultimately delete their only copy out of despair, robbing the world of a great story. By giving everyone a voice, everyone has a fair chance, which is way, way more than big publishing houses can ever say they gave all authors.
Call me crazy, but it seems like someone is trying to profiteer in this case. And it’s not Amazon! Shame on the big publishing industry for taking away your right to choose and trying to charge you twice as much for what’s left over, which they happen to slam you in the face with advertising to convince you it’s good.
Author of Children of Secrecy, only on Kindle!