Wednesday, July 27, 2016

The Business of Writing: Digital Distribution Strategies for E-books #ASMSG #MFRWOrg

Snow in July by Kim Iverson Headlee
99 cents now through 7/31/16!
If I had written this article six months ago, I would have begun with the advice to release a new e-book on Kindle Unlimited and keep it exclusively with Amazon for at least a year prior to releasing it on other platforms such as Nook Press and iTunes.

Now I know better.

Before I launch into the horror stories, let me start with the basics.

Amazon, with its proprietary e-reader device the Kindle in all its many flavors, has become the largest distributor of e-books on the planet. It also pays the lowest royalty rates to authors under most circumstances, a mere 35%, while forcing authors and publishers into a very narrow pricing window ($2.99–$9.99) in order to earn that coveted 70% royalty payout.

Oh and by the way, if you have discounted your title to less than $2.99, that kicks you back into the 35% payout rate for the week, even on sales that were made at $2.99 prior to the price reduction. Don't believe me? Experiment with your book's pricing, and then leave a comment here if you observe different results.

Authors who have enrolled their titles in Kindle Select (a.k.a. Kindle Unlimited to readers) have it even worse now that Amazon has gone to a per-page-read model for payments. As of this writing, the typical payout is about $0.003 (three tenths of a penny) per reported page read. This means that an author needs to have a customer read at least 120 pages of an e-book priced at 99 cents in order to earn the same royalty amount (at the 35% payout rate) as a regular paid download.

What? You've published a novella on Kindle Unlimited that Amazon has deemed is less than 120 pages? Tough luck, pal. Write something longer next time.

While there are short-term advantages to releasing a book via Kindle Unlimited, such as the ability to set up five free promotional days out of every 90, in the long run you are not doing yourself or your book any favors by adhering to Amazon exclusivity. And you expose yourself to the risk of having your account shut down without warning or recourse (keep reading to get to those horror stories).

Before you panic, however, there are other distribution options to consider:
  • Nook (nookpress.com). The royalty payout is 40% for books priced at less than $2.99, at which point the payout rate jumps to 65%. They also follow Amazon's example and reduce the payout rate to 40% for books priced at more than $9.99.
  • Kobo (writinglife.kobobooks.com). The royalty payout is 45% for books priced at $2.98 or less; otherwise, authors earn a 70% payout rate, even for titles priced higher than $9.99.
  • Google Play (play.google.com/books/publish). Per their overview, the author keeps "most" (in theory, more than 50%) of what is earned in download sales. I could not find any specific royalty payout schedule, and I have no sales data for this platform since I deactivated my books there in 2015, after a brief trial period. I did, however, find a royalty payout rate of 52% reported via third-party distributor Pronoun.
  • Apple (iTunes/iBooks). The vendor account for this retailer is easiest to manage if you have Apple equipment; i.e., a Mac or iPad. According to Pronoun, the royalty payout rate is 70% regardless of the book's price.
  • Draft2Digital (draft2digital.com). This is my third-party distributor of choice for platforms such as iTunes, Scribd, and others. The royalty payout is 60% for all books regardless of price, even to Nook and Kobo platforms.
  • Smashwords (smashwords.com). The royalty payout varies by book's price and the origin of the sale (affiliate, non-affiliate, and Premium Catalog retailers). The Premium Catalog retailer category earns 60% payout regardless of the book's price. For a book priced at $0.99, the payout is 47–60%, with affiliate sales earning the lowest rate and Premium Catalog retail sales earning the highest. At $1.99, the payout rate is 58–70%, with the highest rate going to non-affiliate rather than Premium Catalog retail sales. When the book's price is set at $2.99 or higher, the Premium Catalog retailer rate of 60% is the lowest tier, with non-affiliate sales earning progressively higher royalty percentages of at least 74%.
  • Pronoun (pronoun.com). In general, they follow the aforementioned retailers' royalty payment rates, with the notable exception of Nook, which they list as a flat rate of 50% rather than the price-dependent 40% or 65%. (Source: http://support.pronoun.com/knowledge_base/topics/what-are-the-retailers-distribution-fees) In addition, they offer distribution to Google Play, which could be advantageous since Google Play's title setup procedure is clunky and difficult to navigate. Just keep in mind that they tell you that you keep 100% of your earnings (i.e., the net after each retailer has taken its commission), not 100% of the list price.

In theory, you could use Smashwords to distribute your 99-cent e-book to Kindle, Nook, and Kobo and earn at least 47% royalty, rather than Amazon's miserly 35%, Nook's 40%, or Kobo's 45%. Or you could distribute via Draft2Digital and get 60% royalties from Nook and Kobo (they do not support distribution to Kindle), or you could give Pronoun a try. Do let me know if you have had success with this approach. I code my own e-books and have vendor accounts for all platforms except iTunes, to whom I distribute using Draft2Digital.

There are other publishing platforms out there, such as StreetLib (https://www.streetlib.com/meetstreetlibus/), which takes a 10% commission on author sales over and above what the retail platforms collect. My advice is to read the fine print, and don't go with any outfit that tacks on its own fee on each sale.

Now, as promised, the horror stories about Amazon's Kindle Unlimited. I'll leave you to discover them for yourself:

In short, Amazon is the big boy on the publishing block, knows it, and doesn't care how many innocent (or, as Michael Lucas put it, "low-value") authors they shaft with their automated fraud detection schemes.

I have now pulled all my books out of automatic enrollment in Kindle Unlimited. The pittance I receive for participation in that marketing ploy is not worth the risk of having my account deactivated without warning or recourse due to fraudulent activity on someone else's part.

Are you frightened enough to pull out of Kindle Select/Kindle Unlimited yet? You should be.

Whether or not you set up multiple vendor or third-party accounts for distributing your books is of course up to you, but I will leave you with a parting point to ponder.

Since I have many titles in my personal catalog, and many customers who read one of my books and then choose to purchase one or more of my other titles, I prefer to make that hunt easy by embedding product links in my "Other books by" section of each e-book. You cannot do this as effectively if you publish via a middleman like Pronoun. During the upload and verification process, Barnes & Noble will reject any book that contains Amazon links, and so forth. So if you go with Pronoun, Draft2Digital, Smashwords, or another third party for distribution to the major retailers, you have to upload a version that either contains no product links whatsoever, or it contains non-competing links such as Half.com, BooksAMillion.com, Audible.com for audiobooks, and so forth.

This approach requires that I maintain retailer-specific versions of each title, which can be a pain when I've published a new book and then have to revisit all the other books to add its link for the appropriate retail platform. However, I've found the exercise to be well worthwhile, especially during a major marketing campaign such as a BookBub feature.

Best of luck in all your publishing decisions and ventures!

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