Self-publishing on a larger stage

Not surprisingly, bestselling erotic trilogy Fifty Shades of Grey by E.L. James, which started out as Twilight fan fiction, got a lot of attention at Frankfurt as a self-publishing success that became even more successful once it was picked up by Random House. The trilogy is rumored to have sold over 50 million copies, but James couldn’t have done that on her own, writes Publishing Perspectives editor-in-chief Ed Nawotka: “It took Random House and Bertelsmann’s global network–and editorial, production, distribution and sales expertise–to make that happen.” He cites 50 Shades as a prime example of how self-pubbed authors and traditional publishers can work together: “Amid the continuing economic recession, the publishing industry needed 50 Shades of Grey. James didn’t need a publisher as such, but once she turned to the pros, her relatively modest success was turned into a maelstrom of money.”

At Frankfurt, publishers were on the lookout for more self-published titles to snap up. Penguin bought the UK rights to crime novel Natural Causes by James Oswald, which sold hundreds of thousands of copies as a self-published book, in a six-figure deal; German publisher Goldman Verlag also made a six-figure deal for the title, and offers were in from Brazil and Italy.

Amazon continued its promotion of its self-publishing platform KDP. The company held daily sessions about the benefits of using self-publishing through KDP, and also announced that it is expanding the Kindle Owners’ Lending Library — which lets Amazon Prime members who own Kindle devices borrow one ebook a month from a library of over 200,000 titles, most of them self-published — to the UK, Germany and France.

In order to offer their books in the KOLL, self-published authors must make them available exclusively through the Kindle store.This is “dangerous…for the ebook rivals who have yet to open their doors to self-published content,” Eoin Purcell writes. “In reality, only Kobo has a fully functional platform for self-publishing authors beyond the USA (Apple does too, but only to the extent that those who have a nice Mac can access their iBookstore, but not everyone has a Mac). Nook’s [self-publishing platform PubIt!] is US only, though the talk is that this will change soon. The longer B&N and Microsoft exclude non-U.S. citizens from the service, the longer Amazon has to lock in exclusive content for three months at a time.”

Speaking of Kobo, the company announced a few more initiatives to compete on the self-publishing front through its self-publishing platform Writing Life. It acquired French digital software company Aquafadas and will make iBooks Author-like tools available to users. Writing Life is available in new languages — German, French, Italian, Portuguese and Dutch — and the company said authors from 82 countries are now using it.

Three bookselling startups to watch

Three of the most-talked-about startups at the Frankfurt Book Fair focus at least in part on new ways of selling books. Ganxy lets authors and publishers create “showcases” to sell books and control marketing and promotions. They can ssell books directly through the showcase or simply provide links to retailers. The entire showcase can then be tweeted, embedded in a blog, website or Facebook page, or can stand alone as a website.”

BookShout! lets users import ebooks they’ve purchased from Barnes & Noble and Amazon into its app. Once BookShout! has verified the purchases, users can access a DRM-protected version of the file uploaded by the publisher.

BookShout! is already working with Random House, HarperCollins, Macmillan and Wiley, but the practice of providing a third-party site with your Amazon user name and password is causing controversy: As Baldar Bjarnason writes at FutureBook, “We don’t know nearly enough for us to decide whether we can trust Bookshout. If they use their own servers as a proxy for the process, then those machines become a prime target for hackers. Compromising them would give them instant access to a host of Amazon accounts and their associated credit cards.”

BookShout! founder Jacob Illian addressed some of the concerns in a comment on paidContent’s story, writing, “At BookShout, we do not store your Amazon or B&N password when you import your books. In fact, if you import your books, buy another book from Amazon and then want to import the new one, you have to enter it all over again.”

ZolaBooks, founded by former literary agent Joe Regal, will begin selling ebooks by the end of this month, Regal said at the Tools of Change Frankfurt conference. “We intend to have every book from every publisher,” Regal said. Most books sold on Zola are protected with the company’s “proprietary” DRM — that was a requirement of the big-six publishers Zola is working with — which Regal claims is “unbreakable.” And, he said, “our answer to competing with Amazon is not to compete with Amazon…Our value system is so completely different from theirs.” He claimed “they’re not fundamentally editorially driven. [Amazon, which is publishing its own print and ebooks, might disagree.] They are pure commerce…Their value is price.”

Going global, thinking mobile

As digital reading expands globally, it won’t look the way it has in the West. In particular, mobile phones could be key in less wealthy countries, but many of those opportunities are so far untapped. ”I’ve been perplexed by the relative lack of interest for books on mobile,” Andrew Bud of the Mobile Entertainment Forum told Publishing Perspectives. “Yes, it’s a harder sale, but as the traditional products that do well on mobile–ringtones, for example–are fading, there is an opportunity for publishers to become a stronger part of this morphing market.”

Ebooks are already selling well on mobile phones in China. At the International Rights Directors Meeting on Tuesday, Gary Tan, owner of the Grayhawk Agency in Taipei, offered a brief overview of China’s mobile ebook market. China has over one billion cell phone users and 300 million smartphone users as of March 2012 and China Mobile, one of two major telecom providers in China, is the country’s largest ebook platform. Publishers may be reluctant to sell foreign rights to China Mobile, as it takes a huge cut of sales — at least 50 percent and sometimes as much as 70 percent — and sells the ebooks at a 90 percent discount from the print price. “These terms sound really bad,” Tan said, but China Mobile has such a large user base that if a book becomes a bestseller on the platform, “we might be talking about six-figure U.S. revenue.”

A panel on potential for ebooks in sub-Saharan Africa also focused on mobile. Ben Williams, a South African bookseller and founder of Avusa Digital Books, a platform for African ebooks, mentioned mobile payments company M-PESA as “one of the most sophisticated banking services you can have in Africa” and said digital bookstores could be built on top of it. He also cited initiatives like Paperight, which rely on photocopying machines in “the copy shops that are all over Africa” to print out copies of ebooks. (There’s advertising on the paper’s margins.” “The copy shop is now like a library or bookstore,” Williams said. Nevertheless, Togo’s Yasmîn Zahra Issaka-Coubageat, publisher of Graines de Pensées, noted that only “thirty percent of the population has a mobile phone in Togo,” and so for many countries even a mobile phone revolution could be a few years away.

Globe, bookshelf photos courtesy of the Frankfurt Book Fair

Amazon launched KOLL in the United States last November with a library of about 5,000 traditionally published titles — some of which weren’t included with the publishers’ permission but, rather, were purchased by Amazon at the wholesale price each time a user borrowed one. This caused a controversy that has since subsided as KOLL has primarily become a vehicle for self-published authors to promote their books: Amazon opened it up to self-published authors in December 2011 through a program called KDP Select, and the library now contains over 200,000 titles, nearly all of them self-published. Authors are paid out of a fund each time their ebook is borrowed. (In exchange for including books in the KOLL, self-published authors must sell them exclusively through Kindle for a period of at least 90 days.) All seven Harry Potter ebooks are also available through the KOLL in English, French, Italian, German and Spanish.

It is unclear how many people in Europe will be eligible to borrow ebooks from the KOLL. Amazon has not released Prime membership numbers in any country, but it seems safe to assume that there are fewer members of “Amazon Premium” in the UK, France or Germany than there are in the United States, and fewer still who own a Kindle. But the expansion of the Kindle Owners’ Lending Library to Europe comes at a time when Amazon is heavily promoting its self-publishing capabilities on the continent. At the Frankfurt Book Fair this week, Amazon has been holding daily sessions for international audiences about how to self-publish their books on Kindle.

In the press release announcing the expansion to Europe, Amazon said it is increasing the pool of money that self-published authors are paid from to $700,000 for October, from $600,000 last month, and “a larger increase anticipated in November.” The company says “in September, authors earned $2.29 per borrow, which is more than many KDP books earn per sale.” (Of course, not all books are borrowed even one time.)

Amazon also says that “in September, KDP Select books that enrolled in August earned 77% more royalties from paid sales than the three months before they were enrolled in the program.  This figure is conservative and only includes books that were available via KDP for the entire three months prior to enrolling in KDP Select.”

Monday morning’s release comes ahead of next week’s Amazon press event, where it is widely believed that Amazon will announce a new Kindle Fire and Kindle e-reader. The Kindle Fire comes with a free one-month trial of Amazon Prime.

The main announcement Monday is that the company “now ships more items with Prime Free Two-Day Shipping than with Free Super Saver Shipping — the program Amazon launched in 2002 that offers free shipping on orders over $25.” That isn’t particularly surprising because households with Prime tend to order a lot more stuff. Macquarie analyst Ben Schachter did a self-analysis last year and found his household placed seven times more Amazon orders after switching to Prime.

Most people with Prime would probably report a similar experience. After I switched to Amazon Prime, I started ordering nearly all of our household items from the service. The last five items I ordered were a dress, tights, a baby gift, an iPad case and Swiffer Dusters.

Analysts have tried to guess how many members Prime has. In February, Bloomberg released a super-sketchy report citing “people familiar with the matter” who say it has between three and five million members. Last November, Piper Jaffray analyst Gene Munster estimated Prime would have 10 million members by the end of 2011. Again, Amazon hasn’t released any official data.

Here are some other tidbits from the release:

• Top four items ordered with Prime: 1) Kindle Fire; 2) $79 (basic, non-touchscreen, ad-supported) Kindle; 3) Kindle Touch (they don’t specify if it’s the ad-supported model or not); 4) Fifty Shades of Grey.
• “Amazon Prime now features more than 15 million unique items.”
• The Prime Instant Video catalog, which offers free streaming to members, contains 22,000 movies and TV episodes. The most-watched TV show is “Downton Abbey, Season 1″ and the most-watched movie is the Swedish version of “The Girl with the Dragon Tattoo.”
  
• The Kindle Owners’ Lending Library, which lets Prime members borrow one ebook for free each month, now offers more than 180,000 books. Amazon cites bestsellers like “The Hunger Games” and Harry Potter, but the vast majority of titles in the KOLL are self-published.
• Totally my favorite: “Amazon Prime members could order 500 different items with Prime Free Two-Day Shipping every day of their lives and still not order every Prime item.” In other words, you could order 500 items every day for 82 years.
• Amazon Prime’s annual price, $79, hasn’t changed since it was launched seven years ago. I suspect many Prime members wouldn’t be bothered by a price hike — to, say, $99 — but the press release does not make it sound as if Amazon is considering that.

The books are Oliver Pötzsch’s bestselling “The Hangman’s Daughter” and the sequel to that book, “The Dark Monk,” released on Tuesday.

“The Hangman’s Daughter,” with a digital list price of $9.99, is $3.99 in the Kindle Store (or free in the Kindle Owners’ Lending Library). It’s $8.99 in Barnes & Noble’s Nook store, $9.99 in the iBookstore and $7.69 at Kobo.

“The Dark Monk,” with a digital list price of $9.99, is $7.69 in the Kindle Store (or free in the Kindle Owners’ Lending Library). It’s $8.99 for Nook, $9.99 in the iBookstore and $7.69 at Kobo.

I can’t find either book in Google’s digital bookstore, Books for Google Play, or in the Sony (SNE) Bookstore. Update, 6/15/12: Both books are now in the Sony Bookstore too. “The Dark Monk” is $7.99 there and “The Hangman’s Daughter” is $9.90.

Houghton Mifflin Harcourt, which is publishing the print versions of all the titles from Amazon Publishing’s New York imprint, is also listed as the publisher of the non-Kindle e-book editions. Amazon previously announced that it would sell James Atlas’s upcoming “Amazon Lives” series of mini biographies through all digital retailers, but didn’t say at the time whether it would expand that policy to other titles too.

Now we see that in the case of at least two published titles, Amazon is making them available to other digital bookstores, and the bookstores are agreeing to carry them. Barnes & Noble had said it would not carry Amazon print titles in its stores, but apparently it doesn’t mind selling some e-books online. I’ll head to my local Barnes & Noble later today to see if “The Dark Monk” is available there too.

See also

Barnes & Noble: We will not carry Amazon Publishing titles in our stores

Amazon will sell some e-books beyond the Kindle Store

Well, here’s how Amazon Publishing will get its books into Barnes & Noble

Larry Kirshbaum shares many more details on how Amazon Publishing will work

As with Pottermore’s other retail agreements, the e-books aren’t sold directly through Kobo. Instead, Kobo’s website (which, for some reason, is currently illustrated with a picture of the Harry Potter books on the iPad) points users to the Pottermore store. Customers buy the e-books there and then link their Pottermore account to their Kobo account.

Pottermore has similar arrangements with Amazon Kindle, Barnes & Noble Nook, Sony Reader and Google. Pottermore hasn’t reached an agreement with Apple yet.

“Kobo is an increasingly powerful player in the e-reading market and we are delighted to have them on board,” Pottermore CEO Charlie Redmayne said in a statement.

(Speaking of Kobo becoming increasingly powerful: Kobo’s parent company, Japanese e-commerce site Rakuten, also announced a $100 million investment in popular image-sharing site Pinterest to help power retail with social).

The news comes a week after Amazon announced that it will make all of the Harry Potter e-books available free to Kindle-owning Amazon Prime members in the Kindle Owners’ Lending Library.

The e-books will be available in all languages, though the Kindle Owners’ Lending Library is U.S.-only.

“It’s a commercial deal that makes sense even with a level of cannibalization of my sales,” Pottermore CEO Charlie Redmayne tells paidContent, “but I believe it will actually drive greater sales.”

“The way the deal is structured means that any lost sales are more than made up for,” Redmayne says. “Yes, some people will borrow from the Kindle Owners’ Lending Library and therefore not buy, but Amazon is paying us a large amount of money for that right, and I believe it’s a commercial deal that makes sense.”

Moreover, Redmayne says the deal “enables people to discover Harry Potter” and thinks that most of the time, readers who “kind of wanted to [buy Harry Potter books] but haven’t…will go to KOLL, discover the brilliance of Jo Rowling’s writing and want to buy the rest and own the set.” Redmayne pointed to some statistics Amazon previously released: The company said that in the case of the Hunger Games trilogy, which is available through KOLL, nineteen percent of customers who borrowed the first book in the trilogy went on to purchase one of the later books instead of waiting another thirty days to borrow it.

Jeff Bezos says regular libraries’ wait times are way too long

Harry Potter e-books are among the most-requested titles through digital library distributor OverDrive, and public library wait times can be long. With Kindle Owners’ Lending Library, “you never get put on a waiting list,” Amazon CEO Jeff Bezos said in the release.

Redmayne was more supportive of libraries, telling me, “The deal we did with public libraries through OverDrive is very much about aiding discovery. Libraries have proven a very effective way of aiding that discovery and introducing people to brands.”

Pottermore also promises more platforms, but not Apple yet

Separately, Redmayne tells the Guardian that Pottermore will announce “new partners and new platforms for the site” in the “next few weeks,” but Apple isn’t one of them yet. (Apple uses the agency model for everything sold on iTunes; it hasn’t yet agreed to send users directly to Pottermore as other retailers have.) “We’re having conversations with Apple, but there is no date, no agreement. Would I like to be working with Apple? Absolutely.”

I’ll be interviewing Pottermore CEO Charlie Redmayne at paidContent 2012, May 23 at the TimesCenter in New York City. Register here.

No changes until June at the earliest

Simon & Schuster, Hachette and HarperCollins agreed to settle with Justice. If the settlement is approved — following a 60-day comment period — those three publishers must terminate existing agreements with Apple’s iBookstore within seven days. In addition, as the Competitive Impact Statement on the settlement explains, the three settling publishers must terminate contracts with other retailers (like Amazon and Barnes & Noble) that contain any “restrictions on an e-book retailer’s ability to set the retail price of any e-book” and any most favored nation clauses. Those MFN clauses — which can be found in all agency publishers’ contracts with retailers, not just the contracts with Apple — state that no other retailer can charge a lower e-book price.

Publishers must terminate the contracts with retailers other than Apple “as soon as each contract permits” — i.e., when the contract expires — but the retailers also have the option to terminate the contracts “on just 30 days notice.” After the original contracts are terminated, the settling publishers may enter into new agreements with retailers (including Apple).

Under those new agreements, for the next two years, retailers may set, change or lower e-book prices and may offer discounts and other promotions “to encourage consumers to purchase one or more e-books.”

After two years, the settling publishers may once again enter into agency pricing agreements that restrict retailers from setting, changing, or lowering e-book prices. However, price MFN clauses are prohibited for five years.

OK, I just want to know what it means for e-book prices

Readers are likely to see lower prices on e-books published by HarperCollins, Hachette and Simon & Schuster — at least at Amazon, which expressed its glee over the settlement. But you won’t see those lower e-book prices until at least June — remember there’s that 60-day waiting period, and then publishers and retailers have to enter into new contracts. It’s in Amazon’s best interest to enact the new contracts as quickly as possible so that it can start discounting the settling publishers’ e-books, as it has said it plans to do. Other e-book retailers, like Barnes & Noble and Kobo, are likely to want to enter into new contracts quickly as well so that they are on a more even playing field with Amazon. They may not be able to afford to discount a wide range of e-books as deeply as Amazon can, but they will want that option.

As soon as the new contracts are in place (and Justice will be holding onto a copy of each of those contracts), let the discounting begin. Forrester analyst James McQuivey told Digital Book World last week that he expects Amazon to discount e-books slowly and strategically, starting with bestsellers. Publishing industry consultant Mike Shatzkin, on the other hand, believes Amazon “will do the splashiest discounting they possibly can, making the point as loudly as possible that they deliver the lowest prices to the consumer and daring their competiton to match them.”

McQuivey and Shatzkin may both be right. Amazon may not deeply discount all of the titles it carries from HarperCollins, Simon & Schuster and Hachette, but I wouldn’t be surprised to see some shockingly cheap bestsellers from those publishers — think massive summer promotions where big titles by authors like James Patterson, Jodi Picoult and Nicholas Sparks are $1.99.

Bundles, buy-one-get-one-free and more stuff you haven’t seen before

Justice notes that agency pricing “prevented e-book retailers from experimenting with innovative pricing strategies…such as offering e-books under an ‘all-you-can-read’ subscription model where consumers would pay a flat monthly fee,” bundles or buy-one-get-one-free promotions. The settlement opens the door for those types of promotions on Hachette, HarperCollins and Simon & Schuster titles.

For example, retailers could bundle frontlist and backlist titles from those publishers for a flat fee. They could offer a free e-book with the purchase of a print book. They could offer, say, romance or mystery bundles with titles from multiple publishers. They could even give e-books away for free. And, presumably, Amazon can start including Hachette, HarperCollins and Simon & Schuster titles in the Kindle Owners’ Lending Library for Amazon Prime members — if it does what it did with titles from some other publishers and pays the wholesale price each time an e-book is borrowed. (In other words, the three settling publishers wouldn’t have to agree to offer their books in the KOLL. Amazon can now just go ahead and do it.)

What about Apple’s iBookstore?

Apple’s iBookstore launched with agency pricing in effect, and it does not sell e-books from non-agency publishers. (That’s why, for instance, you still can’t find The Hunger Games — published by non-agency publisher Scholastic — in the iBookstore.) So it will be very interesting to see how Apple responds to the settlement. If it simply removes Simon & Schuster, Hachette and HarperCollins titles from its shelves without negotiating new contracts — yes, this would mean Walter Isaacson’s Steve Jobs biography, published by Simon & Schuster, would no longer be available through iTunes — it will be losing a large part of its catalog.

If Apple agrees to negotiate new contracts that don’t require agency pricing, it could also make agreements with the many publishers who have not been able to sell their books in the iBookstore before. That would mean a much wider book selection for iBookstore shoppers.

What will I see at Kobo, Barnes & Noble and other non-Amazon e-book retailers?

Barnes & Noble, Kobo and other e-book retailers will be under immense pressure to discount Hachette, HarperCollins and Simon & Schuster e-books to the same prices that Amazon offers. Keep in mind, though, that these stores have survived so far without always matching Amazon’s prices on titles from non-agency publishers. The settlement puts more titles from big bestselling authors in play, but Kobo and B&N do not necessarily have to match on every price in order to stand some ground against Amazon. (That said, the settlement makes their lives harder, not easier.)

I’d expect to see B&N and Kobo rolling out increased loyalty programs and other perks to try to keep readers shopping with them. For instance, Barnes & Noble could offer two free titles to anyone who buys a new Nook. They could start other membership, loyalty or subscription programs. Barnes & Noble already has the ability to bundle e-books with print transactions from its in-store cash registers and might start offering more e-book specials to in-store shoppers.

Barnes & Noble and Kobo could also turn their attention to the titles that Amazon is paying less attention to — say a HarperCollins backlist book. They could run special promotions or reading groups around those books. (Amazon could do this, too, of course.)

Retailers could have been doing many of these things all along, but non-Amazon players are going to feel the pressure to innovate quickly. They may get added support from the settling publishers (in terms of promotion, marketing suggestions, etc.) to the extent that that is not forbidden by the settlement.

Will DRM go away?

Many — including Ruth Curry and Emily Gould of Emily Books, here on paidContent — are arguing that publishers’ best tool against Amazon is to drop DRM on their titles. Science fiction author Charlie Stross, in a much-read post, writes, “If the major publishers switch to selling ebooks without DRM, then they can enable customers to buy books from a variety of outlets and move away from the walled garden of the Kindle store.” As GigaOM’s Mathew Ingram has argued, publishers see a feasible model for removing DRM in Pottermore.

I wouldn’t be at all surprised if at least one big-six publisher announces plans to drop DRM this year — Hachette’s Maja Thomas hinted at it recently — but the actual implementation of the new policy could take awhile as it would likely require negotiations with literary agents as well as the implementation of more robust direct sales systems from publishers’ own sites.

What doesn’t change

Agency pricing itself has not been declared illegal. Publishers who enacted agency pricing later — namely, Random House — can keep using the model. They don’t have to enter into new contracts. In addition, Macmillan and Penguin are fighting the lawsuit and can continue selling e-books under the agency model until a settlement or decision is reached (unless a judge explicitly forbids them to use the model before that).

Random House could, of course, renegotiate its contracts and remove agency pricing if it thinks that its titles will be at a disadvantage against cheaper non-agency titles from HarperCollins, Simon & Schuster and HarperCollins. But since agency pricing leaves it in Random House’s power to discount books across retailers, we might simply see deeper and more discounts coming from Random House itself.

And if Random House doesn’t deeply discount big titles from bestselling authors — but those titles stay at or near the top of bestseller lists anyway — that will support the belief that readers are willing to pay a premium for books by certain authors.

Some limits

Amazon cannot now, for example, make every single HarperCollins title it carries free (even if it were inclined to do so). When it comes time for Simon & Schuster, HarperCollins and Hachette to negotiate their new contracts, the settlement allows them to “negotiate a commitment from an e-book retailer that a retailer’s aggregate expenditure on discounts and promotions of the Settling Defendant’s e-books will not exceed the retailer’s aggregate commission under an agency agreement in which the publisher sets the e-book price and the retailer is compensated through a commission.” The settling publishers can also negotiate one-year contracts that “prevent e-book retailers from cumulatively selling that Settling Defendant’s e-books at a loss over the period of the contract.”

In other words, under that type of contract, Amazon (or any other retailer who agrees to the contract) could discount certain titles as much as it wants, or give them away for free. But it could not sell a publisher’s “entire catalogue at a sustained loss.” So if Amazon and a settling publisher sign a contract that gives Amazon a 30 percent commission on each title sold, Amazon cannot discount that publisher’s entire catalogue by more than the total amount of the commission it receives.

Bestselling author Richard Russo, Forrester’s James McQuivey and Barnes & Noble’s Jonathan Shar will be among those discussing the future of e-books at paidContent 2012, May 23 at the TimesCenter in New York, NY. Register here.

Recently, though, Amazon shared some data about Kindle Singles with me, and allowed Kindle Singles authors to share their sales figures with me as well.

Amazon launched Kindle Singles in January 2011 as a home for “compelling ideas expressed at their natural length.” There are now 165 Singles, and Amazon adds around three more each week. Authors and publishers have to apply to have their work included. Most Kindle Singles are exclusive to Amazon. Others come from traditional publishers — like Random House and Hachette — or new e-singles publishers like Byliner and The Atavist, and are sold across platforms, not just on Amazon. While Barnes & Noble and Apple (NSDQ: AAPL) recently launched sections for e-singles on their sites, they don’t sign original authors and provide little of the marketing support that Kindle Singles authors receive.

How Well Are They Selling?

Amazon says that in the 14 months the program has been running, it has sold over two million Kindle Singles. Seventy percent of each sale goes to the author or publisher, and Amazon keeps 30 percent. Amazon wouldn’t disclose its total revenues from those two million singles, but the minimum price of a Single is $0.99 and most are $1.99 (the author or publisher sets the price). So with an average price of $1.87 multiplied by two million, a rough estimate of Amazon’s 30-percent cut is $1.12 million. (How much are some authors making? See our post later this morning.)

How does this compare to other e-singles sites? Total sales through the Kindle Singles store dwarf those at e-singles sites like Byliner and The Atavist, but the Kindle Singles list is much larger. Byliner has published 18 “Byliner Originals” (15 of those available as Kindle Singles) and told me it “expects to sell over 1 million copies this year” across Amazon, Apple, Google (NSDQ: GOOG), Kobo and Barnes & Noble (NYSE: BKS). The Atavist has published 13 e-singles (12 of those available as Kindle Singles) and would only say that it has sold “over 100,000″ copies.

A Home For Unknown Authors?

Kindle Singles editor David Blum, an adjunct professor at Columbia and former editor-in-chief of the Village Voice and New York Press, sees Kindle Singles as a place to promote the work of unknown authors, including some of his former writing students. In my conversation with Blum, he often described Kindle Singles in relation to the world of magazine writing. “There are a lot of obstacles in the traditional magazine world,” he says, calling Kindle Singles a “middle ground between magazine and book writing,” with “the shards of the magazine industry on one side” and “the decline in the publishing industry and magazine industry working against writers with ideas that don’t fit easily into one or the other niche.”

The program receives around 50 unsolicited submissions a week, and just a handful of those are accepted. Considering that three new Singles are published each week, that is an acceptance rate of six percent (probably less since Blum also solicits some titles himself).

Of course, many of the writers in the program aren’t newbies to the book world. Amazon gave me a list of the top 10 Kindle Singles bestsellers (by units sold), and seven of them are works by previously published big-name bestselling authors: Lee Child, Stephen King, David Baldacci, Dean Koontz, Karin Slaughter, Jodi Picoult, Jon Krakauer. (Picoult’s “Leaving Home” and Slaughter’s “Thorn in My Side” are only available as Kindle Singles; the other titles are not exclusive to Amazon.)

As the Kindle Singles store gets larger — and more brand-name writers decide to take part — individual authors may have a harder time standing out. Right now, one of Kindle Singles’ biggest benefits for authors — one that differentiates it from Nook Snaps and Apple Quick Reads – is the heavy promotion the list gets on the site. “It sits right on a level with many other big sections of the store,” Russ Grandinetti, VP Kindle Content, said. “If you’re on that list, it’s a lot easier to get noticed.” Kindle Singles are also sometimes included in Amazon’s e-mail newsletters and Kindle Daily Deal program.

There are 165 Kindle Singles now. If three more are added every week, that would put the total around 280 titles by the end of this year, decreasing the program’s showcase effect.

All of the authors that I spoke with enjoy working with Blum. Many say they see him as a literary presence within Amazon — a tastemaker. It appears that he has been able to operate independently; the one other editor working with him used to be his intern.

“Let’s say you work for an underfunded literary magazine and your private mission is to promote literary good tastes and writers you think are talented and having something meaningful to contribute to the culture,” said Oliver Broudy, a former Paris Review managing editor who has written two Kindle Singles. “Now let’s say you have millions and millions of dollars to devote to that cause. That could be the Kindle Singles program. Dave is accountable to the rest of Amazon, but I do believe there’s something of that spirit in his enterprise.”

But will the lit-mag vibe survive if the operation becomes bigger and more commercial? I asked Grandinetti if he thinks more big-name authors will join Kindle Singles. “I hope so,” he said. “The more that publishers think about this as a companion opportunity to their main activity; the more that editors start to understand this is an option for things that come across their desk-that’s a real opportunity.”

Kindle Singles’ Function Within Amazon

Grandinetti wouldn’t disclose Kindle Singles’ share of total Kindle revenues, but said it’s “going to grow a lot, and that will partially be a function of how attractive writers and publishers find the format relative to more traditional books.” When considering the submissions to Kindle Singles versus the titles self-published through the Kindle Direct Publishing platform, “we don’t have a pre-conceived goal of how much ends up in Singles versus [in the broader store],” he said.

Kindle Singles and Amazon’s other publishing initiatives sometimes feed each other. Blum refers authors who aren’t accepted to Kindle Singles to KDP. One Kindle Single, Evan Rail’s “Why Beer Matters,” was originally published on KDP and “we just moved that over,” Blum said. Twenty-nine Kindle Singles are already in the Kindle Owners’ Lending Library, which allows Amazon Prime members who own Kindles to borrow one e-book a month.

I asked the authors I spoke with — many of whom had also published full-length books with traditional publishers — if they’d consider publishing future books with Amazon. They all said they’d at least give Amazon a look at full-length projects, because of their experience with Kindle Singles.

In that way, Kindle Singles allows Amazon to draw in authors who deem the program low-risk because it’s not in conflict with other publisher relationships they may have. Those authors may then stick around, especially if they believe that doing a full-length project with Amazon has the potential to be as lucrative as Kindle Singles have been for many of them.

How lucrative? See the next post.

The Kindle Owners’ Lending Library allows Amazon Prime members who own a Kindle to “borrow” one e-book per month. In exchange for agreeing to sell their e-books exclusively in the Kindle Store, self-published authors can add those books to the Kindle Owners’ Lending Library through a program called KDP Select.

Authors who participate in KDP Select are paid, per borrow, out of a monthly fund. In February and March, that fund is $600,000 per month. In January, it was $700,000.

Let’s go through the interesting parts of the press release, shall we?

– “Since launching the Kindle Owners’ Lending Library in November 2011, selection has grown by over 20 times.” Nearly all of that growth comes from self-published books added to the library, which now includes 100,000 titles — up from about 5,000 at launch, yes, but with little if any increased participation from traditional publishers. (Some traditional publishers were included in the library without their consent, and Amazon pays them an e-book’s wholesale price each time it is borrowed. No big-six publishers are participating.)
– So when Amazon says the library includes “over 100 New York Times (NYSE: NYT) Best Sellers like The Hunger Games trilogy,” that number hasn’t changed since November. In other words, 0.1 percent of the books in the library are NYT bestsellers.
– “More than a third of the Top 20 Kindle Best Sellers in February are enrolled in the library and available to borrow for free.” I don’t have the Kindle bestseller list for all of February but it would definitely include the three Hunger Games titles, leaving three to four places for KDP Select titles (or for traditionally published titles in the Kindle Owners’ Lending Library.)
– “More Amazon customers are reading independently-published books.” That’s vague; we don’t know how many more or whether they’re reading them specifically through this program, etc.
– “Over 1 million KDP Select” books have been borrowed since the program launched in December. This doesn’t mean, of course, that 1 million different KDP Select titles have been borrowed. We don’t know how many books in the library have been borrowed at least one time. Some books have likely not been borrowed even once.
– The release hints several times that participation in KDP Select also increases paid sales. It mentions three self-published authors who increased paid sales. Kindle VP Russ Grandinetti also suggested this is the case at Digital Book World in January.
– Participating self-published authors “have earned $1.8 million from the KDP Select Fund so far.” Remember every one of those authors has agreed to make their books exclusive to Amazon and they are only paid if their book is borrowed.

I think the main thing to keep in mind is that the $1.8 million is a pretty good deal for Amazon. Think of it like this: Let’s say there are 95,000 self-published titles in the Kindle Owners’ Lending Library. (That’s 100,000 minus the roughly 5,000 traditionally published titles Amazon started with.) Some self-published authors have more than one book in the library, so let’s say 90,000 self-published authors are participating. I have no idea if that’s actually the number but you can fiddle around as you like; anyway, $1.8 million divided by 90,000 authors is $20 per author.

Update: I checked out this list of authors — I think it’s the complete list of authors who are participating in the Kindle Owners’ Lending Library. There are 2,238 names on the list. Those not participating via KDP Select are paid separately. At any rate, 2,238 is FAR less (duh) than the 90,000 I estimated above. So the $20 figure I cited above is misleading, and I’m sorry.

Here’s a better way to think about it: by BOOK. Right now I see 116,982 Prime-eligible Kindle books. Subtract 5,000, the rough number contributed by traditional publishers. That leaves 111,982 titles. Divide that by the $1.8 million that has been paid out since December and you get $16.07. That’s the amount that Amazon has paid, on average, so far, for exclusive selling rights to each book in the Kindle Owners’ Lending Library today.

Some authors’ books are borrowed many times and this is a good deal for them (even though in March they’ll be paid out of a smaller fund than they were paid out of in January despite the fact that WAY more of them are participating). But don’t forget it’s a good deal for Amazon too.

The Kindle Owners’ Lending Library allows Amazon Prime members who own a Kindle to “borrow” one e-book per month. In exchange for agreeing to sell their e-books exclusively in the Kindle Store, self-published authors can add those books to the Kindle Owners’ Lending Library through a program called KDP Select.

Authors who participate in KDP Select are paid, per borrow, out of a monthly fund. In February and March, that fund is $600,000 per month. In January, it was $700,000.

Let’s go through the interesting parts of the press release, shall we?

– “Since launching the Kindle Owners’ Lending Library in November 2011, selection has grown by over 20 times.” Nearly all of that growth comes from self-published books added to the library, which now includes 100,000 titles — up from about 5,000 at launch, yes, but with little if any increased participation from traditional publishers. (Some traditional publishers were included in the library without their consent, and Amazon pays them an e-book’s wholesale price each time it is borrowed. No big-six publishers are participating.)
– So when Amazon says the library includes “over 100 New York Times (NYSE: NYT) Best Sellers like The Hunger Games trilogy,” that number hasn’t changed since November. In other words, 0.1 percent of the books in the library are NYT bestsellers.
– “More than a third of the Top 20 Kindle Best Sellers in February are enrolled in the library and available to borrow for free.” I don’t have the Kindle bestseller list for all of February but it would definitely include the three Hunger Games titles, leaving three to four places for KDP Select titles (or for traditionally published titles in the Kindle Owners’ Lending Library.)
– “More Amazon customers are reading independently-published books.” That’s vague; we don’t know how many more or whether they’re reading them specifically through this program, etc.
– “Over 1 million KDP Select” books have been borrowed since the program launched in December. This doesn’t mean, of course, that 1 million different KDP Select titles have been borrowed. We don’t know how many books in the library have been borrowed at least one time. Some books have likely not been borrowed even once.
– The release hints several times that participation in KDP Select also increases paid sales. It mentions three self-published authors who increased paid sales. Kindle VP Russ Grandinetti also suggested this is the case at Digital Book World in January.
– Participating self-published authors “have earned $1.8 million from the KDP Select Fund so far.” Remember every one of those authors has agreed to make their books exclusive to Amazon and they are only paid if their book is borrowed.

I think the main thing to keep in mind is that the $1.8 million is a pretty good deal for Amazon. Think of it like this: Let’s say there are 95,000 self-published titles in the Kindle Owners’ Lending Library. (That’s 100,000 minus the roughly 5,000 traditionally published titles Amazon started with.) Some self-published authors have more than one book in the library, so let’s say 90,000 self-published authors are participating. I have no idea if that’s actually the number but you can fiddle around as you like; anyway, $1.8 million divided by 90,000 authors is $20 per author.

Update: I checked out this list of authors — I think it’s the complete list of authors who are participating in the Kindle Owners’ Lending Library. There are 2,238 names on the list. Those not participating via KDP Select are paid separately. At any rate, 2,238 is FAR less (duh) than the 90,000 I estimated above. So the $20 figure I cited above is misleading, and I’m sorry.

Here’s a better way to think about it: by BOOK. Right now I see 116,982 Prime-eligible Kindle books. Subtract 5,000, the rough number contributed by traditional publishers. That leaves 111,982 titles. Divide that by the $1.8 million that has been paid out since December and you get $16.07. That’s the amount that Amazon has paid, on average, so far, for exclusive selling rights to each book in the Kindle Owners’ Lending Library today.

Some authors’ books are borrowed many times and this is a good deal for them (even though in March they’ll be paid out of a smaller fund than they were paid out of in January despite the fact that WAY more of them are participating). But don’t forget it’s a good deal for Amazon too.