The Two Towers: Apple iBooks Author EULA vs Amazon KDP Select

Before the announcement on January 19, the hope was that Apple’s iBooks Author program would somehow kick Amazon where it hurts. Assuming that anyone can find a location that actually causes Amazon any monetary angst, that is – hunting expeditions for this locale have so far been unsuccessful.

A publishing platform that would make ebook creation easier for the educational market was another “Holy Grail” that some pundits hoped that Apple was about to tackle. I had heard some theorizing that Apple was going to “revolutionize” ebook textbook publishing with the announcement.

And it did, but not in the way that anyone had expected.

By now, you may have heard the chatter (samples here, here and here) about Apple’s Author End-User License Agreement (EULA) for producing books (iBooks) with their new program. If an author wants to be recompensed for the blood, sweat and tears they have put into their book, and they want to create it using Apple’s new program, which is supposed to be so cool, they have to be willing to sign over exclusive, absolutely exclusive, distribution rights to their work, forever. Not for a period of time, but forever. Authors can’t even sell their books on their own sites.

Now if authors want to give the book away, they can distribute it wherever they like.

Some people wanted Apple to give Amazon a poke in the eye with a sharp stick. Why? Because of Amazon’s Kindle Direct Publishing program, also known as Kindle Digital Selects. As a librarian, I have some issues with the program, because the public face of this program is the Kindle Owners’ Lending Library, where Kindle Owners can, well, borrow an ebook from Amazon without buying it. Just like at their local library.

But from the authors’ side, this appears to be a way better deal than Apple. A very detailed analysis of the pros and cons from an author’s perspective was written by Carolyn McCray and posted at Publishing Perspectives. There have also been some recent sales statistics made available by Amazon at Digital Book World showing that there is a positive ripple-effect to participation in the program, because it includes promotion on Amazon’s Kindle Daily Deal mailing, which has pretty big circulation.

Authors want their books to get read, and they want to be fairly compensated. Whatever one might think about Amazon’s practices, or what they might morph into in the long-term, in the short-term, there are reports that indicate those goals are being accomplished.

And Amazon doesn’t expect a lifetime commitment when authors sign up. 90 day exclusivity may not be for everyone, but it is a much shorter term than forever. No matter how you count the days.

But a lot of people are more worried about the long-term than the short-term. Amazon is playing a very long game. As a recent NPR story put it, Amazon’s tactics are seen as ‘predatory’, because Amazon is not just an extremely huge bookseller, but they are also a publisher. Not just an ebook publisher, but a print publisher. They have more clout in more places in the publishing and bookselling business than anybody. Ever.

People were hoping that Apple’s announcement on January 19 would stick Amazon where it might hurt.

Instead, we have a situation resembling the one in J.R.R. Tolkien’s The Two Towers. On the one side, the dark tower of Amazon, with their huge distribution network and their “predatory” practices and their consumers locked-in to their Kindles.

On the other side, we have the white tower of Apple, signing their authors into permanent contractual servitude, telling eager potential iBook textbook creators that if they want to use the cool Apple product they either have to give their work away for free or they have to let Apple own the rights to their work forever.

And in the middle, us poor consumers, hunkering down while the electronic salvos fire overhead.

Remember that in Tolkien’s story, the white tower didn’t turn out to be any less self-serving than the dark tower once the truth was revealed. White just turned out to be the new black.


Brilliance Audio, Amazon, and the Great Un-downloading

On January 4, OverDrive sent an email to all of its libraries with a bombshell announcement, (quoted here from Infodocket)

“Effective January 31, 2012, as instructed by the publisher, BrillianceAudio will suspend the availability of all download audiobook titles for library purchase across all vendors. This change does not affect any titles currently in your library’s catalog. You will not, however, be able to add any additional copies.”

Compared to the Harper Collins 26 checkout limit or the Penguin/Kindle “will they/won’t they” drama, the Brilliance withdrawal notice has generated only a few ripples in the pond. The tree fell in the forest, and there were surprisingly few people around to hear it.

And the voices that have spoken up have cried out against OverDrive. Before we “shoot the messenger”, let’s take a look at the message again.

The loss of Brilliance audiobook downloads is bad news for OverDrive. They license a lot of Brilliance audiobooks, and some are definitely going to be missed from library collections. J.D. Robb, Nora Roberts, Nevada Barr, Tom Clancy, Robert Crais, W.E.B. Griffin, Dean Koontz, Jayne Ann Krentz, the list goes on. These are all authors where my LPOW had long hold queues on OverDrive and licensed multiple copies, up to our maximum. And we bought physical audiobooks, and print books, and ebooks if available and every other format imaginable. OverDrive is going to miss their slices of that revenue pie. This Brilliance withdrawal is not in their interest.

So who benefits? Amazon owns Brilliance Audio. Amazon also owns Audible, which sells downloadable audio direct to consumers. (Full disclosure: Reading Reality is both an Amazon Affiliate and an Audible Affiliate)

Amazon has a track record of cutting out intermediaries wherever they can. They are offering self-published authors terrific deals in order to get agents out of the picture. They have become a traditional publisher as well, with several imprints under their banner ranging from romance (Montlake Romance) to mystery (Thomas & Mercer) to science fiction (47North) to international (AmazonCrossing).

This holiday season, Amazon tried to directly cut out local bookstores (not that they haven’t been doing an indirect job of that all along) by encouraging customers to take the Amazon “price check” app into their local bookstore and then compare the local price to the Amazon price for a $5 discount off the Amazon price. Ecosalon called this out as one of their “Most Offensive Ad Campaigns of 2011

Last but not least in the list of Amazon’s effort to remove obstacles between themselves and the direct consumer, there’s the Kindle Lending Library. Which attempts to eliminate libraries. Amazon Prime members can borrow one book per month, as long as they buy everything else.

So, if Amazon owns Brilliance, which makes audiobooks, and Amazon owns Audible, which sells downloadable audiobooks, who would be responsible for the decision to stop letting OverDrive and all other library vendors (Ingram, Baker & Taylor, 3M) license Brilliance downloadable audiobooks to the library market?



What can we do about it?

Attacking OverDrive will not help.  Amazon is a 900 lb. gorilla, if not bigger. There are very, very few entities that have been able to successfully negotiate with Amazon and come away winners. The one time I can think of is when the publishers managed to break Amazon’s lock on Kindle book pricing by withholding content. But the publishers had something that Amazon wanted, bestselling author content.

What do we have that Amazon wants? Can we use our image of “mom and apple pie” and how much we do for the public good to make Amazon see reason?

The Brilliance audio download tree fell in the forest. It’s up to libraries to make Amazon hear our message.



Amazon and the library redux

Not surprisingly, there has been a lot of commentary in the library world about Amazon’s Kindle Lending Library.

Most of the the library and ebook pundits go over the nitty-gritty details of the Kindle Lending Library, compare the extremely restrictive terms of Amazon’s initial foray into lending services with the vast array of library offerings, and pronounce that libraries have nothing to worry about.

ReadWriteWeb warns its readers “not to get too excited” about the prospect of rushing out to join Amazon Prime and tearing up their library cards.

My personal favorite is the post at Agnostic, Maybe that The Amazon Lending Library is NOT the Library Apocalypse. For one thing, the library apocalypse is more likely going to come as a result of shrinking budgets than anything else.

But to stretch the apocalypse metaphor further, is Amazon helping to feed the Four Horsemen’s horses? That strikes this particular pundit as a much more likely scenario.

The particulars of the Amazon deal as currently stated are very restrictive.  However, many patrons think that library policies are very restrictive. I’m not saying that they are, I am saying that everything is a matter of perspective. How many patrons have we lost for life over arguments about 15 cent or 25 cent overdue fines?

Amazon will change the structure of the deal as soon as it decides it is beneficial for them to do so. I would be willing to bet that the one book per month limit is the first thing to go. One book at a time, like Netflix, will make more sense to most users. But Amazon had to start somewhere, and they can afford to think about the very long term. Their point is to sell Kindles and to get more Prime Members. (And now, to win the probable court case.)

What members of the general public have to say is quite informative. Amazon has a lot of mindshare and the lending program has generated a lot of interest. Lending books for no additional charge used to be one service that libraries offered that was not available on the net. It was a counter to the argument that “why do we need libraries, everything is on the net now?”

The Amazon Lending Library publicity means that people know there are other alternatives on the net for borrowing books. Just because that alternative is not available to everyone now, doesn’t mean that it can’t be expanded later. And people who are making the argument to cut library funding will NOT dive into that detail. The sound bite will be enough.

Libraries do lend ebooks, and thanks to services like OverDrive and Project Gutenberg, a library’s collection can be larger and more diverse than Amazon’s, especially since OverDrive was more careful about actually securing rights instead of just assuming it could do whatever it felt like.

But commenters on the Amazon kerfuffle make the point over and over that if a user wants anything popular from the library, they have to get on a long wait list. No one likes that. What Amazon is offering, limited as it appears to a librarian, is available to any qualified user who wants it, right now. The whole point of ebooks is that a reader can have what they want, when and where they want it.

Over on Librarian by Day, a lot of statistics are used to make the case Why Amazon’s Lending Library is Not a Threat to Public Libraries. The problem is that these kind of statistics don’t move people. Sound bites and stories move people. Every statistic is absolutely correct, and it all sounds like “preaching to the choir”. Anyone who is already convinced that libraries are necessary will be swayed by these facts. Anyone who wants to believe that we can all be replaced by an electronic device, or who just loves bright, shiny toys, or who is simply willing to be convinced because they want to lower their taxes, is going to follow the marketing, and Amazon does great marketing.

We can expect that Amazon will learn from the rollout of its lending program, make changes, and improve it, making it more attractive to its users.  But as was asked over at the E-Content blog at American Libraries, “Can we learn from it?

Amazon presents a challenge to libraries, not because this particular service is better than what libraries currently offer, but just because they generate a huge amount of press and they used the word “library” in their announcement. But what will we as librarians make of this challenge?

Amazon wants to be your library

We’ve all read the news by now. Amazon has gone into the library business. And as the Baltimore Sun described it on November 3, this is bad news for libraries.

Amazon’s announcement on November 3 of the Kindle Owner’s Lending Library is a masterpiece of marketing. But the service it offers, at the price point that Amazon is willing to provide it, is a direct shot across the bow of every public library in America.

Any Amazon Prime customer is automatically a subscriber to the new service. There is just one catch. The service only works if you have an actual Kindle! No Kindle app users need apply.

But an Amazon Prime subscription only costs $79 per year, and includes pretty much the same video streaming as Netflix, in addition to 2-day shipping on everything in the Amazon marketplace. For people who do a lot of their shopping through Amazon, this is a great deal. I’m not currently one of those people, but the Netflix to Amazon comparison may make it worthwhile on that cost alone. I can’t say we’re not thinking about it.

The current cost of the lowest price Kindle is $79. That’s a one time cost. Has anyone noticed that three of the very prominently displayed titles in the Kindle Owner’s Lending Library are The Hunger Games Trilogy? This can’t be a coincidence. The Hunger Games ebooks are not available to libraries through OverDrive. They are available as audio through OverDrive, but not as ebooks. Scholastic does have a deal with Amazon to lend through their lending program, but not through public libraries.

Currently, the “Big Six” publishers do not participate in Amazon’s lending library. That’s Random House, Simon & Schuster, HarperCollins, Macmillan, Penguin and Hachette. But then, two of those six, Macmillan and Simon & Schuster, don’t participate in the library lending space, and HarperCollins’ participation brings up the number 26 and a whole lot of curse words.

But the lending library program is merely another string in Amazon’s bow. Let’s look at what it is again. Any Kindle owner who is already part of Prime Services can borrow one book per month for 30 days, no overdue fees and no hold queues. No muss, no fuss, no additional charges, on a platform they are already familiar with.

What Amazon gets out of this transaction is data, which is also what they get out of allowing Kindle users to borrow OverDrive ebooks from the libraries. They get more data about what people are reading on their Kindles, and they get the opportunity to sell them more Kindle books targeted to them based on that data. Amazon wins big on this.

But I have to contrast the Amazon service with a recent experience at a local library. I decided to finally read the second book in an older mystery series, the Ian Rutledge series by Charles Todd. I listened to Test of Will on a car trip, liked it, and wanted to find Wings of Fire. The library didn’t have it, I don’t want to own it, so I tried interlibrary loan. ILL costs $2. The ebook only costs $7.99. I almost bought it, but I still don’t have a need to own it, and organizing my ebooks is getting to be a chore. I wasn’t worried about how long it would take for the book to arrive, so the month it took to get here was no big deal.

I have three weeks to read it. Not a serious problem for me, I’m used to shorter deadlines, but a nuisance. On the other hand, there’s a 20 cent per day fee if it’s overdue. Since I know the ebook cost $7.99, I’m starting to wonder why I didn’t just buy it, except I’ve already paid $2. And there’s a bookmark in the book to let me know that if I lose or damage the book I’ll automatically be charged $50 until my library settles up with the library that actually owns the book. Since the copy I have is the hardcover, that wouldn’t be $50, but it would be more than $7.99. Obviously, I need to keep the cats away from the book.

I understand about cost recovery. I’ve made all those arguments myself. And multiple times, at that. But I still won’t do another ILL for a book that’s available for under $10 as an ebook. Why? Because the experience is all negative from my perspective. I place the request, and I wait. The book comes in, and I have to figure out when the branch it’s at is open, which is a big issue here. I pay for the ILL, and then I get served with a series of warnings, because the presumption is that I will do something wrong. Those warning labels are attached to the book, just in case I forget them. Then I have to return the book, or I will have to pay again.

The Amazon experience is neutral or positive, and this is true for any ebook purchase from Barnes and Noble and Google and Apple as well. The book is there or it isn’t. Amazon has the special case of the lending library. So someone can borrow it or they can’t. If it’s available for purchase, and I’m willing to pay, I buy it. It automatically downloads to my device, which is already set up from my previous purchases. I’m done. No further charges, no need to go anywhere, no warnings, no fines, no delays. And some potentially helpful suggestions about other books I might like. I’m free to browse further or ignore them and dive into my new book.

Libraries need to be different and good and positive about it. Always. All the time. Whenever we face the public. Are we? If we’re not, Amazon has the potential to do to us what they helped do to Borders.

Amazoogle Affiliates

Not too long ago, a friend asked whether I was planning to include the “buy from Amazon” link in my blog posts. I had recommended several books that he wanted to buy, and he thought I should get some credit, or possibly blame, for it. This was a definitely not bad idea, but since I’m much more agnostic about where I purchase my own books, I needed to think on the whole thing for a bit.

I currently have a substantial credit from Powell’s for all the books we sold to them. It is good (it is excellent) at the Google ebookstore as long as I enter through the Powell’s site, since Powell’s is a Google Books affiliate. When I purchase print books, I tend to buy from Barnes and Noble, they ship faster without having to purchase an additional membership. So I understand completely why someone would want to buy their books or ebooks from someone other than Amazon. Logo - 125x40

And my interest has always been in the story, not where the book gets purchased. But I still liked the idea of putting in the link, because the idea of making it easy for people to get the book (or especially ebook) while they were thinking about it seemed cool. So, I started the process with all the vendors.

It turns out that Amazon makes it really, really easy to become an affiliate and link back from the blog to Amazon. No wonder they have so many affiliates! The tools are a piece of cake. So yes, if you click on a link within a new post, it will link to Amazon and I will get credit. There is also a link on the right hand side.

Barnes and Noble made it easy to get the affiliate account, but the tools to build links are not quite as easy. So, if B&N is your flavor of choice, there is a link on the right. eHarlequin uses the same affiliate vetting service as B&N. It’s apparently a small world. And since I review a fair number of Carina Press books, and Carina is an imprint of Harlequin, it was easy to sign up for that at the same time.

eharelquin - romance and escape for less

Becoming a Google Books affiliate is a surprisingly long process. It’s a three-stage process, which makes it sound rather like a rocket launch. There’s the Google AdSense application, Then the Google Affiliate Network application, and then the Google Bookstore Affiliate application. I’m stuck at the Google Bookstore part.

The hits to the book just keep on coming

There  have been a lot of announcements this week that have made an awful lot of folks in an awful lot of places sound like Chicken Little announcing that, “the sky is falling, the sky is falling!”

In Publisher’s Weekly, there was a report that ebook sales were up 169% in January and February 2011 over previous year sales, and that March was also up 145.7%. In real money, for the first quarter of 2011, e-book sales were up 159.8%, to $233.1 million for the 16 publishers who report figures to the American Association of Publishers (AAP). And mass market paperback sales were only $123.3 million for the first quarter for the same group. Still money I’d like to have in my pocket, but the trend line is pretty clear.

Also yesterday, Amazon announced that sales of Kindle books have outstripped sales of hardcover and paperbooks combined.  For every 100 print books that they sell, they sell 105 Kindle books. And Amazon was very clear in the announcement that they meant sell, not give away.  Free Kindle books were not included in that 105 number, only actual sales. It does seem to include sales of Kindle books where there is no print edition, but that would be perfectly fair, since the print sales would include books where there is no Kindle edition. As Amazon points out, the Kindle was only introduced in November 2007. This revolution has happened in only 3.5 years.  Gutenberg must be absolutely spinning in his grave.

Ironically, the place I first saw the announcement was on aarlist2, a yahoo group that discusses romance novels. And most of the commentary was negative.  This is ironic because the romance genre readership as a whole has embraced electronic publishing, and there are several publishing houses that are e-only. Harlequin‘s entire current catalog is published simultaneously in epub and print, and they have an imprint (Carina Press) that is e-only.

Which brings me to the third announcement of the week. Early in the week, Library Journal and NetGalley announced that LJ would be including reviews of ebook only releases in Xpress Reviews, starting with romance.  Romance ebooks are the hottest genre among ebook readers in public libraries.  At my LPOW, romance ebook circulation was double-plus the next nearest contending genre. Anything I purchased circulated, and the hotter, the better. But without any review source whatsoever, I was purchasing based on tiny blurbs in OverDrive. It was pretty much guesswork. Getting something out there in the review space should be a good thing. (Full disclosure, I am one of the reviewers for LJ)

As a side note to the Amazon announcement, they also touted that the new Kindle with Special Offers, in other words, the Kindle with lots of advertisements, is now the best selling Kindle on the market. In order to save $25, people are willing to have ads pushed at them with their books. Indefinitely. There is an article in the latest issue of Fast Company about Morgan Spurlock’s new movie. The article is called, “I’m with the brand,” and it’s all about how product placement works in movies and TV. This new Kindle is just more of the same, except it’s not just a one hour TV show or a two hour movie, it’s every book ever read on it. I’d pay an extra $50 to be let out. But then, that’s why I bought an iPad. I only have to gaze at the little Apple every once in a while.

Snowball careening downhill–look out below!

In the April 27 Industry News from Publisher’s Weekly, Amazon reported that sales in their ebook division jumped 63% in the first quarter of 2011.  That was pretty much their good news.   Their bad news, underlaying a certain amount of spin, was that even though revenues were up across the board, their actual income was down.  What’s up with that?  Amazon is investing in even more technology and more infrastructure to meet ever-increasing demands.

According to the report, Kindle owners are larger-volume ebook buyers than non-Kindle owners.  That can’t be a surprise, considering that Kindle owners are locked into purchasing ebooks from Amazon.  This is a marketing strategy that is older than dirt, after all.  The earlier version went something like this: “the razor is cheap, it’s the blades that are expensive.”  The new, cheaper advertising-supported Kindle is being released early in order to take even greater advantage of this.

Amazon’s recent announcement that they will provide Kindle format ebooks via Overdrive is also part of this strategy.  Up until this week, Kindle owners couldn’t borrow ebooks from their libraries.  Now, they know they will soon be able to, for an admittedly undefined value of soon.  This eliminates a clear advantage that Barnes and Noble’s Nook had.  However, to recap the latest round of the ereader wars, B&N just announced a major upgrade to the color Nook that pushes it way above just an ereader.  The review of the new color Nook in this morning’s USA Today shows that the new Color Nook is more of a baby Android powered iPad than just an ereader.

But back to the point about Kindles, what this means is, more reasons for people to buy Kindles or fewer reasons for people not to buy Kindles, so, more Kindles out there.  And Kindle owners buy more ebooks from Amazon than non-Kindle owners, however else they might get their ebooks.  The announcement about the Amazon/Overdrive deal got an amazing amount of press for something relating to libraries, but it was all related to the fact that the name “Amazon” was in it.  Amazon got a lot of mindshare out of something that will probably cost them next to nothing.

It’s also clear from the sheer numbers that ebook buyers actually buy more books than print book buyers.  No surprise there.  If you are sitting in an airport, shopping for ebooks before your flight, guessing what you’ll like, there is a certain amount of glee at the sheer ease of purchasing without having to think of carrying the things.  There are other factors.  Ebooks are still generally cheaper than hardcovers, Michael Connelly notwithstanding.  There is also the instant gratification factor that simply can’t be underestimated.

What does this mean for libraries?  Just Amazon saying that Kindle users would be able to borrow ebooks from libraries generated huge press, even without specifics.  Demand for ebooks, which is already huge, is going to skyrocket.  The amount of general interest press that covered the Amazon announcement showed that ebooks and ereaders have reached well beyond techies and young people and whatever early adopter market people might have thought and spread well into general users everywhere.  For anyone who doubts this, next time you travel, while you are at the airport waiting for your flight, just look around at the number of people reading on ereaders or iPads vs. “dead tree” books.  The percentage will be 1/3 or more.

Many public libraries have the collection philosophy “give ’em what they want”.  It is due to that philosophy that we have invested heavily in best selling fiction, and moved as deeply as we have into AV material.  But ebooks seem like a whole new ball game in some ways.  Especially since we are trying to divide a budget pie that is shrinking into an increasing number of pieces, and ebooks are just another piece.  The same title is now demanded in print, large print, audiobook, ebook, and eaudio, and multiple copies of each.  Meanwhile the demands for DVDs, music and children’s material certainly have not gone away.  Because ebooks are new, it can seem simplest not to invest, or not to invest a lot, to say that there isn’t enough demand in the community, or that the library can’t afford it. Or that people still want print books, not ebooks.  But if you build a good ebook collection, they will come.  It takes time and money.  Unfortunately, those are the two commodities no library seems to have enough of these days.

However, the demand for ebooks is like the proverbial snowball rolling down the hill and picking up speed, as well as rocks and twigs, as it rolls down.  If your library has that philosophy of “give ’em what they want”, then ebooks are looking more and more like what a significant segment of the public wants. The trick will be smoothing the rocks and twigs out of that snowball as we give it to them.