The Pros & Cons of KDP Select

Amazon recently introduced their new KDP Select option for authors who are publishing ebooks via Amazon’s Kindle Direct Publishing.  But what exactly is KDP Select, and should indie authors select it or not?

What is KDP Select? 

KDP Select enables indie authors to include their ebooks in the Kindle Owners’ Lending Library. This library is not available to all Kindle owners – it is only available to Kindle owners who purchase an Amazon Prime membership or who take up the offer of a one month free trial of Amazon Prime membership.

Amazon has created a new fund to compensate authors whose ebooks are borrowed from this library.

Adding a title to KDP Select requires exclusivity for a period of at least 90 days. In other words you agree NOT to sell the title elsewhere including other ebook stores and even from your own web site during that exclusivity period.  The initial period is 90 days and this renews automatically unless you opt out.

Amazon explains, “When you make any of your titles exclusive to the Kindle Store for at least 90 days, those with US rights will automatically be included in the Kindle Owners’ Lending Library and can earn a share of a monthly fund.  The monthly fund for December 2011 is $500,000 and will total at least $6 million in 2012.

Also “Your share of the Kindle Owners’ Lending Library Fund is calculated based on a share of the total number of qualified borrows of all participating KDP titles. For example, if the monthly fund amount is $500,000 and the total qualified borrows of all participating KDP titles is 100,000 in December and if your book was borrowed 1,500 times, you will earn 1.5% (1,500/100,000 = 1.5%), or $7,500 in December.

Your Kindle books will not be automatically added into KDP Select. You can decide whether or not to participate. The KDP Select option is accessible from the KDP Bookshelf.

Why is Amazon offering KDP Select?

KDP Select is Amazon’s way of increasing the number of titles available in the Kindle Owners’ Lending Library. That makes the library more attractive and may encourage more Kindle owners to purchase an Amazon Prime Membership. Since they are selling the new Kindles at a price less than what it costs to manufacture them, Amazon’s business model relies heavily upon customers purchasing content. Subscription models like the Amazon Prime membership are likely to be a key component of their revenue over the next year or two.

Amazon Prime basically gives members a bulk deal on content. It costs $79 for one year and while the initial package leans heavily toward video content it would not surprise me if Amazon increases the number of Kindle books that members are allowed to borrow.  I do not expect them to leave it at one book per month.

What Does This Mean for Writers and Publishers?

In the long term we should be concerned about how subscription models may factor in to our e-publishing businesses. If more customers purchase subscriptions that allow “bulk buying discount” then what affect will that have on the revenue available to pay authors?

In the short term indie authors need to decide individually whether KDP Select a good deal for them. They should be considering carefully what they will receive in return for giving up some of their rights and accepting such an exclusivity agreement.

So let’s take a look at some specific pros and cons of KDP Select. Since it only started this month, there are plenty of “unknowns”, however we’ll probably learn a lot more in a couple of weeks when the results from December come out.

Pros

Exposure
The first benefit of participating in KDP Select is that your book will gain some added exposure and attention from being there. Prime members will be able to identify ebooks that are part of the Kindle Owners Lending Library by a small “Prime Badge” alongside the item in search results. You may attract some new readers by allowing them to borrow a title, and they may go on to purchase other books you have written.

Compensation
Amazon has set up a fund to compensate authors, starting with $500,000 for December. The big question is exactly how much will an author earn each time one of their ebooks is borrowed?  Since there are millions of new Kindle Fire users it follows that there will be probably a large number of Amazon Prime members who are entitled to borrow a book each month. So there is a high probability that the $500,000 will be divided up into tiny slices.

Of course we will have a better idea of some numbers in January. (Update: The results for KDP Select in December are here. In December authors received $1.70 for each time their Kindle book was borrowed.) Then, in the months following December it will be important to consider the following trends:

  • Changes in the total number of titles in KDP Select.
  • The growth in Amazon Prime memberships: we can expect more Kindle Fire customers will be joining, but no memberships will be expiring for 12 months.
  • Changes in the monthly fund Amazon allocates to compensate authors.

Limited Duration of Exclusivity
You are only tied to a minimum 90-day exclusivity period, not forever and not even years. If you do not opt out your participation automatically renews for another 90 days.

Limited Negative Effect on Regular Sales
The people eligible to borrow your ebook are only a subset of Amazon’s entire customer base, i.e. Amazon Prime members, and even they only get to borrow one book each month. So lending a title in the Kindle Owners’ Lending Library should not eat too much into your regular sales.

Access to Promotional Tools
Amazon states that by participating in KDP Select you gain access to a new set of promotional tools starting with the option to promote your KDP Select-enrolled titles for free for up to 5 days every 90 days. (What other promotional tools there are, I have no idea. If you know can you please post details in a comment below).

At first glance making your books free may seem more like a gift to readers than to the author, however many writers have successfully increased their readership with a “loss leader” strategy. Offering one ebook free attracts new readers who go on to purchase additional titles.

A free ebook might be downloaded thousands of times over several days days. Note that when your ebook is free it will be offered free to all Amazon customers, not only Amazon Prime members. However many authors who have experimented with free pricing in Amazon’s store have found that “paid sales” are higher than normal after the free period expires.

Example. When I was researching the effects of making ebooks free at Amazon, I managed to get my ebook “Kindle Superuser” into the Top 5 Free Kindle Books. For several days it was downloaded around 10,000 times per day. I don’t know how this compares to other authors who have made the Top 5 or Top 10 free – once again I welcome any feedback and I plan to post more about the results of that experiment soon.

Additional In-Store Mentions
Because your ebook has been lent and downloaded (free) more times this will result in greater exposure through mentions in Amazon’s “Customers Who Bought This Item Also Bought” and “Customers Who Highlighted This Item Also Highlighted” sections.

Ability to Leverage Your Existing Audience
If you have a solid author platform and good readership then it may be possible to leverage this to drive a high number of borrows.

Cons

Giving Up Rights
To participate in KDP Select you must agree to sell your title exclusively through Amazon for 90 days. If you are already selling reasonable quantities of your title through other ebook stores or through your own web site then this probably won’t work for you. Some authors, however, receive very few sales through other channels so this might not require much of a sacrifice.

Please also be aware that if you opt out part-way through a 90-day period of exclusivity you are still obligated to keep that title exclusive for the remainder of the 90 days.

Getting Borrowed
Will Amazon Prime members tend to select higher-priced New York Times bestsellers to borrow? There are at least 100 of them in the Kindle Owners’ Lending Library. And what if your book is priced low? I suspect that low-priced ebooks will be borrowed less than higher-priced titles. Remember that Amazon Prime members can only borrow one ebook a month from the Kindle Owner’s Lending Library so they might decide to exercise that option on something that costs more. Admittedly this also means that the fund may be split among fewer “indie” borrows, and we might even see a windfall going to the few indie authors that get “borrowed” in December. If so, I’m certain it won’t last as many more authors jump on the bandwagon in January and February.

Not Enough Compensation
Possibly. It is too early to say until the first results come in. However if each borrow brings in, for example, only a few cents, then this would quickly become a “con” for many authors.

Since Amazon first introduced KDP Select there has been some heated debate over these pros and cons. One reader over at The Passive Voice commented “I have huge objections to the way this is set up. A limited pot is crazy. There should be a minimum per download fee that is fair and equitable. This opacity suits nobody except for Amazon – whose outlay is capped. They are risking little and asking us to risk everything for a limited pot. It’s completely one-sided.

On the other hand there are authors who know that one of the biggest problems is obscurity and they are jumping at the opportunities for additional exposure.

(Update: The results for KDP Select in December are here. In December authors received $1.70 for each time their Kindle book was borrowed.)

What will you do? Do you think there is enough on offer to make it worth putting your title exclusively into this program? Please share your thoughts and comments below.The Indie Author's Guide to Publishing Ebooks

About the Author: Gary McLaren

Gary McLaren is the author of 'The Indie Author's Guide to Publishing Ebooks'. He also manages several web sites for professional writers including Publish Your Own Ebooks and Worldwide Freelance.





Comments

  1. My first impression is this is good if you write in a genre that is has a large market such as sci-fi or romance.
    This is a library which means your book is one in thousands. Imagine your book in a public library how many people will check it out? Will they see it among the thousands of other books?
    I agree, if the reader can only obtain one free book at a time it will probably be the pricier better known authors as opposed to a newbie.
    I will not participate, at least not now.

  2. Thanks for the comprehensive look at both sides–with what info. is currently available.

  3. Hi Gary;

    Thank you for shedding more light about KDP select. I am new to all this but hopeful that through you and others who like sharing, discussing and giving advice to fellow writers, will do for me. I am more convinced that it’s your book, “The Indie authors guide to publishing” that really launched me into a world of e-book, and helped me to know the difference between amazon and book aggregators. I have published my first novel with Amazon today, and hope you will love to read and review it. I am happy for you and will not hesitate to recommend your book to my writers friends here in Botswana.

    Keep up the good work.

    Sincerely,
    Onkabetse Nkete

  4. Well done article but you are missing some of the more important cons to the program. First, Amazon’s Prime club is “large” (relatively speaking) in the United States, not worldwide, yet the exclusivity with its concomitant inability to sell your ebook anywhere worldwide — not even from your own website — can be very limiting in this holiday period.

    Second, indie authors are not given the right to audit the program. You have to trust that whatever dollars you are paid are correct. If you don’t trust your banker, why should you trust Amazon? Do you think Amazon’s primary purpose is your betterment or its own betterment?

    You might want to take a look at my blog post, “eBook Exclusivity — A Good or Bad Idea?,” availbale at http://wp.me/pKZEY-AH, for some more potential problems with this program.

  5. Long-term – ??? Short-term – “Pennies” versus “Exposure, Exposure, Exposure.”

  6. This post sums up the KDP select program and all of the pros and cons nicely. I just want to say that myself and three of my best Indie pals all took advantage of this program this month. While Amazon is doing this for the benefit of Amazon, it has also done all four of us a world of good in the name of exposure. Our books deserve to be out there and because of KDP Select, they are. Between the four of us, we have had thousands of downloads.

    And it’s not so much the lending library as the five day freebie promotion that’s doing it. Say what you want about Amazon, but realize that they’re offering you a platform on a website that definitely gets traffic. That’s both a privilage and a benefit for Indie authors. I will definitely do this again.

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