I Want You To Want Me, I Need You To Need Me

In the final of my current series of posts about the e-book business, we're going to talk about the food chain a little bit.

The average run-of-the-mill self-published e-book author is kind of at the bottom of the food chain.  This person goes on-line, accepts the terms of service, the KDP or Nook Press contract, and away they go.

We at JABberwocky, I must admit though I hate to do so, are not that much further up.  We get to be in something called the Kindle White Glove program for agents.  We represent many authors, we have the ability to put up books by multiple published authors, we have people we can talk to.

Above us, I'd probably put small publishers that may be able to provide a few thousand titles, that may have dedicated legal teams to negotiate with Amazon, that may have have a few core titles in a particular category that would be important for Amazon to sell.

Then you've got Open Road or Rosetta Books, dedicated e-book publishers with lots and lots of titles, backers with deep pockets, publishing players running them.  They have multiple major programs from multiple major authors or estates.

And then, the Big Five.

From my experience, I think that the fiercest advocates of self-publishing don't always recognize what it means to be toward the bottom of the food chain.

Let me explain a little bit, what it means:

The Kindle White Glove program goes only so far.  If there is a search algorithm that is screwed up that makes it hard for people to find our books, we have someone we can complain to directly, but this person will not generally do anything to overrule the computer.  Because we are in the White Glove program, our books are nominated for Kindle Daily Deals, but the odds that we will ever get one aren't very good, in part because there isn't a mechanism to explain why it might be particularly appropriate to have a KDD at a particular time.  We can complain about how royalty statements are formatted, and our concerns will be taken seriously, and addressed over a two or three year time frame, maybe.  Just like any KDP author, we'll get treated a little bit better if we do things with Amazon exclusively.  We sign the same KDP contract at the end of the day that anyone else does.

Let's talk about Kindle Daily Deals a bit.  

We recently arranged with Open Road for them to publish six of our Simon R. Green titles as part of a package that will include a Simon R. Green short story collection that will come out this summer.  Within a few weeks of Open Road taking over, they got a Kindle Daily Deal for Simon R. Green.  I couldn't have gotten that.  I have someone to talk to, my titles are in the running, but I don't have a realistic chance at this.  All the people that are higher up on the food chain than me have that chance.  Open Road probably provides slates of nominees for Daily Deals as do the big publishers, with dedicated talk-to-Amazon people at the publisher talking to dedicated talk-to-Open-Road people.  It wouldn't surprise me if there are more Daily Deal slots over the course of a year that go to people lower down on the food chain as examples, models, inspirations, whatever.  Kind of like not too many people actually win the lottery, but you want to have winners to get people to play.  I don't have the scope or the scale to seriously compete for one of only 365 Kindle Daily Deal slots over a year, and I'd have to compete with all the other literary agencies in the White Glove program.

Let's talk about contracts.

We are not sure what to do with Barnes & Noble.  As part of the transition from their PubIt program to their Nook Press program (and why is there a transition, anyway; what is the underlying advantage of making everyone migrate from one platform to another, which there has to be...) we notice, which we hadn't paid as much attention to when our e-book program first started up with PubIt, that B&N isn't as helpful on e-book territoriality in their Nook Press contract as other vendors are.  This is now important to us.  We have more books from our partner agency, Zeno, in the UK, where we may have rights to sell a book only in the US and Canada.  Maybe we'll want to do e-books only in the UK for authors who seem likely to sell something there but don't have a UK publisher.  No vendor promises absolutely for sure that they will sell books only in the territories we say to sell them in, but B&N promises less of an effort.  Not a commercially reasonable effort or a best effort, but not much of an effort at all.

Interestingly enough, if we move from a Nook Press contract to a publisher contract, they will agree to pay more attention contractually to territoriality.  And their price for doing so?  A smaller royalty rate than everyone else offers.  

There are other issues as well, maybe four or five things where B&N's Nook Press contract offers language that is inferior to other people in the e-book space.  I haven't fully joined the battle and am not sure where it will all shake out at the end, but I am 99.99% certain that we are having problems negotiating our contract that wouldn't exist for people higher up in the food chain.  I can't imagine that a Big Five publisher has to take a smaller royalty rate in order to have B&N respect territoriality.  Another of the clauses we are fighting about, I know we don't have the provision B&N wants from us in most of our contracts with Big Five publishers, so those Big Five publishers can't be agreeing to what B&N wants us to agree to.  If the publisher doesn't have it from us, they can't give it to B&N.

I had lunch with an editor this week.  I mentioned how our last couple of checks from Kobo were bigger than our last couple of checks from Apple.  In fact, we just got our biggest ever Kobo check.  Not big, but twice or more what we were getting from Kobo two years ago.  The Big Five publisher this editor works for is doing a much bigger percentage of their business with Apple. We think, this editor and I, that the difference is almost certainly a marketing difference.  The Big Five publisher can get books promoted in different places on the iBooks store where we cannot.  Impulse buyers can find their authors and titles more easily than they can find ours. 

We would like to sell our books via Google, but in order to do so we would have to set up entirely with self-serve via their on-line system without any human intervention.  I'm not willing to do that; I think I'm big enough and important enough that I should have someone to talk to.  Nook and Kobo don't have White Glove programs, but we do have people we can e-mail, and get responses from.  I am 100% certain that the Big Five publishers can talk to people at Google, while for me, selling books on Google is supposed to be as automated and inhumane a process as trying to get human help for using Blogger or Gmail.

And finally...

Rather quietly, Audible just announced that they are reducing royalty rates for self-published audio books done through their ACX program.  Audible is an Amazon company.

What leverage do the authors have?  None, really.

The bigger you are, the more attention you get.

The bigger you are, the more you can go "mano a mano" with the Amazon lawyers.

The bigger you are, the more marketing you can get.

And the bigger you are, the less likely it is that you'll be forced to take a cram-down on your royalty rates.

And there's a reason for this.  

Amazon and the Big Five publishers may argue with one another from time to time.  Amazon removed all the "Buy" buttons from Macmillan titles.  There was a time a few years ago when Penguin stopped providing new releases to Amazon, including things like a #1 bestselling Sookie Stackhouse title.  But at the end of the day, Amazon can get away for a short while not selling Brandon Sanderson's Words of Radiance when it comes out next week, but they can't go for an extended period of time not selling major #1 bestselling books from major authors.  Over time, there are lots of other places to buy e-books, but only one publisher in the US to sell Words of Radiance.  Amazon wasn't entirely incorrect to declare in a statement at the end of the Buy Button Battle with Macmillan to declare bitterly that Macmillan had a monopoly.  But for the JABberwocky e-book program, I don't really have a program if I'm not selling through Amazon somehow or other.  I might have a program without selling through B&N, but I don't have one not selling through Amazon.  

So what will we do if Amazon does ever do with Kindle royalties what it just did with ACX royalties? Will we all decamp to selling only on Kobo, B&N and Google? Will Hugh Howey use his self-publishing fortune to set up a site for selling e-books direct to consumers that will be an open platform for anyone wishing to sign the HHDP publishing agreement? Or do we just have to suck it up?

There is no guaranty, no tablets from Sinai, no fine print in the contract, no law, no nothing, that says that we shall always receive a 70% royalty as the sellers of independently published e-books.  There is more room for that rate to go down than for it to go up.  And if Amazon wants it to go down, the Big Five publisher that has a monopoly on selling Words of Radiance next week has a big advantage in holding the line over the agent that represents the book or the run-of-the-mill KDP published author.

Much as I love the ability of any author to publish their own e-books, I am also self-aware of what I can and cannot do as a provider of e-books.  Heretical as it might seem to say this, I believe on the most holistic global level that the bigger publishers add value to the publication and sale of e-books, because they are bigger and have clout and can get marketing and go mano-a-mano with Amazon and Apple.  And I can say this and say at the same time that their royalty rates are too low; it's simple math that I don't believe the value they add is equal to the percentage they take.  It's also simple math that makes me want to stick with the JABberwocky e-book program, to give us leverage to get those royalties up and because globally I can do better across the full range of JABberwocky clients by offering e-books from a full range of our clients.  Individual results may vary.  Some authors are going to be better off being self-published.  The math may change, if publishers offer a higher royalty rate or if the big companies we deal with to sell e-books make it easier to do business with them just like the Big Five do. 

Prior posts on this subject from recent weeks:

Analyzing the Hugh Howey survey results

Marketing and e-books