From Digital Book World:

Kindle Unlimited’s effect on the best-seller list has indeed grown.

Kindle Unlimited titles have been removed from the Digital Book World Ebook Best-Seller list due to an inability to sort out retail purchases from Kindle Unlimited “reads” when creating the list.

After discussing several possibilities with Amazon as to how to include titles that had robust sales but also had reads on the new ebook subscription platform counted toward Amazon Kindle sales ranking, no solution was found.

. . . .

If “reads,” where the user isn’t paying to purchase a book each time, are counted toward best-seller rankings on the Kindle list and they are unable to be separated out from regular purchases, then it would be unfair to include those titles on the list.

Had those titles been included, they would have elevated several Amazon Publishing, self-published and back-list ebooks onto the best-seller list, including Mockingjay, The Giver, Rhett by J.S. Cooper,Harry Potter and the Sorcerer’s Stone and more.

Link to the rest at Digital Book World and thanks to Richard for the tip.

From TechCrunch:

It was the best of times, it was the worst of times, it was a time of triumph, it was a time of disaster, it was the publishing industry in 2014, just after mighty Amazon fired a new salvo in its war on traditional publishing by announcing its $10/month Kindle Unlimited book subscription service. At first glance this might have seemed useless and ridiculous…

…given the absence of any books from the “Big Five” publishers. But, according to Author Earnings,

self-published authors now account for 31% of total daily [Amazon] ebook sales regardless of genre … self-published authors are now earning nearly 40% of all ebook royalties on the Kindle store

meaning that Kindle Unlimited is unlikely to be a complete flop. Which is all that Amazon wants from it, for now; it seems clear that their long-term strategy is to slowly ratchet up the pressure on traditional publishers until they give in and accept a model like Amazon Video, wherein consumers can either purchase individual episodes/shows/movies (Instant Video) or join a subscription service (Prime Instant Video.) That’s the same model that Apple has adopted for music: iTunes for purchases, Beats for subscriptions.

I have been banging the drum for subscription services myself, largely because, as Danny Crichton points out, we’ve seen this movie before, and we know how it ends:

The plot remains the same: The traditional publishers of content defend their business models against the assault of the Internet. There’s some suspense, and then the Internet wins … But unlike up-and-coming artists in video or audio, the plot twist for books is that there are almost no alternative revenue sources for writers.

…or are there?

. . . .

So I’ve been thinking about this a lot. And I’m beginning to think that treating books like music or movies might be bad for us all.

Authors don’t get performance revenue unless they are already at the top of the heap. But we want good authors to be paid well, because if there’s no money in the literary talent pool, it will get very shallow indeed. So maybe we should focus on what books do offer that music and movies mostly don’t; the intimate, personal, long-term connection between author and reader, forged over many hours.

It seems to me that asking people to pay for a book before that connection is forged is kind of crazy, if you want to maximize revenue; and asking people to pay for books that don’t connect is just plain wrong. So I’m somewhat amazed that no start-up or e-book platform has, as far as I know, yet tried a model wherein readers pay for books after they read them.

. . . .

I’m not talking about “read three chapters and pay for the rest” or any irritating nonsense like that. I’m talking about giving entire e-books away for free and then asking their readers to pay for them immediately after they finish reading them. The single moment when readers most want to give authors their money is the moment they finish a book that has transported them to another world or revolutionized their view of this one. It seems senseless not to take advantage of that, now that technology makes it possible.

. . . .

This model would mean bad books won’t make any money; I’m very OK with that. It’s true that readers may be reluctant to give as much to authors known to be zillionaires; I’m OK with that too. And obviously it implicitly puts an enormous amount of trust and faith in the average reader; again, I don’t see this as a problem.

Link to the rest at TechCrunch and thanks to Joshua for the tip.

From Futurebook:

With almost the kind of timing that Amazon Prime promises its members, Len Vlahos’ Book Industry Study Group (BISG) has arrived to deepen the debate about subscriptions and their potential in publishing.

Only days after Seattle launched its Kindle Unlimited subscription program — quickly pulling up alongside Oyster and Scribd (pronounced “Scribbed”) as one of the most-debated elements of the topic — BISG’s Digital Books and the New Subscription Economy is being released with a message that sounds like the voice of the digital disruption, itself.

While we are still in the early days, our findings suggest that most book publishers will accept that subscription businesses are an inevitable part of the transformation from print to digital book publishing.

If anything, three forces seem to converge in the pages of this 86-page report, culminating in a deep sea both of potential and concern for publishing:

• Inevitability
• Change
• Consumer preference

. . . .

“The big point in the study,” says Ted Hill, “is that these models — whether you call them subscriptions or not — have been around in various parts of the publishing industry for a while. And they’re growing. And they’re not going away.”

. . . .

In fact, attempts to counter the “Netflix of books” idea on the basis that literature knows no “binge” tendencies like binge-viewing of TV shows or binge-listening to music are hopeless, too, Hill says. Some readers of genres including romance, mystery, and science fiction may be prone to “binge-reading” of a kind that really does correlate to the binge-viewer or -listener.

“You fall into the trap that everyone does in publishing, in talking about it ‘in general.’” Hill says. “There are many sub-sets and types of readers. Who is the ‘general reader’? Is it an 8-year-old reading Dr. Seuss? Is it someone reading literary fiction? Somebody in Book-of-the-Month? Somebody who reads those two romances a day?

“Once you get into a more granular view of it, there are many more exceptions. The question becomes whether the markets are large enough to pursue” as the specificity of various sub-sets of the readership come into view. And even in the relatively small size of a niche interest, he concedes, avid interest may support some sort of subscription context.

. . . .

“You know, we’ve had the big-publishers-are-evil and the little-publishers-are-good” phases, “and the Barnes & Noble is evil and the mom-and-pop bookstore is good” phases in the When Harry Met Sally days, and now that’s flipped around, of course, and it’s just hard to use terms like ‘good’ and ‘evil’ when you’re talking about business entities.”

Link to the rest at Futurebook

From Digital Book World:

On Friday, Amazon rolled out it’s Kindle Unlimited feature, where for a fixed fee of $9.99 a month readers can read as many books as they want from a certain subset of the ebooks sold by Amazon. It also includes a limited number of audio books from Audible.com. Here is how the numbers break down:

– 2,769,500+ ebooks in Amazon
– 645,790 books in Kindle Unlimited (about 23%)
– 2,157 audio books (about 0.3% of the Kindle Unlimited Books
– 2,773 books in KU are free (even if the reader isn’t subscribed to Kindle Unlimited)

How a title gets into Kindle Unlimited

Before I discuss the two-tier system. Let me explain how an author’s book gets into Kindle Unlimited.

– Kindle Direct Publishing titles enrolled in Select: this is by far the largest group of ebooks in Kindle Unlimited and is mainly self-published titles, although I suspect there are a fair number of small-presses that use KDP to list their books with Amazon. For those that don’t know, Select titles have added features such as the ability to be sold for free for five days out of 90, ability to do time-bound sales, can be borrowed from the Kindle Owners’ Lending Library, and now they are available to those who are subscribed to Kindle Unlimited. While that’s a lot of advantages, it comes with a big down-side. You must be EXCLUSIVE to Amazon. You can’t sell those titles anywhere else. Not your own site, not Barnes and Noble or the iBooks store.

. . . .

How a publisher/author is compensated

– For books enrolled in KDP & Select: Amazon has a pool of funds which is established at the start of each month. This is the same fund that has been used for “borrows” for people who are enrolled in Prime (they get 1 borrow a month). The fund does not take into account the size of the book or it’s price. Instead it takes the total amount of the pool divided by the number of borrows to calculate a unit price. This unit price is then multiplied by the number of times an author’s books are borrowed. Historically, the per unit price has been about $2 (sometimes a bit more, other times a bit less). The “downloads” from KU will be treated like a “borrow” once the reader gets past the first 10% of the book.

– For publishers/authors who opt-in to KU: they are paid the same price that they would receive if the reader had bought the book outright. Again, this amount is only credited once the reader has passed the 10% mark.

– For titles added without consent: Publishers are paid as if a regular sale were made without any minimum reading requirement.

. . . .

Historically, Amazon has been good about treating self-published authors and traditionally published authors equally. There are some exceptions (for instance traditionally published titles can be pre-ordered, and most self-published authors cannot get this feature. Again there have been exceptions made for best-selling self-published authors), but for the most part both self- and traditionally published authors have enjoyed equal treatment. They share similar exposure on best-seller lists and top-rated lists, and Amazon’s “cut” from sales have been the same for both groups (30% under the agency model). In fact, when the agency model went into affect, Amazon raised self-publisher’s royalty from 35% to 70% to match what traditional publishers were getting. But now with the roll-out of Kindle Unlimited, we see two very different treatments:

Self-published authors MUST be exclusive to Amazon (except for a handful of best-selling authors) and can’t sell their books on other sites. Traditionally published books have no such exclusivity requirement and can be sold wherever the publisher wishes.

Self-published authors are paid from a pool set by Amazon each month. They have no idea how much they will be paid per book. Traditionally published books get paid exactly as they would if a sale were made. They know exactly what the unit price will be for each book and are not relying on the Amazon’s whim as far as what their unit price will be.

Link to the rest at Digital Book World

From USA Today:

Target wants to help host your book club — online.

As the retailer works to build a more competitive e-commerce experience, it’s partnering with a startup e-book subscription service called Librify to give customers an online platform for buying, sharing, and discussing their favorite books.

The official launch is still several months off, but the announcement comes ahead of BookExpo in New York City this week, the biggest event of the year for the publishing industry.

Librify, which started beta testing with select users in March, offers a social-subscription service for e-books. For $8.99 a month, you get access to a recommended book each month, and a 10%-20% discount on all other e-books. Librify has more than 500,000 titles available for purchase so far — that’s about half of what Amazon offers through the Kindle.

But Librify also offers a social platform built around the idea of creating a virtual book club-type experience.

. . . .

Partnering with Target gives both companies a chance to expand their reach. Librify gets access to Target’s marketing power, brand recognition, and customer base. Target gets closer to offering customers a more compelling online experience.

The service will be targeted at women, especially young professionals and moms of the coveted Millennial generation.

. . . .

Target employees choose a new “club pick” every month based on what they personally are reading. Stone Herman says Librify will be able to leverage this curation expertise and capitalize on Target’s brand.

Link to the rest at USA Today

From The Huffington Post:

The headline of David Streitfeld’s article in the New York Times on Dec. 24, 2013, nicely summarizes the latest high-tech scheme to hit the book business: “As New Services Track Habits, the E-Books Are Reading You.”

After reading what Streitfeld and others have to say about the business model of companies like Scribd, Oyster, and Entitle, it seems clear that these companies are making different pitches to different audiences. The pitch to readers is that they will be able read as many e-books as they want for a flat monthly fee, while the pitch to authors is that they’ll be able to see detailed analytics about those customers’ reading habits. Both of these pitches have big problems.

What do readers get?

These e-book subscription services offer readers access to whatever books that are listed on that particular service at any given moment. This is far less than all the books in print. There are several major publishers missing from each of these services, and even the publishers that are participating may hold back many important books. Customers may not be able to read what they want, because many of the books they’ve heard about will not be available. This is not made clear on the websites of these services. The reader may be paying for an all-you-can eat buffet, but the selection on the table is pretty limited.

Nor are prospective readers told that their reading habits will be extensively data-mined. This sharing of “reader-analytics” is the inducement for publishers to participate in the first place.

. . . .

These companies are apparently offering this data as a trade-off to publishers. Sign up your books, and we’ll give you data that shows how our readers react to them. What kind of data?

. . . .

But how about the writers? Do they get anything of value? Not really — they’re more likely to end up with problems.

Start with the money. Authors’ royalties are set by contract, but the payment per book is often drastically reduced when the publisher makes this type arrangement with a subscription service. What can the author expect? Not much. If, for example, the subscription service has 10,000 customers who each read 10 titles a month out of a database of 100,000 titles, then the average number of readers per month for each book is — one. If that reader is spending less than $10 per month to read those ten titles, then the amount of that fee that is allocated to each book is probably less than one dollar. When you divide that one dollar between the publisher, the subscription service, and the author, the amount the author gets is likely to be in the mid two-figures — and both of them are on the right-hand side of the decimal point.

. . . .

Well, maybe authors aren’t in this deal for the revenue. They’re really looking for information. But will they get it? Maybe yes; maybe no. The subscription service’s contract is normally with the publisher. Whether the publisher decides to share that information with the author is a matter of the publisher-author contract.

Link to the rest at The Huffington Post

From Forbes blogs:

If you’re like most digitally connected folks, you probably have access to a video subscription service like Netflix Netflix, or maybe a music subscription service like Spotify. In that case, new services that do the same but for ebooks want you.

Oyster, Scribd and Entitle (just re-branded from eReatah) are all new ebook subscription services that are competing for your business. Lately, the battle has heated up.

Early this week, Entitle relaunched to the public with a new name and lower prices. It offers a catalog of about 100,000 ebooks and users can read, download and own two a month for $14.99, three books a month for $21.99, and four books a month for $27.99.

. . . .

When it comes to the competition between these services, it’s all about building a catalog and gathering customers. Oyster took the lead in this round when it comes to building a catalog. It’s the first service that Perseus has signed with. Through Constellation, Perseus is one of the largest ebook distributors in the world and potentially a very powerful partner.

Link to the rest at Forbes blogs

With his perversely legal mind, PG is inclined to wonder exactly where in the grant of rights in a typical publishing contract the publisher receives the right to include a book in a subscription service and, more importantly, what the royalty rate is.

The reason PG wonders about the royalty rate is that a great many publishing contracts include differing royalty rates for licenses and sales. Sales are usually included in the primary rights royalty sections and licenses are included in the subsidiary rights sections. Licensing of subsidiary rights usually pays higher royalties to the author than sales do.

PG mentions this because he has never seen an agreement whereby ebooks are sold to readers. In his experience, there’s always a license.

As an example, here’s some relevant language from the website of Entitle, one of the ebook subscription services mentioned above:

Unless otherwise specified, the Entitle service, and any ebooks obtained through our service, are for your personal and non-commercial use only and we grant you a limited, non exclusive, non transferable, license to access the Entitle service for that purpose. You may not download, copy, distribute, display, reproduce, duplicate, publish, license, create derivative works from, or offer for sale any ebooks contained on, or obtained from or through, the Entitle service, without our express written consent.

This is part of the terms of service that Entitle requires its customers to accept prior to downloading any ebooks.

This is licensing language which is part of a licensing agreement in click-to-accept form. If you’ve been on the Inernet for more than ten minutes, you’ve clicked a licensing agreement.

If you think hard about your experience purchasing a physical book from a bookstore, then opening the book to read it, you will not recall ever entering into a click-to-accept license. You buy the physical copy of the book, you don’t license it. The book is protected solely by copyright laws, not a license.

Under those copyright laws, because you own the physical book, you can sell your copy. You’re not licensed to do that with ebooks downloaded through the Entitle service.

Just saying.

From Mark Coker at Smashwords

Oyster Shipments to Begin in Three Days.

On September 5, Smashwords announced a distribution agreement with Oyster, a new and innovative ebook subscription service. Oyster offers consumers unlimited access to more than 100,000 ebooks for only $9.95 per month.

At the time we announced the deal, we also announced that we wouldn’t begin shipping to Oyster until at least 72 hours after we shared the financial terms with you.  The clock starts now.

I also stated at the time that I believed the terms were author-friendly, and that Smashwords authors would be pleased when they learned the details.  Today, via this email, I’m sharing the details.

Here’s a link to our original announcement here. 

From Guest Blogger Randall with a thanks to J.M. for the tip.

From ABC News:

Online document-sharing site Scribd is taking a page from Netflix’s success story as it sets out to create the world’s largest subscription service for digital books.

The opening chapter in Scribd’s quest begins Tuesday with the introduction of an e-book subscription service that will boast thousands of titles published by HarperCollins before July 2012. HarperCollins, which is owned by News Corp., becomes the first of the five largest U.S. publishers to join a service vying to create an alternative to buying individual titles.

Scribd will charge $9 per month for a service that offers unlimited access to most of HarperCollins’ back catalog, as well as an assortment of other books from smaller publishers. Recent best sellers from Harper Collins aren’t included in the subscription service, although customers will be able to buy new titles individually on Scribd’s site.

. . . .

 HarperCollins and authors will be paid based on how much their books are read under a complicated formula, Adler said. He declined to provide more specifics about the financial arrangements.

Link to the rest at ABC News and thanks to DJ for the tip.

From GigaOm:

Independent digital bookstore and publisher Emily Books already offers subscriptions to its monthly ebook selections through its website. Now it has launched an iOS app, “Emily Books Reader,” that lets users subscribe and read the ebooks on their iPhones or iPads.

. . . .

Emily Books, the independent ebookstore and publisher cofounded by writer and former Gawker editor Emily Gould, has offered readers a subscription model since its launch in 2011: One ebook a month, for $13.99 a month or $159.99 a year. Now the company is taking that model to iOS, with a new reading app that also allows subscriptions.

. . . .

The app, “Emily Books Reader,” was built by 29th Street Publishing, a New York-based startup that has also built iOS magazines for publications like Serious Eats and The Awl.

. . . .

“I got really excited about the idea of an iOS app because that’s how I read books. I loved the idea of just getting a push notification that a book was ready for me to read.”

Link to the rest at GigaOm and thanks to L for the tip.