Newsflash: Amazon Acts like For-Profit Company!

One of the most incredible phenomena I’ve witnessed since I’ve become interested in self-publishing has been the propensity for many authors to lionize Amazon as if Jeff Bezos’s sole purpose in life was to help avenge the author class against the evil patriarchs of traditional publishing. Well, guess what? The realization has finally begun to dawn that facilitating self-publishing has been a means to an end for Amazon, and not the end itself.

What has finally punctured the confidence of those who have believed that Amazon will always be their friend was the introduction of Amazon’s Kindle Unlimited program in July. Under that program, anyone can pay $9.99 a month for unlimited free access to over 700,000 titles. Authors that opt in get paid a varying amount (initially about $1.80 but most recently only $1.39) every time a program participant reads at least 10% of their book.

Sounds great, right? But unfortunately, not, and especially for the genre authors that have flourished the most from the advent of the Kindle and the eBook. As reported yesterday by The New York Times, writers like uber romance author H.M. Ward, have seen their incomes abruptly drop by up to 75% as a result. Why? Because the readers that read the most genre books are apparently quite happy to devour one genre book as another. And why should Ms. Ward be surprised? She employs four co-writers to help her churn out a new title every two weeks.

Apparently, Amazon just might be pursuing a way to maximize its own profits rather than those of indie authors. What a shock!

Meanwhile, Kindle Unlimited authors are reacting by chopping books up into smaller pieces so that they get more fees for the same amount of work (a bit unseemly and obvious, to my taste), or by pulling their books from the program entirely (a rational response, but what will Amazon do next? After all, it has complete authority over what it chooses to pay authors, regardless of the program involved).

It’s ironic that the scales should now be falling from the eyes of Amazon fans so soon after the Hatchette dispute led them to vilify traditionally published authors for their gullibility in siding with their publishers, and their business model, instead of abandoning them for Amazon. Now, it seems, that career path does not seem so certain.

That anyone should be surprised by this turn of events astounds me. Amazon is a multi-billion dollar corporation, and one that is legendary for its ability to squeeze the last farthing out of its suppliers. To be sure, self-published authors have been paid handsomely by Amazon to date, but with a clear purpose: to help Amazon achieve its self-proclaimed goal of achieving as close to complete domination of the retail sales marketplace as possible.

As I have written before, the real issue that authors of any stripe should be concerned about is whether there will be competition in the marketplace for the written word. Where there are multiple alternative ways that books are created, marketed and sold, authors will have choices and leverage.

Where there is only one dominant player (Amazon) or group of players (the Big 6 traditional publishers) all with the same business model, the result is the same. Each inevitably leads to a situation where authors have no say, no leverage, and minimum wage existences – if that.

From that perspective, self-published authors should not be cheering for traditional publishers to fail and Amazon to win, but for traditional publishers to rise to the challenge and provide strong competition to Amazon. In the ideal world, new publishers would enter the marketplace as well, and also new business models.

As I wrote in my earlier earlier, pessimistic piece (titled The Future of Competition in Publishing: be Very Afraid):

What authors really need is more competition in the marketplace, and it’s difficult to see where that will come from if Amazon ultimately succeeds in gaining effective control of  prices.

So the moral of the story is this: it doesn’t matter whether Hatchette is “good” and Amazon is “bad” or the other way around. And looking into the future, it doesn’t matter whether Amazon has been “good” to authors in the past. What matters is to be clear-eyed in understanding what the future holds.

Amazon is a business, and it will act in exactly the same way that every other public company always has, and always will. If it can gain a monopoly through legal means, it will. And when it has succeeded in grasping that rarest of holy grails, it will take advantage of its monopoly power in every legal means available to it. That most assuredly will include lowering author royalties to the lowest price it can while maintaining the flow of new content.

Whether it’s by coincidence or design that Amazon introduced Kindle Unlimited at the same time it was seeking to break Hatchette’s will is difficult to know. But I suspect that we’ll be hearing a lot fewer condescending references to Amazon Derangement Syndrome (the propensity of unenlightened authors to see the rise of Amazonian dominance as a bad thing) from those that claim, against all possible evidence to the contrary, that for some magical, mystical reason Amazon will never act like a for-profit company when it comes to indie authors.

Right. Good luck with that.