Amazon’s Importance to US Book Sales Keeps Increasing—for Better or Worse

Today’s post draws from material previously published in The Hot Sheet, a paid subscription email newsletter that I write and publish every two weeks. Your first two issues are free.

Since Hot Sheet started publishing in 2015, Amazon has changed, grown, and dominated more than any other company in the US book publishing industry. While that’s not likely a surprise to anyone, here are the key developments that authors need to know about.

Amazon has pulled back on most of its writer-focused programs

Here’s a list of all the writer-focused programs Amazon has launched in the last decade; only one is still active.

  • Kindle Singles. This program debuted in 2011 and expanded with Singles Classics in 2016. Amazon describes the initiative as “a way to make iconic articles, stories, and essays from well-known authors writing for top magazines and periodicals available in digital form, many for the first time.” It seems mostly designed to give Kindle Unlimited subscribers a library of special content. (More on that in a minute.)
  • Kindle Serials. This program was very active in 2012 and 2013, but Amazon stopped publishing serials in collaboration with authors in 2014 and no longer features them on the site.
  • Kindle Worlds. This program launched in 2013 and provided a way for authors and fan-fiction writers to collaborate in a way that profited everyone. It was discontinued, to authors’ great disappointment, in 2018.
  • Kindle Scout. Launched in 2014, this was kind of like American Idol for unpublished books. Any writer could upload the beginning of a story, along with a cover, and try to gather as many reader votes as possible to catch the attention of Amazon staff and secure a boilerplate book contract with Amazon via Kindle Press. It also closed in 2018.
  • Kindle Press. This program published titles primarily coming from Kindle Scout. It was discontinued in 2019.
  • Write On by Kindle. Launched in 2014, this was kind of like Amazon’s version of Wattpad, an online writing community. It closed in 2017.
  • Amazon Storywriter and Storybuilder. In 2015, Amazon launched special, free software to help people more easily write their scripts, presumably for the discovery benefit of Amazon Studios. It shut down in 2019.
  • Day OneAmazon’s literary journal was produced every week starting in October 2013 until it closed in 2017.

But Amazon has doubled down on its own traditional publishing program, Amazon Publishing (APub)

Amazon now has more than a dozen active traditional publishing imprints and is the largest publisher of works in translation. Amazon can easily identify the money-making authors and niches that publishers miss through their own data-based decision-making and consumer marketing. In 2019, Amazon Publishing released more than 1,000 titles, which puts them in the top 10 of US-based publishers in terms of publishing volume. Amazon Publishing titles are not carried by traditional bookstores, and the digital editions cannot be purchased by libraries.

Amazon Publishing ebooks often sell for around $5 or $6, or can be read for free through Kindle Unlimited. Meanwhile, traditional publishers often charge more than $10 for a new release. That has important implications for the rest of the market.

Amazon could be making it difficult for other publishers to break out new novelists

Peter Hildick-Smith of the research firm Codex Group has argued that cheap ebooks from Amazon (including titles from self-published authors) can make it more difficult for publishers to establish or maintain loyalty for brand-name authors. Amazon’s media revenue keeps growing, despite them giving away an incredible amount of free content. He told us, “If [official industry reports say] fiction is down, we don’t believe those sales have gone away. They’ve just become hidden behind the Amazon curtain…where 90 percent of Amazon’s own proprietary publishing titles are also in fiction.”

Hildick-Smith said that one might best describe Amazon Publishing not as a traditional publisher but as a content creator feeding a subscription machine. Subscriptions like Amazon Prime and Kindle Unlimited now earn close to $6 billion for Amazon and continue to grow—so it might be wise to think of Amazon Publishing as a Netflix or Spotify. Amazon Prime members look to Kindle First, Prime Reading, and the Kindle Owner’s Lending Library for free ebooks to maximize their subscription value; Kindle Unlimited subscribers who pay a monthly fee for access may rarely venture outside Amazon’s selection.

Kindle Unlimited: the ebook subscription service that requires exclusivity has become essential for some genre fiction authors

In July 2014, Amazon launched Kindle Unlimited, an “all-you-can-read” subscription service for ebooks that costs $9.99/month. Notably, the Big Five publishers keep their titles out of the service, with few exceptions. Thus, the KU catalog is made up of self-published titles and Amazon Publishing titles, as well as titles from traditional publishers outside the Big Five. The service primarily attracts genre fiction readers and romance readers in particular. For self-published authors who aren’t yet established, KU is often seen as a necessity.

The big drawback to KU for self-published authors: it requires exclusivity to Amazon for the ebook edition (but not print), and it pays based on pages read. The pool of money for making these payments to authors—the KDP Global Fund—is retroactively determined each month. (While payment terms for traditional publishers remains unknown, the working assumption has been they are not paid on a per-page system.)

The page-read system is frequently manipulated by bad actors. Amazon continually tweaks what constitutes a page read and makes other modifications to the system to curb manipulation, but it still exists. Amazon has to remain vigilant to prevent underhanded tactics that hurt all authors, since there’s a fixed amount of money to go around each month to pay for pages read. For an historical overview of the Global Fund payout (and the value of a page read), see Written Word Media’s charts. The first month’s fund in 2015 was $2.5 million; it reached $32.6 million in August 2020. The average payout per page now hovers at less than half a cent.

Well-established indie authors don’t necessarily have to go exclusive with Amazon—at least not for all their titles—and usually prefer to distribute widely. However, less-well-known authors may feel compelled to put all their eggs in the Amazon basket. KU page reads contribute to a title’s Amazon ranking, and thus can make a title more visible. When we asked indie author Sean Platt of Sterling & Stone about the matter in 2017, he said, “KU is where all the power is. [It] is pixie dust. Sprinkle some of that on a subpar title, and it can shoot up the ranks by simply existing.”

In 2017, Michael Cader of Publishers Lunch estimated that self-published titles represent about 73% of all KU reads. Furthermore, KU reads and other proprietary Amazon programs possibly represent more ebook units read than all of the competitive stores have sold put together.

Amazon creates its own bestseller lists and also dominates its own Kindle bestseller list

Ever since Amazon’s rise as the dominant book retailer, many of us have loudly regretted that the company doesn’t make public the data on its sales of digital products. While that hasn’t changed, Amazon did start producing Amazon Charts—updated each Wednesday—showing which titles have been Most Read and Most Sold in fiction and nonfiction categories.

It’s important to note how these lists are put together: Most Sold includes print sales and pre-orders through Amazon and its physical retail outlets; Most Read reflects digital consumption that’s actively happening (ebook + audio). Something could be Most Sold, for example, but if it’s not being read or listened to, it might not appear on Most Read. Both numbers include books borrowed or accessed through subscription programs like Audible and Kindle Unlimited.

The Amazon Most Read list does something the rest of the industry can’t do: reveals the top 20 titles the Kindle/Audible-universe people are actually consuming. Genres and categories such as children’s and adult fiction are combined, which makes for some amusing juxtapositions. Some industry insiders think that “borrowed” copies from Prime and Kindle Unlimited shouldn’t count in Most Sold, but the inclusion of borrowed books authentically reflects Amazon’s strong interest in its subscription services and offers a worthwhile comparison to the established bestseller lists (as does Most Read).

A data point that is unlikely to surprise anyone: Kindle bestsellers are often from Amazon’s own publishing imprints. This is partly because Amazon Publishing puts its own books into the Kindle First promotions, ebooks which are available for free to Amazon Prime subscribers before their release date.

Hildick-Smith told us the hallmark of successful fiction publishing is sustaining loyalty to a brand and that the number-one factor in a decision to buy a new book is whether the author is someone the reader knows and likes. However, that loyalty is being eroded by low-price tradeoffs. The big question about the subscription programs: Even if they bring in a lot of money for Amazon and are growing year on year, will they generate the same revenue for authors?

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