Yesterday, Amazon introduced Kindle Direct Publishing Select (KDP), featuring a multi-million dollar seed fund. KDP Select allows authors to earn royalties by lending out their books through Amazon's Prime Kindle Owners Lending Library.
Authors who choose to participate will share in a US$500,000 pool per calendar month, apportioned by the number of titles lent. To participate, they must pledge to make their titles exclusive to the Kindle Store for at least 90 days. In return, they have a monthly chance at a portion of that half-million dollar pot.
On the whole, iBooks revenues and market share seem to lag behind those of Kindle. That holds true even though the audience that prefers to purchase through iBooks is passionate and visible. One reason for this is Apple's limited deployment. The Amazon ebook store offers readers on nearly all mobile and desktop platforms -- even letting readers get at their books with just a browser -- while Apple's iBooks are currently limited to iOS, without even a Mac client to improve the reach.
KDP Select provides a strong incentive to pull books from Apple's store, particularly books from independent authors. In some ways, it's like iAds for ebooks, providing a revenue stream for material that is otherwise free to access. Borrowers who like and want to keep the books they borrow can return and then pay for a permanent copy, offering a further win for all parties involved.
Amazon has pledged $6 million for 2012, as well as an initial $500,000 for December 2011. Money will be divided on a strict market share basis, regardless of the book's royalty option. (Amazon offers two royalty programs that return either 70% or 35% of a book's sale price, and may involve delivery fees.)
This program will appeal particularly to small independent writers who do not have strong sales reason to remain in iBooks, the Nook store, and other vendors like Smashwords and Lulu. By stepping back those markets, and giving Amazon an exclusive, Amazon will gain a much larger catalog.
I decided to test KDP Select with my short Kindle Fire ebook, a topic that seemed naturally native to the Amazon ecosystem. Will it match the revenues from the AppStore with iAds? I somehow doubt it, but I did want to give it a try.
From here, it now becomes a gold rush as to who can and will best market their books for lending popularity. A book that gains buzz and traction this way can not only draw from a bigger portion of the seed pot, but also lend the Amazon catalog a bigger cachet. The negatives, of course, are that Amazon's expanded catalog will likely include a much larger collection of material that will continue to struggle to find an audience.
On the whole, Amazon has tried to corner the market for small indie book writers. You can upload a Microsoft .doc file to KDP in minutes, and have the book go live within days. With iBooks, you must establish a vendor account, apply for ISBNs, and wait weeks for your ePub-validated books to pass review. The iTunes Connect reporting system is slow and hard to use in comparison with KDP's user-friendly updates.
Is KDP Select a shot across iBooks' bow? I strongly doubt that the iBooks business model relies on cornering the small independent market, and I also doubt that any larger publishers will agree to exclusivity without a guaranteed income vs. a shot at a royalty pool. So why did Amazon go this way, and why did they choose to demand exclusivity?
My guess is that they are hoping to mine an ever growing pool of Kindle-aires, authors making their names and reputation on the Kindle book store. KDP Select is as good a program as any to help the market decide who the next winners will be, and to grow a stable of Kindle-exclusive authors from the ground up.
Update: Indie Pub Smashwords says Amazon is showing their predatory spots with KDP Select.