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How Apple iBooks needs to compete with Amazon: KDP Select


Amazon has trailblazed; Apple has followed. Apple's iBooks program currently allows authors to self-publish ebooks. Authors create their own business built around iTunes Connect, just as they do for self-published apps.

So where does Apple have room to improve? What follows is the first of several posts about how iBooks can improve to better compete with Amazon. In this post, I discuss Amazon's exclusive KDP Select program and what Apple can do in response.

KDP Select

When Amazon launched its recent KDP Select program, the independent publish world reacted strongly and negatively. KDP Select is built around exclusive Amazon listings, requiring authors to withdraw their titles from competing vendors like Apple's iBooks, Smashwords, and Lulu. If you want to participate in Select, you cannot sell your book in any form with any other vendor.

You must enroll books for a minimum of 90 days. During this time, Select allows authors to loan their books for, well, free -- and promote their books by giving them away, again, for free.

Sounds bad, right?

As a lure, Amazon has promised a shared pot of $500K per month for December 2011 and monthly through 2012, with a total commitment of six million dollars. (The first month is over and Amazon has not yet announced per-borrow reward amounts; most involved are guessing in the range of cents-per-borrow.)

What's more, it's a zero sum game: the more authors who play in the arena, the fewer dollars there are for each. Sounds bad, but is it a losing proposition for authors?

Personal experience shows that for niche and underperforming titles, KDP Select is actually a great way to gain market traction.

Target Market

KDP Select with its unlimited free loans and exclusivity requirements is clearly not a game that any well-established book wants to play in. "Talking to Siri: Learning the Language of Apple's Intelligent Assistant" is an ebook by TUAW editor Steve Sande and myself that has been selling quite well on both Amazon and iBooks. It will soon debut as a print book with Addison Wesley/Que.

We declined to enroll it in KDP Select. We could not see any advantage from withdrawing it from iBooks or offering it as a free loan book.

Instead, we focused on a couple of our highly geeky Kindle Fire-specific titles. These titles cover Email and Third Party Content. In response to Amazon, we withdrew these from iBooks, added them to the KDP Select program and have seen surprisingly good results.

That's because KDP Select trades off promotion for free copies. I personally used one of my five KDP promotion free days on Christmas for my Kindle Fire Third Party Content ebook. Mind you, this is a small very narrowly-focused ebook that shows readers how to incorporate content outside of the Amazon system on your tablet. In other words, it's never going to be a general best seller.

That day, my sales numbers jumped from modest into the high triple digits. I made no money of course, as each copy was given away for free, but the book's momentum carried it forward to very gratifying sales for the week that followed. In exchange for cultivating a cadre of exclusive-to-Amazon titles, their program is helping authors promote for very low fixed costs on Amazon's part.

Amazon's Outlay

Amazon has commited to $500,000 per month to share among KDP Select authors. This money is apportioned by loan popularity. A hot fiction title climbing the Amazon charts will do a lot better than a niche geek nonfiction title. One loan is one vote. Authors must compete against each other to gain a portion of the half-million pot of dollars.

In addition to this basic fixed-outlay scheme, Amazon has some basic infrastructure costs with regard to loan management and title promotion.

Apple's Response

To date, Apple has not focused highly on independent authors. This is a shame as more and more self-published works are emerging outside the bounds of traditional publishing.

As I'll explain in my next post, to publish on iBooks, you'll need a properly formatted and validated ePub file and a costly registered ISBN (International Standard Book Number). On Amazon, all you need is passion and a Microsoft Word doc file. Add KDP Select to the mix and many potential iBooks titles will never make it to the Apple bookshelf. They'll be limited exclusively to Amazon.

Amazon's pre-emptive raid into the independent publisher's world is cutting off titles, both present and future, from iBooks, and other platforms. If Apple hopes to lure these authors to its store, it's going to have to react, and react strongly. Something has to draw them away from Amazon and from KDP Select.

Apple needs to provide these authors with a reason to stay away from exclusive Amazon listings, and potentially to list exclusively with Apple.

Right now, it does so by offering better terms than Amazon. With Apple, authors receive a full 70% of list price with no delivery fees, the bane of Amazon sales. On Amazon, delivery fees that are linked to file size can cut a chunk of profit out of any book listed for $2.99 or higher. (Items listed at 30% royalty rates, or sold for under $2.99 are exempted from delivery fees.)

The problem is that, at least in our experience, Amazon sells better than iBooks, particularly for smaller titles. Items are more discoverable on Amazon and Apple does little to promote independents. If Apple were to provide some way for smaller authors to market more discoverably on the iBooks store, they could grow that indie community.

Apple also needs to provide more and better author peer support. Authors, who regularly congregate on Amazon's forums, find little equivalent on Apple's sites.

Apple could also hire iBooks evangelists, in parallel to their World Wide Developer Relations, to teach potential authors about iBook authoring tools, how to use iTunes Connect, and provide book publishing road shows -- but more about that in my next post.

Will Apple offer its own exclusive agreements in response to KDP Select, as recent unsourced rumors seem to suggest? TUAW doesn't find these rumors credible, but if Apple does, it better make sure to provide the marketing push that's the true draw of the Select program.

Posts in this series:

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