Amazon Doubling Author Royalties: Can It Make You Rich?

By Peter Nevland - Jan 27 , 2010

Whether it was in anticipation of today’s Apple tablet release or a generous and fair gesture to deserving authors everywhere, Amazon released plans for this coming June to double the royalty rates they will pay Kindle e-book authors and publishers from 35% to 70%, according to their press release last week.

You might be thinking with the higher royalties and Amazon’s Digital Text Platform open to all prospective authors that the time of opportunity for authors has finally come. “Hooray! I can write for a living and never have to work again!”

Hold on there, partner. If you lean too far out on the neck of that horse, you’re liable to fall off and git yourself hurt! (So much for my cowboy imitations. . . .)

The horse in my little analogy is the marketing and platform building that remain as important as ever to get book sales moving. Publishers are either discovering this truth and reaping the benefits, or sticking to the tired and worn out mantra that, “Everyone will come to us because we’re the only place to get quality content.” Can you visualize the view of their upturned nostrils?

Samhain Publishing and Bethany House Publishers, two opposite poles on the belief system magnet, have harnessed the true power of Kindle to boost their revenues. The way they’ve done it is with charging nothing for their books. And it’s not just Samhain and Bethany House who are doing it—3 out of the top 4, 16 out of the top 25, and 64 out of the top 100 Kindle titles are free downloads.

Samhain is not as big as Harlequin Publishing, but they may soon be. Christine Brashear, Samhain’s head of marketing, has offered a new free book every two weeks for the last year. Not only has it shot the giveaway book into the bestseller list, it’s dramatically increased sales of other paid-for titles. In October, she designated Giving Chase as her free sample and garnered a whopping 26,897 downloads during that month. Not only that, Chased and Taking Chase, two other books in that series, jumped from 97 to 2666 and 119 to 3279 paid downloads, respectively, from September to October.

Bethany House Publishers employs a similar strategy, releasing free downloads of titles for a limited time to build a following that would pay to download them. They currently occupy the top two spots on the Kindle Bestseller list, with Cape Fear and Southern Storm, two Christian thrillers by Terri Blackstock. Last week, another Bethany House author, Brandilyn Collins, held the top two spots with Exposure and Dark Pursuit. Now that Collins’ two books are no longer free, they’ve fallen to #19 and #24, but would they have ever gotten that high in the first place without the exposure that free downloads generated?

“Brian O’Leary, a principal at Magellan Media Consulting Partners, which advises publishers, said that there was a risk that free reading could eventually “supplant paid reading.”” I sure hope he doesn’t talk any grocery stores into halting their free sample giveaways. Keep a watch out for all those angry mobs demanding free food outside your local supermarket to start appearing any day now…

Brian Murray, chief executive at HarperCollins, showed even more flexibility by pronouncing that “free is not a business model.” He’s right, unless you’re talking about building an audience with free, valuable-to-them content.

If you want to win in the e-book market, offer a free book download for a limited time, make sure it’s a good sample, and then line up the rest of the series of your titles for consumers to buy. (If you read my eulogy to Billy Mays last summer, you’ll notice how similar the secrets of hawking infomercial products are to the secret of selling e-books.)

The only problem for independent authors is that they’re apparently shut out of the free sample opportunity. According to a blog post by Ben Metcalfe, $0.99 is as cheap as independent authors can set the price of any of their e-book uploads. Everyone may be able to upload Kindle content with a chance for double the old royalties, but not everyone can use the best Kindle tools for building a following.

That means that you still have to build a platform on your own.

Just because only publishing companies can offer free Kindle downloads, doesn’t mean that you can’t leverage the powers of the internet to make your writing a success. Start a website. Offer free, quality content. Get more and more people to read it. If you need inspiration, watch Julie & Julia, since that’s exactly what she did to get a book and movie deal.

Then, when you’ve got a few thousand followers, release a cheap download version on Kindle and make an impact. It may take anywhere from 3,000 to 5,000 downloads in a month to attain a position somewhere on their bestseller list. That number isn’t out of reach, but it does require work. Are you ready to roll up your sleeves?

While you’re churning out the sweat it takes to get noticed, the New York Times will be producing the sweat of nervousness, hoping that people will, literally, buy large quantities of their rarified content. On the same day that Amazon announced an increase in author royalties, the newspaper giant announced that Internet users would now have to pay to download website content over a specified monthly amount. This is now their second attempt at charging for online content. It’s “where we think the web is going,” said Arthur Sulzberger, NYT publisher.

According to Mythbusters, standing on a sinking ship won’t suck you down to the bottom with it, but it will remove the thing that kept you out of the shark- or iceberg-infested waters. I’m not sure what future the New York Times has locked into their tunnel vision, but the Internet started on the idea of free, shared content and will always cater to those who apply that model to their business-building strategy.

Royalty rates will rise and fall. Publishers and corporations will either adapt with changing conditions, or cling to the delusions of their reputation’s power to make money. Opportunities will come and go for the little guy trying to make a name for himself in the big, bad world. As long as a capitalistic society exists, anyone who wants to succeed will have to craft a compelling product and then work their butts off to tell everyone in the world about it.

Any other solution is merely the product of an unharnessed imagination.

Now, get back on that pony and ride!