How to Game Amazon Unlimited

Today’s blog is courtesy of Seamus McCree, who has always had an interest in how people can scam any financial transaction. Since he is a fictional character, take his advice with a pinch (no, make that a saltshaker) of salt. ~ Jim

Mr. Jackson’s recent post demonstrated that Hugh Howey needs a course in remedial math, given the faulty design and interpretation in his Author Earnings Report. I have some good news for Howey on how he can afford to take a little time off for coursework.

If he follows my advice, he will accrue two benefits. He’ll earn substantially greater profits from Amazon Unlimited than he otherwise would. And, because Amazon apparently uses loaned-book data from Amazon Unlimited as part of their bestseller determination, it will have the added benefit of maintaining or improving Howey’s ranking on Amazon’s bestseller lists, which should help drive further sales.

It's FREE!

Howey (or any KDP Select author) needs to rally his fans to take advantage of the 30-day free trial of Amazon Unlimited. Here are the actual Amazon Unlimited Terms of Use, and they don’t appear onerous. Remember to cancel to avoid the $9.99 a month charge.

Gallons of e-ink have been spilled (a decent summary that includes links to other articles is this from CNET) either decrying the difference between the way Amazon pays KDP Select authors and those with standard publishing contracts, promoting what a good deal it is for everyone, sounding the death knell for books as we know them—or something in between. For authors, it comes down to how they are paid, and this is the key to helping Howey (or your favorite KDP Select author or even a legacy published author who has been included in the program to make it look good.). Every time a member of the Amazon Unlimited program reads at least 10% of a book under the program, the author is credited with a sale.

Now, if you happen to be a nonKDP author and your publisher has agreed to have your book included in Kindle Unlimited, when the reader hits the magic 10% mark, your publisher is credited with a sale at whatever price Amazon is charging to the Kindle ebook. The author will get royalties based on the sale. Good deal, huh? Unfortunately there aren’t many traditionally published novels currently available as part of Kindle Unlimited; most of the 600,000 titles are from the self-published folks using KDP Select.

So, back to helping Hugh Howey. When I was writing this article, Howey had 20 books listed in Kindle Unlimited. Here are the steps to give Howey some extra money, whether or not you like his books:

1. Register for your 30-day free trial.

2. “Borrow” Howey books (you can borrow a maximum of ten at a time).

3. Take your favorite print book (or a second e-reader) and start reading. Every time you turn a page, click page turn in your borrowed Howey book until you get to 10%, then close that book and start another. (To be safe, go to 11% or 12 % since there may be some junk in the beginning that Amazon won’t count.) Howey will be credited for a book sale for every book on which you reach the magic 10%. This approach should at least temporarily fool any Amazon algorithms to avoid counting any speed-readers who just flip through books.

4. Once you have “read” the ten books, borrow the next ten. If more have appeared, do it again.

5. With twenty books available on Kindle Unlimited, all you have to do is read two or three print books in your 30 days, follow procedures in item #3 and Howey gets credit.

6. Cancel your subscription before the 30 days are up if you don’t want to continue.

Because Amazon isn’t giving KDP authors the same deal as legacy publishers, it is not clear exactly how much Howey will make with every book your “borrow” and “read.” Anecdotal evidence I’ve seen indicates for books borrowed as part of Amazon Prime, KDP Select authors have been paid around $2. If the same amount holds, you can give Howey $40 of Amazon money just for having your reader open and flicking pages in a method that won’t tip Amazon off that you aren’t actually reading the book.

Oh, and if you are a fan of the Hunger Games or Harry Potter or Lord of the Rings, you can do the same thing and make sure Suzanne Collins, or JK Rowlings or the estate of Tolkien (and their publishers) receive some of Amazon’s largess.

There is an added bonus. Amazon is counting any book “read” in Amazon Unlimited as a sale for purposes of their various bestseller lists. This should help keep the KDP readers on top of those comical compilations of cosmic content curation, which will help justify Howey’s claims that independent authors are making more money than those published by Big-5 publishers. Except, that while KDP Select authors may be credited with a couple of bucks for each read, the Big 5 publishers will be paid full ebook list price for any of their books you read.

Buying Your Way to an Amazon bestselling author

We’ve learned how authors and their agents can buy their way onto and even to the top of the major bestseller lists (here and here are two articles). There’s a way KDP Select authors can get in the game with a little help from their friends. Let’s say a new company forms. Call it Bestsellers-Guaranteed (B-G for short). B-G’s plan is to collect a cadre of “readers”—people who are willing to have B-G control their ereader between (say) midnight and six every day.

Aspiring Bestselling Author Ian Desperate hires B-G to propel his sales to the top of the charts. For every book read by one of B-G’s “readers,” Amazon pays Desperate (say) $2.00 for each book “read.” He turns $1.00 over to B-G. They in turn pay their “readers” fifty cents for every book “read.” [Actually, B-G will require upfront payment and guarantee Desperate a certain number of “reads.”] Utilizing the app placed on their cadre of robot ereaders, B-G turns the page at the actual reader’s normal pace. The app reads a book a night, earning about $15 each month for the owner of the ereader and for B-G. Since the monthly subscription costs only $9.99 the ereader owner makes $60/yr. for leaving their reader on and connected to a network overnight. B-G makes $360/yr./device less expenses. The author makes plenty of money they wouldn’t have gotten before, offset by the few sales they would have gotten anyway from this group of people.

Presumably, an author who wants top bestseller status will have to pay extra for Bestseller-Guaranteed’s services, but I’ll leave the contract terms to the fictional enterprise and author to figure out.

CAVEAT

You heard it here first – but you heard it from a fictional character, who can’t be sued or brought to trial for aiding and abetting fraud. My creator, James M. Jackson, disavows this get-rich scheme. He’s not suggesting it as a strategy for any author or for any individual or corporation. You do it, he is not responsible.

Do I think some people will try to game the system? Yes, I do. It is something Amazon will need to combat, because if a fictional character can figure this out, some human will as well. And while I have a decent set of scruples, many humans don't.

Of course, if Howey wants to send me (Seamus, that is) on a fully paid (fictional) holiday for bringing this to his attention, that would be okay.

~ Seamus McCree

Author Earnings 3rd Quarter Report: Making an Iceberg from an Ice cube?

“Howey sees an ice-cube, and shrieks 'iceberg'." ~ Philip Jones, editor Bookseller

Hugh Howey (author of the Wool series published by Kindle Direct Publishing) published his July 2014 Author Earnings Report. Howey is an unabashed promoter of self-publishing and of Amazon, and why not, he’s done very well by both. However, his success does not mean he is an expert on publishing in general.

Many people have questioned the methodology in his previous reports. Essentially, he pulls data from Amazon’s eBook “bestseller” lists. Given Amazon's "bestseller" lists currently contain around 120,000 books, [and doesn’t that say something about Amazon’s marketing?], Howey estimates that covers about half of Amazon’s ebook sales. Using an ebook’s Amazon ranking, he projects the number of sales for each book. He then uses those figures to “prove” self-publishing is much preferred over traditional publishing.

Looking at sales from 120,000 books sounds impressive. However, of those books, only 40,000 had any sales on July 14, 2014, the day the data was harvested. Of those 40,000, roughly 10% sold a single book that day. Only 15,500 books sold more than 10 copies on the chosen day.

I’ve taken two claims from the latest report and analyzed them:

CLAIM: ‘This makes indie authors, as a cohort, the largest publisher of ebooks on Amazon.com in terms of market share.”

Facts, as taken from his report: Indies sold 31% of eBooks on Amazon, Big 5 sold 38%, Small and Medium Publishers sold 20%, and Amazon Publishing (segregated from other small publishers because of its relationship with the Amazon online sales) sold 6%. By calling the collection of thousands of Indie authors a cohort, he asserts they are the largest publisher. EXCUSE ME? Are Indie authors in a profit-sharing plan so they can be combined and share their wealth? How is it possible to consider traditional publishers separately at the same time Indie authors are lumped together? This construct is a fiction of the greatest order.

Malarkey such as this gives truth to the statement that “There are lies, damn lies, and statistics.” Talk about a bad use of data!

Adding the Big 5, Small and Medium Publishers, and Amazon Publications from Howey’s data (no matter how flawed), here’s what he should have concluded: Even on Amazon, ebooks from Traditional Publishers Still Outsell Indie Published eBooks almost 2-1 [64% to 31%].

CLAIM: “We can now say that self-published authors earn more in royalties than Big 5 authors, combined.”

First, let’s put some (implied) qualifiers in here: (1) we’re talking ebooks only, and (2) we’re restricted to Amazon sales. Now, to the facts from Howey’s report. To determine royalties, he takes the imputed sales data based on Amazon ranking, applies the known book price to the sales, and imputes author royalties based on assumed rates. Although self-published authors can choose from two royalty scales, for eBooks most will choose the 70% rate, and that is what he uses. For the big 5, Howey assumed a 20% royalty. (His calculations show Amazon takes 20% off the top, the publisher pays a 25% royalty on the remaining 80%). While 25% is an “industry standard,” I have read that some best-selling authors (just the sort of people included in Howey’s report) have negotiated higher rates. Therefore, it is possible that the Big 5 author royalties are understated, but I have no way to quantify by how much.

I know some small publishers pay higher royalties than 25%. My own royalties for Kindle books have averaged 33% of list price—that’s 165% of Howey’s assumption . I feel quite confident when I say the royalties computed for small and medium publishers are understated.

Howey’s calculations show Indie authors earned 39% of total royalties paid, the Big 5 authors earned 37%, authors with small and medium publishers earned 16% and Amazon published authors earned 6%. Depending on how understated the big 5 royalties are, the report might have been reasonable to claim that “Self-published authors earn more in royalties from ebooks sold on Amazon than do the Big 5 authors,” although even that could be a stretch.

Using even this modified statement to crow about Self-Publishing’s superiority misses several large points.

Point one: Many self-published authors only publish ebooks and limit their distribution to Amazon because of certain marketing advantages Amazon offers them for exclusivity. Howey’s reported royalties for these authors represents their total royalties for the book (with the possible exception of audiobooks). Big 5 authors sell across multiple ebook platforms. I am not a Big 5 author, however Amazon only accounts for 70% of my ebook sales. Not that this is appropriate, but if we do as Howey does and project from one instance to impute the whole, we take my 70% and apply it to all the Big 5 authors and get significantly different results. Instead of producing income at a level equal to only 95% of Indie published authors, Big 5 authors would be earning 135% of what Indie published do. [This is wrong on so many levels, but it does highlight the point that for many Indie authors Amazon is the whole enchilada, and for Big 5 that is not the case. Also, between writing this and its publication, I found an article that indicates that in the U.S. Amazon represents 60% of Hachette’s ebook sales. In the UK it’s 78%.]

If Howey took into account all ebook sales regardless of vendor, his beloved comparison falls flat. When we also realize that all Big 5 authors are selling hard covers or follow-on paperbacks that generate royalties as well, not to mention what might be happening in international sales, to make any statement about royalties for Indies vs. Big 5 is specious.

One further point: Howey’s purpose of these studies is to highlight to individual authors why Indie publishing is superior to traditional publishing. An individual author is not a class of authors, and it is important to disaggregate the numbers. Here’s a different way of looking at some of Howey’s results.

Average Author Revenue per “best-selling book” based on Amazon ebook sales:

Big 5     $27.26     Indie     $17.58     Small and Medium    $3.96     Amazon     $122.18

Of course, if we removed the 80,000 books with no sales from the equation, results change and voilà, now Indies do beat Big 5.

Big 5     $49.87     Indie     $53.22     Small and Medium     $15.18     Amazon     $163.60

However, Amazon tops both Indie and Big 5 by a 3-1 margin. So, shouldn’t the real story be that Amazon knows how to promote its own or knows how to pick ‘em or something trumpeting Amazon’s superiority?

I am not saying Indie is better or worse than traditional publishing. Nor am I saying that having Amazon publish your book is the best of all worlds. I am saying that Howey’s data shines a narrow beam of light on one small area of author income. It is an ice cube in an ocean of data. Howey’s conclusions are flawed and unusable.

~ Jim

(Originally Published on Writers Who Kill 7/27/14)

UK Author Income Survey: Much Ado About Nothing?

Since the Authors’ Licensing & Collecting Society (ALCS) published the summary of their UK Author Income Survey, much angst has been displayed in the blogosphere about this study claiming that one more nail has been driven into the coffin of aspiring authors.

The survey summary troubles me, not for what it says about author incomes, but about whether it has any validity. Consider the following:

The publication provides no footnotes or link to detail the mechanics of the survey. Proper surveys provide sufficient information about their methodology so readers can judge the quality of the results. The sample size appears large with 2,454 participants, but how were people selected? Do they represent a fair cross-section of the purported population of all UK writers? Are the methodologies consistent with previous studies? Don’t know.

Where did the full-time writers go?

The summary compares current results to those from a 2005 study (which I have not researched). Are the samples actually comparable, or is there a bias because of the sampling process? This might seem esoteric, so let me make a quick point before I lose you. In their 2005 study 40% of responders earned all their income from writing. In 2013 they found only 11.5% earned all their income from writing.

• Does this mean that over 70% of writers who formally earned all their income from writing now must take part-time jobs?
• Or does it mean the populations surveyed are substantially different?

I don’t know because they have provided no details on survey construction. The summary implies the former, but I suspect the two populations surveyed are not the same. AND if that is the case, then the reliability of any comparison between 2005 and 2013 is seriously jeopardized.

But wait! There’s more!

Their conclusion (p. 4) is nigh on dystopian, to wit: “If unchecked, this rapid decline in the number of full-time writers could have serious implications for the breadth and quality of content that drives the economic success of our creative industries in the UK.”

Purported Income Decline

They then go on (p. 5) to report that those who are full-time writers have median incomes of only £11,000 (approximately $18,800 at current conversion rates), fully 29% below the 2005 real monetary value reported and, 35% below the Joseph Roundtree Foundation’s calculation of a “socially acceptable standard of living,” whatever that means. The report then suggests that “Given that typical earnings from writing as a profession fall way below that standard, it is not surprising that the number of full-time writers is also declining sharply.”

Really? I am unconvinced. In the United States the number of fast food workers has not declined despite the fact that full-time earnings rarely come up to poverty levels. Perhaps these writers are taking supplemental employment, but show me the graphs and charts that illustrate the number of people who considered themselves full-time writers in the past and now work extra jobs to make ends meet. Where’s the graph showing how many people used to have full-time writing jobs whose employers cut hours so they now only work part-time as writers? The lack of those graphs implies to me that the survey either did not ask the question (why?) or the answer is not persuasive.

One last thing about their report of the purported decline in all writers’ income: the summary report does provide statistics about the age of the respondents (P. 3). Fully 29% were over age 65; only 17% were under age 44. Given all the other comparisons they provided, why not ones about the change in ages from the prior survey? Perhaps because it illustrates different groups of responders?

Rights Reversion

The study also includes a number of statistics about digital versus print, rights reversion, etc. Here’s an interesting one: “70% of [those exercising a reversion clause in their book contracts] went on to earn more money from the work in question.” The real question is why 100% didn’t? Why did 30% revert their rights and then do nothing with them? And why is it important to report that 70% earned more – as if that were some knock on the industry?

Self-publishing

Another statistic blared by the summary (p.10) is “Just over 25% of writers have self-published a work, with a typical return on their investment of 40%.” What does this mean? How do they measure investment? Does it include only out-of-pocket expenses, or does it impute an investment value for hours spent writing? And what does “typical return” mean? In all my statistics courses I never learned the mathematical meaning of “typical.” Mean—yes. Median—yes. Mode—yes. Normal and Student’s T distributions—yes. Typical—no.

Conclusion

If the ACLS wants this study to have relevance, to shed light on the writing industry, they need to provide methodology information to demonstrate results are comparable between 2005 and 2013 and that the selection procedures provided a population that represents the whole universe of UK writers.

~ Jim

The Kindness of Strangers

Dateline 7 July 2014: Early morning, Hampton Inn, Utica, New York.

The camera case with wanderlust

I had planned to upload my photos from the day before to my computer, choose one for my daily Facebook post celebrating the road trip we were on—and the camera was not where I expected it to be. I checked the room without success. I thought about when I had last used it (taking a picture of the bridge over the Hudson River we’d crossed) and what I had done with the camera (zipped it into a soft case, which I’d shoved into an outside pouch on my knapsack).

Conclusion: when I brought the knapsack inside the motel the previous night, I must have tipped the camera case out.

 I checked outside around the car. I checked under the car. I checked inside the car. I rechecked the hotel room. Nada.

With the almost certain knowledge I had lost my small camera (I still had the big one safely stored in a camera backpack) I trooped down to the hotel front desk and enquired whether anyone turned in a lost camera. Indeed someone had, and once I told the clerk the make of the camera, it and I were reunited.

All because of the kindness of a stranger.

Normally when I use this camera, I attach its case to my belt. Normally does not mean always, and on this road trip I had misplaced my small camera once before. That time I laid it down next to me on the boat trip to visit the Northern Gannet colony on Bonaventure Island, which is off the coast of the Gaspé Peninsula in Quebec. When I got up, I didn’t check around me.

 A younger man saw me leave the camera and brought it to me. Again, the kindness of a stranger. I was able to personally thank that young man, but only through this blog can I thank the person who found and turned in my camera in Utica.

Although my camera loss and recovery occurred during summer, for reasons not clear to me, that experience got me thinking about an act of kindness I received during winter. Six miles from home and about three miles from the nearest habitation, I skidded off the road with sufficient speed that I crested the snowbank. Two of my wheels retained contact with the snow. The other two were up in the air. When I tried to back out (four-wheel drive can solve anything, right?), I proceeded to spin the wheels and turtle my Ford Expedition so that none of the wheels had traction. A logging truck passed by. The driver saw me shoveling the snow from under my vehicle to attempt to regain traction. He backed up and, using my chain, pulled me out of the snowbank.

Innumerable strangers have given me directions over the years. Some of them have physically led me to where I needed to go because the directions were complicated.

In an act of kindness with long-term career effects, a professor on the Boston University selection MBA selection committee convinced the rest of the committee to ignore a technicality that would have voided my application. Without his intervention I would not have been able to go back to BU and complete my MBA. As it turned out, I later took a course taught by this professor. He recognized my name and told me the story.

I could go on (and on), but instead, I’d be interesting in hearing your stories about how a stranger’s kindness helped you.

~ Jim

[This post originally appeared on Writers Who Kill 13 July 2014]