Amazon’s new lending feature is probably going to anger some publishers

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When it comes to Kindle features, Amazon tends to follow the aphorism that it’s easier to ask forgiveness than permission. This strategy doesn’t always work–see the text-to-speech controversy–but it helps give Amazon the element of surprise in the marketplace.

With that in mind, I have a feeling that some indie publishers are going to be up in arms about the new lending feature that was enabled this morning, because of how Amazon rolled it out.

Yesterday, Amazon quietly updated the terms and conditions for publishers who use its Digital Text Platform to publish to the Kindle Store. It added section 5.2.2, which explains how the Lending Program works. In particular, it explains the following:

  • all DTP titles have lending enabled by default;
  • titles using the 35% royalty option may opt out of the lending program;
  • titles using the 70% royalty option can NOT opt out;
  • any opt-outs are not retroactive, so anyone who purchased the title while lending was available will continue to have access to the feature.

This means if you’re a publisher and you hate the idea of the lending program, you have to scramble today to go into your DTP account and manually disable the lending feature for each eligible title. While you’re doing that, anyone who buys a copy will still be able to lend it in the future.

What’s not clear in this circumstance is what happens to all the customers who bought a copy before lending went into effect, since they’re not explicitly described in section 5.2.2. Do they also get to keep the lending feature? If so, then essentially any anti-lending publisher just lost control over lending for all previous purchases; if not, then some customers may find this feature suddenly disappearing from select indie titles. We’ll have to see what develops, and which group gets to angrily (and perhaps legitimately) denounce Amazon’s policies.

I’m hoping publishers don’t freak out about this too much, but you know what control freaks they are when it comes to Kindle editions. (Ha ha, I kid! No I don’t!)

Still, it seems strange to me that Amazon didn’t make the feature opt-in. The whole opt-out approach is the kind of maneuver Facebook and other companies use when they want to roll out something that they suspect will get a lot of criticism and pushback. Unfortunately, while it makes strategic sense for Amazon, it stomps on the rights of DTP participants.

“Kindle Book Lending – FAQ” [Amazon DTP]

(Photo: romulusnr)

Via Chris Walters’ BookSprung blog

18 Comments on Amazon’s new lending feature is probably going to anger some publishers

  1. How utterly charming, and on a day when every publisher I know is offline and on vacation, and Amazon is aware of this.

    This is an illegal grab for copyright, and I can smell a class-action lawsuit if they don’t back down from this.

  2. Considering the lending is a time-limited *one-time* per book “loan” the impact is going to be essentially zero for both buyers and publishers. After all, other than spec-sheeting, the “feature” is useless in real-world terms.
    The real market-impact feature came weeks ago with the availability of ebook gifting.

  3. I believe that it’s the 70% royalty payment books that must participate in the book lending program, and the 35% royalty payment books that can opt out, as per Amazon.

    “However, for Digital Books that are in the 35% Royalty Option (as described in the Pricing Page), you may choose to opt out of the Kindle Book Lending program…Digital Books that are in the 70% Royalty Option (as described in the Pricing Page) cannot be opted out of the lending feature.”

  4. Every single day I see comments that make me think the publishers really don’t get it.

  5. I’ll have to study the T&C but agree that opt-in would better than a possibly limited opt-out. Clearly they’re responding to B&N’s lending program, but I wonder why DTP publishers (which does not include the majors) is the target. Maybe because they have more power over the smaller publishers.

    I don’t have a problem with a highly limited lending program but I do think it is something that should be discussed. I set my eBook prices extremely low partly because I support the idea of each user buying their own copy. With paperbacks, in contrast, I assume pass-along, and set higher prices as a result (and also because of the higher cost of paperback).

    Rob Preece, Publisher

  6. So… write books that take 15 days to read. Then everyone will HAVE to buy your book just to read the last spellbinding chapter!

    From a consumer standpoint, this lending program sucks just as much as it did when the nook got it ages ago. I would have hoped for Amazon to do something better, but in the end they’re limited by the restrictions imposed by silly publishers.

  7. “but I wonder why DTP publishers (which does not include the majors) is the target”

    IIRC publishers all have to start using DTP as publishing to the Kindle store through Mobipocket is being removed as an option (if it hasn’t already).

  8. As a publisher, I’m curious: Can Amazon legally update terms without notifying our press? @Rob, Jaded Ibis Press also prices our ebooks at low prices (always under $10) so that more people can afford them.
    @What “restrictions imposed by silly publishers” are you talking about? Small publishers like us, who are breaking new literary ground, are at the mercy of Amazon if we want our titles to be available on Kindle. There is so much public misunderstanding about how these systems function.

  9. As a writer who just received this notice from Amazon, I am furious. This makes me sick to my stomach. I’m charging 5.95 for my book—not exactly ripping people off for a year’s worth of labor, plus what I paid the editor and cover designer. It’s MY property. I hope we can sue them for this. I think Amazon has underestimated the level of rage in response to this action.

  10. I think it’s a good idea, and it’s pretty restrictive. You can only lend a book one time, for a certain time period, and then from what I understand you can’t lend it again. Very good idea.

    I’m sorry for the RAGE expressed by one author, you just convinced me that I will NEVER buy your book{s}. You are part of the problem, not the solution.

  11. If the goal is to hasten the demise of pBooks, as may be the case with Amazon, then you’d want to eliminate or diminish all advantages of pBooks over eBooks. Lending is one of those remaining pBook advantages, thanks to the doctrine of first sale. It would appear that Amazon has duplicated the limits of lending pBooks. If I lend you my copy of a book, I cannot read it myself until you return it. Amazon has improved lending in that I don’t have to hunt down and haunt those who are tardy in returning books that I have lent.

    Now, what about Libraries? They can buy one or more copies of a book from Amazon and lend each of them 15 days. Whose business model does this threaten? Overdrive perhaps?

  12. Well, this indie author in the 70% program isn’t upset. As a reader, I’d never bother, and as an author it doesn’t seem like a very big deal. There are families out there who all get to read a book purchased a single time on their several Kindles. If there are also people who get to read a borrowed copy, that’s great. Maybe they’ll like the book and buy others.

  13. You’ve got it, girl. Introduce other readers to your works, and if they are interested, they will buy more. It’s just like the DTB world, but some evidently don’t agree.

  14. XJT, from the sound of the press release, there is an opt out for this.

    What annoys many of us is the automatic opt in without the publisher or self-pubbed’s permission.

    It reeks of the same arrogance as Facebook which changes privacy policies at a whim and always to the detriment of the user’s privacy.

    I hope this explodes in Amazon’s face as most of Facebook’s opt ins have although, heaven knows, neither has “gotten” why this is wrong because they keep doing it.

  15. I do not believe that there is nothing illegal about Amazon changes. What I am reading from the comments of some of the authors here suggests that they did not pay close attention to the terms and conditions for those who participated in the 70% ‘royalty’ option.

    The key sentence from the 70 Percent Royalty Option FAQ is “The title will be included in a broad set of features in the Kindle Store, such as text-to-speech. This list of features will grow over time as Amazon continues to add more functionality to Kindle and the Kindle Store.”

    See: http://forums.digitaltextplatform.com/dtpforums/entry.jspa?externalID=437&categoryID=20#3_require

  16. I really don’t see why this is so upsetting to authors. They’re just duplicating something available on the Nook. Also there won’t be anymore lost sales than are already lost when people trade paperbacks, buy used, or get books from the library. xjt’s rage seems a bit extreme.

  17. I think ebook lending is a great idea. Kindle customers have been asking for this feature for a long time and I hope it will be available outside the US as soon as possible. Even after reading this article I’m still confused as to what is the problem??? Publishers will be upset – Well as a non-US person I’ve been extremely upset at the big publisher monopoly in my country that has kept us buying books at 3 times the price of other countries for decades. So my sympathy for the Big 6 publishers is non-existant. Indie Publishers are upset? I buy ebooks all the time from indie publishers in the mobi/prc format and read them on my kindle. Authors are upset? Books always have been lent and always will be lent in to future. It’s part of the reading experience. If my friend enjoys a book I’ve lent her then she is very likely to buy her own copy of that authors work in the future.

    There’s a lot of knocking of the social network phenomenon here but I’d like to suggest that publishers look at the big social network sites for readers that are on the internet. That’s where and how I choose my books, not the new release page at Amazon.

  18. As an author, I have a problem with unlimited lending (which may happen) or the extent to which books can be lent between millions of people online. You see, if you have a physical book, your lending is going to be limited to a small amount of people in your physical area. I’m OK with that. But with digital lending, and these Lending Groups online, their is the potential to destroy an author’s sole source of income: sales.

    People will argue that others may find out about your book by lending, and maybe buy more books from the same author (if you’ve written more). But you know as well as I that they’ll first check to see if a book is available for FREE on a Lending site before they’ll buy it. The internet is much bigger than your neighborhood block. This could be devastating to authors, especially independent authors whose only source of income is the book-by-book sale.

    Also, here is how Amazon rolled it out this week, in real words, when they allowed 35% to opt out and 70% royalty to not be able to.

    “If you don’t lend your book, we are going to cut your profits in half.”

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