Amazon senior v-p Russ Grandinetti was genial, confident and a bit elusive at Digital Book World. He fielded questions about author discontent and the new contract with Hachette Book Group, noting that while conflicts with suppliers were not new, they were “usually not so public.”
Grandinetti was interviewed on stage by DBW organizers Mike Shatzkin and Michael Cader. Asked about discontent among independent authors over the impact of Kindle Unlimited, Amazon’s e-book subscription, on their income, Grandinetti said “vocal, vibrant” author complaints helped Amazon improve services. Grandinetti claimed that overall, indie authors remain happy with Amazon. He pointed to a 95% renewal rate in KDP Select—authors must be exclusive for three months in the program to be included in KU. He was also quick to note that unhappy authors can get out of the program “after three months. What if their regular publishers allowed that?”
Grandinetti said he was “cautiously optimistic,” about KU since the program is only six months old. He emphasized “that a la carte e-book sales (normal retail) were growing faster than Kindle and KDP sales.” Indeed, he said “overall author earnings” across all the Amazon Kindle programs “are double what they were in 2014.”
Asked “how big do you want Amazon Publishing to be,” Grandinetti didn’t quite answer noting that, “publishers selling books is not new,” and that “more approaches to publishing is healthy.” In fact he used the question to remind the gathering of all the things Amazon does for its authors that traditional publishers don’t, noting in particular “monthly royalty payments.” He spoke about Amazon’s translation tools, which have reduced translation costs and opened new markets for books, and pointed to continuous surveys of its authors about their contracts and more. “Let’s measure Amazon Publishing by its innovation,” he said.
Despite being in peacemaking mode, Grandinetti was clear that Amazon will continue to be a disruptor. Asked if the new contract would mean “stability” in the industry, he said “that makes me nervous. It’s hard to predict stability,” reminding his interviewers “we just introduced e-book subscription.” While he personally loves print, he said “we don’t have a predetermined sense of what size the digital market should be.” And he also noted once again that “we need to know how the subscription model can be useful to books, subscription is important.”
Later during a panel on the e-book subscription model, Nielsen BookScan’s Jonathan Stolper offered data on the subscription market. E-book subscription represents 5% of the book business (10% if you include Amazon Prime, removed because it's not truly a subscription program); 56% of book buyers are 18 to 29 years old, while 79% of e-book subscribers match that demographic. E-book subscribers skew a bit more male and are willing to pay up to $17/month for access (the median was $10/month) and e-book subscription does not seem to affect their other book purchases.
The panel, which included Kensington publisher Steven Zacharius and S&S v-p Douglas Stambaugh in addition to representatives from Scribd and Oyster, heaped praise on the business model. “We make money on e-book subscription,” said Zacharius, “I hope they’re making money too.” Kensington also offers frontlist titles via the services and Zacharius said, “there’s no cannabiliization of print.” S&S offers only backlist. “Genre fiction does well, romance, new adult, indie authors. Deep backlist has done well. It’s early but we’re happy,' Stambaugh said.
Zacharius said he has 2,000 titles on Amazon’s Kindle Unlimited, 3,500 each on Oyster and Scribd, “no windowing, same catalog on both and the top ten titles on each are very similar.” Stambaugh agreed: “subscription is getting people to read more. It is not taking heavy buyers and turning them into subscribers. It’s more male with wider reading. It’s a healthy option for publishers. We only offer backlist today, but tomorrow, who knows?”