Kindle Head Russ Grandinetti Offers the View from Amazon at Digital Book World 2015

Joining publishers at Digital Book World 2015 in New York City this morning, Kindle SVP Russ Grandinetti offered a frank explanation of Amazon’s perspective on the book business.

To be fair, little about it comes as much surprise to those in publishing who follows the e-tailer. But after an unusually contentious past year, Grandinetti’s discussion today with Conference Chair Mike Shatzkin and Publishers Lunch founder Michael Cader marked a noteworthy change in the public dialogue between publishers and their biggest distributor.

Here’s a roundup of key topics in this morning’s candid conversation:

  • The Hachette dispute: Disagreements between publishers and booksellers are nothing new, but Amazon’s battle with Hachette was unusually public. “Our goal is to keep it rare,” says Grandinetti.
  • Authors: “We treat authors the same way we treat buying customers,” and Amazon is “highly motivated” to make its publishing services work for them. The indie community, Grandinetti says, is “incredibly vibrant” and vocal. “They like CAPSlock a lot when they tell us what’s going on.” Amazon finds that KDP Select remains very popular, more than doubling authors’ earnings through the platform in August–December last year over the same period in 2013.
  • Kindle Unlimited: Amazon is working to address authors’ concerns that the subscription-based program is diminishing their revenue, asking for patience in the meantime. “It’s only been six months,” Grandinetti adds. On the subscription ebook model overall, Grandinetti says, “More approaches to publishing is pretty healthy” and reminds publishers they weren’t happy at first when bookstores began selling used books. “In every single digital media category, subscriptions are succeeding at some level,” and books won’t be an exception.
  • The return of agency pricing: Cader points out that the latest three distribution contracts reached between Amazon and Big Five publishers Macmillan, Hachette and Simon & Schuster, which restores to each of them the right to set their own ebook prices, sets the stage for several years of stability in the terms of trade. Asked whether that opens up a window for pursuing new opportunities, Grandinetti says, “Contracts don’t necessarily equal opportunity” but sounds optimistic. “Our interests and the interests of publishers are highly aligned.”

2 thoughts on “Kindle Head Russ Grandinetti Offers the View from Amazon at Digital Book World 2015

  1. Michael W. Perry

    Amazon SVP quote: “We treat authors the same way we treat buying customers,” and Amazon is “highly motivated” to make its publishing services work for them.”

    Nonsense. Using stacks of pennies, I could explain to a three-year-old why Amazon treats authors badly. Apple pays a flat 70% royalties at all price levels. Amazon royalty scheme is a maze of varying rates and fees that never pays 70% and often pay half that, particularly with the lower-priced ebooks that Amazon claims it wants to encourage.

    For instance suppose an author sells 1,000 copies of a modestly priced $1.99 novel on both Apple’s iBookstore and Amazon’s Kindle store. What does each pay him?

    * Apple will pay him $1400.

    * Amazon will pay him only $700.

    If paying half the market rate for the same product isn’t a Screw the Authors policy on Amazon part, then what is?

    And I might add that, were I the author of the book described above, I might use those stack of pennies to explain to a child why “Evil Amazon” means that we won’t be able to go to Fun Town this weekend. “They are like Scrooge in the Christmas story, Susie. They aren’t paying your daddy enough money for his books. They are bad, bad people. All they want is money.”

    In short, there’s no need to take Amazon’s claims about caring for authors seriously. If they did, they’d adopt Apple’s simply royalty policy and abandon one that often pays half as much.

    If you want to understand someone (here that SVP) or an organization (here Amazon), ignore their words and look at their deeds. When it comes to authors, Amazon comes up woefully lacking.

    Reply
  2. Theresa M. Moore

    I agree. My experience with Amazon was the complete opposite from what Grandinetti describes, and KDP Select was a bust in my estimation, after reading the bad experiences of many other authors who tried the program. Grandinetti has only been around for 6 months, when I had been dealing with Amazon for 6 years. Who are you going to believe?

    As for his remark abour treating authors the same way as customers, in that case I would prefer not to be a customer. Many people do not see what went on the background while shoppers stuffed their Kindles with cheap and free books. Amazon published a one way contract, and it was non-negotiable. That’s no way to retain content and suppliers. As for me, I’m doing fine without Amazon and I plan to keep it that way.

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