I think KU is going to be better for the new and still building author. But the big names...not so sure. Especially since the latest royalty rate was something like $1.33/book, which as you point out, is significantly less than what they normally get.
And asking big name authors to choose exclusivity? Wow.
We need to clarify this point: because it's an extremely complex one. It's not that big name authors are being asked to choose exclusivity on the whole -- but per book and definitely for new releases. Definitely, the big name indie authors -- like H,M. Ward, for example -- were wooed into KU without being forced to pull their books out of other distribution channels. Now, six months after KU has rolled out, these same indie authors are being forced to choose which titles they want to keep in KU -- and which titles they want out.
For many indie authors who have relied on writing a series to generate their staggering success and popularity, this is a bit of a problem because their first book of their series can't be free on Amazon AND be in KU. Plus, how do you tell your enormous fan base who you have built across ALL platforms -- and internationally, to Darke's point -- that you're releasing your next book exclusively with Amazon? That's an extremely difficult business conundrum -- pitting customer satisfaction against an author's sales potential.
On the traditional side, it's even more complicated because Amazon cut different deals with different publishers (AND in some cases, different deals with authors -- per title). And it is our understanding that -- until recently -- they were paying out the retail price of every book for every borrow. In other words, Life of Pi isn't getting paid $1.33 per borrow -- they're getting something closer to their standard negotiated royalty rate under the terms of whatever deal they agreed to when Amazon courted them into KU.
So essentially, when Amazon rolled out KU, there were three tiers with different payment structures for those authors with participating books in KU: 1. traditionally published books getting basically full retail royalties for every KU borrow; 2. big name indie authors who were getting the standard monthly KU pay-out for borrow BUT who weren't being forced to pull their books from competing distribution channels, and 3. all the rest of the indie authors who had to choose from the beginning -- in KU or out -- and then suffer the consequences.
But really, we have now heard and come to realize THAT is an extreme over-simplification of what's been going on, and indeed, there are so many different deal terms and deal structures flying around behind the scenes that it's almost comical.
Then, you complicate things further when you look at recent PublishersMarketplace deals... there are a shocking number of "digital first/digital only" deals being made by agents, and who are they selling these digital rights to...? Kindle First and Kindle World, Montlake Romance, Lake Union, Thomas Mercer -- in other words, all to Amazon's own publishing imprints.
And even more shocking is the fact that we look up several of the other "small" presses that we've never heard of who are buying these digital rights and what do you find out? They're ALL Amazon imprints. Skyscape? One agency we just researched has almost all of their YA and MG deals funneling to Skyscape.
And what's going to happen with these authors' books. They're most certainly going to be released exclusively through KU.
The consequences of that? You tell us.