Kindle Online Lending Library (KOLL) - Use it or Abuse it?

A debate has been raging in Cyberspace ever since Amazon announced the Kindle Online Lending Library (KOLL). What's the issue? According to some, Amazon is throwing its weight around, trying to crush the competition with this new offering. If an author allows their eBook to be "borrowed" by signing up for KOLL (for a minimum 90 day stint), the author must grant Amazon exclusive rights to distribute their eBook. In exchange, Amazon will pay the author a certain sum of money for each time someone (Amazon Prime Members only) "borrows" his or her eBook. Thus, the name Kindle Online Lending Library (this program also goes under the name KDP Select).

Some authors criticize Amazon for using its clout in an apparent attempt to drive out competition. Barnes & Noble (Nook) and Smashwords promise to be particularly hard hit if Amazon can control the digital marketplace. Some see this eventual domination by one company as bad for all authors. These authors would eschew this offering from Amazon and try to convince others to do the same. In some other cases, an additional justification to ignore the KOLL is simply a matter of pride, as some prefer to see their book available in as many formats and from as many sources as possible.

On the other hand, getting one's eBook "borrowed" can only increase exposure and provide the author with another source of revenue not available today. Proponents would suggest a financial analysis to determine if the additional "borrow" revenue offsets the lost revenue from other sources. In addition, Amazon will permit a free giveaway promotion for any 5 days within any 90-day period. If this doesn't appeal to you, I get it!  It certainly didn’t appeal to me when I first signed up, but hang around to see how that turned out.

Insofar as the social, moral and philosophical aspects of Amazon's play in this space, I'll leave those esoteric arguments and judgment to others. I couldn't care less how Amazon is leveraging its size to improve its market share. I looked at this opportunity solely on the basis of how it affects my royalties, since I donate part of those payments to charity.

The digital eBook has created a revolution in our industry and all the old rules no longer apply. Authors are now much more in control of their own marketing, distribution and sales and are obligated to use this freedom to support their causes and further their aspirations as authors. So I preferred to analyze the Amazon offering from the viewpoint of a newly published author operating on a shifting landscape in a new and changing publishing world.

I decided to take the plunge back in December 2011 when Amazon announced KOLL after realizing that my Amazon sales were 10-15 times greater than all my other channels combined. It was also out of curiosity, and I only needed to commit for 90 days. Why not?

After committing, Amazon had exclusive rights to sell my eBook, The Last Jump - A Novel of World War II. I gave up NO other rights to my work but I had to un-publish my eBook from all other channels which included Barnes & Noble, Smashwords, Google Books and my publisher's website. Amazon certainly didn't take my word for it, as they must have launched a search-bot to verify they were the only seller. They found something out there, never told me what it was (it could have been my own website) but asked for a pile of additional information from me in a seriously threatening email. We eventually cleared this up, but they certainly need some training on how to deal with customers and business partners.

Amazon originally announced they had placed $600,000 in an account for the first 90 days of the program. At the end of the quarter, they split the pot among all books borrowed (to get a rate per book) and paid each author that rate times the number of books borrowed during that period. Since then the have placed $500,000 in the pot and because the number of participants and "borrows" varies, the rate also varies.

Here is how much Amazon has paid per "borrow" since December:

In my case in the first 90 days, the revenue for "borrows" exceeded the royalties paid by all other sources (besides Amazon) combined. I easily made much more per month lending The Last Jump than I made selling it through the other sales channels. From a math point of view, KOLL made sense for me. Therefore, after 90 days, I re-upped for another 90-day tour, and those results were similarly successful. I've given it a reasonable trial period and I like the results so I'm sticking with it, and I will as long as Amazon can keep paying in the $2.00 per borrow range.

My biggest concern was that having The Last Jump in the KOLL would suppress sales. The interesting part of this analysis was my worst fear was not realized. I assumed that my sales might diminish by about the same rate as the "borrows" increased. I was surprised to find this was not the case. Sales remained constant at about the same level (before KOLL) while at the same time the additional "borrows" actually increased my monthly revenue.

Another feature of the KOLL allows authors five days during each 90-day period in which they can give their eBook away for free--without royalties, of course. Obviously, at first blush, this didn't interest me at all. But after noting that two other authors (whom I knew) were promoting their own eBooks with a free giveaway promotion, I decided what the hell, let me try it too. So we teamed up to offer free downloads in honor of the fallen for Memorial Day. One of the authors built an "e-poster" with all three eBooks featured, and we collaborated to distribute emails and posts to our respective friends/families and social media sites. Again, I was concerned that this giveaway would impact sales but was willing to try the experiment and observe the results. I was astounded by what happened!

First off, The Last Jump received over 21,100 free downloads. Unbelievable! The other authors were in the same ballpark. At first I figured there goes 21,000 eBook sales. But a strange thing happened. I sold as many in the three days after Memorial Day as was sold in the entire month of May prior to Memorial Day. So far in June my sales are running about eight-nine times normal and my "borrows" are at roughly the same multiplier. I haven't seen the same acceleration of hard book sales at this time, but June results are still preliminary. Besides, I'm not expecting any shift in hard book sales since I consider this unique to the eBook world.

In June my sales ranking on Amazon has gone through the roof. I don't know how much longer this phenomenon will last and I can't explain how or why this occurred but the cause and effect are clear. Getting so much exposure for The Last Jump based on the free promotion somehow stimulated further interest and increased sales and borrows dramatically. So, beside the financial benefit of earning money for each borrow, the opportunity to provide a "giveaway" turned out to be the bigger benefit of the Kindle Online Lending Library. It propelled sales immediately and pushed my ranking and daily sales numbers to a new level. Needless to say, I will be doing this free promotion again on Veteran's Day.

I'm sure personal experiences will vary according to the many factors that are different for each eBook. Style, genre, quality, size and subject vary all over the place and will influence results from joining the KOLL. And there are those who will refuse to consider utilizing the KOLL for reasons of principle. However, I thought I 'd share my experience, as one story among many that will play out during this remarkable digital revolution. Perhaps it will help someone else out there.

Good luck to all of you on your journey.

 John E. Nevola - Author of The Last Jump - A Novel of World War II