The Great Amazon Hysteria… Part 31

ChickenLittleAre you scared yet? Because you should be scared. Something really bad is about to happen. It affects all of us.

Our livelihoods are at risk. The ability to support our families. It’s just over the horizon. It could happen any minute. It’s coming for all of us!

WE ARE DOOOOOOOOOMED.

Ahem.

I’ve been around for long enough to know that authors can be a skittish bunch. Probably something to do with our over-active imaginations, with an assist from that old writers’ favorite: the whiskey brunch.

More seriously, we are going through a period of unprecedented change so it’s perfectly normal for people to be a little fearful. I think the disruption we are all experiencing is greater than that which has been faced by similar industries. In fact, I think the transition from print book to e-book is akin to going straight from vinyl to MP3, with all that entails.

So, change. Lots of it. And change can be scary – even if you seem to be benefitting from the changes that are happening. I get that. However, at this point, we should all know enough to treat media reports on Amazon (and publishing in general) with the requisite amount of skepticism. As in 100% skepticism.

Patient Zero in this latest outbreak of Amazon Hysteria appears to have been The Atlantic who ran a piece on June 20, headlined: “What If Authors Were Paid Every Time Someone Turned a Page?”

The rather important distinction that this new payment system only applied to some self-published titles – those enrolled in a wholly optional program called KDP Select – wasn’t made until PARAGRAPH EIGHT. And even then the distinction wasn’t super clear and floated the wholly baseless idea that this could also apply to traditionally published books:

While many larger publishers’ offerings are included in these programs, the details of those deals have not been made public. Their authors may or may not be paid by the page. Amazon’s announcement only says that the new formula applies to Kindle Select books that are self-published and distributed through Amazon’s Kindle Direct Publishing program.

Next up in this steaming pile of hot takes was this article from The Verge on June 21. The original article has been amended (but still contains huge inaccuracies) so I can’t quote from it, but the correction appended underneath clearly shows the problem:

Correction: The original version of this article conflated Kindle Direct Publishing (KDP) and KDP Select. The new royalty system only applies to KDP Select authors, who have their books offered on both the Lending Library and Kindle Unlimited as part of the program. In addition, the $3 million pool number quoted was for this month, not May as originally stated. We regret the error.

It’s amusing that the correction contains another error (the pool is actually $10.8m for May), but I digress.

The panic then spread to the newspapers, starting with this Telegraph article on June 22. Headlined “Amazon to pay Kindle authors only for pages read,” it opened with the following:

If you are an author whose book fails to grip in the opening chapter, it could prove costly. Amazon is to begin paying royalties to writers based on the number of pages read by Kindle users, rather than the number of books downloaded. If a reader abandons the book a quarter of the way in, the author will get only a quarter of the money they would have earned if the reader stuck it out to the end.

Sounds scary.

Of course, it’s completely inaccurate. As you should all know by now, this new payment system only applies to titles enrolled in KDP Select – a completely optional program. That rather crucial distinction is only made in the fifth paragraph, and isn’t made either in the click-bait headline, or the shamefully inaccurate, fear-mongering sub-headline: “Amazon’s new system will cut the royalties for self-published authors who fail to hold a reader’s attention until the final page.”

And then after skipping over the most crucial piece of information – that this new payment system only applies to self-published titles that are enrolled in a particular, optional program – the Telegraph moves full steam ahead into panic-manufacture mode (what the UK papers do best), quoting all sorts of despairing authors. Sigh.

The article leaves out a rather important bit of context. Authors getting paid little or nothing for readers ditching a book that doesn’t grab them is nothing new. For years now, customers could read the first 10% of pretty much any book (print or digital) on retailers like Amazon or Barnes & Noble without paying for it. These free samples are actually great and help drive sales. I love them both as a reader and a writer.

Also, for the last twelve months Kindle Unlimited/KDP Select has had a similar system in place where payment to authors for books borrowed via Kindle Unlimited wasn’t triggered unless the reader went beyond the 10% point.

So there’s nothing new about the concept that a slow opening could cost you. And it’s not like readers don’t browse books in physical stores – reading a page or two before ditching it – without being charged and without the author getting paid. This is all normal stuff. It’s just a little less controversial when you aren’t actively trying to describe it in sensationalist terms.

GooglenewsAnd the story is still spreading, as you can see from the screenshot on the right. Most of these articles fail to point out that this new payment system only applies to an optional program for self-published titles. Many also fail to point out that it doesn’t apply to traditionally published titles at all.

The result, of course, has been widespread panic. Writers completely losing their minds all over social media. It’s not their fault per se, this erroneous message was spread far and wide by journalists who were either lazy, ill-informed, clueless about self-publishing, actively engaging in click-bait, or a combination thereof.

This is nothing new, but the question I want to ask is this: why do we react to it? We’ve been down this road many, many times before. Two recent examples:

  1. In January 2014, the media went completely nuts over Mein Kampf being a “digital bestseller.” It turned out that it wasn’t a bestseller at all. It had sold very few copies… until the media made it one with this huge, rolling coverage of a completely erroneous article on Vocativ.
  1. In June 2014, an author wrote an Op-Ed in the New York Times decrying how little money being a “digital bestseller” had made him. The media took that story and ran with it… again without checking the facts. It turned out that, like Hitler, he never was a digital bestseller at all, until the ensuing media storm, and the money he made was very much as expected, given the book’s actual sales figures, and the fact he went via a publisher (who took their own cut).

And I didn’t even mention The Great Erotica Panic of 2013, the extended (and tiresome) Amazon-Hachette dispute, or the unprecedented imbroglio over Macmillan’s buy buttons getting removed from Amazon a few years back… when the whole thing was a smokescreen for five of the Big 6 publishers engaging in an illegal price-fixing scheme with Apple.

The point is this: don’t believe everything you read. Think twice before helping spread panic. Before commenting on something publicly, or sharing it with your friends on social media, perhaps consider doing some basic fact-checking.

Because the journalists sure as hell aren’t doing it.

About David Gaughran

David Gaughran is Irish, living in Prague, and the author of Mercenary, A Storm Hits Valparaiso, Let's Get Digital, Let's Get Visible, and this here blog.
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100 Responses to The Great Amazon Hysteria… Part 31

  1. Anna Dobritt says:

    Reblogged this on Anna Dobritt — Author and commented:
    Very interesting article.

    Like

  2. Sara says:

    I got that notice from Kindle in my monthly newsletter from them. I was pleased with the idea. It provides an incentive to put more stories in front of people and give them more choices, instead of hunkering down and weeping in a corner.
    Now if I can only get people to go pick my books instead of someone else’s!!!

    Like

  3. Karin Cox says:

    ❤ Thanks, Dave, for the levity. Yes, it is ever-changing, but we can handle this. Just like we've handled everything else.

    Like

  4. Greg says:

    Even more key to how misinformed the articles are is not the fact that it only applies to books in KDP Select but that it only applies to books borrowed from the lending library (via Prime).
    These articles suggest that all books sold/downloaded will not be paid and that Amazon will get the whole book price and the author only a page price. This is incorrect. Purchases/downloads are still paid out at the normal royalty. The new pricing scheme is only applicable to lends.

    For novelists, this should probably result in higher payouts. for shorts, on the other hand…

    Liked by 1 person

  5. Eden Sharp says:

    Even if there is the potential for Amazon to start paying all Kindle authors in the same way, or for its approach to catch on with others, Chuck Wendig argues in the positive that it ‘fixes the weird inequity and stops punishing people who wrote actual-size novels.’ That ‘it stops incentivizing people to write tiny little no-nothing stories.’ The bad news is everything is impermanent. The good news is that everything is impermanent.

    Liked by 1 person

  6. Shah Wharton says:

    Reblogged this on Shah's Scribbles and commented:
    Chill your beans, authors. Read this instead …

    Like

  7. Nortina S. says:

    Reblogged this on Nortina Mariela and commented:
    It seems like there’s a Great Amazon Hysteria every week! Here’s some insight on the latest scare that has all you indies blowing gaskets. I actually think the pay-per-page method is a good idea. It should motivate authors to write more compelling stories from beginning, middle, to end. I’m sure many readers have felt they’ve wasted money on a boring book. Now authors (let’s clarify, self-published authors with books in the KDP Select program) will get paid for how boring or exciting (and well written!) their books are. Besides, this is no different from let’s say…. a library.

    Like

    • Raven says:

      Not all of us Indies are blowing gaskets. Are some? Yes. But for the most part, it is a small minority. I really didn’t pay the whole hoopla much mind as I am not enrolled in Kindle Select. I chose to opt out so I could publish to multiple platforms. However, it is good to have all the facts, and it will be interesting to see how it goes once all the bugs are worked out. As I do allow for lending in the Kindle Owner’s Lending Library, I am affected very little by this.

      Liked by 1 person

  8. Great article David, it really does place the hysteria of the change in the calm blanket of context.

    Like

  9. David,

    Excellent article/insights (as usual). The only point with which I take issue is:

    “The result, of course, has been widespread panic. Writers completely losing their minds all over social media. It’s not their fault per se …”

    On the contrary, I think it very much IS their fault, as even a modest research effort would reveal all these stories to be unfounded and sensationalist BS. For example, I suspect none of your regular readers had the slightest doubt as to how the new policy will be administered or the reasoning behind the change. I admire you for fighting the good fight, but fear education of the Truly Clueless is a thankless task.

    Like

    • Aha, yes, well, there’s plenty of blame to go around!

      Joking aside, I try and remind myself that not all authors are publishing news nerds and many people still (bizarrely!) trust the news media and assume that they still operate to some level of fact-checking and whatnot.

      It’s kind of hard to blame someone when the exact same story is in 100 different articles. Or, at least, I think the journalists/editors responsible should get the most criticism for this. But, yeah, people need to wise up. It’s not the first time this has happened.

      Like

    • Sara says:

      If they simply took the monthly newsletters that both Kindle and Amazon send out, none of this could have surprised them. I read that in both the May and the June newsletters and found myself quite happy with the idea that I could get paid per page, as if I were being paid by the old print mags like Astounding Tales and Isaac Asimov’s Sci-Fi Magazine, even though those publications paid by the word.
      Hmmm…. could we get Amazon to pay us by the word? Think of the incentive to produce Dickensian prose!

      Like

    • Sara says:

      Barbara, I get the monthly newsletters from Amazon Kindle Direct Publishing. I don’t remember when I started that subscription, which is free, but if you go to KDP’s website and sign in, it may be easier to find it that way.

      Like

  10. The problem I’ve heard voiced is that Amazon did not specify if the reader could stop and start reading again. The policy states authors would only get paid ‘the first time’ the reader reads it, but it didn’t say what happens if they stop and put the e-book down.

    The big question is: If the reader stops reading after five pages, is that all the author gets paid for, or will the Select royalties start adding up again when the reader goes back and reads more pages?

    Like

    • There have been some conflicting answer from KDP Support, but my current understanding is the following:

      Readers can stop and start again. If they read 10 pages in July, and then forget about the book until December, when they finish the whole thing, you will get paid for July’s pages (along with July’s sales at the usual point) and then December’s pages (along with December’s sales etc.). It doesn’t matter how many breaks there are between sessions, or how long the reader takes. You will get paid each month for the pages read that month. NOTE: Only the first time a reader reads them. Subsequent re-reads won’t earn an author subsequent payments.

      Like

    • Alan Tucker says:

      The “first time” thing applies to each page, not the book. So, if a reader starts your book, puts it down for a time, then picks it back up and starts from the beginning again, you only get paid once for those first few pages, but if they keep reading further the second time, you get paid for the new pages read. Make sense?

      Like

  11. susan lee kerr says:

    Thank you, Dave!

    Like

  12. K. A. Jordan says:

    But — but — you get more clicks when you scream ‘The Sky Is Falling!’🙂

    In all honesty, the only reaction I have to the new program is ‘Amazon, meh?’

    Even releasing a new title to Select/Unlimited as a freebie only gets a dozen d/ls world wide, at best. The program continues to lose every advantage it ever had. In fact my last two free days, on Select, got 1 – that’s right 1 – d/l a day.

    I was one of the first to find world wide success with Select. The returns have steadily diminished until I’ve decided to go with Smashwords pre-orders for my next release.

    The explosive growth of the markets slowed as the markets have matured. Amazon isn’t a hot e-book market any more. At least not for me, my sales have always been better on B&N.

    Like

  13. fiveacres says:

    The value of a fast opening reminds me of my discovery of one of my favorite authors: Lois McMaster Bujold. I found her first published book on a dealer’s table at a SF convention. I read the back blurb copy, shrugged at the front cover and started reading the first page. A quarter of the way through I finally managed to pull myself away from the story long enough to buy it and take it back to my room to finish it. I think I reread it before the weekend was over.

    Like

    • This is the thing. Under what system does a slow opening work for an author? It’s a pretty strange hill to die on.

      Like

      • Under what system? The system that made Paula Hawkins a NYT #1 best-selling author. I have commented elsewhere about The Girl on The Train, in which virtually nothing happens for the first 29 pages. I really liked the book, but if it had not been a present from my daughter, I would have given up after the first dozen dreary pages. “So, how far have you read now, Dad?” “How’s it going, Dad?” Incentives.

        Like

      • But the writing was good for those first 29 pages, yes? There must have been something which kept you reading, something compelling in the voice, style, characters, etc. (I haven’t read it myself.)

        My point is that a slow/boring/badly written opening has never been something which specifically attracted readers or was a boon for writers under any system. That’s not to say that there aren’t great books with quiet openings, or successful ones. If you don’t have an opening which grabs a reader (and that could be with the voice rather than something hammy like an explosion), then you are in danger of losing them. That’s always been true.

        Like

  14. Reblogged this on akrummenacker and commented:
    I’ve been seeing a lot of people panicking over the new royalties deal Amazon is rolling out. This article may help straighten out some of the misconceptions a few have out there. I hope it helps…

    Like

  15. Reblogged this on CKBooks Publishing and commented:
    I had heard whispers of this but since I’m not in Amazon’s KDP Select program, I have really not paid attention.
    Thanks for the clarification, David and the wise words about not passing on what we don’t really know about.😉

    Like

  16. Jeremy Henderson says:

    Reblogged this on the post-college try and commented:
    My first reblog. I like his style. Surgical. Shaming. And I haven’t even self-published yet. Full steam ahead.

    Like

  17. Ahhhhh. Sanity! Thank you!

    Like

  18. Reblogged this on David VanDyke's Author Blog and commented:
    As usual, a concise summary of the current situation. Believe me, folks, the sky is not falling. In fact, it may be rising.

    Like

  19. The balanced, rational view as always, Dave. When are you going to get with the program and start manufacturing some panic?😉

    I’m adopting the wait-and-see stance. It could net me more than the previous 10% solution or it could yield less. Who knows? In any case, It strikes me as neither evil nor anti-author. To date, KU/KOLL units account for about 1/3 of my units moved and net a little less than the royalties on straight sales. I removed from KDP Select The Homeland Connection, a four-novel “boxed set” of some 800 pages and priced at triple my single novels. It didn’t make sense to steeply discount it to Prime members either by the 10% measure or by the page formula.

    Like

  20. MishaBurnett says:

    I’ve got all my books as Kindle exclusives–not because I love Amazon, but because I have been on B&N, Kobo, and Smashwords, and haven’t found any of them to be worth the hassle of formatting an e-book for them. (And formatting e-books is very little hassle for me.)

    Until recently I could say that no one had ever borrowed any of my novels through the KU program, but someone did just get a copy of my last novel. So I’ve had one borrow.

    It doesn’t matter to me if Amazon pays anything at all for KU.

    Like

  21. Jim Kukral says:

    The first step to coming to terms with this nonsense you pointed out so correctly is to realize there really isn’t a thing called a “journalist” any longer. Once we accept that fact; this type of thing is much more easily stomached.

    It’s all about the headlines and shares and poorly targeted, under effective, and overly expensive cpm bought ads to their sites.

    Like

  22. Reblogged this on Ruth Nestvold – Indie Adventures and commented:
    There has been a lot silliness being spread about Amazon’s new payout scheme for KDP Select authors. This correction needs to be shared far and wide!

    Like

  23. Pingback: For Indie Writers: You have the control. Own it. | ELIZABETH HUNTER

  24. Sean McCann says:

    The other side to the hysteria is complacency. Just because Amazon are only testing the water doesn’t mean they won’t roll it out everywhere they can. Whatever increases their profitability, they’ll do it. Eventually. This is a voracious corporate, make no mistake. I’m sure they used to offer free delivery on purchases in the UK, but I think this is now only available to Prime customers. To me this is a bit like my local supermarket saying ‘Sure you can shop here, Sean, as long as you pay the annual membership fee of £xx.’ It’s a lock-in. This is how the big corps work. (1) Snaffle all the customers. (2) Kill off the competition. (3) Screw the customers because they’ve got nowhere else to go cos the competition is all deader than a deadhead in Deadsville.

    Personally I couldn’t give a monkeys about the current phase. I’m guessing Amazon/KDP has been swamped by self-published crap and thinks this move will cut down on what may well be loss-making business for them. It’s probably a lot of admin for them and very little revenues.

    As David says, the ability for readers to siphon out the crap already exists. I can usually tell just from the blurb if something’s going to be shite. Even just 100 words of blurb will be riddled with spelling mistakes, poor sentence construction, etc. To me the biggest problem seems to be an inability for readers to actually find good stuff among the crap. I’m talking a bit off the top of my head here, admittedly, as I hardly use websites to find books, but the ones I have tried to use are pretty awful, in terms of navigation around the site; in terms of promoting stuff that is already bestselling at the expense of everything else. These websites really are the proverbial haystacks and I don’t know how you find needles in them. So why am I going to use Amazon/KDP? Er…

    Like

  25. joelkings5 says:

    Reblogged this on JOEL JEREMIAH KINGS and commented:
    powerful

    Like

  26. William Ockham says:

    It amazes me that no one seems to realize that what Amazon is doing is giving you some powerful reading analytics with this move.

    Like

    • Well, that depends. We don’t know what exact data Amazon will share. Perhaps there will be more than Amazon has indicated, but based on that alone it looks like a simple count of “Pages Read” for each title in the KDP reports. If that is true (BIG if, we won’t know until it launches), then we won’t have very much useful information at all.

      In fact, if there is that little data than we will have worse useful information than the current situation, and no idea how many people are actually reading our books – let alone when they stop reading. You could have a simple raw number like 8,623 pages read on Title A and 19,704 pages read on Title B and that doesn’t tell you much.

      I hope it’s better than that. I expect it will improve over time regardless, but we don’t know yet (AFAIK) how spare/useful that data will be. (Please correct me if I’m wrong.) I’ll probably wait to blog about all the ramifications until the we have all the information – but I needed to try and stop these fabrications from spreading first.

      Like

  27. bpeschel says:

    The Telegraph article was even more egregious, because in addition to the inaccurate click-bait headline, the writer added that the payment program would “initially” be applied to Kindle Select. This implied that it would spread to the rest of the Kindle books.

    This was more than hastily inaccurate writing on the part of the Telegraph reporter, it was akin to journalistic malpractice.

    And some writers fell for it hard. If you look at The Passive Voice, there’s a link to some author who wrote an open letter to J.K. Rowling, seeking her to use her influence with Amazon like Taylor Swift did for Apple. She ignored the fact that Rowling’s Harry Potter books are enrolled in Select (and probably will do even better since she knows how to write a book that people will read).

    Like

  28. mohinder15 says:

    Please disclose the secret of Great Amazon Hystertia ….part 31, so that innocent people can understand something to save their livelihoods which are at risk. mohinder1515@gmail.com

    Like

  29. Jeff Menapace says:

    Good article, David. Kudos.

    Like

  30. Pingback: For Indie Writers: You have the control. Own it. | The Passive Voice | A Lawyer's Thoughts on Authors, Self-Publishing and Traditional Publishing

  31. Reblogged this on Armand Rosamilia and commented:
    Amazon Hysteria… again…

    Like

  32. Aaron Niz says:

    I think most are getting it wrong on both sides. There’s very little deep analysis of what this change means, and sadly, your article continues the trend of easy pickings.

    Mocking “the sky is falling” calls is just the flip-side of the coin.

    The reality is nuanced and important not to miss. Make no mistake, KU has been a game-changer, and the effects of it are being felt. Changing to the payment per page is yet another game changer.

    The model of how writers make money is changing quickly. How readers consume is changing rapidly. Laughing it off is as silly as running for cover and cowering.

    What’s needed is intelligent analysis, which is missing from your piece as well as the other pieces you rightfully mocked.

    Like

    • Actually, I will be doing some in-depth analysis, but I’m waiting for the program to launch as crucial questions – like what kind of data we’ll be getting – will be unanswered until then. I did an extensive post on KDP Select when it launched, covering all the angles. I did the same with Kindle Unlimited, and I’ll do the same with this… when it launches.

      This was a post on a very specific issue. Quite obviously.

      Like

    • And, really, if you have such incredible and unique insights, why don’t you dazzle us all and write your own post?

      Like

      • Aaron Niz says:

        Okay, David. Here goes…

        I believe that the Kindle Unlimited subscription model is absolutely the forerunner of an overall move towards subscription-based services that will provide the bulk of how we authors eventually make our living.

        Amazon knows this. Amazon is tinkering with KU as a sort of petri dish, seeing how authors and readers react and then gathering data for the coming years. But Amazon has a notion of what the future holds and I am fairly certain that KU-style model is a big part of it.

        Amazon is also using KU to crush the life out of their already withering competition. B&N and Kobo are not competitive. They’re dying out. Amazon knows it. Apple MAY provide competition, as might Google, but so far no other company with any muscle has stepped up to the plate with any innovations of their own.

        Whether Apple or Google ever steps up is anyone’s guess. Right now my money is on no…

        So with this newest innovative tactic (the pay by the page model), Amazon is doing a number of possible things (and perhaps a few at once). They’re continuing to choke the life out of their competitors through forcing authors to go exclusive more and more.

        They’re changing the way they pay authors, and slowly working toward the model that will eventually be used en masse in the future (in my mind it will someday be a few pennies or a nickel per “unit consumed” or “download”).

        It may be that we’re 2-3 years away from the model fully changing over, but things are moving much more rapidly than expected. Already, KU has changed the game.

        Authors going wide and thinking that is the answer are just fooling themselves. The other platforms don’t account for enough readers to make a meaningful dent in Amazon’s competitive advantage. The other platforms don’t innovate, they don’t create robust programs, they simply follow Amazon’s lead and hemorrhage marketshare in the process.

        Amazon is quickly becoming the only game in town. When that happens, the switch to a “pennies on the borrow” or “fraction of a fraction of a penny per page read” model is soon to follow.

        Sales will still be part of the equation, and I believe smart authors who build their brands and backlist intelligently can and will still make money in that future time. But it won’t be easy.

        And I don’t think many authors realize just how much of a backlist they’ll need to make money when this occurs. Look at music, look at tv/movies, look at Youtube. Everyone is a content creator now. And when everyone and anyone can create content, only a few will make real money.

        That means we need to get better, we need to have more content, we need to be ready and able to make small amounts of money on large amounts of intellectual property at some point.

        Is that in six months? A year? Three? I can’t say. But I do think that KU and the way Amazon is moving is absolutely a sea change in this industry.

        Like

      • Jeff Menapace says:

        Wow, very impressive–and sobering–reply.

        Like

      • To paraphrase the quote attributed to Samuel Johnson, your ideas are both good and original. But the part that is good is not original, and the part that is original is not good.

        I agree that subscription models will be a big part of the mix in the future. In fact, I agree so much that I said it back in 2011: https://davidgaughran.wordpress.com/2011/12/11/how-much-do-you-want-to-get-paid-tomorrow/

        You might note that the idea wasn’t new or original when I expressed it four years ago.

        Also, the idea that Amazon uses programs to test and gather data before launching something with all those learned lessons is hardly new either. I haven’t checked, but I’m pretty sure I said something along those lines in this post last year, when I suggested that KDP Select was a test run/data gathering mission for the eventual launch of Kindle Unlimited: https://davidgaughran.wordpress.com/2014/07/20/kindle-unlimited-the-key-questions/

        Finally, the idea that Amazon is using its various programs, including KU, to gain a competitive advantage is hardly groundbreaking either, or that Apple and Google, rather than Kobo or B&N, are its likely ultimate competition, or that Amazon likes when authors go exclusive, or that an open distribution system will lead to lots and lots more content in the future, or that Amazon’s competitors aren’t innovating as fast (they are still trying to catch up to where the Kindle Store was… in 2011). All of these ideas have been around for a long time.

        So now we move onto what was original in your thesis.

        You paint a scary picture, where Amazon is the only retailer and uses its dominance to force a model of payment per page on the entire Kindle Store and you suggest that this will happen in the next 6 months to 3 years, and that subscriptions via KU will form the majority of all transactions.

        I can’t see it.

        My back-of-the-envelope calculations suggest that <5% of current Kindle Store transactions (even removing freeloads from the equation) will be affected by these new terms. While there has been significant growth in KU in the last year, the rate of growth doesn't suggest (at all) that subscription models will become dominant in the timeline you suggest.

        Even in music, where subscription models are much more embedded and advanced (and much more attractive to users), we haven't reached anything like that point – and that's with the major labels/artists on board, which is not the case in books at all.

        While I think subscription models will be a big part of the mix in the future, I suspect it won't be the majority share, perhaps something more like a quarter or maybe a third of the market, and that it will take a while to get there. Plenty of time to prepare, if needed, for any changes.

        I also think you're overstating Amazon's dominance and underplaying the viability of other platforms. Nook is in freefall, that's obvious, but Apple has been gobbling up much of its market share. Industry estimates are hard to come by, but I haven't seen any suggestion that Amazon's US e-book market share of ~67% has changed hugely in the last couple of years.

        While it is entrenched in the UK, with a reasonably stable market share of 85-90% (largely because it essentially had the market to itself for so long), it's not as dominant in other international markets. Kobo is the major player in Canada and Amazon’s market share there is minimal – it only took me around 60 sales recently to reach #6 in the Canadian Kindle Store. And if you look at other nascent markets like Germany, France, and Italy, Amazon's share is generally considered to be less than 50%. And there's also the possibility that European regulators will step in and hamper Amazon's growth in the EU in one way or another.

        Change will be a constant. But the best insurance policy against the future is a readership. Writers should focus on building that readership however they can, and adapting to change/the market as they go. For some that will mean going exclusive with Amazon, for others that will mean building their audience on other retailers and Amazon concurrently.

        To dismiss that latter strategy as authors "fooling themselves" is short-sighted. A reader is a reader. Even if Amazon does eventually gobble up all Apple’s market share, that wouldn’t invalidate the strategy of going wide with distro. Because, quite obviously, all those Apple customers who discovered your books will have become Amazon customers – and presumably won’t have lost their regard for your writing during their switch to a Kindle.

        Although I'm sure multi-million selling self-publishers like Bella Andre would love to hear from you how about they are doing it wrong.

        Like

      • Sara says:

        I would like to add my 2 cents’ worth to this.

        The subscription-based idea is akin to something my grandmother gave me as a birthday present when I was 9 years old: a series of reissued editions of the classics like ‘Treasure Island’ and ‘Swiss Family Robinson’, aimed at getting children to love reading. I received a book every month for three years and then asked my grandma for something else, as my bookshelves were full to the brim. Needless to say, I reread all of those novels and sent them to my nephew’s children when I moved.

        This is, therefore, not really something new but a revisited version of what I had as a child and was also the means by which books were marketed and sold when the publishing business first began. I have a very tired 18th century book which lists all the subscribers in its preface pages. If Kindle did something like this, it revives an old practice that conveyed literature of all kinds to the reading public.

        It may seem like an odd thing to do, but it is nothing new historically,

        Like

      • @Aaron Niz: You haven’t said anything new in your analysis, so I’m not sure what it brings to the table. Authors have been making the same assumptions you’ve outlined above all over writing forums. And they are just assumptions, based on your own fears, not an “in-depth analysis of data,” which is what you scolded David for not providing (yet.)

        I happen to believe exactly the opposite of what you believe, and my belief is based on my experience, not on the things that keep me awake at night. While the subscription model will continue to be an important part of the industry’s landscape from now on, it will not become the only game in town. For one thing, it simply doesn’t suit the needs of all readers. It’s great for high-volume readers, but a reader who only reads one or two books per month doesn’t find much value in it–in fact, it might cost them MORE per month than they’d spend if they bought their one or two books directly.

        You might attempt to argue that Amazon will just find that even juicier, to wring more money out of customers without providing value, but such behavior would be counter to the way Amazon has treated its customers since its first day. Amazon has remained doggedly focused on providing and excellent experience to customers. Forcing them to pay more money for ebooks than they want to pay would not only go against all their previous behavior when it comes to customer satisfaction, but also against the stance they took in the lawsuit against Apple and the Big Five re: agency pricing. Sure, they might abruptly change their stance on customer experience, but…Occam’s razor.

        While there will certainly be some growing pains with regards to per-page payouts, I find the idea that Amazon is trying to force everybody into a pennies-per-download model utterly ridiculous. I’m fairly confident in saying that I’ve had more experience than you have when it comes to receiving money from Amazon in exchange for providing content. They have consistently demonstrated a desire to make the job of content-providing for Amazon MORE attractive to providers, not less. So again, maybe they’ll suddenly do a 180, put on a big, swishy black cape, and grow a mustache which they twirl as they laugh furiously, but given their focus on attracting and retaining excellent content, I find that terribly unlikely. Contracts restrict me from going into details about what, specifically, I’m talking about, but suffice it to say, I’ve seen Amazon do certain things voluntarily to make sure I’m having a positive experience as a content provider. Your vision of Amazon as bully that’s just waiting to squeeze off all the money and reduce it to a trickle to authors simply doesn’t fit (like, at all) with their actual track record of the way they treat authors.

        Finally, Amazon is not choking the life out of B&N and Kobo. B&N and Kobo are choking their own lives out, by keeping their business models static and clinging to ideas about the publishing industry that don’t align with the truth we can all see–truths about reader behavior and preferences. It’s not Amazon’s fault that some of its competitors aren’t trying very hard to compete.

        Like

      • That’s nice to hear. I’ve always found Amazon good to deal with also.

        Like

      • Nirmala says:

        I will add to what others have said that if Amazon started paying pennies per download, that self-published authors would desert them en masse, and whatever alternative channels were still around at that point (or that were created to take advantage of the way Amazon was mistreating authors) would start gaining market share. There is a natural tension between a retailer and their suppliers but to suggest that Amazon can permanently squeeze out all competing online retailers and mistreat their suppliers indiscriminately is not a very supportable proposition.

        And furthermore, all of this only applies to self-published authors. If you recall, Amazon just renegotiated long term contracts with all of the big 5 publishers, so no way that any of those books will be sold under a pennies per download model anytime soon.

        Like

  33. Reblogged this on Lise McClendon and commented:
    I was just at the Jackson Hole Writers Conference where the confusion and sometimes anger about Amazon was evident. Please do your homework before you jump off that panic cliff! More here from the ever-wise David Gaughran…

    Like

  34. Widdershins says:

    Fact check, and follow the money. There be the answers you seek!😀

    Like

  35. The way I see it as a self published author is, if authors such as yourself, Catherine Ryan Howard, Joanna Penn, Joe Konrath etc aren’t freaking out about Amazon, Smashwords or any other company’s changes then why the hell should I.

    I’d rather listen to successful self pubbed authors and follow their lead than believe the garbage some papers want to spread about Amazon. Just a pity some places have such hatred for Amazon that they’d mislead potential future authors. That sucks.

    Like

    • I think that most savvy/successful self-publishers will adopt a similar approach: they will view KU2 (can we call it that?) as a tool. Just like free is a tool, KDP Select is a tool, pricing cheaply is a tool, and, yes, self-publishing is a tool.

      KU2 will have pros and cons. It will be used cleverly by some. Others will stay out. Neither choice will be Right or Wrong – it will depend on how its used and whether it advances that writers’ goals.

      The shriekers will continue shrieking – just like they do about cheap books, free books, e-books, Amazon, and self-publishing – while the rest of us get on with the business of building an audience, using whatever tools we can.

      The funny thing about all this is that, even if the shriekers are right and Bezos is planning to build a spaceship out of authors’ bones, focusing on building your own audience with whatever tools you can is STILL the smartest approach to take right now.

      Like

      • Aaron Niz says:

        Just to continue the conversation, David…..

        I’m not going to complain or shriek about what’s happening with KU or Amazon or anywhere else.

        My contention that in the future we will need a very large backlist to make the same kind of money being made now with less product, is based on other media industries.

        I’ve worked with a guy who made straight to DVD/Video films. Back when that industry was cooking, it sounded like it was a good living. Once things switched over to On Demand and Streaming video, that same content provider was making pennies on the dollar.

        Music…same thing. Once it switched over to digital consumption, my friend who owns an indie label makes fifty percent of his money through streaming revenue. And the other part of his business had to change, so now he creates “collectible” albums with fancy artwork and boxes and stuff to charge premium prices for.

        I know for awhile with YouTube, the big YouTube stars made lots and lots of money. But from what I understand, people make less now and only a handful make millions…

        It seems to me that the most obvious difference in terms of how much money is made, has to do with how much content creation is occurring and how easily accessible that content is. And so with a site like YouTube, with so much easy content available, only the very very top tier of creators will be stars and command the kind of audience so as to make a great living from it.

        It only stands to reason that books are going the way of these other industries. We’re not quite as available as YouTube clips, but we’re more accessible and the content is easier to come by then say, films for instance.

        With so much content flooding the market, it will be worth less and less. I don’t see how this can be anything but the case. The few writers with enormous audiences can command premium pricing and cut special deals with platforms, while the masses will have to make do with pennies per product download/rental/borrow, etc.

        Your assumption that subscription will not fundamentally change the picture (and soon) doesn’t add up to me. it’s already radically changed things. By the way, I’ve benefited enormously from the change, but I have no illusions that the gravy train is going on forever.

        I always saw this as a land grab, and nothing has changed my opinion. Content will be king, and only those with ENORMOUS backlists will thrive in such a market. Already, the belts are being tightened. It will continue.

        Yes, sales will always be a factor, but with cheaper options, you can bet that it won’t be nearly as easy for a new author (or even a mid list veteran) to net that sale as they once might have.

        Where you seem to hear sour grapes or “the sky is falling,” I feel I’m just speaking an obvious truth. I’ve been publishing successfully, writing full-time since 2011. I adjusted over and over again in that timeframe, and made plenty of money doing it. But I don’t choose to crow about sales figures because I see it as beside the point.

        How much someone sells is not the overwhelming factor in whether their logic is sound. My logic is sound because other industries have absolutely gone in this direction. Books, as we know, are no different or more special than any other form of media.

        Like

      • I don’t classify you as a shrieker, BTW. Your position is based on logic and analysis, even if I disagree with it. The shriekers aren’t using their brains at all. We just got off on the wrong foot because you made a number of unwarranted assumptions in your opening remarks, and were a little snooty. And then I was cranky in my response. But we’re both still here so it mustn’t have been that bad. Anyway…

        It’s instructive to note where books are similar to other industries but also crucial to note the differences. As Nirmala pointed out, consumption patterns are very different indeed – which has an obvious knock-on effect to remuneration.

        And to double down on Nirmala’s point, there’s another key difference between books and music: songs have a high replayability factor. A teenager might listen to their favorite song 100 times before tiring of it, maybe even more than that. So when we are talking about pennies (or fractions of a penny) for things like Spotify plays, we should bear that in mind – it’s not an apples to apples comparison. At all.

        That doesn’t mean books won’t turn out like music. It could. It just means that we can’t use the experience of music as inarguable proof that books will turn out like music. I see plenty of other reasons to be cautious before making that leap too, aside from those I mentioned above.

        Time will tell.

        Ultimately, though, predictions make mugs of us all. If you are the commenter from The Passive Voice that I think you might be, then you will know that quite well yourself – as you (if it is you!) were telling everyone that short fiction was the future, and so forth, and then a week or two later Amazon cut the legs out from under that strategy with KU2.

        So we’ll see. We could both be wrong.

        Like

      • Nirmala says:

        In response to Aaron: The one major difference with ebooks is that level of consumption. An average subscriber might listen to 50 songs or more in a single day, watch 5 or more movies on a weekend, but it is unlikely that the average subscriber will read much more than a book a week. This means that a subscription service can easily afford to pay authors much more than pennies per download, even if a music subscription service cannot.

        Like

  36. Pingback: Morning Links: Typewriter Turns Printer. Amazon Hysteria - TeleRead: News and views on e-books, libraries, publishing and related topics

  37. Adding to the this-is-nothing-new drumbeat: paid membership lending libraries, the KU of an earlier era, preceded the advent of free public libraries. The difference for authors and publishers is that the lending library copy got sold once and never earned another cent of royalties or revenues, while the KU edition earns every time a new page is read by a KU member. For the skilled indie author, the new pay-per-view regime could be a real boon, especially in light of the fact that Amazon has reported that a substantial fraction of even Kindle bestsellers are never finished by readers.

    My modest monthly sales might pale in units sold compared to the top books available in KU, but as a fraction of pages read, I could be doing much better. I will be tracking this closely to see if that is the case. I might even do some petri-dish experiments of my own, taking some of the eight novels now on KDP Select out of the program. We’ll see.

    Like

  38. K. A. Jordan says:

    How does the Scribd purge of Romance and Erotica titles fit into the larger pictures? ARE Romance and Erotica readers reading so many titles a month that it has affected Scribd’s bottom line?

    Is this the reason Amazon has dropped their payments to authors?

    Like

    • Here’s Smashwords blog post on the whole thing: http://blog.smashwords.com/2015/06/scribd-cuts-romance-catalog.html

      BTW it’s just Romance titles. Erotica was never part of the subscription service, it was only ever available on Scribd via a standard purchase transaction. But, yes, to answer your question, apparently Romance readers were reading so much that Scribd couldn’t afford to continue offering that content. Which is crazy. It’s like getting your leg amputated because someone is standing on your toe.

      The real problem here is Scribd’s unsustainable business model. Scribd pays out 70% of the list price every time someone borrows a book, but only charges $8.99 or $9.99 a month for readers under its all-you-can-eat plan. There’s no way in hell that is sustainable. Obviously. If a reader borrows one $4.99 backlist Harlequin title, one $2.99 indie title, and one $9.99 HarperCollins title in a month, Scribd has already made a loss of a couple of dollars on that reader. And, of course, romance readers tend to read a hell of a lot more than 3 books a month. More like 3 a week, at least.

      I said Scribd’s model was unsustainable when it launched. I said it again when Kindle Unlimited launched and authors complained that the compensation system wasn’t as good as Scribd (I said I’d rather have something sustainable rather than the ideal payout system). I wasn’t the only person saying this – it was a pretty widespread view. When it was put to Scribd execs, they did a lot of hand-waving and used the terrible analogy of gym membership. Yeah, the business plan essentially seemed to be that they hoped people would pay for the service… but not use it.

      Which is crazy. And it has failed. No surprises there.

      But what is even crazier is this decision to ditch romance – with no warning, explanation, or apology, I should note – a decision which doesn’t address the key problem: the payout model. Ditching the most popular content to try and stop the hemorrhaging of payouts is crazy. They should be changing the model, but my guess is they are locked down to contracts and are getting away with this under the ruse of some kind of content guidelines. In short, it doesn’t look good for Scribd’s immediate future, let alone its long-term future.

      The only explanation we have got is from the distributors – Smashwords and Draft2Digital. Nothing from Scribd. They’ve essentially thrown romance readers and authors under the bus and haven’t even bothered to tell them. Scribd has even gone as far as to limit what distributors can tell us. It’s pretty bad.

      Like

      • K. A. Jordan says:

        I think they will lose a huge slice of their customer base. It’s an odd move from a business point of view, to say the very least. It’s going to hurt a lot of authors, and infuriate all their romance readers.

        I’ve got two books on the line. I’m keeping my fingers crossed, both are short and sweet, they might slide through, but I’m not holding my breath.

        Like

  39. Aaron Niz says:

    Nirmala: Just because they *can* afford to pay authors more, does not mean they will. Also, as has been shown with Scribd and KU, they actually don’t seem able to pay very much at all. Scribd just de-listed a bunch of romance titles precisely because they can’t afford to pay the content producers so much for borrows.

    And again, it’s not a case of how many movies/tv shows/songs can someone play in a week. It’s simple supply and demand. There is an overabundance on the supply side, with authors (content creators) having unfettered access to publish books. Much like YouTube or Soundcloud or other digital entertainment platforms, anybody can produce work.

    Some of that work will be good and customers will pay some amount for it. Much of the work will not be good or desirable. In any case, though, there is virtually unlimited production (aka supply).

    Even if there is a great deal of demand, there’s simply no reason to continue to pay such high royalties to the authors of content unless they prove themselves to be on the top tier (like a Bella Andre, or perhaps a Blake Crouch type of author). If you drive large volumes of customers than perhaps you can cut a better deal–perhaps not.

    Or you can try and sell direct from your own site. I don’t advocate it, but in the future some may find traction doing so, rather than getting the pennies per unit model.

    Like

  40. Pingback: Writer Wednesday | creative barbwire (or the many lives of a creator)

  41. Jean Mead says:

    What’s next? No payment at all? Maybe we will be told to be happy with the coverage our books get by being with KDP. Amazon is not going to lose out on this.

    Like

  42. Ebook Itch says:

    Do you like
    KU 2.0 and
    Kindle Select?

    We do not like them,
    Ebook Itch!

    Would you like
    pages read rates
    here or there?

    We don’t like them
    anywhere!

    Would you, could you,
    read your Kindle on a boat?

    We would not!
    Not on a train,
    Not in the rain.
    We’re done with
    Bezos and his game!

    You do not like them,
    you say?
    Have you even seen
    the numbers yet?
    What if the PPRC
    was even higher,
    as “at least…”
    suggests?

    Ebook Itch, if you let us be,
    we’ll wait til August 15th and see.
    We will try it and you will see
    it’s crazy to pay per page read!

    [Time passes.]

    Say!
    This KU 2.0
    is not so bad.
    In fact, it’s very
    not bad indeed.
    Wait, we need
    to improve our
    craft. We’ll be
    right back and
    spread the cheer,
    when KU 3.0 is here!

    We will love KU in our houses
    and with our spouses,
    we will love KU here,
    there and everywhere!

    [RIP Dr. Seuss…]

    Like

  43. Pingback: Publishing Service Index: July 2015 | The Independent Publishing Magazine

  44. ariefarnam says:

    For anyone who started after 2011 it doesn’t matter anyway. Why is this important? It only applies to a few authors who managed to get into the system early enough to get traction in Amazon algorithms. The only way anyone has broken in since 2011 is through erotica or marketing to other authors. (Interesting how those two are buddies.) Today it doesn’t matter how good your book or even your cover or your website or your description or your SM strategy is. If you are unknown, there is zero chance of anything. We’ll take small chances but this is literally zero chance.

    Like

    • Hey, I understand that this can be a frustrating business, especially when you are trying to break in, but this is simply not true at all. I’d love to find the source of this meme because not only is it completely false, I think it’s pretty damaging to spread this kind of thing around.

      Yes, in some ways, things are harder than when I started in 2011, but in some ways they are much much easier too. There is more competition, and the competition is generally slicker (both self-publishers and publishers), but the market is much much bigger than it was in 2011 and the tools we have to reach readers now are infinitely more sophisticated. Selling 1,000 books in a month in 2011 was headline news and considered a real milestone in someone’s career. In 2015, you can sell that in a day (or twice that) with one single ad. That’s just one example.

      But, really, all you have to do is look at the charts. They are filled with writers who only started publishing in the last couple of years. I was having this exact debate with someone in May. Here’s what I said then:

      “I absolutely reject the notion that self-publishing success is only attainable for authors who started in 2010/11, or established authors self-publishing their backlist. In fact, it’s demonstrably false.

      Let’s take a look at the US Kindle Store charts:

      1. At #4 in the US Kindle Store at the time of writing is a book by Vanessa Waltz, which has been selling insane amounts. She appears to have published her first in February 2014.

      2. #11 is a title from Nicole Snow, who appears to have published her first in 2013.

      3. #21 is a book from Helena Hunting, who appears to have published her first in 2014.

      4. #40 is by Cora Brent, who appears to have published her first in 2014.

      That’s just the first two pages of the Top 100, and I probably missed one or two.”

      I bet anything you could conduct the same exercise yourself right now and get similar results.

      Anyway, that aside, to deal with the actual problem at the base of this, here is a marketing template that I recommend for all writers trying to build an audience today: https://davidgaughran.wordpress.com/2014/08/29/starting-from-zero/

      Finally I want to say this (and this isn’t specifically directed at you). There seems to be a weird sense of entitlement out there, that success is something that should happen to everyone and happen overnight. That’s not how it works. It generally takes a hell of a lot of hard work and it generally takes a lot of time (and persistence, and bloody mindedness).

      I started in 2011. It took a while for my sales to get going. I didn’t experience any kind of overnight success. I certainly didn’t find it easy to crack the charts back then. I think I sold less than 2,000 books in my first year self-publishing. Fast forward four years and I can have a purple patch where I sell almost 20,000 books in the space of three months – which is awesome, but those streaks are rare and require extreme planning, tons of marketing, and a killer product (i.e. half of those sales came from a box set I was in). And I still have months where sales tank and I might only sell a few hundred books.

      That’s this business. It’s very up and down. No one gets anything for free. But you know what? It’s a million times better than it was five years ago, ten years ago, twenty years ago. It’s a million times better for writers right now than it is for pretty much any other creative profession. We all need a little perspective.

      Like

    • Sometimes a given work takes time to find an audience. Moby Dick only sold 50 copies during the author’s lifetime out of the 3000 originally published, and it didn’t become a success until twenty-five years after the author’s death.

      Not necessarily a cheerful thing to dwell on, but we do have considerably more marketing options available to us nowadays.

      Liked by 1 person

  45. I kind of like the idea of paying by the page. Amazon is saturated with crappy writing. This will encourage people to take their time and produce something worth reading!
    21timetraveler.com

    Like

  46. Pingback: The Kindle Chronicles - TKC 364 David Gaughran

  47. I’d propose a different question for authors to ask, especially professional writers who are trying to remain in business:

    Why did Amazon decide to go to this payment model?

    Think about the answer for a minute, without trying to formulate a diatribe “for” or “against” something.

    Here’s my own answer: because when you’re in business, you constantly look for ways to reduce your wholesale costs while increasing retail sales. This is what has happened in every single industry that markets creative goods: music, newspapers, movies…you name it. Every. Single. One.

    In other words: Amazon is looking to reduce wholesale costs of content, while increasing retail sales of content *AND its own devices*. Why? Because Amazon wants to smooth the buying experience for *all* of its products, and the higher end Kindle devices are the grease. It’s the only reason the devices were built and sold.

    Amazon’s been up front about this. Jeff Bezos has publicly said so. It’s not a mystery shrouded in “algorithms”; Amazon wants content, but they want what drives overall sales and commitment to the Amazon brand more.

    I’m concerned that fellow authors (of any type) might be thinking that, somehow, ebooks are fundamentally different than other content. I’m confident that they’re not. That’s what every other industry thought, and one by one, they’ve changed. There is one difference, though: when it comes to self-publishing on Amazon, Amazon holds most of the cards. And they can reshuffle anytime they like.

    And one other thing: those ebooks that you’re “selling”? Amazon’s got you in a nice arm lock, because Amazon only sells *licenses to view* your content. This means that when you publish an ebook on Amazon, you give Amazon the right to give, take back, and modify the reading experience just about any way they like–because people are only buying a usage license, not a book copy. This is exactly how most software you buy works.

    Like

    • Well, it’s not just Amazon that is selling licenses rather than the books themselves – it’s every major e-book retailer and there’s not much we can do about it.

      Regarding motivations behind the switch to the new payment model in KU2, you could be right, but I think the answer is a little more simple/straightforward. I don’t see how this new model really reduces Amazon’s wholesale costs when they are just taking the same pot they would have had and distributing it under different rules. I think the already floated explanations – to encourage more novels to be enrolled rather than shorts, and to improve reader discovery of the former over the latter – are a little more convincing.

      But then you never know with Amazon. Writers debated endlessly about KDP Select, and Amazon’s motivations, and it all turned out to be a giant test bed for Kindle Unlimited.

      Like

  48. Thank you for posting this article. I actually just self-published my first book yesterday. I am learning “the ropes,” so to speak! It’s such an amazing amount of freedom to be able to self-publish! I use Booktango.

    What site do you use? What kinds of texts do you publish?

    Like

  49. zenterviews says:

    Great Article. I really like how you dissected the sensationalism, and spoke in simple terms about what is actually going on. Thanks.

    Like

  50. Pingback: Publishing Service Index: August 2015 | The Independent Publishing Magazine

  51. Reblogged this on vellichor cafe and commented:
    It’s Reblog Thursday, here is a really interesting article that sums up the Amazon -par-per-page ordeal going on in the writers world.

    Like

  52. Pingback: Publishing Service Index: September 2015 | The Independent Publishing Magazine

  53. slipinweb says:

    i want to see part 2 of this movie CHICKEN LITTLE hit like if u think so…

    Like

  54. Pingback: Kindle Edition Normalized Pages (KENP) | Diane Tibert

  55. Pingback: The 20 Must-Read Articles of 2015 for Aspiring Writers - Beth Jusino Beth Jusino

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