The prisoner’s dilemma of self-publishing

I am not an expert in game theory but I have watched a lot of game shows. A few years ago, there was one on British TV which involved two strangers having to negotiate with each other before secretly selecting either to share or take all the money. If they both agreed to share the prize, they would do so. If one of them said they would share while the other said they’d take it all, the sharer would get nothing and the take it all person would take it all. If they both said they’d take it all, they’d both lose.

Classic game theory. It’s the prisoner’s dilemma. Of course they ought both to say they’d share. And of course, most weeks, one or both of them would get greedy and want it all.

Here’s a thing that self-publishers have to decide: to go exclusively with Amazon or not.

Amazon really want you to sign up to their exclusive programme (Select). If you’re in Select, they’ll let you run promotional days with your book available for free. They’ll let readers borrow your book and pay you for it. They’ll promote your book more via their own algorithms. And, as of today, they’ll sign your books up for Kindle Unlimited, their new subscription reading service. But if you’re in Select, you can’t sell your book anywhere else. You can’t give it away anywhere else. You’re not even really supposed to have excerpts on your own website, though I don’t think they enforce that one. You’ve agreed to make the book content exclusive to Amazon. That’s great for Amazon, obviously.

In the short term, it’s also been good for a lot of self-published authors. They’ve found that they can make more money from the Kindle lending library than they do in sales from other retailers. They like the extra boosts from the promo ops and the free days. They’ll probably make some money from the new scheme as well.

In the long term, I think it’s a disaster for self-publishing, and for most self-published authors. Amazon want to be the only game in town. They want exclusive content because they want to be the only online bookseller. That’s their end game. And once they get there, they’ll be in a position to dictate any terms they want to authors. Earlier this year they announced a drop in royalties on self-published audio books from 50-90% to a fixed 40%. For non-exclusive content, that dropped even lower, to 25%. They could do that because, for most self-publishers, the Amazon service is really the only way to get audio books made and distributed. Authors had no choice but to accept Amazon’s new terms, because they had nowhere else to go.

At the moment, I make about half my income on my self-published books from Amazon, and half elsewhere. If Amazon’s terms become too heinous, I can leave. I’ll lose out, but I won’t lose everything. If too many authors (especially the big name sellers) also found the terms too heinous and decided to leave, it could be enough to make them reconsider. Amazon needs content, especially for things like Unlimited, which means they need content providers. I don’t think they’re yet at a stage where they would risk dropping royalty rates on ebooks, or at least not by much. But if everyone were to sign their books up to Select, that would effectively put B&N and iTunes and Kobo out of the self-publishing marketplace. And that gives Amazon exactly what they want: power. Authors couldn’t pull their books, or threaten to, because there would be no alternative retailer to take them.

It’s in the best long-term interests of all self-published authors for there to be a competitive marketplace. Even if you don’t sell much at B&N, you are still better off because they are there. Even if your book is currently in Select, you are better off because B&N is still there.

And that’s the point about game theory. It’s true that you can make the quick grab now by giving Amazon exclusivity. But you can only do that because enough other people are sticking with the other markets and keeping Amazon honest (for some value of honest). If we all go for the grab, if we all throw all our books in with Amazon alone, we’re all going to lose out in the end.

Probably. I mean, I’m neither an economist nor a business analyst nor a game theorist. But I’m a farmer’s daughter. I know what it means to be a tiny supplier in a market dominated by huge corporate retailers. It’s bad enough trying to get a fair price for milk when there are five big supermarket buyers. But if there were only one? I shudder to think.

So, I’ll be keeping my books up on all available platforms, and I’ll be encouraging other authors to do the same.


  • I’m a reader, not a writer, but I still found this very interesting. I hitched my wagon to Amazon years ago when I bought my first Kindle and I have never regretted that decision. Still, I find myself strangely at odds with the rest of my Twitter stream today because I have no interest in the KU program at all. I am fully aware that my ownership of the ebooks I’ve paid for is somewhat tenuous, but I still prefer to buy most of my ebooks (some I do borrow from the library). I am still working all of this out in my head, but KU seems like a huge lending library that I pay a small subscription fee to. I already have access to a huge lending library that my taxes help fund. I don’t know–I guess it just seems that between my library and my monthly Kindle budget I have access to more books than I can read already. I’m just not sure I need one more thing.

    • Yes, it’s exactly like that. If you’re interested in owning and re-reading books, then a subscription service isn’t for you.

      I do suspect that for many readers, especially of genre fiction, ownership isn’t such a big deal. Services like Netflix and Spotify have shown that for movies and music, there’s a big market for a non-ownership subscription service. I think it’s reasonable to assume the same is true for books.

  • As a reader, that is, consumer, a monopoly is never a good thing. Diversity and choice works better for me; even though I’m not a very good American-style capitalist, competition gives me buying choices. So, I don’t want to see Amazon monopolize the book market, even though I do NOT hesitate to buy a book, e or paper, from Amazon, when they offer it at a lower price, or have a deal going. But this happens in comparison to another vendor. I like comparing. I can also see what you’re saying about the disadvantages for authors.

    Even though I own and operate (hee hee) three e readers and sundry iThings, I find myself backtracking on paper books, like a pussycat when you open the door and the wind is too cold. She tiptoes back. Nope, I like it better on the inside. I like it better in a paper book. One of the truly disappointing things about the “E” thing in books is that what I’d hoped would be greater access and availability, especially for those who can’t afford it, has not turned out that way. And instead of access and availability of books, music, films, etc, the “un-embodied” nature of art has turned out, moue of disappointment here, to be the disposable nature of art. We ought to reread Walter Benjamin and what he had to say about the object of art in the age of reproduction. That’s where it starts, really and we’re still here balancing on the tightrope between its boons (do we really want to return to the illuminated manuscript; burn the presses? nope) and its death-knells.

    I’m not sure what the future holds. I guess in the end, people will find their niches and make their choices (except it feels as if the more “choices” we seem to have, the less there is to choose from). I don’t think Kindle Unlimited is unlimited, au contraire, it’s quite limiting to readers and authors. But then, I envision my biddy-hood in a post-apocalyptic Amazonian (and remember what happened to them) wasteland where I’ll shift through pile-high garbage heaps of books looking for vintage copies of Mary Stewart.