Amazon's Kindle turned five years old last week. What an exciting half-decade it's been!

Jeff Bezos showed his genius when he gave his e-reader that name. The device sparked a conflagration that is still pretty much out of control. The old publishing world is in chaos, and nobody has a clue what direction the wildfire will take next.

Although if you want a little glimpse into the crystal ball, Agent Laurie McLean offered some optimistic predictions in her guest post here two weeks ago.

But in just the two weeks since her post, we've seen more wild shifts and changes. HarperCollins, moving to more ebooks, is closing one of its biggest warehouses, and seems set to gobble up Simon and Schuster.  And Simon and Schuster has launched a new scary-scammy self-publishing wing by teaming up with the vanity publisher Author Solutions. Yes, the Author Solutions which was recently acquired by Penguin, which was recently purchased by Random House. And Random House is launching several new digital-only imprints. Ditto HarperCollins' Avon imprint which is actually soliciting your NaNo novels. (Yes. That one surprised the heck out of me, too.)

Confused yet? I sure am. Some people think the Big Six-no-Five-or-is-it-Four—are soon to become the Big One, which still may not be Big enough to compete with what some fear will become the most powerful publishing force of all: the Mighty Zon. (Sarah Lacy at PandoDaily has some interesting things to say on the subject of Amazon's inevitable dominance.)

In five years, Amazon has gone from mail-order bookseller to major player in world publishing.

They did this partly by sparking the "indie revolution".

The "revolution" was another product of Mr. Bezos' marketing genius. He wanted cheap electronic books for his new Kindle, and the Big Six were not about to slash prices for some upstart online retailer with a gadget nobody thought they needed. Publishers wanted to charge the same price for an ebook as they did for a new hardcover book. Amazon accused them of price-fixing and went after them through the legal system.

But meanwhile they needed cheap books for the new Kindle owners.

So they opened up Amazon to self-publishers, offering an author-friendly e-book creation system and a 70% "royalty" to authors who priced their books in the range Amazon wanted to promote: between three and ten dollars.

I'm putting "royalty" in quotes, because, by strict definition, Amazon doesn't pay a traditional royalty. Publishers pay royalties. Retailers take a percentage. For self-publishers, Amazon is a retailer, so technically, Amazon is not paying a 70% royalty; it's taking a 30% sales commission.

But whatever you choose to call it, the payment system worked. Big time. While the Big Six were shrinking advances, lists and print runs—and making increasingly unreasonable demands on authors—the Zon offered writers a new way to distribute their work and actually make money at it.

I first became aware of the viability of Amazon-aided self-publishing in late 2009, when a fellow chick lit author, Elisa Lorello, self-published a novel that went to the top of the Kindle bestseller list on Christmas Day. This was when traditional publishers were treating chick lit as toxic waste and refused to acquire any titles that didn't involve vampires, werepersons, or other dentally-enhanced people-eaters.

I paid even more attention a few months later when Amazon offered Lorello a nice contract with their first publishing venture, Amazon Encore.

Elisa became one of thousands of highly successful e-book self-publishers. In 2010, Amazon's new "indies" like John Locke and Amanda Hocking became household names. At the same time, established, agented novelists like Joe Konrath and Dean Wesley Smith self-published and started to preach the gospel of the "indie" movement.

Then, on March 21, 2011, New York Times bestseller Barry Eisler turned down a six figure advance from St. Martin's  to self-publish his new thriller.

That was the moment when even the nay-sayers had to accept that self-publishing had become mainstream.

Indies went on to become some of the greatest bestsellers of all time, like E. L. James (although, like me, she started with a small press, not strictly self-publishing.) Other self-pubbers made high-profile deals with Hollywood, like Hugh Howey, who sold his Wool books to Ridley Scott for some serious bucks. (Sorry, Hugh, that I tried to give Wool to Speilberg in an earlier version of this post. LOL.)

Subsequently, a whole industry of editors, designers, coders and online advertisers sprang up to minister to the needs of the new indie entrepreneur-authors.

John Locke wrote a book telling how to achieve Amazon success like his. Literally millions of self-publishers flooded the marketplace in 2011 and 2012. (Nobody's quite sure how many ebooks there are, since many don't have ISBNs.)

But a few months ago, things began to change. Amazon made some policy changes that were decidedly less friendly to self-publishers.

Indies who formerly sang Amazon's praises began to get cranky. I recently saw this lament on the Kindleboards (with apologies to Tennessee Ernie Ford.)

Some authors even think indies are being "being quietly herded off into a corner" since the DoJ decision brought down the price of Big Six books. Stephen Hise wrote a dark post at Indies Unlimited on the effects of Amazon's policy changes on the indie author.

What we do know is that Amazon's attempt to bring down prices through the legal system finally paid off. Big name ebooks by Big Six authors are now selling for reasonable, and even give-away prices.

So indies aren't as necessary to the Amazon bottom line as they once were. I'm not sure things are as dire as Derek Haines says in his post in The Vandal, because established indies report they continue to have good Amazon sales. But he has some legitimate worries.

For the new author who is thinking of launching a career by self-publishing through Amazon, it's important to be aware things have changed drastically in recent months. One thing to be aware of—especially if you're a newbie—is that a lot of the most powerful marketing strategies of the "Kindle Millionaires" are no longer viable:

#1 Garnering lots of of Amazon reviews: A great deal of John Locke's success was due to his huge number of positive Amazon reviews. His "how I made millions" book claimed this was due to his expertise in targeting the right reader.

But it turns out his expertise was actually in buying fake reviews.

The paid review and sock-puppet review scandals that rocked Amazon this summer after revelations by Locke--and an embarrassing number of others--have resulted in a draconian crackdown on all Amazon reviews.

The L.A. Times reports that many authors have found their reviews disappearing. Some popular legitimate reviewers have had all their reviews (of indies and trad-pubbed books alike) deleted with no explanation. I've seen lots of reports from authors who have lost dozens of reviews for no apparent reason. And authors who question the arbitrary removals are told they'll be banned from selling on Amazon forever if they dare to question any action by the Great Zon. Even Amazon advocate Joe Konrath thinks they've gone over to the dark side with this.

Amazon now bans authors from reviewing other authors' books in their own genre. They claim this is because their TOS guidelines ban reviewing by a "competitor," and this protects against attacks on rivals by sock puppets. But they delete positive and negative reviews alike. And not only from authors in their own genre. Some people have been told all published authors have been banned from reviewing. (If the New York Times or the New Yorker did this, they'd have to go out of business. Authors have ALWAYS reviewed other authors.)

They are also deleting reviews by anybody with a name similar to the author. I've had reviews deleted from anybody named "Allen". The rational is that anybody with the same name has a financial interest in my work. (Yes, Woody Allen, Joan Allen, and General John Allen have a big financial interest in my books :-) )

As you can imagine, this has made many reviewers wary of posting anything to Amazon, and has left readers jaded and untrusting. Seeking reviews is now a much less sure-fire way of making sales. Unfortunately, search engines still favor books with more reviews. Not a good situation for a newbie self-publisher.

2) Using free ebooks to raise your Amazon profile. Elisa Lorello had her big Christmas 2009 success because she offered her book free on Amazon that day. That pushed her to the top of the "bestseller" list and raised her book from obscurity to the top of suggested "also boughts" and "top sellers" that appear on every Kindle.

But in late 2011, Amazon introduced KDP Select. Only authors enrolled in the "Select" program are now allowed freebie give-aways. Select requires exclusivity. If you sell ebooks at Barnes and Noble, iTunes, Smashwords, Kobo, etc—or even on your own website—you aren't allowed to list a book as "free" on Amazon.

And the "also boughts" and "top sellers" also heavily favor books in the KDP Select program.

Until recently, Amazon matched the price you charge for your book on other platforms, so it was possible to get around the KDP Select exclusivity by making your book free on Smashwords, but many of us are finding that even after several months, Amazon doesn't seem to be matching a "free" price.

They are however, sweetening the pot for KDP Select members by doubling the price they pay for "borrows" (Select books are also free to borrow for Amazon Prime members.) Now many Select books will get more than the sale price for a borrow. It's tempting, but only if you have other books available at other retailers. I think it's unwise for anybody to be 100% dependent on the whims of Amazon's ever-changing algorithms.

3) Selling mass quantities of 99 cent ebooks to become a bestseller on Amazon. A year ago, D.D. Scott, the force of nature behind the Writers Guide to E-Publishing, preached the gospel of "Snickers-bar marketing" and the 99 cent ebook.

But that has all changed. Here's what she said last week,

"Up until a few months ago, using the 99 Cent Price Point got you a ton of fabulous VISIBILITY ….You could more than make up for a higher royalty per book (using a price point of $2.99 or above) because of the higher quantity of books sold at the lower 99 Cent price.

BUT…not anymore!!!

Due to the agency pricing/cost-fixing schemes and the resulting Department of Justice settlement with a few of The Big Six Publishers – with several more holding out for litigation, many Big Six/TradiPubs are lowering their prices to between 99 Cents and $3.99.

Also…and this is HUGE…Amazon’s algorithms have definitely changed to favor the TradiPub books at these lower prices."

There was also a change in the Amazon algorithms last May that give a 99 cent book sale less "weight" in sales rankings. To be counted as a full "sale" a book has to sell for $2.99 or more.

4)  Getting featured on Kindle Nation Daily, E-Reader News Today, Pixel of Ink or other sites for e-book readers. Recently the big sites for ebook promos announced they will be severely restricting the number of free books they list, due to a firm request from Amazon. Here's how they put it at ENT.

"While Amazon cannot "make" us do anything with our website, they can tell us they will not pay us anymore if we don't do what they want us to do.  And what they've told us to do is cut down A LOT on the free books or they will not pay us at all.  I can't go into detail on what they've told us but this is something that will be affecting all sites similar to ours within the next month."

5) Promoting your work on Facebook. Facebook is still "free" for family and friends, but now you have to pay to use it for marketing. Meghan Ward talked in her post this week about "Promoted Posts", which Facebook launched in May of this year.

"For $5 $10, or $15, Facebook will make your post more visible within your followers’ news feeds. If you don’t promote your post, only a fraction of your followers will ever see it." 

Facebook's changes mean that only about 16% of all your followers now see your regular posts. If you want more people to see them, you have to pay around $50. Even for family photos and LOL Cat videos.
So does all this mean the indie movement is over?

Not at all. Simon and Schuster wouldn't be making their clueless foray into self-publishing if they thought indie publishing was going to diminish.  

But I think it's important not to think of it as the "Kindle" movement any more. I think the "revolution" needs to wean itself from the Mighty Zon and Facebook to be truly "indie".

The truth is, "indie" is a misnomer for someone who is 100% dependent on a mega-corporation. Yes, when you publish on Amazon you're an "independent contractor" rather than an employee, but that isn't necessarily a ticket to financial independence.

I think the indies of the future will need to focus on smaller outlets like Smashwords, Kobo and Barnes and Noble, even though they may require more initial work.

Smashwords may be a little cumbersome, but it is a truly "independent" company. Mark Coker started it because he's an indie author himself, and I think right now he still only has about thirteen employees. It's still a very "indie" operation.

And a number of indies are finding Smashwords is their best source of revenue. Horror author Edward M. Grant said on the Passive Voice blog this week,

"I’ve sold about 4x as many e-books through Smashwords and its distributors as through Amazon in the last three months, and made more money on most of the sales."

If you want to support independent publishing, look for ebook titles to buy at Smashwords before clicking automatically to Amazon. You can buy a book there for your Kindle, Nook, Kobo, iPad or any other device just as easily as with Amazon. And there are a whole lot of great books free. (Shameless plug: My comic mystery SHERWOOD, LTD is free on Smashwords.) Leaving your reviews on Smashwords instead of Amazon may also have a greater impact. Certainly your review will have a better chance of a long shelf-life.

Kobo is another very author-friendly retailer that's just beginning to hit its stride. They're the biggest online book retailer in Canada, where they started, and now they've been acquired by e-commerce giant, Rakuten, they're getting a good chunk of the global market.

British indie superstar Saffina Desforges says Kobo is blitzing the airwaves with adverts for their mini ereaders, which are "cute and back lit--with a very attractive price tag of 40 quid."

Kobo reps tell me they plan to start forums and discussion groups to rival the Kindleboards. Let's hope they'll be monitored by polite Canadians so we can leave the crankypants Kindleboarders behind to snipe at each other in the Amazon jungle.

Let me be clear: I'm not telling indies to abandon Amazon. It still has 43% of the ebook market--which may go up again with the phenomenal success of the new Kindle Fire tablet.

And I think KDP Select is great for launching a book, but I suggest using it for the minimum of three months. Do your freebies and get your title and name out there. But then I think it's best to opt out and spread your book to as many platforms as possible.

Amazon's shift to favoring the traditional publishers may mean fewer "Kindle Millionaires," but I have no doubt there will be new Indie E-Book Millionaires.

For the new writers out there who are on the fence about self-publishing, my advice is to keep your options open. Don't make your decision based on old news. The new digital imprints and unagented submissions at Random House and HarperCollins could be game-changers. (They are offering real publishing contracts: the opposite of Simon and Schuster's vanity publishing imprint.)

And don’t forget there are wonderful small digital publishers like mine who pay great royalties and take all the financial risk by providing cover design, editing, formatting and even some marketing. A niche publisher that carries only your genre and targets your market can be a very good choice for a newbie writer who is not an expert in business or marketing. (Just make sure the publisher is legit and check them out with Writer Beware. If you have to pay up front or sign away any rights, you don't want to go there.)

Because now more than ever, indies will have to become market-savvy entrepreneurs. Here's advice from Kristen McLean at Tools of Change for Publishing.

"In order to be well-equipped for this new environment, we think authors and content creators need as much training in business and publishing expertise as they do in writing. They need to understand deep structural issues like the way data flows around the industry, new modes of discovery, new thinking about consumer behavior, how to read the numbers, the potential of new technology, and how to build an effective team around themselves so they can run their businesses."

One way for authors to keep up with publishing business news is to follow Jane Friedman, who has launched a new link list today of Best Business Advice for Writers.

Whether or not Amazon is "dumping" the indies, it's time to rethink the rules that have been working for self- and small publishers for the past four years. We all need to plan innovative marketing strategies that involve smaller, more indie-friendly companies.

You don't want to find you've escaped the oppression of the Big Six only to be squashed by the Big Zon.


Book News: Anne's new Camilla Randall mystery, NO PLACE LIKE HOME will be launching next week. It's set in San Luis Obispo, "the happiest town on earth" and explores how close we all are to homelessness. (I'm totally in love with this cover by Laura Morrigan.)

Also, we'll be having some exciting give-aways of ebooks AND paper books for HOW TO BE A WRITER IN THE E-AGE...AND KEEP YOUR E-SANITY on this blog and Catherine Ryan Hyde's next week. Stop by for a chance to win free books!