Friday, August 3, 2012

Congratulations: You Killed LendInk And Denied Your Fellow Authors Their Lend Royalties

Fair warning: I am angry, and this is an angry post. When misinformation has the power to kill totally legitimate, above-board small businesses, it's time to stop being nicey-nice and start getting down to brass tacks. When the business in question directly impacts authors' livelihoods, it's time to take action.

UPDATED ON 8/6/12 TO ADD: I really don't understand why some people who've read this post keep raising an objection about the issue of whether or not the authors of books on LendInk were entitled to a commission on the lends. In my response to one commenter below, Sessha, I left out the words "where the author was entitled to compensation", and certain people are fixating on that omission, trying to make this all about whether or not EVERY lend on LendInk was compensated. NO, only lends where the author was entitled to compensation per Ammy/B&N terms were compensated, which I think I made clear in the post itself. Unfortunately Blogger won't let me edit any comments, only delete or add new ones.

The question of whether or not the author is entitled to a commission on a lend is totally beside the point. The point is that this was a totally legitimate site that was doing nothing wrong, and anyone who was entitled to a commission per Ammy/B&N terms was getting it because all lends were processed by Ammy & B&N. Even if it were to turn out that there wasn't a single book on the site where the author was entitled to a lend commission at the time the site was suspended, what difference does that make? Would that mean it was OK for all these authors to accuse the site of being a piracy outlet, and to spread that slander?
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This week, there was a huge kerfuffle on Facebook and elsewhere about LendInk.com, a site that allowed people to list any of the 'lendable' Kindle or Nook books they own in exchange for getting access to other members' listings of 'lendable' books. The sites make their money on advertising: they don't get any piece of the action on the lends, which are essentially private transactions between two individuals, carried out in full compliance with the lending rules and limitations set forth by Amazon and B&N. As another person put it in a discussion on my Facebook page:

If I have a copy of ebook X that I think somebody might want to borrow (just once, as per [Amazon's and B&N's Terms and Conditions]), I can say so on this site. If someone wants to borrow it, they contact me and I either say yes or no. If I say yes, I tell amazon to lend it and it's flagged on amazon as having had its lend. No different than me lending it to my mum for her kindle.

Just as with any other lend, the author gets her commission [if she is eligible for one, per Amazon's and B&N's terms and conditions] on lends originating from contacts made on sites like LendInk. There is nothing illegal about such sites, and having your book listed as available to lend on such sites is a GOOD thing because the fact that someone else already bought it serves as a kind of implied endorsement, and the lend listings lead to lend commissions you wouldn't otherwise get [on your Kindle/Nook books that are eligible for lend commissions].

But once a few hair-on-fire, sky-is-falling types of indie authors got wind of LendInk and found their books listed there, they jumped right to the WRONG conclusion that this was some kind of illegal Napster for ebooks and went on the warpath. Rather than take a few moments to read the site's FAQ, where the specifics of the site and the legality of it were addressed clearly and in detail, these authors immediately started posting warnings to all their author friends about this new ebook pirating site, LendInk. It became an online game of 'telephone', with well-meaning people re-posting incorrect claims about LendInk, and the claims about LendInk getting more distorted as they were passed around and new posters added their take on the situation. In a matter of just THREE DAYS, it went from an online campaign of spreading hysterical misinformation to LendInk being shut down.

The icing on this cake d'stupidity is that many people are taking the fact that LendInk has been shut down as proof that it MUST have been a pirate site, and posting "Yay, us!! We beat the evil ebook pirates!!" messages online. A more accurate message for them to post would be, "Yay, us!! We killed a small business that was making readers happy and making authors money!! And we did it without any actual evidence of wrongdoing, just hearsay and angry threats!! This is a victory for those who wish to cut off noses to spite faces everywhere!!"

While I'm still investigating the specifics of the shutdown, there's a suspension of service message on LendInk's former home page so I think the most likely reason is that one or more ill-informed authors sent 'takedown' notices to LendInk's web hosting company, threatening legal action for intellectual property theft.

Even though LendInk wasn't doing anything illegal or unethical, having to prove it in court is a costly and time-consuming process. Add to this the fact that you must generally stop doing business until you've been exonerated in court, and it's not surprising that the great majority of small businesses are more likely to fold than fight the good fight. If anyone were to bring a totally bogus legal action against Publetariat, there's no question I'd shut the site down rather than go to court to defend it. I simply don't have the money or time to fight a frivolous lawsuit, no matter how completely ridiculous that lawsuit's claims might be.

I fervently hope LendInk will be back, but it's too soon to tell. For now, just let me say this to everyone who's participated in the events leading up to its suspension this week:

Congratulations. You may have just destroyed a legitimate small business that was making life better for readers and authors of ebooks. You have caused someone who was in business to serve readers and authors a great deal of stress and expense, and potentially the total loss of his livelihood. You have definitely cost every author whose book was listed there the lend commissions [or added exposure] they would have otherwise received through this totally legal, legitimate channel for Amazon's and B&N's existing ebook lending programs. Pat yourself on the back, because I certainly won't be doing it.

UPDATED TO ADD:
There's some evidence to suggest LendInk's site was hacked. I can't say for certain whether it was or not, and if it was, whether the hack was a targeted attack instigated by one of those making false claims about LendInk. I've got some feelers out to contacts and I'm trying to get the full story.

But whatever the reason for LendInk's current state of suspension, its owner is now put in the position of having to answer to all the false claims authors have made about it in emails to Amazon. I'm hopeful that once Amazon fully investigates the situation, they will see there's been no wrongdoing and alter their responses to authors who complain about LendInk accordingly.

Also, I'm getting some feedback from people with wrong information. Let me address the myths floating around out there.

MYTH: Only Prime members can lend or borrow Kindle books.

FACT: Any Kindle book the publisher has marked as Lendable is lendable. The Kindle Lending Library is a special, sub-program for Prime members that gives them access to books publishers have approved only for limited lends to Prime members. Read Amazon's page about Kindle book lending here.

MYTH: LendInk claimed to have Amazon's approval to list its books on its site and lend them on its site, and it was a lie.

FACT: LendInk claimed all lends were processed by Amazon and B&N, and they were. No special 'agreement' is necessary, since it was the owners of the Kindle books who were listing them on LendInk, NOT LendInk itself. All they were doing was putting Kindle book owners in touch with one another, it was those book owners who actually transacted with one another to request and approve lends.

Here is some of the actual text from the former FAQ on LendInk:

Is the loaning of eBooks really legal? Isn't this the same as file sharing?
Yes, loaning of certain eBooks is legal and No, it is not the same as file sharing. The key difference between the two is that the loan status of an eBook is directly dictated by the publisher and file sharing is usually done without the publishers consent. Working with Amazon.com and Barnes and Noble, the publisher's make their eBooks available for loan under very strict rules. The actual book loaning process is handled by Amazon.com and Barnes and Noble, not by Lendink.

I am a Publisher or Author of a book on Lendink, how did you get a copy of my book?
First, let us explain up front, we do not have a copy of your book. This is actually a common misunderstanding of how Lendink functions. No book has or will be stored on any Lendink server, ever. The title of the book is entered by our members and the book information is fed to us by an automated link between Lendink and Amazon or Barnes and Noble. Our servers only store our member contact information and the basic book information such as the author, ASIN and book description. We do not even store the book cover artwork.

MYTH: LendInk was allowing members to lend multiple copies of the same book, which is against the one-lend policy. I saw (or my friend saw) where multiple copies of one book were listed as available to lend.

FACT: Not true. If multiple copies of a single book were listed as available to lend, that just means multiple members of LendInk owned that book and listed it as available to lend. Since all lends occurred off the LendInk site, through Amazon and B&N's *own* lending mechanisms, it would not be possible for any Kindle book owner to exceed publishers' specified lend limits---at least, not without some kind of hacking or dishonesty on the part of the Kindle book owner. And even if that were to occur, it would not be LendInk's fault.

MYTH: My book is offered through KDP Select, so it's not lendable.

FACT: Lendability is a requirement of participation in KDP Select. Here's the main Amazon KDP page about the program (note how most of the information here is specifically ABOUT lending), and here's a link to KDP Select terms and conditions. I'll add more to this section as more myths come in.

And unfortunately, due to the persistence of a certain commenter who couldn't leave well enough alone, comments on this post are now closed. Much like those indie authors who, it appears, have taken down LendInk, when certain people have nothing of value to contribute it only makes them more talkative.

22 comments:

Professor Crazy said...

As I mentioned I would do, I am providing a copy of the email Amazon sent me on this matter:

Hello Douglas,

We have not authorized lendink.com to loan your book and have not provided your file to them.

If you've found your work available on an unauthorized website such as lendink.com, we suggest contacting that website to confirm your rights and request removal of your work. If you distribute your book through other sales channels, you might contact them to inquire as to whether they have authorized the inclusion of your book on lendink.com.

Our lending program allows a purchaser to lend a title once and does not allow the recipient to re-loan that book. For more information about Kindle book lending, check out this page:
http://www.amazon.com/gp/help/customer/display.html?nodeId=200549320&#loan

April L. Hamilton said...

Professor -
A bunch of authors sent emails to Amazon stating LendInk was lending copies of those authors' books without those authors' permission, none of which was true at all.

Amazon predictably replied by stating they haven't given permission for LendInk to lend their Kindle books, et cetera, et cetera. But since LendInk has never lent a Kindle book, neither the authors' complaints nor Amazon's responses are relevant.

The one-lend limit is enforced by Amazon, and all LendInk lends were processed by Amazon with their customers' permission.

Professor Crazy said...

I believe you have accurate info about the kdp program, but possibly not about the KDP Select Program, as that is associated with the Lending Library Amazon has, whereas other Kindle ebooks aren't. Kindle Prime Members, even, are only allowed to be lent one ebook per month from the Lending Library---not an unlimited amount, by any stretch of the imagination.

Amazon Prime Members pay for this privilege. Sure, it's a subprogram, but its rules are different--why else have a Lending Library where even people who pay extra money are only allowed one book per month from said library?

What you say are MYTHS are not, at least, not all of them, nor completely. I think the FAQ where LendInk mentions their agreement with Amazon was maybe number 5, maybe 6 or 4, somewhere in there. Do you have a complete copy of their FAQ page? I don't recall your quoting from the FAQ I just mentioned--it IS, or WAS, there, when the site was up. That is not at all a myth.

Even if individuals are allowed to lend regular KDP ebooks for a period of 14 days, as Amazon says is allowable, they don't say that can be to several different people just once for the 14 day period--though it would be once to each person, that could mean a thousands of d/loads to thousands of "individuals". In fact, as they wrote in the email I was sent, they state: "Our lending program allows a purchaser to lend a title once and does not allow the recipient to re-loan that book" That's once, not thousands of times.

The book lending company you mentioned, on the other hand, though not directly affiliated with Amazon, must have a good working relationship with them to be included in their Cloud service. This is very different from LendInk, as Amazon is disavowing knowledge of them lending books through Amazon, who in the email I received from them calls them "an unauthorized website such as lendink.com".

April L. Hamilton said...

Professor:


"Even if individuals are allowed to lend regular KDP ebooks for a period of 14 days, as Amazon says is allowable, they don't say that can be to several different people just once for the 14 day period--though it would be once to each person, that could mean a thousands of d/loads to thousands of "individuals". In fact, as they wrote in the email I was sent, they state: "Our lending program allows a purchaser to lend a title once and does not allow the recipient to re-loan that book" That's once, not thousands of times."

Why do you assume this was happening? It wasn't. Any book listed on LendInk had a one-lend limit. Period. If there were hundreds or even thousands of copies of certain books, that only means hundreds or thousands of site members owned a copy and listed it as available to lend.

RE: Prime, again, this is neither here nor there. ALL Kindle books can be made lendable, at the publisher's discretion. So how does the fact that the Prime Kindle Lending Library is limited to Prime members make LendInk's business model illegal?

April L. Hamilton said...

Also -
No one needs to have a 'good working relationship' with Amazon to use their Cloud service for website hosting. You simply pay a fee and Amazon provides server space and bandwidth.

Sessha Batto said...

Borrows through kindle direct are compensated, but if an individual lends their copy the author does not get any payment. While I agree that lend-ink's plan wasn't piracy, per se, it definitely goes against the 'word of mouth, lend to a friend' intent of the single lend of a purchased copy. With piracy download sites abounding of course authors are intent on maintaining their rights - I would love a reader to lend my book to a friend, but not to someone they don't know who, perhaps, might otherwise be encouraged to pay the very reasonable price to purchase a title they were interested in. Bottom line, I think the whole thing would have resolved very differently if they had ASKED to include books, rather than displaying all titles available on Amazon (whether lendable or not). Len-Ink's business and right to make a living is NOT more valid than an author's right to control where and how their work is distributed.

Sheryl said...

As far as I know, there's no way to disable the lending option on Amazon Kindle...I've tried, without success.

Not that I really mind - lending is a good thing; it didn't kill print book sales, and there's no reason why it should kill ebook sales either.

April L. Hamilton said...

Sessha -
All lends through LendInk and sites like it ARE compensated because Ammy & B&N process (and count!) the lends.

As for "intent" of the ebook lending program...as far as Amazon is concerned, it's about selling more Kindles and more Kindle books. One of the big barriers to people adopting ereaders was the compaint that ebooks aren't lendable. Surprise, surprise! Pretty soon Amazon had negotiated lend terms with big publishers and added lending options to its KDP.

It HELPS Amazon when more books are lent, especially since you don't even need a Kindle to read a Kindle book. If you're using the Kindle Reader app and find you're borrowing some ebooks and liking the format, you're more likely to buy a Kindle.

And you also seem to forget, or overlook, that most publishers (really ALL of them at this point, so far as I've seen) place a 1-lend limit on each book. If anything, this is BETTER than hardcopy books because hardcopy books can be lent an unlimited number of times and can even be re-sold, and neither the author nor the publisher gets any compensation for all of that activity.

April L. Hamilton said...

Sheryl -
The option to lend or not is set by the publisher. If you have self-published Kindle books through the KDP, it's an option you can change on the dashboard for a given book. However, as of this writing, if your book is set for the 70% royalty option OR is enrolled in KDP Select, making it lendable is a requirement for participation in either of those programs.

Catherine Czerkawska said...

April, I agree with you and I'm more than a little miffed myself. Any site that displays my books with a 'buy' button that links to Amazon is a good site in my book. I've been going on about this for days. The panic was crazy and inspired by the general authorial panic about piracy. We need to start behaving like video game designers with regard to this kind of thing. I feel a blog post coming on myself, but I know if I stick my head above the parapet I'll be shot down in flames. I may have to do it though, in the interests of sanity!

April L. Hamilton said...

Catherine -
I hope you do. Right now, the clear, calm voice of reason is being totally drowned out by the panicked screams of the torch-and-pitchfork-wielding mob. ='(

Stuart Whitmore said...

Where does Amazon count lending of books, and how is that compensated to authors? In KDP, the loans are for the KDP Select (Lending Library) loans only, which are monetized as part of the Prime/KDP Select setup. If a reader lends a book to another person (i.e., a loan not related to the Lending Library), this -- as far as I can tell -- is not counted and not compensated (monetarily) to the author.

I'm not against lending, but I am against misinformation, and unless you can explain in detail how I'm wrong, I will consider the statement that authors are compensated when a reader lends their book to another reader as misinformation.

April L. Hamilton said...

Stuart -
What I meant to say is that where commissions were due, they were being paid.

Authors who opted in the for the 70% royalty option had to set their books as lendable as a condition of that option, so they were making more money off of the lendability of their books, too.

Any way you slice it, whether you opted into KDP Select (which requires books be lendable) or the 70% royalty option (also requires books be lendable), you were making more money as an author than if lendability never existed.

As for those few authors who stuck with the 35% royalty option and STILL opted to make their books lendable, they knew going in they weren't getting extra money by doing so, and therefore they have no right to be complaining about reduced royalties or commissions now.

Nobody forced anyone to make his or her book lendable.

April L. Hamilton said...

Forgot to mention - those who opt in for KDP Select get a share of Amazon's monthly Kindle Lending Library fee pool based on how many lends their books had in the month, so they're getting a commission on every lend.

Stuart Whitmore said...

Yes, but in your blog post you're telling people that authors are being deprived of revenue from people not being able to loan other people books and this is false. I already said that I'm not against lending, and I clarified that the earnings from KDP Select are not what we're talking about here.

Stuart Whitmore said...

Specifically: "Just as with any other lend, the author gets her commission on lends originating from contacts made on sites like LendInk." This is false, or a "myth" to use your term for it.

April L. Hamilton said...

Stuart -
If my books, which are lendable and are part of KDP Select, are up for lending on a site like LendInk, then the actions of some misinformed authors cause that site to be closed down, YES, I and every other author in KDP Select whose books were there has been deprived of lend commissions from lends that will now never occur.

Many others have been deprived of royalties on sales, as the owner of the site also ran affiliate links for hundreds of books and those links were generating significant sales every single month from click-throughs on LendInk.

Shutting down this site, if that is what has indeed occurred, has hurt both authors and readers.

Pick nits if you will on semantics and specifics, but the point stands: a useful site that was good for both authors and readers appears to have been shut down based on nothing more than suspicions and slander from overreacting indie authors who decided to shoot first and ask questions later. They were WRONG to do this.

April L. Hamilton said...

Again, as I have already said, if a commission was due the author was getting it. That statement was not untrue, perhaps just not specific enough.

Those who were not due commissions, AGAIN, have no right to complain because no one forced them to make their books lendable. It's an OPT-IN proposition.

And my statement was in response specifically to those who WERE due commissions and had jumped to the WRONG conclusion that lends through LendInk weren't being "counted" towards their commissions. Those lends WERE being counted.

The statement isn't really applicable to those who WEREN'T due commissions, so it's pointless to argue its validity with respect to that group.

Stuart Whitmore said...

Anybody who had a unicorn in their backyard still has their unicorn. While this statement may be true, it's irrelevant, because nobody has a unicorn in their backyard. Likewise, nobody was due any commissions resulting from people lending to each other via the site in question.

"And my statement was in response specifically to those who WERE due commissions and had jumped to the WRONG conclusion that lends through LendInk weren't being "counted" towards their commissions. Those lends WERE being counted." Was LendInk helping Prime members find Lending Library books? You've presented it as a person-to-person loan-finding service. Which is it? If they were not helping Prime-member Kindle owners find Lending Library books, then your statement is false -- those lends WERE NOT being counted.

April L. Hamilton said...

You are WRONG.

Like I have already said, REPEATEDLY, anyone whose books are enrolled in the KDP Select program gets a commission on every lend, and that INCLUDED lends from LendInk because as I have ALSO REPEATEDLY SAID, all lends originating from that site were processed by Amazon and COUNTED toward each author's monthly lend total.

IT IS NOT POSSIBLE FOR PEOPLE TO LEND KINDLE BOOKS PURCHASED ON AMAZON TO ONE ANOTHER PRIVATELY, WITHOUT AMAZON'S KNOWLEDGE OR INVOLVEMENT, OTHER THAN IF ONE OF THEM ILLEGALLY STRIPS THE DRM OFF THE BOOK BEFORE LENDING OR IF THE BOOK IS LENT RIGHT ALONG WITH THE KINDLE IT RESIDES ON. NEITHER OF THESE THINGS WERE HAPPENING WITH LENDINK. ALL LENDS OF KINDLE BOOKS WERE BEING PROCESSED THROUGH AMAZON.

Those in KDP Select got extra money for each lend at the end of each month, so YES, they were getting paid for each lend.

I never said anything about Prime and the Kindle Lending Library that's tied to Prime in my post. Prime Lending Library books are generally coming from Big 6 publishers, NOT indie authors. It's a marketing program that allows publishers to get their books wider exposure. I never said ANYTHING about Prime KLL commissions, because if there are any, it's based on private negotations between Amazon and publishers and hasn't been made public knowledge.

THIS POST WAS AND IS SPECIFICALLY ABOUT INDIE AUTHORS, AND ADDRESSING THE SLANDERS LEVELLED AT LENDINK BY PEOPLE WHO DIDN'T KNOW WHAT THEY WERE TALKING ABOUT AND DIDN'T BOTHER TO FIND OUT.

I'm done bandying words about peripheral arguments on this, with you or anyone else. It never fails that those who have no basis to debate the central point attempt to derail the debate entirely with irrelevant minutiae, by arguing semantics, or taking statements out of context.

If you would like to argue that it was in fact a GOOD thing that these indie authors brought down LendInk based on false accusations and hearsay alone, by all means share your rationale. Otherwise, we're done here.

April L. Hamilton said...

Keep posting your irrelevant comments and objections to my deletion of them, Stuart. I'll keep deleting them.

April L. Hamilton said...

CORRECTION in my answer to Sessha - All lends on LendInk and sites like them WHERE THE AUTHOR WAS ENTITLED TO COMPENSATION (per Ammy / B&N terms) were being compensated.