In the first part, he talks about why he made the decision to go exclusive with Amazon. It boiled down to having greater comfort developing for Amazon’s platform, and liking the kind of control Amazon gave him over the presentation of his book that he didn’t feel he could get with Barnes & Noble. (And also, he never ended up selling that many copies of works he had offered through B&N anyway.)
Then he gets into discussing the Lending Library.
This is an interesting wrinkle here in this story. See, Amazon dedicates a set amount of money (right now it’s $700,000. It was $500,000. It fluctuates a bit) for it’s Amazon Kindle Owners’ Lending Library, and so, when readers “borrow” one of my books, it’s not like giving it away. I get a little portion of that money.
The interesting thing: apparently, the size of the portion one receives is unrelated to the price of the book borrowed. At least, so far as I can see. I have several short stories and an essay available for sale for 99 cents, and for which I receive 35 cents or so of every sale (as opposed to the $1.70 I would receive from a $2.99 sale, or the $3.50 I receive from a $4.99 sale). But whether someone “borrows” a 99-cent short story or a $4.99 novel (or even, I would assume, novels costing $7.99 or, egregiously, $9.99 or $12.99 or higher yet), the royalty is (or was, anyway) $1.70.
Entrekin notes that, of course, the amount will fluctuate over time. But it’s still a decent chunk of money, and it has important implications for pricing: if you’re going to get the same royalties every time your book gets checked out, why price higher? And it’s also a pretty good argument to go exclusive with Amazon, he points out—if Amazon wants to give you money for letting someone read your book without even having to pay for it, why not let them?
I would point out that nobody knows how much longer Amazon will be content to pay authors that kind of money for library checkouts—but on the other hand, as long as you don’t let yourself get too dependent on it, perhaps it is a good idea to grab the money while you can.