Is Amazon Firing CreateSpace

Kindle Direct Publishing (KDP) announced their new Print-on-demand services. The announcement raises serious questions as to CreateSpace, Amazon’s POD subsidiary’s future role in the Amazon family. The details of KDP’s Print-on-demand (POD) services creates direct competition between two divisions that had formally stayed on their own sides of the house.

At first glance, it hard to understand why Amazon, the parent company of both, wishes to create a competitive environment between its two subsidiaries? Is this a step toward eliminating CreateSpace? Is the plan to combine print and ebooks into one platform, or is Amazon just using KDP to expand their POD market share?

We reached out to Amazon’s PR department for their comments but didn’t hear back from them.

CreateSpace: A marriage within a marriage.

CreateSpace is a DBA (doing business as) of On-Demand Publishing LLC. And On Demand Publishing (ODM) is a subsidiary of Amazon. The print-on-demand arm of CreateSpace is the merger of two companies, and the story goes like this:

On Demand Publishing purchased Custom Flix, an on-demand DVD company. ODM also acquired BookSurge, an on-demand print book company. Amazon then acquired ODM as a subsidiary in 2005.

In 2007, Amazon changed the CustomFlix name to CreateSpace and then in 2009; Amazon merged BookSurge under the CreateSpace name.

Previously, BookSurge was best known for it’s 2008 legal battles in an Antitrust Lawsuit that claimed unfair practices and attempts to give the books printed by BookSurge preference on Amazon’s site.

Never the Twain Shall Meet

Since 2009, CreateSpace and KDP have pretty much operated in their own space. CreateSpace providing print on demand services and KDP offering ebook creation and distribution services. The two operations maintained some synergy through cross marketing their services. If an author wanted to offer their Kindle book as a print, the author was directed to CreateSpace and vice versa.

A Beta by Any Other Name

KDP is calling its Print on Demand (POD) services a Beta, In fact, even their agreement includes the word “beta.” The nomenclature might suggest that KDP is not “all in”…except—

The term beta seems more related to the number of services offered rather than KDP’s commitment to the POD path. If they weren’t “all in” on their new service it is unlikely that they would be offering such easy transfers for CreateSpace authors to join the new KDP platform.

Testing Things Already Tested

A beta suggests a test. Traditionally, betas are used to test the waters before heavily investing in final production. It’s a way to work out the bugs and make changes to faulty models or improve on original ideas.

CreateSpace has been providing POD services for over fifteen years. Amazon has full access to the processes, systems, and financials. There doesn’t seem a lot to test regarding how it all works. The only tests here seem to be, “how many ebook authors will add POD and how many CreateSpace authors will make the jump to KDP?”

Moreover, if the Amazon’s plan is to either absorb or re-brand CreateSpace POD services under KDP then why a beta test? And why not simply move all the current services and authors to KDP?

I Never Promised You a Rose Garden

KDP’s chief selling point to CreateSpace authors is their dashboard. Transferring a print book to KDP allows authors to view all of their sales in a single place. No more jumping between the KDP site for electronic sales and CreateSpace for print sales.

A nice feature, but what is more interesting is the stuff KDP isn’t offering yet, and the list is fairly extensive.

KDP’s site provides a comparison chart. Most of their features are marked “coming soon.” KDP also offers this “important” note:

Important: CreateSpace still offers features like physical proofs, author copies, expanded distribution, and professional publishing services like editing, design, and formatting help (among others). KDP will add these features in the future.

Although KDP has a dashboard and the same royalties as CreateSpace, there is no guarantee, with a beta agreement, that terms won’t change or that any of the coming soon features will be offered. The thing about the “future” is you seldom can predict its arrival.

Poaching with Permission

We’re used to seeing comparison charts. When these charts are used for product comparison, the company’s goal is to help the consumer decide on the product features they wish to buy. When comparison charts are used to demonstrate differences between two companies or two competitive products, their purpose is to convince the consumer to choose one over the other.

Although KDP’s comparison chart shouldn’t entice a CreateSpace author, as it mostly just promises, it’s not the content but intent that is the factor.

The comparison chart is intended to make it clear that KDP is not CreateSpace.

KDP also requires the signing of a new agreement with them and notes that, after transfer, your CreateSpace “stuff” will live on only in the archive.

After you publish your CreateSpace book on KDP, we’ll automatically remove your CreateSpace paperback from sale, and your KDP sales will be tracked in your KDP sales and royalty reports. You can still access historical sales reports on CreateSpace but you will not need to take any additional action there.

These factors all suggest that this is not a merger of names and services. KDP is doing its own POD thing and their “thing” does not include CreateSpace.

Since CreateSpace hasn’t announced a new ebook service, it appears they are okay with the poaching. It seems a lot like training your replacement.

The Future of CreateSpace?

For many authors, entry into the self-publishing market begins with an ebook. It’s cheap, mostly do-it-yourself, and an easy way to test the waters. That means the majority of the up-sell opportunities for a provider reside in converting ebook authors to POD authors. That also means KDP is sitting on some precious data.

With a database of both POD authors and Ebook authors, it doesn’t require much in the way of analytics for KDP to compile a list of ebook authors who don’t have a print book option. That report creates a target list that is a dream come true for any POD marketing team.

That capability doesn’t bode well for CreateSpace’s revenue forecasting. CreateSpace will be competing against KDP with KDP holding all of the cards since their database can show them every author without a print book. Considering that Kindle has the lion’s share of ebook authors, that is a pretty powerful and exclusive marketing tool.

It doesn’t seem CreateSpace has any way to compete once KDP offers full POD services. Which would make sense…if they weren’t sister divisions in the same company.

Unless these subsidiaries are running cut-throat internal operations, it’s hard to image the move doesn’t signal the end of CreateSpace’s POD services. It’s more likely that Amazon has a different course for CreateSpace. That course may be either selling it, dissolving it, or honing its focus on other on-demand markets, like music and movies. Selling the POD portion of CreateSpace seems most unlikely. You don’t gut membership when you’re trying to entice buyers. You do, however, niche down the operations to bolster the bottom line or focus on a particular market.

Whatever the future for CreateSpace, it is doubtful that printing books is a part of the landscape.

And the Real Question is?

From a business viewpoint, consolidation makes perfect sense. CreateSpace authors tend to refer to “it all” as Amazon anyway. And other than spreading the financial risk across subsidiaries, it never made much sense to silo ebook and POD functions in two different places.

The real questions aren’t about the future of CreateSpace. The real question is “what is Amazon really up to this move?”

Trust Me; You’ll Love it

As noted, the POD agreement with KDP is a “beta” agreement. Now one can read that as meaning; we’re calling the program a “beta”, so the agreement is the “beta agreement.” A nice assumption, but perhaps a foolish one.

If the agreement “itself” is a beta agreement, then that means the agreement itself is a “test” and certainly “subject to change.” In other words, once the “beta” is complete, authors who have ported over to KDP will be asked to accept the “final” agreement and all its possible changes.

Authors love Amazon, as do other sellers, but everyone knows Amazon often change terms with a certain air of “take it or leave it.” Once you have all your eggs in that basket, it’s hard to unring the bell. (Yes, I just offered a two-for-one on cliches)

More concerning is KDP’s lack of Extended Distribution. Without it, an author’s books are not available for purchase from bookstores, mass merchants, academic institutions, or libraries. Perhaps an easier way to put it is: KDP books are only available on Amazon.

You might recall the earlier mention of BookSurge’s small Antitrust issue. What if KDP decides not to offer Extended Distribution? What if the new terms require Amazon exclusivity?

There are, of course, other critical unknowns. The royalty agreement is the same, but that doesn’t promise that authors will enjoy “at cost” purchase of their books. There is also the consideration that KDP may limit templates and layouts, which is likely since they have already stated that not all CreateSpace trim sizes “work” on the KDP system.

Should You Make the Move?

I’m not going to dance around the question: The answer is, not yet.

Yes, it would be nice to have all your print and electronic book stats in one place. And currently the royalty terms are the same, however, if you already have your book(s) at CreateSpace the future uncertainty and corresponding potential risks suggest you hold for the moment.

As noted, there are too many important features KDP isn’t offering. The lack of formatting services, the absence of a physical proof, and the inability to purchase at cost copies are deal breakers. On the last, consider how you might run a giveaway or display at a book fair if you are required to buy your books at full retail?

The future of CreateSpace may seem a bit uncertain. But until KDP can offer clarity as to what they will offer, when they will offer it, the full and finalized terms and conditions, and the costs of their services, it doesn’t make a lot of sense to jump on KDP’s beta POD offering.

Raymond Esposito is an award-winning dark fiction author and Amazon best-seller. His articles and interviews have appeared in a variety of publications including Family Circle and Sanitarium Magazine. He has a degree in Cognitive Psychology and has spent over 25 years as a criminal behaviorist.