http://blog.smashwords.com/2011/12/amaz ... h-kdp.html
Here's part of what Mark Coker has to say:
At first glance, the program looks enticing. Amazon has created a $500,000 monthly pool of cash they'll distribute to participating authors based on the number of times your book is borrowed from their new lending library....
But there's a catch. Actually, multiple catches, which are outlined in their Terms and Conditions:
1. For the time your book is enrolled in the program, you cannot distribute or sell your book anywhere else. Not Apple, not Barnes & Noble, not Smashwords, not Kobo, not Sony, not even your own personal blog or web site. Your title must be 100% exclusive to Amazon.
2. If you violate their exclusivity terms at any point during the three-month enrollment period, or you unpublish your book to remove it from the program so you can distribute your book elsewhere, you risk forfeited earnings, delayed payments, a lien on future earnings, or you may get kicked out of the Kindle Direct Publishing program altogether.
3. Your enrollment, and thus your liability to Amazon, automatically renews every three months if you neglect to opt out.
Amazon has also modified the Kindle Direct Platform's user interface with the effect of making it almost difficult not to enroll your books. Where they once placed their pull down menu for managing your book's settings, they've now placed the enrollment link. The pull down settings menu is moved to the bottom of their dashboard.
Read the entire article, keeping in mind the courage Mark Coker is showing with those words. Smashwords has agreements to distribute ebooks with all the other major distributors. He would no doubt like to distribute to Amazon too. This makes that less likely. The guy has guts. He's also one of the few in the epublishing business who seems to really have the interests of writers at heart.
The dangerous legalese from Amazon doesn't surprise me. Several years ago, I was involved in the beta testing for a program called Amazon Shorts. The basic idea seemed to be a good one. Authors publish a series of short stories or a book in installments (Shorts) and, when they finish, they release the entire book. It seemed like an excellent incentitive to write one piece at a time. But there were two major catches.
* As above, being in the program meant not being able to publish elsewhere for a time that might prove to be very frustrating if, for instance, a major publisher appeared eager to release it in time for Christmas sales.
* A non-disclosure agreement from Hell. I've got more legal background that I sometimes like to admit, and I know that nondisclosure agreements are not the sort of thing you sign lightly. Courts can get rather unpleasant, insisting that if you signed it, you must obey it, unfair or not.
Using my position as a beta tester, I forced the Amazon staffer I was working with to bring the issue up with the Amazon lawyer who'd written the contract terms. Since being in Amazon Shorts didn't provide me with any insider information about Amazon, I told that lawyer, the net effect of those terms was to make it extremely risky for me or anyone in Amazon Shorts to criticize Amazon. Whatever I said could be called privileged information, even if it was a conversation overheard on a bus or merely clever speculation on my part. I soon heard back. Amazon's lawyer had refused to weaken those terms and so I refused to sign up for Shorts. In the end, it mattered little, since Amazon Shorts failed, probably due to those those nasty don't publish elsewhere restrictions. Select could suffer the same fate, although perhaps not without hurting a number of authors.
Mark Coker is right. Signing terms like those turns authors into the equivalent of a tenant farmer, totally dependent on an Amazon who, in effect with all these non-distribution elsewhere restrictions, owns the rights to your book.
Here's Mark Coker's summary of KDP Select's key danger:
The new Amazon KDP Select program strikes me as a startling example of a predatory business practice. Amazon has the opportunity to leverage their dominance as the world's largest ebook retailer (and world's largest payer to indie authors) to attain monopolistic advantage by effectively denying its competing retailers (Apple, B&N, Kobo, Sony, etc) access to the books from indie authors.
Another analogy might be that of a coal miner in company housing in a company town where the only place to shop is the company store, as in the country song "I owe my soul to the company store". No author should sell their soul to anyone.
Given policies like these, I may need to correct some earlier comments I made in the forum when I suggested that Scrivener authors publish there books two ways: 1. Direct through Amazon to get the maximum royality it offers. 2. Indirectly to the other ebook distributors through Smashwords to avoid distribution hassles.
It might be better for legal reasons to go through a middle man such as Smashwords for all your distribution to avoid being trapped inadvertently in restrictive conditions and legal penalties if you deal directly with Amazon.
I can't emphasize more strongly that right now epublishing is like the old Wild West. There no 'law west of the Pecos.' There's a lot of nasty infighting going on, particularly by Amazon. You can get into big trouble if you're not careful what you sign. Personally,I wouldn't be surprised if, in the next year or so, some unfortunate author ends up with a hot book that too late they discover can only be sold by Amazon.
Moral: Look very carefully at any agreement before you sign it.