By LEN EDGERLY, Contributing Editor

A blind alley is closed at one end. It leads nowhere. Why on earth would you ever want to go down one?

Russ Grandinetti (photo at right), Amazon’s Vice President of Kindle Content, puts it this way: “We like going down blind alleys, because occasionally they turn into broad vistas.”

Grandinetti is quoting Amazon founder and CEO Jeff Bezos with that metaphor, which aptly describes the success of a program launched almost a year ago named KDP Select.

Unless you have self-published a book at Kindle Direct Publishing, you may not have heard of KDP Select. But you probably do know about the Kindle Owners’ Lending Library (KOLL, pronounced “coal.”)

Through KOLL, Amazon Prime members in the U.S. who own Kindle devices get free borrowing rights for up to one Kindle book a month, with no due dates. The lending library was added on November 3, 2011, to free two-day shipping and free Prime Instant Videos as benefits of Amazon Prime, which costs $79 a year.

The lending library began with only 5,000 books to choose from. None of them came from authors publishing their work through Kindle Direct Publishing.

Thirty-five days after launching the lending library, Amazon opened the library’s doors to KDP authors. Through KDP Select, an author or publisher can make their books available for free borrowing at the lending library in return for granting a 90-day exclusive to the Kindle Store. After the 90 days are up, they are free to sell their eBooks at Barnes & Noble, Sony, Kobo, or anywhere else.

Amazon’s lending library is unusual in that an author receives a payment every time his or her book is borrowed. In fact, through November of this year KDP Select authors have received a total of more than $7 million in payments from Amazon. The money is distributed on a prorated basis, determined by how many borrowings take place for each book. The payments have been running about $2 per borrowing.

KDP Select also enables an author or publisher to offer their Kindle book for free at the regular Kindle Store, for up to five days every 90 days.

“In hindsight, it seems obvious that it succeeded so well,” Grandinetti said of KDP Select in a telephone interview on November 28th. “It wasn’t obvious in advance—we had hopes, but we didn’t know. That one has turned out to be super successful.”

Grandinetti is an enthusiastic exec who uses the word “super” a lot. And in the case of KDP Select, an initiative that might well have been a blind alley but turned into a broad vista, the numbers back him up.

Thanks to the response by authors and publishers to KDP Select, the Kindle Owners’ Lending Library has grown from 5,000 titles to approximately 240,000. KDP Select books have been purchased, borrowed from KOLL, or downloaded for free more than 200 million times in the past year.

In that same year, more than 500 books enrolled in KDP Select have reached the top 100 Kindle bestseller lists around the world.

Grandinetti believes the lending library helps increase a book’s sales in the Kindle Store, because free borrowing is, in effect, an extended sampling mechanism for books that customers might not otherwise take a chance on.

“It helps them reach an audience that they might not otherwise have reached,” Grandinetti said of authors whose books are available in the library. Another benefit is that a borrowing is treated like a sale for the purpose of personalized recommendations and ranking on Amazon’s bestseller lists.

Amazon invented the Kindle Owner’s Lending Library in order to create an added benefit for customers purchasing a Kindle eReader or Kindle Fire. That’s why free borrowing from the library is not available via Kindle apps such as those for the iPad, Blackberry devices or personal computers.

As for the larger picture here, I know that many in the traditional publishing industry see only a ruthless new competitor in Amazon. But when I have the chance to interview Amazon executives, from Jeff Bezos on down, I never hear about competitors. I hear about customers.

From the company’s Vice President of Kindle Content, I hear how initiatives like KDP Select that entail millions of dollars of spending are launched in order to bring new benefits to customers who are authors and publishers, as well as customers who are readers.

“The price that I charge a customer today is the lowest that I can charge while still maintaining a healthy business for us, so we can continue, and also for the publishing community,” Grandinetti told me.

“Having a great, robust, diverse, successful publishing business and having a great, robust, diverse, successful agent and author business is really great for readers,” he added. “I feel that Amazon and Kindle have contributed to that, and we’ll continue to try and find ways to do so.”

On the day after I spoke with Grandinetti, Amazon issued a press release announcing that the company will add $1.5 million to the KDP Select global fund on top of the regular monthly payments, payable to authors and publishers during the three-month period from December through February.

In the press release I found evidence that when a player with Amazon’s resources is willing to go down blind alleys, the broad vistas that sometimes open up are not just one company’s to enjoy and profit from.

They can also open for a single writer, like Martin Crosbie, the author of a first novel titled My Temporary Life who was quoted in the release.

Crosbie, who lives in Vancouver, British Columbia, earned $100 from royalties for his book in the two months before he enrolled it in KDP Select. He then earned $45,000 in a single month from paid sales and payments for borrowings from the Kindle Owners’ Lending Library.

“I have readers anxiously waiting for my next novel,” Crosbie was quoted as saying, “and—I never get tired of saying this—I’m a full-time writer.”

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Contributing editor Len Edgerly blogs at The Kindle Chronicles where you can hear his interview

with Russ Grandinetti at 13:29 of Episode 226.

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SEARCH AND SORT KINDLE OWNERS’ LENDING LIBRARY (KOLL) BOOKS FOR YOUR NEXT FREE BORROW!

(Requires Amazon Prime Membership)

(Click here for more information about the Prime program)

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By LEN EDGERLY

Contributing Editor

I find it refreshing that Russ Grandinetti (photo at right), one of the top Kindle executives at Amazon, knows as little about what’s ahead for social reading on the Kindle as I do.

When you try to understand Kindle strategy from outside the mother ship, it’s easy to assume that Bezos and team have the future scribbled down on whiteboards in Seattle, or captured in top-secret Evernote notebooks on their Kindle Fires. I mean, they invented the thing, right?

Nearly five years ago the Kindle didn’t even exist, and the gorgeous but tethered-to-your-computer-with-a-wire Sony Reader was going nowhere. And remember when the first Kindle came out, how it was dissed by Robert Scoble on down? “Whoever designed this should be fired and the team should start over,” Scoble scolded in an open letter to Bezos. Unperturbed, Amazon pressed on as if they knew how successful the Kindle would be.

Maybe not. Maybe they were just trying things to see what customers wanted more and less of. And maybe that’s what they’ve been doing ever since the original Kindle sold out in five and a half hours on November 19, 2007.

That’s the insight I gleaned from an interview with Grandinetti this week in a tucked-away meeting room beneath the huge exhibit floor at BookExpo America in New York City. The topic was social reading, something I feel I should do more of, like eating my broccoli. But because reading has been a solitary joy in my life for so long, I resist sharing my highlights and notes or following those of other readers, even though such sharing is easy with tools being rolled out for the Kindle.

I figured Grandinetti, the czar of Kindle content, would have a clearer view of how social reading will evolve, because he and his team are inventing it.

He admitted that he shares a love of the old ways himself when it comes to reading. He described kindle.amazon.com, where you can make your annotations public and follow others, as “a place that might be a little more off the beaten path” compared with the main Amazon.com site. As such, kindle.amazon.com is a good place to put trial features in place.

“We’re just doing our best,” Grandinetti continued, “to pay attention to what people like, what they don’t like, what they use, what they don’t use.” It also takes time for people to become aware that these new, experimental features even exist.

He added: “We’ll keep inventing. We’ll keep listening. We’re going to proceed adaptively, and I think you’ll start to see an increasingly large number of inventions, but inventions in response to use.”

You can see this process in action if you look back to the launch of Kindle Singles in January of last year. The big idea there was to set reading free from the constraint of how many words an author can write for an article or a book. Kindle Singles created an entirely new space, between 5,000 and 30,000 words or between the length of traditional articles and traditional books. Authors and readers loved it. By March of this year, Amazon had sold more than 2 million Kindle Singles.

“People love knowing when walls come down and constraints get lifted,” Grandinetti told me. “Which is different than something being fully evolved or mature. It takes time to invent inside that.”

As Kindle Singles took off, another dimension of the program became clear: the smashing of the constraint of time. “We were really proud to have a Single from Christopher Hitchens eight days after Bin Laden was shot, which is a time frame that traditional publishing would have found very difficult to publish into,” Grandinetti said.

When you see the surprise of a guy at the epicenter of Kindle strategy, about aspects of the Kindle as significant as social reading and Kindle Singles, you understand that anything can happen. What Amazon appears to excel at is jumping on opportunities like an 800-pound cat, a feline with very good hearing that spends most of the afternoon gazing intently at anything that moves.

This same agility is evident in Grandinetti’s comments on the hot-button issue of eBook pricing.

When I asked for his reaction to the Department of Justice’s anti-trust lawsuit against Apple and the Publisher Defendants over eBook pricing, he eschewed gloating and stuck to the company line: “We think it’s great for customers for retailers to be able to compete and set prices for consumers and try to find a way to build a great business and a great consumer offering.”

He went on to describe pricing in terms that echoed his description of experimentation with other features of the Kindle.

“Over time,” he said, “I think all of us have developed a more thoughtful, more robust, more data-driven way to think about walking that line between offering our consumers real value and having it be a great business for booksellers, for publishers, and for authors.

“I think people will continue to try lots of different strategies about how to price their books, and I think that competition, that experimentation, is a good thing.”
Which means Russ Grandinetti and Amazon don’t know much more than you or I do about how eBook prices, social reading, innovations in content form, or a host of other aspects of the Kindle Revolution will evolve.

The one thing you can be pretty sure of is that when they see something move, some gesture of interest or disinterest by their customers, they will pounce on it before most of us know anything changed.

Len Edgerly blogs at The Kindle Chronicles where you can hear his interview with Russ Grandinetti in its entirety at 23:38 of this week’s Kindle Chronicles podcast Episode 201.