Amazon Forces Unglue.it To Suspend Crowdfunding Operations

Unglue.it, the new crowdfunding site that encourages authors and publishers to make their ebooks available under a Creative Commons license, today was forced to suspend all active campaigns, after Amazon informed the organization that it would no longer process its pledge payments. Amazon Payments also required Unglue.it to void all pending pledges.

Eric Hellman, founder of Unglue.it developer Gluejar Inc., told LJ that the company received “cryptic” automated messages two weeks ago indicating that Amazon would be reviewing the company’s business model with them. On Wednesday, they were finally able to speak with a senior account manager, who informed them that crowdfunding, in general, presents regulatory and contractual issues that Amazon is having difficulty keeping pace with. According to their conversation, with the exception of Kickstarter, Amazon Payments will be rejecting business with all new crowdfunding operations.

“We’re very disappointed that this has happened. We’ll relaunch very soon and unglue many many books. Maybe some day billions of people will read unglued books and recall with amazement the span of years when Amazon dominated the world of ebooks,” Hellman wrote on the official Unglue.it blog.

At press time, Amazon had not returned requests for comment.

Even weeks before their official launch, Unglue.it had grappled with the choice of payment processors. A May 3 blog post noted that the company would have preferred to work with Paypal, because Amazon Payments did not offer the ability to process foreign currency transactions, forcing non-U.S. pledges to be made on a major credit card and be subject to a pledge-reducing currency conversion fee. The post also noted that “many publishers, fearful of Amazon’s dominance of the ebook market, may be wary of participating in a market that requires users to have yet another Amazon relationship.”

Yet even though the company passed its technical review with Paypal in January, they are still in business review limbo with the processor, which does work with other crowdfunding operations, including IndieGoGo. They chose to work with Amazon primarily to get the platform running.

Paypal “is still processing our application,” Hellman said.

Hellman told LJ that Unglue.it had already been working to implement a new payment model, and while he wasn’t at liberty to discuss it in detail, he said “what we want to do is decouple ourselves from these payment providers as much as possible.”

The suspension of pledge campaigns will not affect Unglue.it’s Oral Literature in Africa campaign. On June 20, after 259 supporters pledged $7,678, Ruth Finnegan’s 1970 classic became the organization’s first successful campaign. The ebook is being produced by Open Book Publishers, and is almost ready for release under a Creative Commons Attribution license that will enable users to read, share, translate, and remix the work.

For now, Unglue.it is working to get its new payment platform up and running, and its encouraging users to support the program by signing up on their website, and continuing to suggest and vote on ebooks for future campaigns.

“We will be back,” Hellman said. “I want to get that message out as clearly as possible.”