What The Hell’s Happening With Kindle Unlimited?

A very quick unpleasant injection of (self-)publishing prattle –

So, Kindle Unlimited is Amazon’s subscription service, yeah? Those who subscribe get access to a variety of e-books that they can click and download for one monthly price. Something-something Spotify, blah-dee-dah-dee Netflix, whatever.

I like the idea as a customer, though I’ll admit a cynical sphincter-clench at the very idea of subscriptions for e-books — e-books are already so fantastically inexpensive that I can’t help the hesitation at seeing the ceiling drop even lower. I feel like Indiana Jones in a cave that’s trying to crush him. This might be my encroaching Old Man Syndrome (“NEW THINGS SCARE ME, NOW EXCUSE ME WHILE I GO USE INTERNET EXPLORER TO CHECK MYSPACE”), but I’m always hissing and spitting at anything that might undercut any author’s ability to earn a living wage.

Regardless, right now, it’s still looking like Kindle Unlimited is troubled waters.

Here’s the news:

Last month, the payout per book checked out was $1.33. A pretty steep drop from what was hovering closer to two bucks per download — which isn’t too far off base with what you’d earn from a buyer buying the book outright (er, presuming you’re in that self-publishing sweet spot of $2.99, which is already cheapy-cheapy). But $1.33 cuts that sharply — average royalties on that e-book from a purchase would be 70%, but this drops it to 44%. (Now, there’s an argument to be had that suggests broader exposure yields to greater sales and thus softens that drop — maybe even erases that drop — though I’ll also note that this is the argument some traditional publishers use to justify the 25% or less of royalty rates in that space.)

This month — and here’s a Publisher’s Lunch link but it requires a subscription, so if anybody has a better link, toss it to me — Amazon added $3.5 million to the fund, which dramatically raised the per-download-payout to, drum roll please…

$1.36.

Wait.

$1.36?!

Three cents.

Which is puzzling, really. It’s suggestive of a couple things. Either nobody’s checking out Kindle Unlimited, or they are, but Kindle Unlimited is getting tons of use across a huge array of books. To reiterate, that means either nobody is subscribing, or there are just too many books in the program getting read to make the payout viable (meaning, the money is spread thin across a glut of books and readers). Amazon puts money in the KDP fund, and nobody really knows where that money comes from or what it’s connected to — it’s a button with tangled pipes and convoluted wiring and it’s hard to know what actually affects that number. Is Amazon just making it up? Is it tied to subscribers? Is there some mad algorithm forged in the brine-pickled belly of an Elder God?

(That’s a larger issue with Amazon, I think, in terms of self-publishing: so much of what happens there is behind the curtain. They change algorithms and suddenly a bestselling self-published book drops through the floor. Discoverability and programmatic cataloging are mysterious processes there — it is all unseen alchemy. It’d be great to have a larger sense of what they’re doing, but they’re not really forthcoming with that information for self-published authors.)

Amazon added three million to bump the payout by three cents. Meaning, without that fund bump, the payout would’ve likely been significantly lower. No idea how much, because nobody’s privy to that information.

So far, at least to my untrained eyes, it seems like Kindle Unlimited is spinning its wheels a bit — I was in for a month and didn’t see a great variety of books available (and though folks seem upset by my insistence on the “shit volcano” effect, discoverability and visibility there is trending toward zero). And stranger still, they require that exclusivity arrangement to be a part of it. Exclusivity to a single retailer and distributor is usually a thing that rewards the seller in some way. If I sell my Fabulous Donglewidget to many retailers and suddenly K-Mart is like, “Nah, fuck that, we want to sell that exclusively,” then we make a deal where I benefit to hang out only on their shelves. Because being on K-Mart’s shelves is not a reward to me — it’s not a privilege. It’s to their benefit, so it has to benefit me and my Fabulous Donglewidget (note: not a euphemism for my or anybody else’s penis). Here, though, where’s the value? “JOIN OUR EXCLUSIVE PROGRAM AND LOSE MONEY PER DOWNLOAD. WERE YOU EARNING TWO DOLLARS A DOWNLOAD? NOW IT’S A DOLLAR THIRTY! FORTUNE FAVORS THE BOLD, AUTHOR-HUMAN.”

Possible I’m just not seeing the value where it exists — I do not have my books enrolled. And here is a good time for any self-published authors to stop by and speak to me of their experiences, because while I’m hearing a lot of dissatisfaction from the KDP ranks, that might just be the loudest voices complaining (and remains anecdotal — aka, “artisanal data”). And I should note here that the program does make sense if you’re offering up smaller e-books: a short story priced at $0.99 earns you thirty cents on a purchase, but a dollar-thirty-ish on download from KU. That’s earning more than the actual cost of the book itself. But, if you’re selling an epic fantasy priced at $4.99 — well, the drop becomes precipitous.

I respect Amazon for being the LET’S JUST FUCK UP SOME SHIT company that they are — but I worry that they’re trying too hard. Even going so far as to competing with themselves. KDP! KDP select! Kindle Unlimited! Kindle Worlds! Amazon Publishing! Kindle Scout! I seriously cannot keep up. The Amazon ecosystem is starting to feel too jungley: choked with its own vegetation and hard to parse. (Though, again: beware my Old Man Syndrome coloring this view. GET OFF MY LAWN, YOU DAMN HOVERKIDS WITH YOUR E-COMICS AND YOUR KINDLE DRUGS.)

My advice to Amazon is, at this point, drop exclusivity for Kindle Unlimited. Though that might dilute the payouts further, I dunno — at the very least, it’ll ensure that by signing on exclusively with Amazon, a self-published author isn’t also having to pay in for the not-actually-a-privilege.

Curious to hear people’s experiences. Share and share alike, folks.

And then get off my lawn.

104 comments

  • Long story short; I shift 50% more books, but get 70% less profit. For a new author, looking for exposure, KU is brilliant, but if you’re trying to earn a living and you already have a fanbase, forget KU (unless you happen to write shorts, because Amazon practically throws money at you when a reader borrows a 99c read). KU gave me the kick up the rear end I needed to go wide.

  • The massive drop in KU payouts is due to a flood of 99 cent shorts being borrowed. And yes, a 3K word short story earns the same $1.36 for a borrow as my 300,000 word ($5.99) trilogy edition. That’s just wrong and it’s ripping the bottom out of the whole KU (and thus KDP Select) program. I am seriously considering pulling my higher priced titles from the program and farming them out. I am also looking at serializing new releases in response to the market forces being imposed by Amazon. This is the exact opposite of Amazon’s goals when introducing KU, but that is the logical path for authors to follow under the current model. To remain in KDP Select it makes more financial sense to release a 5K to 10K word short every month than several novels per year.

    What’s the solution? Amazon should set the borrow payout at 50% of list price across the board with a cap of $2.99 paid per borrow. Thus a $0.99 title would pay $0.49 and titles priced at $5.99 and above would get $2.99 per borrow. I think authors of novels could live with that, at least I could. Amazon could also handle it, since it takes people a lot longer to read a novel than a short story and the funds would go farther if the payout was based on list price. Failing that, KU should be an option for KDP Select titles, not a requirement. Don’t open it up to non-KDP Select titles, but don’t force all KDP Select titles to be in KU. I would probably keep my more expensive titles in KDP Select just for the Countdown Deal option, as I did before the advent of KU. However, the KU debacle in current form threatens to drive me, and other loyal KDP Select authors, away from the fold.

  • It’s the biggest reason why I pulled out of their ‘Select’ program–nothing was ‘select’ save for making Amazon in total control of my work. Kinda defeats the whole ‘indie author’ notion.

  • It’s weird that so many writers were unwilling to see this as anything but an attack on their rightfully (er, algorithmically) earned rankings and monthly rev. Where’s the innovation, guys? Go write something!

    Count me among the writers who are doing extremely well under KU. My monthly income is 20x what it was in June, when I first decided to give this writerly gig a go. Not a month later, KU was rolled out. I’m am so excited and grateful that this program was here. Clawing up the ranks alongside indies who had planted themselves there was going to be tough, but KU made it possible.

    Amazon has the same hard costs (minimal) for delivery and even more consumer data to mine, while borrows and subscribers go up every month. The program probably is here to stay, though I’m sure they’ll tinker with it here and there. The fact that they’ve driven the per-unit price down to $1.39 says to me that they actually favor shorter works. That’s great, isn’t it? When was the last time there was a hot market for short stories? Back when the “New Yorker” was a big thing?

    What surprises me is that while so many writers are doing their drama-flounce to other retailers, no other retailers are doing anything to become better markets. If that happens, boom… Wow, exciting!

      • I’ve also definitely been accused of being a Pollyanna about KU (and select in general). It’s definitely good for some writers, but they mostly seem not to be the same writers who were doing well under the old structure. It’s definitely good for short-story writers, and I think Meg is correct that Amazon may not be all that upset about that. Even before this, e-publishing and Amazon created a market for short stories where none had existed. Not everyone is a short-story writer, but they aren’t really less work, and I can get frustrated when fellow authors are dismissive of the form. I do think things will settle down once authors get used to it, and in many cases, figure out how to make it work or not work for them, and readers get used to the service.

        On my self-published work (this isn’t true for my traditionally published work, and while I haven’t been doing this long enough to have much of either a back list or a track record, I haven’t seen the backlist hit a lot of other people have complained about), I don’t do well with other retailers, and I frankly dislike Smashwords, so I haven’t had an issue with the exclusivity. I completely agree with Meg that it would be nice if other vendors offered a serious alternative. Heck, it’d be nice if Smashwords bothered to upgrade their meatgrinder app.

          • I’m sort of vaguely aware of them, and while I figure their software is probably much less likely to give me a migraine than Smashwords, I doubt it’d change my numbers with partner vendors much. I do decently with other vendors (mostly ARE) on the traditional published, but I think I’ve sold fewer than a dozen copies through Smashwords and its vendors (and I have three titles with them). I could try putting those titles through Draft2Digital, although it’s important to me to have those titles available to libraries (I chose the free to libraries option on Smashwords). Ease of use is important, but it needs to be coupled with good distribution. Thanks for the suggestion!

    • “What surprises me is that while so many writers are doing their drama-flounce to other retailers, no other retailers are doing anything to become better markets. If that happens, boom… Wow, exciting!”

      This is simply not true. Kobo is aggressively promoting indies. I’ve been personally asked to participate in a half dozen promotions over the past 4 months with them. GooglePlay featured one of my titles three times over the same time period, resulting in large increases in sales and exposure. Apple asked and featured a bundle I was in in October, resulting in another rush of sales. And, yes, it has been exciting seeing my numbers improve at these other sites. Only Barnes & Noble has not stepped up its game (and we all know they’ve got a lot of issues to deal with right now). Oh, and I’m seeing some great traction at Scribd and Oyster, both subscription services like KU, but which pay full royalties, unlike KU.

      Nobody should be decrying your decision to stay exclusive; it’s what works for you. But you can’t deny the overwhelming, albeit anecdotal at this point, trend showing most authors are suffering under KU.

      • Kobo has no hope of overtaking Amazon unless something truly amazing happens. With 65% of the market, it would have to be a huge, well-funded player like Google that could make any kind of dent. Possibly Apple.

        I’m glad you’re doing better on the other outlets. fwiw, I don’t see that “most authors are suffering under KU.” I think some top authors got press for their disappointment, but “most” authors is a lot of people. With more borrows every month and more and more titles going in, that money is going somewhere.

        • Until we have a full plate of data (which may never happen because: Amazon), the best we can do is go on the numbers we have — the payouts have dropped, and it seems to me that more folks are unhappy than happy. Which, again, is not data, but it’s at least worth looking into.

  • It’s about

    1)taking out other subscription services

    2)offering more “product” than anyone else, even if that slowly diminishes individual payouts

    3)providing another service to funnel consumers further into Amazon’s jungle (think of indie author’s as Amazon’s own loinclothed Tarzans, easing the palefaces in their transition as they go hardcore native).

    Amazon has a plan with KU. Amazon ALWAYS has a plan. And it’s meant to benefit them first and, best case scenario, consumers and vendors in the process.

    I wouldn’t dare tough KU if I were a long-form writer who regularly prices above the 3.99 price point.

  • I’m not sure what to think of it honestly. Being a relatively new author trying to build my base, I don’t see the worth in it. At this point I want to aim for grabbing as many readers as possible, and some of those people only read iBooks or on Nooks. Other than that, hell I don’t know, it’s all a crap shoot.

    • One thing to remember is that Kindle is by far the largest seller of ebooks. For example, a letter from the President of McMillan posted on the TOR website today states that 65% of their ebooks are sold by Amazon. There is also a popular free Kindle Reading App that allows those without Kindle devices to read Kindle books on the iPad, tablet, laptop, PC, or smartphone which really opens up a far larger market than any other platform. And don’t forget that Martha Stewart made millions selling her product line exclusively through Target. There can be advantages to going exclusive, especially with the biggest retail outlet. And if you are most concerned with exposure at this point, then you will get the most on Amazon hands down. So while I am not entirely pleased with the way Amazon is handling KU payouts, I still have most of my titles in KDP Select and make a living selling them there. .

  • It’s about beating the prices down until their competition folds – they they control the market and can do what they please. Amazon is the Wal-Mart of publishing. Remember Amazonfail, when thousands of books simply disappeared from the radar? And all of them books the political right would like to ban altogether. They claimed an “error.” It looked more like a trial run to me.

    I don’t trust anything with this level of opacity.

    Bottom line: Amazon is out to make money for Amazon. If you think otherwise you are not watching their track record.

  • From the point of view of a consumer, I took the free KU trial and cancelled it half way through the month. I went through my whole Goodreads “want to read” list and not a single one of the 100+ books was available on KU. I went through again and only a couple of the authors represented on my list had work available on KU, and those were mostly articles in magazines, or short stories in anthologies. I checked out a couple of books that sounded moderately interesting, and one was OK but not good enough for me to read the rest of the series and one had an interesting premise but was terribly formatted and edited.

  • This is why I will only use KU with my future short story series. My full-length novels will never see KU, and will be sold using not only Amazon, but also other formats.

  • I’m a little old to be ‘flouncing’, but I’m one who’s leaving KSelect, also KU. My books are available to a different subscription service, Scribd, and also to PageFoundry, plus Apple iBooks, B&N Nook, and Kobo. Whether they’ll sell more is questionable, but if they do, I’ll get 60% of the list price, wherever the book is sold. Not quite as good as AMZ’s foreign sales, much better than domestic sales.
    An added reason for leaving the Select program is that the promotions have essentially stopped working. I’ve had much better results going thorough a commercial emailer, so that’s the route I’ve started now. I’ll know in a couple of months whether the other venues are worthwhile.
    Amazon adding millions here and there sounds good, in theory; but how many fingers are in that pie?
    I thought KU sounded good in the beginning, but that was before AMZ dropped the payout. Now?
    I just wish Apple, B&N, and the others would offer promotions that compared with Amazon. For that matter, if D2D offered an emailer daily listing new acquisitions, I’d love it. Ditto Apple, B&N, Kobo, and the others. Begin by emailing previous customers who’ve bought a book sent through D2D, ask if they’d like a daily email of featured books. Make it routine; let a few lines of code send out the questionnaire, or just add them automatically “As someone who’s bought a book from one of our authors, we though you might be interested…”. As long as there’s an opt-out, I doubt people would consider it spam.
    Instead, Apple, for one, sends out an ad, but they feature best-sellers. Who really don’t need the free publicity, IMHO. Amazon does the same.
    Or…if they aren’t willing to compete with AMZ, get used to being third or fourth best, no more than a minor player in the market that’s poised to take over book publishing.

  • But wait, everything Amazon does is gold for the authors..argleblargle…disruption…blargleargle….buggywhips, amirite?

    Amazon is slowly, but surely killing books.

    • Agreed. I’m now at a point where I don’t want to sell my books on that platform because I just don’t take it seriously any more. Never thought I would hear myself saying that but there you go.

  • Thanks for the informative article, Chuck. As someone who has been suspicious about Amazon’s secretive practices and propaganda masquerading as fact, I have stayed away from any kind of exclusive program with Amazon so I wasn’t aware of all of this going on.

    I can’t believe that long novels get the same as short stories in this program? That’s outrageous and further devalues the hard work of most authors.

    Yes, it gives short stories a leg up in terms of success but seriously, a person who works a couple of days at a story or a week or two at one story should not be getting the same for it as someone who works a year on a full-length novel, which length-wise is the equivalent of how many short stories?

    While I do okay ales swith Amazon, I also do okay with other platforms including Kobo, Smashwords and surprisingly, B&N, so exclusivity with Amazon, nah. Not worth it for me.

    • Okay, one more time. Short stories aren’t really less work.

      I just sent one off to be beta’d that I’ve been working on intermittently since April. I can write a novel in about a month. I am one of those writers who usually has multiple projects going at a time and will often leave one for a while and go back to it, so it’s sometimes hard to quantify actual writing time, but they require no less thought or care.

      We have probably all seen things on Amazon purporting to be shorts that resemble either snippets of longer pieces or outlines. This does not make the form less legitimate.

      Keep in mind too that the payments are not only the same for works of different lengths, they are the same for works that are different price points. So while I may not be comfortable charging more than 99 cents for a short, someone else might be asking 2.99 or 3.99. They get the same as I do.

      • Your comment applies to works of all length. There are plenty of novel length books that only sell for 99c and very few shorts that would sell for more than that. That is how the free market works for book sales. I’ve seen novella length titles priced at $9.99, but they are hundreds of thousands, even millions, down the sales charts. KU is different. And the system is flawed. The reason short works shouldn’t get the same payout as novels has nothing to do with the value of the work, or how long it took to write it. It has everything to do with the time it takes to consume it. I can read dozens of short stories in a day, but not more than a single novel. Since KU is an “all-you-can-eat” venue with a fixed price per month for consumers, Amazon should base payouts to authors on the amount of time it takes the average reader to consume each title. This is easy to do. My Kindle tells me how much time is remaining in each book or chapter of whatever I am reading. In fact, one of my shortest works gets ranked in the “90 minute read” charts on Amazon, so they already know and understand this concept. If they apply it to the KU payout methodology, the KU system would become more viable and attractive to novelists.

        • That’s an excellent point, David. However, I wonder if Amazon actually wants to make it that attractive to novelists. It may well suit their purposes to have the service heavily loaded with shorts.

  • January 23, 2015 at 6:36 PM // Reply

    I don’t find this all that complicated. Why would I want my books to be widely and consistently available for a royalty to me of only $1.36 if I could be getting $2, unless this availability is getting me almost twice as many sales? What’s in it for me? Clearly Amazon is benefiting, but I’m not, and that is simply not a business model that works for me.

  • The KU program doesn’t financially work for us. We are co-authors who split our royalties 50-50. We earn more on a sale than we would in KU, especially when the payout is in the $1.36 range. In addition, we shy away from the exclusivity clause. Much as we appreciate Amazon, we also value our other venues. Maybe writing shorts would be the ideal way to benefit from KU, and something we should consider. At this point, at least for us, the jury is still out on KU.

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