The New (and improved?) Kindle Unlimited

A week ago, I received the same email from Kindle Direct Publishing that I'm sure many of you did. It read as follows:

Hello,

Today we have a few exciting announcements to share related to the KDP Select global fund. The first is that we’re adding a bonus of $7.8 million to the May KDP Select global fund on top of the previously announced $3 million base fund, bringing the total fund to $10.8 million. We are also pleased to report that:

• KDP Select authors are on track to earn over $60M in the first half of 2015 from books read in Kindle Unlimited and the Kindle Owners’ Lending Library.

• Total royalties across subscription and a la carte sales earned by KDP Select authors in the US are on track to more than double in the first half of 2015 compared to the same period last year.

• Authors have continued to renew their titles in KDP Select at rates in excess of 95% each month since Kindle Unlimited launched.

These trends give us the confidence to look forward and share that the KDP Select global fund will be in excess of $11M for both July and August.

We’re always looking at ways to make our programs even better, and we’ve received lots of great feedback on how to improve the way we pay KDP authors for books in Kindle Unlimited. One particular piece of feedback we’ve heard consistently from authors is that paying the same for all books regardless of length may not provide a strong enough alignment between the interests of authors and readers. We agree. With this in mind, we’re pleased to announce that beginning on July 1, the KDP Select Global Fund will be paid out based on the number of pages KU and KOLL customers read.

As with our current approach, we’ll continue to offer a global fund for each month. Under this new model, the amount an author earns will be determined by their share of total pages read rather than their share of total qualified borrows. Here are a few examples illustrating how the fund will be paid out. For simplicity, assume the fund is $10M and that 100,000,000 total pages were read in the month:

• The author of a 100 page book which was borrowed and read completely 100 times would earn $1,000 ($10 million multiplied by 10,000 pages for this author divided by 100,000,000 total pages).

• The author of a 200 page book which was borrowed and read completely 100 times would earn $2,000 ($10 million multiplied by 20,000 pages for this author divided by 100,000,000 total pages).

• The author of a 200 page book which was borrowed 100 times but only read half way through on average would earn $1,000 ($10 million multiplied by 10,000 pages for this author divided by 100,000,000 total pages).

We will similarly change the way we pay KDP Select All-Star bonuses which will be awarded to authors and titles based on total KU and KOLL pages read.

We think this is a solid step forward and better aligns the interests of readers and authors. Our goal, as always, is to build a service that rewards authors for their valuable work, attracts more readers and encourages them to read more and more often. We welcome your continued feedback and ideas about how we can further improve Kindle Direct Publishing and Kindle Unlimited.

In the coming days we’ll share more details about this change. In the meantime, for further information (such as how we measure pages read) you can read more here: https://kdp.amazon.com/help?topicId=A156OS90J7RDN.

Best Regards,
The Kindle Direct Publishing Team

A few days ago, I saw this video on my Facebook feed.

 

It's been a year since everyone started losing their shit about the Kindle Unlimited program, and what better way to celebrate said program's first birthday than by making everyone lose their shit again?

What will this mean for us indie authors? Will this system reward authors more fairly for the amount of work they're putting in, or are we all just bending over a little further for Bezos to get another inch in? Surely it's too soon to tell until some actual data starts rolling in, but that shouldn't stop us from making wild speculations. So let's get started!

The first thing I'd like to point out is that I agree with Bezos/Hitler in the video that the ten-cent-per-page example given in the above letter is almost certainly misleadingly optimistic. I know it's a hypothetical example, but to even suggest those numbers could even be anywhere on the spectrum of possibility feels, to me, like kind of a scummy move on Amazon's part, and one that's likely to come back to bite them in the ass when a bunch of naive authors feel duped after reality comes a-kickin' them in the nuts.

"What was I thinking? I'll have those reports on your desk as soon as you EAT MY ASS! It sounded brilliant at the time."

"What was I thinking? I'll have those reports on your desk as soon as you EAT MY ASS! It sounded brilliant at the time."

Let's face the facts. My own flagship book, Critical Failures, is 260 pages long. Amazon isn't going to pay me 26 bucks every time some $9.99/month KU subscriber reads my book. That would be awesome, but it's just not sustainable. And as novels go, that's not a particularly long one.

Let's dial it down a few notches and take a look at (what I hope is) a worst-case scenario. Now, mind you, I saw no guarantees that shares would be made up of whole cents. One of the biggest criticisms of the KU program is that the amount of money in the well we're all drawing from is determined solely and arbitrarily by Amazon. If more pages are read than there are cents in the well, we could be looking at fraction-of-a-cent shares. But let's not think of that right now.

Who's going to get hit the hardest by this move? That's pretty easy to guess. It's likely those same people who this change was instigated by. The ones gaming the system by flooding the market with eight-page-long short "stories" and scooping up the same $1.30 that legitimate writers were getting for their 600+ page novels. Under the old rules, a reader needed to get through 10% of the book in order for it to count as a borrow. It didn't take long for people to figure out that with a book under ten pages long, the initial click was all they needed to qualify.

I'm not opposed to short stories. In fact, I believe one of the biggest benefits of this whole e-book revolution we're in is that authors who enjoy writing them are finally able to make some money doing so, and that readers who enjoy reading them have so many more to choose from.

Under the new rules, writers will be paid by pages read, rather than by the book. Those who had previously been going for that initial click are in for some rough seas ahead. The best they can hope to make for their eight-page book (under my hypothetical worst-case scenario) is $0.08, if a reader reads it from cover to cover (including the two pages of back matter links to all of their other shitty eight-page books). But how good of a writer is someone intentionally gaming the system likely to be? How much work were they likely to have put into a story when that one click was all they cared about?

"What do I gotta do to get you to walk outta here with this book?"

"What do I gotta do to get you to walk outta here with this book?"

What I'm predicting is that these scammers will suddenly find themselves being paid $0.01 per book, maybe $0.02 if a generous and optimistic reader is willing to wade through a second page of their horrible shit. That's a long fall from the $1.30 they were making under the old system.

And for all the crying they'll likely do about it, they're the ones who are primarily to blame (or thank?) for this change. For the system to work, there must be benefits for all three parties involved. That is the writer, the reader, and Amazon. If any one of these three parties is getting screwed over, the system needs to be adjusted. 

When people try to game the system by cranking out short, shitty books with provocative covers, or divide their novel into forty "episodes", Amazon pays more to the authors than they make from customer subscriptions. I'm kind of shocked they've let it go on as long as it has.

So who will come out ahead under the new system? Authors who are writing quality, substantial-length books that customers want to read. If you ask me, something seems fundamentally right about that.

But the most important question I have to ask is "How will these changes affect me, an author who writes books of varying lengths?"

I did a little number crunching, to compare the difference between what I estimate to make from the KU borrows I've had so far this month (based on a $1.30 payout per borrow) and what I might expect to make under the new system for those same borrows (based on a one-cent payout per page read). 

The estimation for the old system is easy enough. (Total number of borrows) X ($1.30)

To calculate a wild guess at what those same borrows might be worth under the new system, I first looked up the number of pages in each book I have enrolled in KDP Select, then subtracted 20% from it (to account for back matter that people aren't likely to read, some people not finishing my books, or possible discrepancies in how Amazon calculates what constitutes a page). Then I multiplied that by the number of borrows I've had for each book. Finally, I added the totals together and moved the decimal back two spaces to go from cents to dollars.

Naturally, my short stories brought in far less money with the new system than they did under the old. But the novels (which are both longer and borrowed far more frequently) did a pretty good job at trying to make up the difference.

My estimate for the new system came to 75% of my estimate for the old system. So while it's not quite as much money, it's certainly not a big enough difference for me to lose my shit over. And remember, that's at one cent per page read. If we wind up getting paid two cents per page read, I'd be doing 50% better under the new system than I would under the old. If KDP's comically optimistic example of 10 cents per page turns out to somehow be real, I'll be snorting caviar off hookers by summer's end.

"I'll get the can opener ready, sugar."

"I'll get the can opener ready, sugar."

Personally, I don't mind a drop in the profits from my short stories too much. As I stated before, they were meant more for gaining wider exposure than they were for making money on their own merits. I started my 1:6 novel to short story pattern before Kindle Unlimited was a thing, enjoyed it thoroughly over the past year, and don't aim to change it now that I'll be getting paid less for them. 

To the people who are losing their shit about these changes, I'd like to remind you of what I said earlier on. For the system to work, it has to benefit the three parties involved. The writer who is doing honest, quality work will likely benefit from an increase in profits. The reader will obviously benefit from the slowdown in eight-page low-quality shit they have to wade through. And Amazon will benefit from not having to pay out more money to scammers than they're bringing in from subscriptions.

Make no mistake. Amazon wants this to work. It's not always easy to accept their arbitrarily selected pool of money that Kindle Unlimited participants are drawing from, but their position has always been that they wanted to pay out enough to make KDP Select an attractive option for authors to agree to their terms of exclusivity. I said the same thing when KU was first launched. Amazon has no motive to dick us over. They depend on our work, and the high price of the exclusivity they require for the benefits they offer is something I'm sure they're all too aware of. 

We wield the pen. We wield the power.


All novels and short stories in the Caverns and Creatures series are available in Kindle Unlimited. Buy or borrow as you like.

This has been a heavily speculative post. Feel free to share your own opinions in the comments here or on my Facebook page.