Tuesday, August 18, 2015

Kindle Unlimited Royalty Structure - My Thoughts

Oh to live in a world where things stayed the same for more than a calendar year. Rapid change and publishing do not mix. As a writer on KBoards said: "This is why authors drink."

Amazon's KDP platform rolled out its new royalty structure for titles exclusive to KDP on July 1st. If you enrolled your book in Select, your book is subject to borrows. Borrows used to be paid at a flat rate (the amount varied from month-to-month) of $1.35 for a book read to 10%. Under the current structure, royalties are paid for pages read at a rate of 0.005779/page.

A 300 KENP (the term for Amazon's calculation of a page) book read to the end would earn $1.73. Under the old system (fondly known as KU.1) that book would have earned $1.35. 300 KENP breaks out into roughly 150 regular pages depending on how it's formatted. So let's say a price point of $2.99 with a $2.09 royalty on a sale and a $1.73 on a borrow. A sweet deal, right? Oh, but that's the honey-trap. Let's run the math....

10% read under KU.1 earned $1.35. 10% read under KU.2 earns 0.17. Yes. 17 cents. (Cents is such an old-fashioned word. I feel I should be wearing a newsboy's cap as I write this, fingers inky with newsprint.) One hopes one has written a high-octane, addictive page-turner but it's a little late now if it isn't. The book is exclusive to Amazon for three months.

With Kindle Unlimited, a subscriber is allowed up to 10 titles at a time per month on their Kindle for $9.99. Maybe my book will make it to the top of a reader's TBR pile. Maybe not. In the meantime, Amazon does not pay out for more than what is read that month. There are obvious reasons why the old system was unsustainable for Amazon, at the same time it was an excellent strategy because the retailer was able to quickly build a huge catalogue of books for their subscription service. It is equally obvious why KU.2 is a bottom-line dreamboat.

(Sadly, I would've done exactly the same thing if I were Amazon. Actually, I'd be even meaner. I'd start culling books from my store that were not performing. I'd be analyzing the Pages Read Data to identify a break-out book that hasn't broken out yet and then I would snap up that author for my Imprints. I'm horrible.)

KU.2 has deep ramifications for publishing and I'm still mulling the possible outcomes. But in the here and now, what it means for this author is something like 17 cents a day. (30 KENP pages x 0.005779 = 0.17337 cents; 30 pages is approx. 3 chapters)

Drinks are on me!