Thursday, July 2, 2015

Kindle Unlimited Evolves

Kindle Unlimited (KU) changes again.
For those who aren’t in the know, Kindle Unlimited is Amazon’s attempt at entering the subscription reading service. It is a fantastic deal for voracious and avid readers: all you can read for $10 a month. If you buy more than two books per month to read, then KU is a good deal for you.
For the authors, the carrot on the stick was that they would be paid for a “borrow” and if the customer bought the book outright, they’d get paid their full share of the sales proceeds on top of that. A borrow was defined as a book being 10% read. However, the catch for authors was they had to give Amazon a three-month exclusive on any book put into the KU library. So, it couldn’t be sold anywhere else, not even on the author’s own web site.
Amazon recently changed their terms of service to the authors concerning how compensation was determined when their stories were read by customers subscribed to the KU program. When the program started, Amazon set the payout limit to “10% read.” If a customer read 10% of the story, then the author would get paid for that borrow.
It didn’t take long for writers to do the math and realize that a 5,000–7,500 word short story would hit that 10% mark far more easily than a full-length novel. All the reader had to do was read two or three pages and that would count as a read. As a result, the KU Library began to fill with short stories instead of novels and other long, literary works. That wasn’t quite what Amazon had in mind.
Plus, most readers borrowing books for free were sampling the books. The majority of borrows were not read from cover-to-cover. Instead, readers were perusing them to see if they were any good or not. Only those books that really grabbed the reader were being read through. This meant Amazon was actually paying authors for readers to read the equivalent of the free sample offered for any book.
Worse, authors of longer literary works were opting out of the program as they were pretty much cut off from making income. Their sales cut off from the rest of the market and only receiving a small portion of the pot put up by Amazon, many found their longer works were not earning enough money in the KU Library to continue making a living.
Also, the most avid of readers often don’t read any given book again. So, once read through a free borrow, it is unlikely that particular reader will actually buy the book. They already read it, why bother buying it?
A lot of writers I know can crank out a short story in a week. But writers of novels can take up to two or three years to produce a single book. The pittance being earned through borrows meant a very poor return on investment (ROI) for novel writers.
Amazon’s new terms of service are intended to level the playing field. Instead of 10% of the book being read, now authors are paid per page read.
The length of a page is determined by a standard model adopted by Amazon. So, even if the reader increases the font size and thereby doubles the number of pages of the book in their ebook reader, the author will be paid according to how many pages that reader completed based on that standard model.
The more a reader enjoys the story, the more of it they will read. The more pages that get read, the more the author will be paid. It doesn’t matter how long or short the story was to begin with.
This means the authors will have to ensure that the story they write is worthwhile enough for a reader to want to read through and not just sample.
Authors Hugh Howey and John Scalzi both weigh in with their opinions on what this means, representing differing views on the matter. My own opinion falls somewhere in the middle.
I don’t care for the exclusivity clause. I want my books available through as many channels as possible to ensure that I will reach whatever possible market there might be out there. I don’t want to put all my eggs into one basket.
The example Amazon gives suggests an author might be paid roughly 10¢ per page read under the new example. They put it this way: if an author has a 100-page book and the author’s book is read in its entirety by 100 people, then 10,000 pages of that author’s book were read. If for that month 100 million pages were read, then the author’s share of the pool is .01%. (Author’s pages read / Total Pages read)
If Amazon put $10M into the kitty for borrowed books, then the author’s share of that kitty is .01%, which means $1,000 payout at the end of the month.
You can view Amazon’s sample here and do the math yourself.
For your information, the KDP Global Fund (the official name of Amazon’s kitty) has been set at $11 million for July, 2015.
The 100 million pages total for a given month is roughly equal to about 285,000 novels—a number I find realistic. If 285,000 people (.08% the population of the United States) each read one book this month, that would cover it.
The key variable in all this is just what defines a “page” in Amazon’s accounting. At the link supplied above, Amazon the metric the use is the Kindle Edition Normalized Page Count (KENPC) which is based on “default settings.” The defaults aren’t delineated. I can cut the number of pages in Nobody to one-third just by reducing the font size to its minimum. I could probably drop it by another 20%–25% by decreasing the spacing between lines and letters. There is a carefully worded disclaimer saying the page counts calculated via the KENPC may vary from what is reported on the book’s page.
If the 10¢ per page metric does hold steady, I could potentially make more money on people borrowing my book than people buying it.
If Amazon customers read 100 million pages for the month of July, and just one person borrows and reads Nobody, I would earn more money for that borrow than if someone bought it outright. Even if the borrower only read 90 pages (⅓) of my book.
Very tempting. Does this mean I’ll be putting Nobody and Dragon into KDP Select?
No. At least, not yet.
My primary reason stands as stated above. I just can’t bring myself to put all my eggs into one basket and cut off all other possible channels of sales.
One variable for which I have no answer: just how many pages are read each month? Amazon holds its cards very close on any sales numbers concerning Kindle Unlimited and Amazon Prime, especially when it comes to just how many participants there really are. That 100 million pages read seems pretty high, but the truth is it could be very conservative.
Next, is Amazon’s global fund. As mentioned above, they have set it at $11 million for July, 2015. This is the fund from which every author gets a share, based on their percentage of the total pages read. Amazon makes no guarantees on how much money they are going to put into the fund each month. To be fair, they have been constantly increasing the fund each month since I started looking at it three years ago. It was $600,000 then, now it is $11 million. That suggests that the program has been a successful one for Amazon, enough so that they keep adding money to the fund to ensure that compensation to the authors remains stable.
Amazon’s first shot at a subscription service for ebooks was the Kindle Select Lending Library. It sounded exciting to me as an author, but the limits on borrowing meant that popular and famous authors would be greatly favored in the program. If I released a book at the same time Steven King did, my book would be locked up in obscurity until the exclusivity period expired.
When Amazon began Kindle Unlimited last year, I predicted it would fade because I felt the compensation model favored shorter works and authors would flood the library with short stories. It would also favor authors with large followings as did the former lending libraries. It turns out, I was right. Independent authors began flooding KDP Select with short stories. Not full-length books as Amazon had intended.
The new model based on pages read I feel is the most equalizing model yet. A popular writer of short stories will make just as much money as a writer of novels per page. It also ensures that a writer whose book was merely sampled will still get paid something. This puts the onus on all authors to write works of quality that will encourage readers to continue reading through the whole book. i.e., If you wanna make money as a writer, write stuff people will wanna keep reading.
With these new changes, I am more tempted than ever to jump in and test the waters. I won’t be putting my mainstream books (Aggadeh Chronicles, Privateer, etc.) into KU just yet. But I do have some experimental stories I wouldn’t mind using to try it out. If it does prove to be lucrative, then I may reconsider my stance on exclusivity.
What would really push me over the edge to get in on a subscription service?
That’s easy: the readers may read any number of books they want, but they may only read any single title once. If a reader wants to read a book again, they'll have to buy it outright. That guarantees a sale for the author. Heck, I'd even be willing to offer a 25% discount the book's price to someone who had read it already in the subscription service.