Last week I wrote about the royalty restructuring of the Kindle Unlimited program. The new system goes into effect July 1, 2015 and it’s going to drastically change how authors are paid when a program subscriber borrows their participating book. This new system only affects writers in the Kindle Unlimited program and authors are given the option of taking their books out of the program should they choose. Currently everyone is arguing over how these changes will effect participating authors. Some writers are convinced every author will benefit under the new system. They believe the new royalty split will help remove some of the authors currently manipulating the system for higher gains, thereby leaving more funds for the remaining authors to share.
I’m less convinced and I’ve picked four groups of authors I predict will suffer under the new system. However, in the interest of fairness, there are some groups I think stand to gain, and I will have my predictions for that group next week.
[important]Facts to remember: The new KU royalty system only pays for the number of pages the borrower actually reads. We have no idea what Amazon considers a page. Amazon intends to establish a universal system for counting pages. The new system will eliminate any variables created by white space, layout differences and font sizes. Once Amazon formulates an official Amazon KU page count for a title, they will post that information in a book’s description. We currently don’t know what the page royalty will be, or how the new system will effect the algorithms Amazon uses to rank and promote titles. [/important]
Now my best calculated guesses for the writers that stand to lose under the new system.
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It will hurt anthologies: Prior to these changes, if a small press (or indie author group) talked one hugely popular author into contributing a story, everyone benefited from a KU loan. The anthology creator could count on the full loan revenue from every rental as long as the readers read past the 10% mark. Under the new system anthology editors looking to take part in KU are more likely to skew page counts toward the most popular writers, if for no other reason than to help recover their production costs. However, this sort of defeats the egalitarianism of making an anthology, the whole point in the past was to give unknown writers a leg up by using the star power of one or two respected authors as bait to entice readers to buy the book. I’m sure anthologies will still be made, but now the organizer behind the anthologies are bound to perceive unknown writers as an even greater liability, especially if they’re under pressure to earn back costs or turn a profit. It also might shove anthologies out of the the KU program altogether.
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It will weaken payouts for children’s ebooks. This one upsets the mom in me the most. School is out so the kids are home and bored. Summer is when they can and should power down some books. Yet younger kid’s books from picture book to beginning chapter books are (in deference to their fledgling readers) shorter, often just 16 to 50 pages long. Also the cost associated with image heavy books in all forms are fairly high, and these books get the double whammy of paying higher Amazon downloading fees, something that comes out of the author/publishing side during a sale. They didn’t need to pay the downloading fee on a KU loan, letting those authors keep a bit extra with each unit borrowed under the old system. I’m also concerned that under the new KU universal page count system, a 16 page picture book might end up counting as only a few pages. The current Unlimited picking for younger kid’s books has never been fantastically large, I can’t see how reducing these author’s payouts is going to help that situation.
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Nonfiction of every kind stands to lose out. It’s hard to know how the page count system will effect image-heavy books. Will a graph or table count as a full page? What about an illustration or photo? As I mentioned above in kid’s books, image heavy books get charged a different download rate, making the KU loan program attractive to both fiction and non-fiction authors with larger graphic loads. However, non-fiction books are notoriously under-read or skimmed. It’s not uncommon for me to get a cookbook and only look at a few recipe categories. Other readers might read only one or two chapters of interest. Granted, as other bloggers have mentioned, nonfiction has seen some heavy abuse from writers trying to game the old KU system. Reports of repackaged Wikipedia pages or books (where only the first 10% of the book is legibly written) show up as common complaints. Obviously, everyone wants to see KU abusers weeded out, but even if the new official page count system fairly takes into account images, this change could adversely impact many nonfiction writers.
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We may witness the end of the serial fiction boom. Readers will still want serials, they’re hooked. But writers who relied on the profitability of serial installment are in for a big shock. Before the Amazon loan program, serials (and most short stories) grew in popularity because of their sale price, usually under one US dollar. It was easy for readers to sample unknown writers without a huge financial commitment. For authors, that under-a-dollar sales price means about .35 US cents for each copy sold. Not great unless you sold a ton of books. Under the old KU payment structure, that number skyrocketed to over a US dollar per title borrowed. Remember, short stories were getting the same pay rate per title as a full length writer was getting on each book. Writers jumped into the format, creating a boom in short works. The profitability of short fiction created resentment with longer fiction writers and led to claims of widespread abuse, namely writers carving up single novels into parts in order to create more borrows. I think it’s safe to say popular short format fiction writers will still do okay under the new pay structure, but only if they don’t lament the advantages they’ve lost. If you are one of those people who thinks longer books should have the royalty advantage, you might not be too worried about this one. But I enjoy reading a tightly constructed short story or serial and I would hate to see the format lose all its steam.
So what does this all mean to you?
If you’re currently publishing (or planning on an ebook career) in one of these areas and counting on the Kindle Unlimited program to power the bulk of your revenue, you might want to rethink that! I don’t see any of these types of books doing particularly well under the new system. Come back next week when I’ll announce the 3 types of books I predict will be big winners under the new system.
What do you think? Will some authors take a larger hit with the new KU royalty rate? Will it drive some authors out? And if so is this still an acceptable loss so that book length writers can enjoy a better royalty ratio from the program?
Great analysis of this, Robin! This is the first time I’ve heard someone discuss the potential impact to children’s books. That would be truly sad if they suffered under this program.
Right now most of the blogs are talking about how wonderful the changes will be for longer fiction! Translation: The changes are great for them! But I tend to think in terms of the big picture. I know all kinds of writers (picture book, middle grade, poets) and I hate to see any of them left out in the cold.
I’m sort of torn down the middle. I think maybe I’m more of a school that Amazon shouldn’t be putting EVERY ebook (or egg) in the same basket. Short fiction, serials, and children’s literature are completely different markets than longer fiction… but All of this, and some other articles I’ve read recently about stagnating innovation and Millennials not reading ebooks are making me wonder if the whole digital book industry is not set for some very big changes.
Eventually, Apple had to get Word. Eventually, ebook retailers are going to have to switch to HTML5 or a similar, open format, or I don’t really see the industry ever doing any better than it is right now.
Hi Alex,
I’m glad you jumped into the discussion. I love the analogy of putting every ebook in the same basket. You’re right, it’s not helpful. I think we all wish Amazon found a better way to do this. And who knows they may still figure out a way to solve some of these problems.
I think the industry will keep changing. It’s the nature of anything tech related. It’s just hard to know how it’s going to change until it starts to happen. I’ll be watching (like you are) for signs of growth and stagnation in the market.
Even though I don’t write short stories or short serials, I still think this new KU program is unfair. What if someone borrows a book as a gift and the person never reads it, or only reads a few pages? Beside the fact that I’m betting readers will freak out that Big Brother is watching. We know they do it now, but they don’t. This might scare potential readers out of the program. I just don’t understand why they have to change something that seems to be working.
Hi Sue,
I doubt the general reading public will ever learn Amazon is counting their pages. The old system wasn’t working either, too many ways to abuse the system. I’m starting to think the KU program is just never going to work. If you think about this long term and logically, the only way for the program to make money for Amazon is to have lots of subscribers (paying $9.99 a month) who are not read many pages. So the more successful the authors are at creating books that keep readers reading, the less money all of them will make.
I suppose self-help falls under non-fiction and I do agree they will be hurt. I read very few self-help anymore, but mostly when I do, it is to search for certain topics within the pages and not the entire book.
@dino0726 from
FictionZeal – Impartial, Straighforward Fiction Book Reviews
Hi Diane,
You’re not alone, non-fiction is often skimmed. It’s something I plan to work on in my own reading habits this summer. : ) Hopefully people will read enough pages to keep these books viable and in the Kindle Unlimited program. Or perhaps Amazon will create changes to structure to help compensate the writers in declining book categories. Only time will tell.
Serial books are the ones I’ve seen brought up in this argument the most. I can see how they might lose out with this new structure. I have a novella series in right now. I’m leaving it to see what happens. If it’s bad, I will pull it, but I’m reserving judgement and any gloom and doom forecasts.
I do hope with picture books Amazon would be fair in how they decide what is a page there. They wouldn’t want to hurt young kids who will be their future customers and readers.
Hi Patricia,
It has become a short vs. long fiction writers battleground of late, and I’m really sorry to see that. There will always be some people who find a way to abuse any system, but they are a select group of people. And as I try to point out here, they are just one group that stands to lose. If we do see a rate of one US penny a page (as many speculators are suggesting) a writer of a 16 page picture book (even with images counted as a page) is going to lose out.
It’s absolutely typical I decide to write serial fiction now, when things are so up in the air! That said, I’m doing it because it seems like fun, and I still believe that. These articles are really useful, Robin. So thanks so much for laying out the pros and cons for us. I’ll look forward to your predictions next time 🙂
Hi Mel,
You know how I love serials, honestly I’ll be just as disappointed as you are if they fade away to nothing. Thanks for saying you like these posts. It’s unusual for us to include posts related to the business side of things, but it’s also part of the writing life now and needs the coverage.
What bothers me about this is why should anyone care how much of a book has been read? Why is that the contigent factor for payment, rather than simply the choice of a title?
Hi Rich,
The program ideology is complicated and controversial. This new system is supposed to correct problems with the old system. In the old calculation the reader needed to read to the 10% mark. Now every page (of the size Amazon decides is a page) will have the same monetary value in the KU program.
I think for those of us who still labor over a 350 page novel each year will see some equalization in payment. It has irked me that some authors divided up full-length books into serials to cash in on KU. I see the change as positive, but we shall see.
Also, isn’t there a special category for Amazon shorts? Maybe that will be addressed.
I noticed you said authors could opt out of KU, but isn’t that also only if they also opt out of the KDP select program?
Hi Jinx,
Yes, you would have to leave KDP Select to remove a book from KU. Yet another piece of this puzzle that seems to invite conflict. It was a flawed structure and one that was easy (should someone feel inclined) to cheat. Now it’s still a flawed structure just in different ways. I think there are any number of ways Amazon could have done this better, including making use of the shorts category. Unfortunately better ideas didn’t came to them and this is what we have to work with. At least for now. If we have learned anything about Amazon it’s that they are not afraid of change. I’ll be looking forward to seeing that first round of reports come mid August, this is one time I would really love to be proved wrong.