Monday morning, June 15th, the self publishing world absorbed the shock wave from the latest Amazon announcement. In case you haven’t heard, Amazon revealed a major monetary restructuring of the royalty calculations on their Kindle Unlimited program. Unlimited is the program that allows Amazon shoppers to pay a subscription fee to borrow an unlimited number of books from a list of over 600,000 titles. In the past, authors of ebooks in the Kindle Select program received a flat rental fee once the borrower read past the 10% mark of the total pages. The new system, effective July 1st, will create a per-page-actually-read pay scale. That means each author will only get paid for the number of pages a borrower actually reads in their book.
Feel free to pause and have a Big Brother Is Watching moment if you didn’t already know Amazon was keeping such a close eye on your page counts.
First some history: Amazon launched a rental program about two years ago, revising it to the current Unlimited system last year. At the launch, there were a lot of upset publishers and authors. They didn’t want the program tied to KDP Select. They were doing fine and they didn’t want any changes at all. Almost everyone hated the idea of a fixed payment rate set by Amazon. And that the amount had no relationship to the book’s sale price, or the length of the book. Many authors found their sales and their revenues plummeting after the loan program launched. Avid readers, the backbone of all book sales, loved the Unlimited program. For the cost of buying one or two e-books they could read as many books are they wanted each month for $9. 99 US dollars.
Once the uproar died down, some authors embraced the system and tried to create higher profitability by shifting away from book-length fiction, the superstar of the first indie boom, and moving into creating novellas, short stories and serials. The growth of short fiction offerings in the last two years was exponential. However, since readers could consume four times as many 50 page titles as they could 200 page titles, the pool of money being used to pay the authors had to spread to more titles, and the amount paid out per title started to fluctuate and shrink. Amazon pumped money into the pool to inflate the payout, but many established writers still pulled out of the KDP Select program so their books would not be part of the loan system. The remaining book length fiction writes have been upset about the system ever since.
Although Amazon hasn’t released too much information, they did say the new payment rate will continue to change month to month based on how much money is in the payment pool and how many pages the borrowers read. Currently a number of self publishing bloggers are wildly overestimating how much that per page payment will be, perhaps their optimism comes from Amazon’s own press release. 
I suggest you run these numbers. Do the payouts represented here look remotely plausible? They don’t to me. And they don’t take into account the vast number of books that are put aside without finishing. Or that readers may take several months to finish a book. Although there are too many unknown variable, like what Amazon considers a page, I think it’s pretty safe to say the payout for many authors will go down. However, we will not know the facts on how this development will effect indie writer’s bottom lines until we see the August 15th KDP sales reports.
Before you wipe your brow and happily dismiss these changes as irrelevant to you, think again. These changes could affect all of us in one way or another. This isn’t just a monetary restructuring of the Kindle Unlimited program, but a publishing development that might cause some serous ripple effects. We have never seen book royalties tied to the number of read pages before. It’s truly shocking.
Next week I’ll be talking about how these changes will affect all fiction writers. And giving my predictions for the types of books that will suffer the most under the new program.
What are your thoughts? If you write indie books and have them included in the Unlimited program, are you concerned? Or are you optimistic?
Wait a tick! How do they determine the number of pages in a book? E book formats are all flexible type. and the readers themselves come in various sizes and resolutions. meaning a book can be 100 pages on one device and 80 oages on another. When you add that the user controls the font size. then you get things really going arouns. So .. how is that actually calculated?
Amazon created their own program to adjust for these factors. They run all the books in the Kindle Unlimited program through this new software and assign them a standardized page count. They call this number the Kindle Edition Normalized Page Count, or the KENPC for short. It’s often very different from the author’s page count because it’s based on the number of words.
Everyone on KBoards Writers Cafe seems to think this new system is just wonderful. I think they are in for a rude awakening. As some of you here have said, this change is about Amazon making more money at the expense of authors. They have a different playing field for the big publishers and superstar indies. The rest of us are clearly not a priority. It looks like a race to the bottom. The per-page payout system seems designed to cause as much murkiness and confusion as possible for authors. We don’t know how many words will be on a page as defined by Amazon. That alone is absurd. Over the first year of KU, the subscribers increased and the money pool increased, but author payouts steadily declined. They would have dropped even lower if authors hadn’t started loudly protesting as the number dropped to $1.33. It seems depressingly clear that the per-page pay rate will also gradually decline over the next year, just as the per-borrow rate did this past year. I guess there is some hope that a mass exodus of authors from KU may limit how low they are able to go. It’s kind of sad that books are being reduced to page views. If I want my life to revolve around page views, I’ll write a blog. Books are not blogs posts. And yet that is exactly how Amazon is treating them.
Imagine eating at a restaurant and only paying for half your meal because you only ate half of it! The restaurant would go broke in a week. But authors are now being asked to hand readers an entire book while only getting paid for part of it (pages read) in many cases. And nobody knows what percentage of readers actually read all the way through. There are enough unpredictable variables here to make one’s head spin.
Hi Jules,
When things change at Amazon there will always be winners and losers. I have my own predictions about who will fall into each group and I’ll be sharing my thoughts in my next two posts. The new system is going to push the writers with the most loyal followings up! No doubt about it.
As for everyone else only time will tell. I don’t think most writers realize how large the percentages are for people who don’t finish books. I’m willing to bet that number will create some shocks. I also wonder how Amazon will handle the reporting on partial reads.
I don’t like this but on a personal level, I don’t see it affecting my publishing decisions. At this point, I am publishing indie. Except for eBooks I want to make available for free (for which I use Smashwords), I am sticking to Amazon only. Their platform and templates are very ergonomic for me and I have them in KDP Select (allowing KU lending). I also loved my first experience with CreateSpace and hope to try their related audiobooks service in the future. I enjoy the creative control of publishing indie and so far I find Amazon’s service pretty intuitive.
Hi Natacha,
It’s important for writers to know what’s going on at Amazon (even if they don’t think it impacts them personally) because we are an interconnected industry. However, I agree. Every author should make their own decisions based on what works best for them.
I know of at least one author that will periodically rotate books in and out of the KUL program. Not sure what they use for their criteria, but it seems to work for them. My first work, Forging Character, will be ready to send to the editor next week. I am not ready to publish yet, as I want to have at least one of the follow on books and workbook completed before publishing.
As for me, I will probably avoid the KUL program unless someone can convince me otherwise.
Great article. Personally, I’ve had more real sales and borrows since I switched most of my books to KUL. For me, it’s been positive.
As for other effects it may have, I think the change will encourage writers to up their game in quality and book length. They’ll need both to make a profit, I think.
One thing I wonder about, though, is how the new system will account for folks like me who like to reread a book. Or how they’ll count a person who jumps in and checks something in the ebook and jumps right back out, like when writing a review.
So, in my case, I would say I’m cautiously optimistic. We’ll see. I don’t have plans of taking my books out of the program any time soon.
Hi Patricia,
I read the fine print and supplemental info and it looks clear to me that they will only count the first read. As for calculating pages or making allowances for readers who jump around, I have no idea. At this point I would just like to know what they call a page. They said they’re building some special program to count all the books the same way regardless of white space or font size. But it would be nice to know what standard measurement they’re using.
I think you’re right. Everyone should up their writing quality to the highest level. Or they need to be prepared for their bottom line to suffer.
Thanks for stopping by and leaving your thoughts.
I’m interested to see how this goes. I have a novella series in Select, so I will be reading what others think and try to make the best decision.
It’s always stressful during the wait. : ( Plus it’s hard to feel good about the situation when the numbers used in the announcement are so laughable. But we have to look at this realistically. If Amazon was making money with the old system they wouldn’t change it. So that means they are going to look for a formula that helps them reduce the total payouts. It’s simple logic. I don’t see how there is any way in world every author is going to come out ahead on this.
I’ve never heard anything more ridiculous! You’re right, if this ripples into all forms of publishing we’re all screwed. Not to mention the added pressure of always wondering if a spot will cause the reader to stop reading. We, of course, worry about that now, but with this method it has even more consequences. I look forward to finding out more about this.
It sure is a strange development in epublishing. I would have loved to be a fly on the wall at that meeting!
The scary thing to me is where Amazon leads, others follow. Or at least they watch to see how they can benefit from adapting aspects of Amazon’s management style. At this point we wait.
As a reader, I’m still baffled by the amount they want to charge per month to have access. Sorry they’re changing the payment structure to the authors.
@dino0726 from
FictionZeal – Impartial, Straighforward Fiction Book Reviews
Hi Diane,
Interesting you say this, I always thought the Unlimited price was pretty good. I guess it all depends on how many books you buy every month. And if the authors you like are in the program. For some readers it’s a big value.
Lots of people have chimed in on this change and, basically, act like the sky is falling. We adjusted to the change last year and we’ll adjust again. As much as we want to believe its art, it’s also business. If you don’t change, you don’t grow. Amazon knows this and so do we. All of my mysteries (about 100 pages each) are in KU and they do quite well there. I’m not pulling out until I actually see some hard numbers. Then I’ll decide. All we really can do is keep writing good books. Our readers will find us.
Hi Willow,
I think a lot of people are in wait and see mode. My husband and I are sticking in for now too, at least with some titles. However, as borrows go up and sales go down, it’s not a comfortable position to be in. I understand it’s considered a “fair” structure now. And that it helps compensate for the shorter titles getting the same share as the longer titles. But my question is, do writers have a bottom line? Is there a number that is no longer a fair?
I agree with you, writing great books just got even more important. Now when a reader drops out after 20 pages it’s going to hurt! A lot! Thanks for stopping by.