Amazon Changes the Payout Rules on Kindle Unlimited

 

Kindle_Unlimited

From next month Amazon has decided to change how it pays authors for books enrolled in its Kindle Unlimited and Kindle Owners’ Lending Library. Previously Amazon paid authors based on whether a reader read more than 10% of a book, or what it referred to as a ‘qualified borrows’.

Kindle Unlimited is a subscription service that allows readers to discover and read as many e-books and audiobooks as they want for a monthly fee of $9.99. This week Amazon announced that authors will be paid based on the number of pages read by a reader. Amazon launched Kindle Unlimited a year ago and I suspect this rule change will be met with a mixed reception. If you write short fiction or non-fiction articles, publish to Amazon, and enrol your books in Kindle Unlimited, then you may soon experience a drop in revenue.

Hybrid author Hugh Howey feels that this change on balance may be a good move by Amazon:

I have a feeling we’ll see some knee-jerk reactions from authors without considering these pros and cons. Shorter works still make a lot of sense in KU. It’s hard to justify selling short stories for more than a dollar, and you only make 35 cents on that dollar under KDP terms. In KU, a 20 page story might earn just as much as a sale. What we should celebrate is that short stories will no longer earn the same amount as a novel, especially since the 10% threshold was much easier to reach on a short story. That system just wasn’t fair. The new system is a vast improvement.

But I also note that Howey takes a subtle pop at those authors who may be more consumed with Amazon algorithms and churning out content to ‘game’ the system, than actually writing full-length books.

To those who write works with a mind of maximizing their earnings according to Amazon’s algorithms, take note: It’s not a good idea. Not in the long term. Write the stories you enjoy and that you think readers’ will love. This remains the best way to game the system: Write great works.

For what it is worth, I’m still left scratching my head as to why Amazon has suddenly decided that free-flow e-books actually have ‘pages’ after all and they can decide where each page ends using Kindle Edition Normalized Page Count (KENPC v1.0)! It’s difficult to gauge the response from authors so far until those first sales statements come in after July, but not all authors see the benefits.

Full details from the Amazon announcement:


Beginning July 1, 2015, we’ll switch from paying Kindle Unlimited (KU) and Kindle Owners’ Lending Library (KOLL) royalties based on qualified borrows, to paying based on the number of pages read. We’re making this switch in response to great feedback we received from authors who asked us to better align payout with the length of books and how much customers read. Under the new payment method, you’ll be paid for each page individual customers read of your book, the first time they read it.

Royalty payments under the new program

As with our current approach, we’ll continue to set a KDP Select Global Fund each month. Under the new payment method, the amount an author earns will be determined by their share of total pages read instead of their share of total qualified borrows.

Here are some examples of how it would work if the fund was $10M and 100,000,000 total pages were read in the month:

  • The author of a 100 page book that 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 that 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 that was borrowed 100 times but only read halfway 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.

You can enroll in KDP Select at any time by visiting your Bookshelf. If you no longer want your book(s) to be included in KDP Select you may unenroll from the program by contacting us with the ASIN of the book you would like to remove.

Kindle Edition Normalized Page Count (KENPC v1.0)

To determine a book’s page count in a way that works across genres and devices, we’ve developed the Kindle Edition Normalized Page Count (KENPC). We calculate KENPC based on standard settings (e.g. font, line height, line spacing, etc.), and we’ll use KENPC to measure the number of pages customers read in your book, starting with the Start Reading Location (SRL) to the end of your book. Amazon typically sets SRL at chapter 1 so readers can start reading the core content of your book as soon as they open it.

This standardized approach allows us to identify pages in a way that works across genres and devices. Non-text elements within books including images, charts and graphs will count toward a book’s KENPC.

When we make this change on July 1, 2015, you’ll be able to see your book’s KENPC listed on the “Promote and Advertise” page in your Bookshelf, and we’ll report on total pages read on your Sales Dashboard report. Because it’s based on default settings, KENPC may vary from page counts listed on your Amazon detail page, which are derived from other sources.

Reporting

After this change, you’ll be able to view your Kindle Unlimited (KU) and Kindle Owners’ Lending Library (KOLL) Pages Read in your Sales Dashboard report by marketplace and title.

We’ll continue to update this Help page with more information on your KDP reports, KU/KOLL royalties, and KDP Select Global Fund payouts as the changes roll out.


 

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