What Will Kindle Unlimited Pay?
We won’t find out for sure until a couple of weeks into July.
In the meantime, the best we can do is make predictions based on what limited data we do have.
When July, 2014 began, the KDP Select Global Fund was $1.2 million. This was to be distributed among Amazon Prime borrows of KDP Select books in the US and UK.
Prior to the introduction of Kindle Unlimited, Amazon typically paid approximately $2 per Amazon Prime borrow.
Kindle Unlimited was introduced a little over halfway through the month of July. $800,000 was added to the KDP Select Global Fund, bringing the total fund to $2 million. Another $785,000 has since been added, bringing the fund to $2,785,000.
A big factor will be that customers can download several Kindle e-books through Kindle Unlimited, whereas Amazon Prime customers can only borrow one book per month.
Thus, the total number of downloads/borrows can be expected to be much higher than the typical number of KDP Select borrows has been in the past.
This will likely reduce the KOLL payments for July, 2014 compared to previous months.
Keep in mind that there are likely to be excessive downloads through Kindle Unlimited for the first couple of months of the program, but this will likely taper off and become steady thereafter. Likely, the KOLL payments will rise somewhat, if not return to normal, by September, 2014.
Update: The results are in now. Kindle Unlimited paid $1.81 per borrow/download in July, 2014, much higher than I was expecting. This is largely due to an unexpected increase in the KOLL fund from $2,000,000 to $2,785,000.
Predicting KOLL Payments for July, 2014
I will base my prediction on the variety of Kindle e-books that I see in my sales reports.
I will also show you how to do the calculation so that you can compare with your own numbers.
You’ll need to visit KDP and get the following numbers:
- The total number of borrows/downloads from July 1 thru July 30. (We’ll ignore the 31st to get a nice, round number. It will make a small difference, but we’re approximating anyway, so… Be sure to include any UK borrows.)
- How many borrows you had from July 1 thru July 17. (Look at your Sales Dashboard graph and add up the borrows for those dates. If you’re reading this message in August, change the dates of the report to July. Be sure to include any borrows you may have had in the UK.)
(Only Prime customers can borrow in the UK. So any borrows you see in the UK aren’t from Kindle Unlimited.)
Let me use the following symbols to represent the two numbers that you looked up:
- D = total number of borrows/downloads thru July 30.
- C = total number of borrows thru July 17.
I’ll work this out for the following example:
- D = 48
- C = 9
Here are the steps:
- Take the original KDP Select Global Fund of $1.2 million and divide by $2. This equals 600,000. This estimates how many Amazon Prime borrows in the US and UK combined Amazon was predicting prior to the debut of Kindle Unlimited.
- Define B = C x 30 / 17. In my example, B = 9 x 30 / 17 = 16. This approximates how many borrows you would have had without the introduction of Kindle Unlimited (assuming roughly equal likelihood of borrows on any day throughout the month).
- Define A = D / B. In my example, A = 48 / 16 = 3. This approximates by which factor your total number of borrows/downloads increased as a result of Kindle Unlimited.
- Define N = A x 600,000. In my example, N = 3 x 600,000 = 1.8 million. This is your estimate for the total number of borrows/downloads by all customers in July based solely on your own data. (If your data isn’t representative, i.e. close to what happened on average, then your projection will be way off. But the game is still fun to play, isn’t it?)
Divide $2 million by N. In my example, this is $2 million / 1.8 million = $1.11. This is your prediction for how much each borrow/download will pay. The closer the data for your own books happens to be to the true (unknown, as of yet) average, the better your prediction will be. Update: Divide $2,785,000 by N, since Amazon added an extra $785,000 to the global fund.
My KOLL Prediction for July, 2014
That’s what I did to arrive at my prediction:
- Based on what limited data I have,
I’m predicting that KDP Select borrows/Kindle Unlimited downloads will pay between $1.10 and $1.25 apiece for July, 2014. You heard it here first. (But if I turn out to be way off, please forget that.) Update: My range changes to $1.53 to $1.74 based on this increased fund. - Although I have a variety of Kindle e-books on my sales reports, just like you, my data could be well below or well above average. So the actual payment could be much higher or lower.
- So, to be safe, I’m going to widen my prediction
to $0.85 to $1.50. 🙂 This changes to $1.18 to $2.09 based on the increased global fund. - If Amazon adds to the KDP Select Global Fund for July, 2014, that may change my prediction considerably. Indeed, Amazon did add another $785,000 to the global fund.
- I would like to believe that it will be closer to $2 than my data projects, and that may very well turn out to be the case. Authors and Amazon both would probably like for KOLL to pay closer to $2. Doesn’t mean it’s going to happen, though. Let’s cross our fingers, just in case.
- I also predict that KDP Select borrows/Kindle Unlimited downloads will pay closer to $2 starting in September, 2014, once many free trials have ended and once customers have had a couple of months to play with this new feature. (Note that I said closer to $2. I didn’t say $2.)
What is your prediction based on your data? The more numbers we see in the comments section, the more data we’ll have to judge by. You don’t have to say how many borrows you’ve had. But whatever your prediction turns out to be, that would be appreciated.
Update: The results are in now. Kindle Unlimited paid $1.81 per borrow/download in July, 2014, much higher than I was expecting. This is largely due to an unexpected increase in the KOLL fund from $2,000,000 to $2,785,000.
What about Sales?
My borrows/downloads were over 5x more frequent than normal from July 18 thru July 30. (Yes, I’ll get to sales. Patience, please.)
That brings my overall number of borrows/downloads for the month to roughly 3 times the usual number of borrows. Hence my prediction of $1.10 to $1.25 for July, 2014.
So even if KOLL pays $1.10, I would still be making over 50% more for Kindle Unlimited downloads than I ordinarily would have made from Amazon Prime borrows. KOLL would have to pay $0.66 or less for my net royalties for borrows to be less than usual. (This remains a possibility, since we don’t know what KOLL will really pay as of now.)
In comparison, my Kindle sales were 15% more frequent than normal from July 18 thru July 30. Yes, my sales improved, too. I would attribute that to the improved sales rank resulting from the many additional downloads in Kindle Unlimited.
Strangely, my best day for Kindle sales in July, 2014 was July 28. My best day for borrows/downloads was July 24. Kindle Unlimited downloads held fairly steady for me all the way thru the 30th, though I’ve heard from others that downloads have tapered off for them.
Disclaimer
This prediction is for entertainment purposes only. I make no guarantees nor warranties. I’m not to be held accountable for any differences between the actual KOLL payments and my prediction. If you blow a fortune gambling based on my prediction, you acknowledge that I warned you—right now—that you shouldn’t have done so. However, if you happen to win big, you’re welcome to send a tip. 🙂
Chris McMullen
Copyright © 2014 Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers
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- Volume 2 on marketability and marketing
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