Historically, Amazon Prime borrows paid around $2 per borrow through KDP Select until the introduction of Kindle Unlimited.
The KOLL global fund has paid less for Amazon Prime borrows and Kindle Unlimited downloads read to 10% since the debut of Kindle Unlimited in July, 2014.
The most recent KOLL payout of $1.33 for October, 2014 shows a significant downward trend:
- $2.00 or thereabouts prior to July, 2014
- $1.81 for July, 2014
- $1.54 for August, 2014
- $1.52 for September, 2014
- $1.33 for October, 2014
- Added: $1.39 for November, 2014
- Added: $1.43 for December, 2014
$1.33 is a significant drop for KOLL payments.
Books with a list price of $2.99 or higher earn royalties of $2 and up for sales (using the 70% royalty option, assuming a negligible delivery cost).
In the past, KOLL borrows have paid close to the royalty for the purchase of a $2.99 book.
But $1.33 is 33% less than the 70% royalty on a $2.99 book. That’s quite significant.
There is another important trend to factor into this analysis.
While the KDP Select payments for Amazon Prime borrows and Kindle Unlimited downloads read to 10% has diminished, another important measure has increased.
The KOLL Global Fund has improved tremendously:
- $1 to $2 million prior to July, 2014.
- $2.875 million for July, 2014.
- $4.7 million for August, 2014.
- $5.0 for September, 2014.
- $5.5 million for October, 2014.
This reveals a significant increase in KDP Select readership.
In October, 2014, Amazon paid a total of $5.5 million for borrows and downloads, yet this translated to just $1.33 per qualifying KDP Select borrow.
What does this mean?
It means there are very many Kindle Unlimited customers and that many of them are actively downloading KDP Select books and reading them to 10%.
It also means that many KDP Select books are thriving in the program.
Of course, it doesn’t mean that every KDP Select book is thriving under Kindle Unlimited.
For some, sales and/or borrows have dwindled.
But for many, sales and/or borrows have improved.
My Kindle sales had steadily declined all year, but steadily improved each month with the introduction of Kindle Unlimited, while the borrows have improved tremendously since July, 2014.
However, I’ve met authors whose numbers have dropped. Every book is different.
A $5.5 million dollar payout with a $1.33 KDP Select payment shows that there are very many Kindle Unlimited customers and qualifying borrows.
The Kindle Unlimited readership is significant and the potential is there.
Every active customer in Kindle Unlimited is, in general, one less customer who would otherwise purchase a book.
Some authors are starting to question the wisdom of enrolling in KDP Select.
Those whose sales or borrows have improved significantly probably aren’t questioning it at all. If it’s working out for you (like it is for me), it makes sense to stick with it.
But authors whose sales or borrows are declining now wonder what it’s like on the other side of the fence.
The million-dollar question is: Would it be better to opt out of KDP Select?
There are a few points to consider:
- Many customers who previously purchased indie books through Kindle or elsewhere are now in Kindle Unlimited. There are still many who aren’t in Kindle Unlimited, but not as many as before. (Of course, some books are thriving on all markets, including markets outside of Kindle. There are apt to be exceptions to any rule. But $5.5 million and $1.33—these numbers show that many customers have migrated to Kindle Unlimited.)
- Are customers satisfied with Kindle Unlimited? It’s a renewable subscription and customers who aren’t happy with it may opt out. The general tendency is for customers to keep their subscriptions once they sign up. It will take significant dissatisfaction to move many customers out (and others will be joining as others opt out). If more high-profile books and authors opt out of Select, this might have a small impact. But look at KDP Select All-Stars. Amazon is paying huge bonuses to the top KDP Select authors to encourage them to remain in the program. Plus, Amazon persuaded smaller traditional publishers to include 100,000 books in Kindle Unlimited. If a few top indie authors do opt out of Select, it probably won’t make much difference. It will take a huge content change, and as long as 100,000 traditional books remain in the mix, that will be hard to change.
- The main drawback of KDP Select is the exclusivity clause. This is only a drawback for books that would sell significant quantities through other outlets, like Smashwords, Kobo, or Nook. Some customers can still purchase Kindle e-books for other devices, like iPhones and iPads, so exclusivity doesn’t really impact those markets. How do you know if your book would sell well on other markets? Unfortunately, the only way to find out is to experiment. Each book is unique.
- If you opt out of KDP Select and publish elsewhere, it can be a royal pain trying to unpublish elsewhere and get back into Select. You’re likely to receive emails from Amazon indicating that your book is available for sale elsewhere until it completely disappears, which can take longer than you might realize. So what if Amazon comes up with some new feature to make KDP Select seem suddenly more enticing? It’s a risk that you take. Whether or not that risk is worthwhile is hard to say, and it will be different for each book. Does Amazon have a marketing surprise coming for the holiday season to make Kindle Unlimited even more worthwhile? Who knows? They do have a new line of Kindles out, hoping to attract new customers this holiday season, and many of those customers will be looking for Kindle books after Christmas.
- Marketing is another factor. It’s possible to market the benefits of Kindle Unlimited in such a way as to help you get more KDP Select downloads. It’s even possible to market specifically to Kindle Unlimited customers. It may not be easy—when is book marketing ever easy?—but the potential is there. If you opt out of KDP Select, then you should be thinking of how to reach customers outside of Kindle through your marketing endeavors—another challenging task.
- Then there is the issue of prediction. There is a current downward trend in KDP Select payments. Will it continue to decrease? Will it level off now? Will it climb back up? Any of these are possible, and any analysis at this early stage is really “precision guesswork.” If you can figure it out you should also be making a killing off the stock market. 🙂
Another issue is 99-cent books in KDP Select.
Imagine setting a list price of 99 cents and earning $1.33 for a book that was read to 10%. That’s fantasy land.
Meanwhile, an author has a 1,000-page book selling for $9.99 and receives the same KOLL payment of $1.33, over $6 less than the royalty for a sale.
We all knew signing up for KDP Select that KOLL payments would be the same regardless of list price, so it’s really no surprise.
However, most of us were hoping for the KOLL payments to remain around $2, like they were with Amazon Prime prior to Kindle Unlimited.
At least then the payments were comparable to the royalty on a $2.99 book.
Many authors presently wish that KDP Select would make a lower payment for 99-cent books, which would help to elevate the KOLL payment for books priced $2.99 and up.
It seems like it would be reasonable. Even if KDP Select paid 40 cents per borrow for 99-cent books, those books would be making a higher royalty than for a sale.
Maybe it wouldn’t have a significant impact on the KOLL payment for other books, but it would at least alleviate a little frustration that some authors are expressing.
There is a general feeling that Kindle Unlimited favors lower-priced, shorter books. With a separate payout for 99-cent books, Amazon could easily demonstrate that this isn’t the case.
But presently all books receive the same share of the KDP Select Global Fund regardless of list price.
Imagine a Black Friday type of event just for book lovers.
You don’t have to imagine it. It’s called Read Tuesday, and it’s free: www.readtuesday.com.
Please support the Read Tuesday Thunderclap. This will help spread awareness on the morning of Read Tuesday (December 9, 2014). It’s easy to help:
- Visit http://thndr.it/1CkO2Bg.
- Click Facebook, Twitter, or Tumblr and sign in.
- Customize the message. (Optional.)
- Agree to the terms. All that will happen is that the Thunderclap post about Read Tuesday will go out the morning of December 9.
- (The warning message simply means that Facebook, Twitter, or Tumblr need your permission to post the Thunderclap message on December 9. This is the only post that Thunderclap will make.)
Copyright © 2014 Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers
- Volume 1 on formatting and publishing
- Volume 2 on marketability and marketing
- Boxed set (of 4 books) now available for Kindle pre-order
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