My favorite graphical series from Self Publishing 2.0 was the monthly update of Amazon’s royalty for books borrowed through the KDP Select program. This past summer, Amazon started their Kindle Unlimited program, which for $9.99 a month, allows subscribers all-you-can-eat access to books that were previously available free at a one-per-month rate to Prime Members. The first graph below shows the payment over the entire history of the program on a single axis, but you’ll have to click on it for full-screen size to read the values.
And here’s the same graph trimmed back to the last sixteen months so it will be easier to read:
Why do I show the last two Select royalty payments, $1.33 and $1.39, as negative values? Because I didn’t want to redraw the whole graph on a new basis.
My own income from the Select program has fallen sharply since Kindle Unlimited was introduced because I haven’t seen enough of an increase in downloads to compensate for the lower royalty. Most of my Kindle books are priced at $0.99, so at least I’m not hurt by cannibalization – I’d still prefer a $1.39 borrow to a $0.35 sale.
But many publishers whose books are all priced at $2.99 or above have seen a drop in income, as readers who would have purchased a book, resulting in a royalty of $2.00 or more, now read it through their Unlimited subscription, resulting in a lower royalty. If those authors don’t see a substantial increase in readership due to the free availability of their books to subscribers, the result is a net loss.
Prior to the introduction of the Unlimited program, it seemed pretty clear that Amazon was targeting a royalty of around $2.00 per borrow for publishers in the Select program. It’s no longer clear what they have in mind, perhaps $1.50? Beware the ides of December, a traditional low month for royalties.
I’ve heard from friends who keep up with the Kindle discussion groups that publishers of short “adult” fiction are the big winners with Kindle Unlimited. The new program of giving large cash bonuses on a declining scale to the top 100 KDP publishers and titles each month is also creating some new winners among the authors and publishers who need it the least.
Given Amazon’s penchant for loyalty programs, my guess it that the bonuses are meant to encourage those authors who have the option to sign trade contracts to remain with KDP. But perhaps they just feel that bonuses for a few are a more effective motivator than pennies for the masses.