Update: No, Amazon didn’t forget the bonus, as I figured out the next morning and posted looking a little more closely at the numbers. But I’m leaving this post up because I don’t believe in hiding my mistakes under the rug:-)
Amazon reported the payout to Kindle Select publishers for December this morning. I had originally estimated it could be as high as $5 per borrow with the $700,000 bonus, though I later lowered my guess to $4 per borrow. As the graph below shows, the reported amount turned out to be $1.88, which I’m hoping means they forgot to double it for the bonus:
Am I wrong? Is it possible that the $1.88 already reflects the bonus? Based on the trends, I don’t think so, but I did report the $1.88 figure above rather than the $3.76 amount I hope will be the final payment per borrow for December. One reason was to make the month-on-month graph comparisons more useful, not to mention preserving the scale on the Y-axis. Another reason is I don’t want to get publisher’s hopes up in case I’m wrong and the final payment turns out to be $1.88.
Keep in mind that the $1.88 figure is being calculated from a pot that was increased from $600,000 to $700,000 before it was doubled to $1,400,000. The only way the final payment per borrow per publisher could have dropped more than 50% after the additional money is if the number of Prime users borrowing a book more than doubled during December. That seems unlikely, but it’s far from impossible for two reasons.
First, there are Christmas gifts of Kindle Fires which come with a month of free Prime. But Fires were also a big gift item last Christmas, when the payment from a smaller pot (I believe it was $500,000) resulted in a $1.70 payment. Second, there’s Amazon’s recent roll-out of the Prime lending program to International Amazons, which depressed the November payment by 20% below the previous month. But that was why I assumed they upped the pool from $600,000 to $700,000. But maybe the international Kindle Owners Lending Library didn’t hit its stride until December, and maybe Fire sales in Europe are soaring.
I believe that people who receive a new Fire HD with a one month trial of Prime are much more likely to be watching a free movie a day for a month (or two free movies a day) than rushing to borrow a book. But pessimists can point out that the previous lowest payment on record, $1.70 in January 2012, came in a month with a $700,000 pot and far fewer Kindles and Fires in consumer hands. I’ll update this post when the answer becomes clear, but that might not happen for a month until Amazon makes the December payment.