I was wrong, again.
Yesterday I posited that the Amazon forgot to add the $700,000 bonus to the reported payment for Kindle Select publishers in December. Today I looked a little closer at the numbers and concluded that Kindle Owner’s Lending Library borrowing of eBooks from self publishers in the Select program doubled from November to December, reaching nearly three quarters of a million eBooks.
So the graph I published yesterday was correct, and the payment for December, from a total pot of $1.4 million dollars, is only $1.88 per book. I’ll paste the graph in again below:
This means that publishers of books priced $2.99 and higher are losing a little (or a lot) of money when customers choose to borrow rather than buy. On the bright side, publishers almost certainly make any difference back on increased volume, since the “free” price is more attractive to potential readers than the cover price.
I’m glad I qualified my post yesterday with the caveats that an increase in the Amazon Prime base due to free trial memberships or the increase in the KOLL base through the addition of European Amazons might have been responsible for the reported drop.
Many of the new KOLL users will no doubt drop out of Prime after their free month expires, but if the increase in the KOLL user base turns out to be due to more European members, American self publishers should brace for a permanent drop in Select royalties unless Amazon puts more money into the pot.
It does strike me that Amazon’s internal money people did an excellent job predicting the increase in KOLL borrowing, and that the bonus was intended to keep the payout in the two dollar per title ballpark. It will be interesting to see what happens in January.
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Hi Morris,
Thanks for this update.
Like you, I am somewhat in awe of Amazon’s ability to estimate the size of the pool required to give a payout of close to $2, with the number of unknowns in a game that isn’t even well understood.
But having said that, I can’t help wondering something. If Amazon want to achieve a payout of $2 a book, why not just offer it, and forget all about the lottery game? Can you see a downside to making the payout predictable? Especially given that authors are making there assumptions on $2 anyway.
Interested in your thoughts.
Derek
Derek,
I guess they are just keeping their options open. In the meantime, the Select program has grown much less compelling for publishers since the “sales” amassed during free promotions barely count at all towards ongoing visibility when the promotion is ended. So I wouldn’t try to predict the long term future of Select, which, after all, isn’t even a rounding error on Amazon sales.
Morris
I just finished my first Select free promotion experiment, and I was really disappointed with the result. Not only did my 1200+ downloads (very good in my small niche) not count towards ongoing visibility, as you put it, but my post-promotion rank in the Paid list, was far lower than when I went into the promotion. It was as if I was penalized for having 3 days without a paid sale.
It took two or three days to climb back to my pre-promotion rank! I am now going well again, but I’m struggling to see many advantages in offering my book free. (Nor did I get any customer reviews from those free downloads, by the way.)
I suppose it’s possible that some of those freebies led to purchases of my other books, but Amazon doesn’t give away any data on things like that, and there was no noticeable increase in overall sales anyway.
Still, I think the Select program is a no-brainer at the moment. The borrows are almost certainly from customers who wouldn’t have paid anyway, and the opportunity cost associated with the exclusivity requirement is minuscule in the current environment.
I just wish all the rave-reviews of free promotion I’ve read about were true. They are not in my case at least.
I have published mostly nonfiction on KDP and have used the Select program.
When I tried freebies they did not result in reviews or increased e-book sales. Maybe they’re waiting on the exam results, lol.
However, I have seen a jump in print books immediately after the promos.
It seems to be getting,”“Curiouser and curiouser!”
I only use KDP for a few books mainly because they are craft patterns and I sell them elsewhere but I have to wonder if I am missing out by not using the program more. I guess time will tell and I will have to keep watching Amazon’s progress.
David,
I do see a similar jump in nonfiction sales after a promotion, but it’s a very small one, less than one additional sale per a hundred give-aways.
Morris
Ann,
Yes, Kindle isn’t ideal for everything, and I can imagine people might want to see patterns on something bigger.
Morris
I did two KDP promotions in January, and my experience was just as Derek mentioned. Instead of a burst of sales immediately following the promotion, like I’d always seen before, sales were in the toilet for four or five days — at least for the books I’d had on promotion.
I probably lost one or two thousand dollars in royalties by having those two promotions — ugh. If Amazon doesn’t rejigger something, there will be far fewer KDP promotions this year compared to last, I’m guessing.
Steve,
On the bright side, if you can lose a couple thousand in royalties by losing ten days sales, you must be raking it in when they’re selling:-) I’m assuming that your Kindle Buffet is permanently free to help build the mailing list, something I wish I had thought of two years ago.
I’ve pretty much dropped the give-aways myself, except for the books I just want to get out there, or that have some connection to printed books that they they might help sell a couple copies.
But I doubt it concerns Amazon at this point. The give-aways were originally the attraction for publishers to join Select, now it’s the payments for borrowing. If those keep dropping, the situation may change again.
Morris
Morris,
Yes, I was just gambling that giving away some of that content in the form of the “Kindle Buffet” book would translate into some organic website traffic and free publicity for my Kindle Fire manual. It worked out OK.
The thing that really surprised me was that the revenue from the UK Kindle book sales have really been strong in the past couple of months. It’s been something like 60 or 75% of what I’m earning from U.S. sales. I have no idea why, I guess there’s just less competition in the UK store.