June 16, 2015

You don’t get paid unless people actually read your book: the new Kindle Unlimited royalties


KU authors should be wary of the fine print. Via Shutterstock.

KU authors should be wary of the fine print. Via Shutterstock.

This July, Amazon is changing the way it pays authors for books in Kindle Unlimited and the Kindle Owners’ Lending Library. In short, it’s paying the authors a royalty based on pages read, rather than paying authors a royalty each time a reader makes it through 10% of a book.

You recognize this is not how royalties usually work. An author with a traditional publisher will receive royalties on each hard copy of the book sold to libraries (or a percentage of the ebook sold at a library rate).

When Kindle Unlimited was first formed, it offered royalties to authors as long as book borrowers read 10% of the text. Now authors are likely to make less money each time the book’s borrowed, unless his or her readers complete a considerable chunk of the text (or even–gasp–read the whole thing).

The contract puts the “Limited” in Kindle Unlimited. Authors are also required to sign over exclusive rights to each work to Amazon. The books can’t be sold by other retailers. This isn’t how contracts usually work in the biz, either. (In related news, we feel a little nostalgic for Laura Hazard Owen‘s Gigom reporting on this beat.)

Amazon assures its authors that each text will be in a consistent font with consistent spacing as its length is determined. But many KU authors aren’t having it. Amazon’s asking Kindle Unlimited authors who want to be taken out of the program to submit their books’ AISNs here.

The Amazon statement explains the new payout:

Under the new payment method, the amount an author earns will be determined by their share of total pages read instead of their share of total qualified borrows.

Here are some examples of how it would work if the fund was $10M and 100,000,000 total pages were read in the month:

  • The author of a 100 page book that was borrowed and read completely 100 times would earn $1,000 ($10 million multiplied by 10,000 pages for this author divided by 100,000,000 total pages).
  • The author of a 200 page book that was borrowed and read completely 100 times would earn $2,000 ($10 million multiplied by 20,000 pages for this author divided by 100,000,000 total pages).
  • The author of a 200 page book that was borrowed 100 times but only read halfway through on average would earn $1,000 ($10 million multiplied by 10,000 pages for this author divided by 100,000,000 total pages).

We will similarly change the way we pay KDP Select All-Star bonuses which will be awarded to authors and titles based on total KU and KOLL pages read.

Author C. E. Kilgore points out, correctly, that this estimate per page is bonkers. It’s unlikely that most authors will make $10 a page. The average KU author makes $1.40 per KU borrow, and is about to make less.

Kindle Unlimited authors are more likely to make a fraction of a penny per page. Kilgore breaks down this calculation in a smart blog post:

Now, being paid per page means that the 25 page novellas filling the pool are going to be earning significantly less than their 250 page swimming-buddies. But, exactly how significantly less isn’t being honestly represented….

A more reasonably achievable figure is 1 penny per page (but I believe it will end up being something more like 0.006 cents – 0.008 cents per page ‘ i.e. not even a penny per page) payouts. So, from this point forward, for simple maths sake, I’ll use my 1 penny per page (in lieu of KU’s unrealistic $10 per page) for the rest of this discussion.

So, an author who has been making a pretty decent earning with their 25page short erotica KU books, by publishing two or three per month and getting $1.40 /KU Borrow for them – well, now they are going to be getting 25cents per KU borrow. That is how extremely significant this payout change is. 

On the other hand, an author of a 250 page fantasy book who was getting 1.40 / KU borrow (instead of $2.70/sale if they were selling for 3.99 at 70% royalty) will now get $2.50 per KU borrow. BUT, that’s only if the reader reads all 250 pages. If the reader stops at page 50, then the author will get 50cents (still better than nothing, I know, but…) In the old payout system, that 50 page mark would have been beyond the 10% requirement, and the author would have earned $1.40.

Kindle Select is doing this for blatantly obvious reasons – all those short books have flooded the pool, making the 10million money pond actually quite shallow under the current equal distribution model. The longer page-count authors are leaving, while more and more authors are adding novellas to the pool, compounding the problem. It was only a matter of time before KU began to drown in the overcrowded, shallow pool in which readers who paid $10 a month were reading 30 25-page books, costing KU close to 80$/month in borrow fees. (This is especially true in many categories including Romance, Erotica, Horror, and non-fiction like business-help and marketing how-to books). And let’s not forget kid’s books in KU – they average, what? 25 colorful pages? 25cents for them, too!

Their chosen solution, however, may not be enough to draw longer books back into the pool. At a penny per page, that author of a $3.99 250 page fantasy novel is still going to be making less per KU borrow. And, what about the authors in Sci-Fi and Thriller who sell for $4.99-$5.99, and LGBT romance for $5.99-$6.99? They’d still be making less than the 70% royalty rate, and with KU still requiring exclusivity (which is DUMB), I can’t see many authors who have left, coming back just because of this change. I know I won’t be.

Aside from exclusivity rights, which are the most obvious drawback to publishing through KU, it seems wild to pay authors based on the number of pages each reader completes. What if, like Judd Apatow, KU subscribers have convinced themselves that buying a book and reading a book are the same thing? Amazon will pocket the subscription rate, and KU authors will not receive a royalty if subscribers are taking out books without getting around to reading them.


Kirsten Reach is an editor at Melville House.