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KDP Select – Does Amazon hold the key to success? Or is their gilded cage a prison?

Okay, folks. There’s a lot of confusion out there (and a fair bit of outrage) over the recently announced and implemented changes to KDP Select borrow payments. Well, we’re here to answer some of your questions.

Let’s go over the basics, shall we?

In mid-June, Amazon announced that they would make sweeping changes to how payments for books in the Kindle Unlimited program were handled. Instead of paying an author for each borrow where the borrower read past the 10% mark, they’d instead pay authors per page read.

This set off a storm of epic proportions, fueled by a few articles with some misleading information. Here’s the straight scoop in a few bullet points, followed by some armchair (or futon, as that’s what we have in our offices) analysis.

  • These changes only apply to books enrolled in the KDP Select program, and only for borrows of those books. None of this information applies to sales.
  • The amount an author receives for each page is based on the total amount of the global fund divided by the total number of pages read in the program.
  • Your page counts for a book will be inflated (in other words, what your print copy considers a page and what KDP Select considers a page are two different things). One of our authors’ books, which comes in at 404 pages in print, is 700 Kindle Edition Normalized Pages (KENP).
  • Kindle Edition Normalized Pages are reported in your KDP dashboard.
  • On July 1st, Amazon released this information:
    • They expect the total Kindle Unlimited Global Fund to be at least 11 million in July.
    • In June, 1.9 million Kindle Edition Normalized Pages were read.
  • Based on that information, we’re extrapolating that the minimum an author will receive for each page IN JULY is $0.0057. A little more than half a cent a page. This number will, of course, change each month.

We asked one of our authors for her perspective on the program, and this is what she sent us (with numbers).

Previously, Amazon paid for each book borrowed where the borrower read past 10% of the book. They paid out approximately $1.40 each time.

The way they calculate pages, my flagship book, which retails for $4.99, is 700 pages (the paperback has 404 pages). Under this new system, if a reader borrows the book and reads to the end, I will make $3.99. Almost as much as the price of the book to buy and $2.59 more than I previously received. I’d like to think that my readers will read to the end. Can I guarantee that? No. And Amazon won’t tell me whether they do or not. They only tell me how many pages are read.

Now, for an author who writes short stories, the reverse will be true. They used to make the $1.40 as well, as that was independent of the number of pages in the book. Now, an author with a 50 page book will only make $0.29.

Is it fair? Yes and no. Presumably, I put more work into my 700 page book than they put into their 50 page book. And of course, if a reader stops reading my 700 page book at 50 pages, where before I would have made $1.40, now I’ll only make $0.29. (And this isn’t to say that authors who write 50 page books don’t work hard. They do. But by the numbers, most novel authors spend more time on their novels than short story authors.)

Like this author, we believe these changes could be good for authors. At least authors who write full length novels and at least right away. They’ll probably mean a big hit in payouts for authors who wrote short or serialized fiction, specifically to take advantage of the $1.40 payout.

Now, we’ve got a couple of frustrations with this new move, despite our cautious optimism. One of them isn’t new. The Kindle Unlimited Global Fund has always varied. When the program started, authors could make upwards of $1.50 per book. At the end, the average was hovering around $1.30-$1.40. Obviously Amazon needs to make money as well, but when you’re talking about an author’s livelihood over a large catalog, that could make a significant difference. The author we polled above saw a $300/month difference from her first month in KU as opposed to her last month (before these changes). She had ten books in the program.

The second is this. While Amazon tells us that June saw 11 million dollars and 1.9 pages read, we have only their email to go on. There are no guarantees as to the total amount of the global fund for July, or the number of pages read. However, this is nothing new. There were no guarantees in the old version of the program either. What I think we can bet on is an influx of authors with longer books joining or re-joining the program and authors with shorter books leaving. We suspect that many novelists left the program disillusioned when their cohorts who wrote serialized fiction or short stories were making the same per borrow as they were. So we expect the total pages read per month to go up, not down. And unless the total Global Fund also increases at a steady rate, this could quickly result in a much lower payout than $0.0057/page.

One of our longtime frustrations with KDP Select is that authors are beholden to Amazon without knowing all of the details. Information about the Global Fund is released mid-month. Yet, your enrollment in KDP Select is for a three month term. So let’s say that you’re enrolled today. You find out that the total number of pages read in the program for July isn’t 1.9 million pages, but 2.4 million. And the total global fund is $11 million. All of a sudden, your estimated payout of $0.0057/page turns into $0.0046/page. Your 700 page book now nets you $3.15 as opposed to $3.99. Is that a huge difference? Yes and no. For some authors, it could mean a difference of $10-$20/month. For others, $1000-$2000. And without any guarantees from Amazon, authors are flying blind.

So what does this mean for you? Let’s go back to our guinea pig author who gave us that quote earlier and see what she thinks.

I’ve started pulling my books out of KDP Select. While my borrows have been steady at 10-20 per day (pre-changes), I’m not thrilled with the changes, the suddenness of them (Amazon announced them two weeks before they went live, so authors didn’t have the option of easily removing their books from the program before the terms and conditions of the program changed), or the lack of information that Amazon’s providing. For example: I can see how many pages are being read of each of my books, but if I see a 700 page bump in my pages read, does that represent one reader of my entire book or 100 readers who never make it past page seven? I sell decently well on iTunes, so I’ve decided to make my books available on all platforms as they expire out of the KDP Select program. Will I go back? Maybe. I won’t rule it out. But until I see how this plays out over the course of the next six months, I’m being cautious.

What do you think of the changes? Are you a fan? Or do you think Amazon is the bull in the china shop shattering all of the beautiful dishes?