What Authors Need to Know About "Kindle Unlimited"

Amazon just announced a new subscription service called Kindle Unlimited, which allows users who pay $9.99 per month unlimited access to a number of Kindle titles. As an author, you need to understand how this new service works, whether or not your books are included, and how much it pays authors.
 

How Are Royalties Calculated?

Music is already knee deep in the subscription model, and most content creators are not happy with the tiny payouts. While we’d like to be optimistic about Kindle Unlimited being a good revenue stream option for authors, we have no idea how it will play out since royalties depend both on both the number of paying subscribers and how many ebooks are read each month.

Amazon is joining other ebook subscription services Scribd and Oyster. There's a great post on the Smashwords blog about the subscription business model. Since the Kindle platform has by far the most users, Amazon has the opportunity to also become top dog among ebook subscription services - IF they can offer readers and authors what they want.

Amazon royalty payment calculation can be relatively complicated, and the example calculation they provide in the Kindle Unlimited help documentation is misleading, giving an example revenue of $5,000 per month. Even if you’re Tom Clancy that will be extremely unlikely!

Amazon has created a KDP Select Global Fund which is beginning with $2 million. Participating titles will receive a monthly percentage of that fund corresponding to the number of users who read more than 10% of their particular title. As of now, Amazon says there are over 600,000 titles. So how much can you expect to be paid for your title being included in Kindle Unlimited?

We received an email from author Larry Kollar this week giving us insight regarding one of his ebooks that has been a part of the Kindle Owner's Lending Library, which has a similar payment scheme and uses the same fund. He said the following:

"Last month, the payout was $2.24 [per download], slightly more than the royalty you get when someone buys a $3 title."

Not bad. If the Kindle Unlimited gets a bigger response and more users than the Kindle Owner's Lending Library, $2 per read could be on the high end of what authors would be paid. Here's a hypothetical scenario: if each of the 600,000 participating titles is read by an average of 5 users per month, that means the $2 million from the KDP Select Global Fund will be split 3 million ways, paying $0.67 per read.

Right now there's no way to tell how many subscribers Kindle Unlimited will have, nor how many ebooks they'll read each month. Mr. Kollar also pointed out that by his calculation based on figures Amazon publicized (the funds prior $1.2 million total divided by $2.24 paid per download), the Kindle Owner's Lending Library had over 530,000 downloads last month. Keep in mind that Amazon pays per download for the Kindle Owner's Lending Library, and will not adopt the new 10% read required for Kindle Unlimited royalty. It will be interesting to see what happens now with the Kindle Unlimited launch. I would bet that the number of books read increases - especially during this initial launch month with a bunch of people taking advantage of the free trial period.

As author participation and the number of available titles grows, the piece of that $2 million pie could become even smaller over time. An increase in subscribers should help the KDP Select Global fund grow. But will the subscriber revenue increase along with addition of titles to balance things out? Only time will tell. How many people consistently read more than $10 per month in ebooks, making it worthwhile to subscribe?
 

Why would I want to participate?

For new authors, we encourage using content giveaways to hook new readers and establish a solid fan base. Adding your title to KDP Select means it will be available in both the Kindle Owner's Lending Library and Kindle Unlimited, where readers would be more likely to try an unknown author’s work. It could mean more exposure for you, so it could be worthwhile enrolling your title in KDP Select for 90 days or a few months to gain new readers.

BUT, to qualify for KDP Select means your title needs to be exclusive to Amazon. You can’t sell it digitally anywhere else while enrolled - even on your own website. You need to decide if it’s worth it for you to have your ebook only available in the Kindle store. Many authors we know get 90% or more of their digital sales from the Kindle store, so it may be a no-brainer for you.

If you’re looking for a good way to expand your audience by giving away your ebook, we feel that it’s more beneficial to use Noisetrade. Unlike Amazon, Noisetrade gives you the email addresses of everyone who downloads your ebook, giving you a direct connection to them through your newsletter email list. AND there is an option for people to leave you a tip and so you can make a little money.
 

How do you know if your ebooks are available to Kindle Unlimited subscribers?

Amazon has made this part simple: only titles participating in Kindle Direct Publishing Select will be included. Amazon has already stated that none of the major publishers are participating yet, so check with your publisher if you have one that handles digital distribution for you.

If you self-published and have control of your own KDP account, here’s how you check to see if your ebooks are a part of KDP Select or not:

  1. Log in to your KDP account at kdp.amazon.com
  2. On the Bookshelf page of your account, look under the column titled “KDP Select”
  3. If your ebooks are included you’ll see an “Info” link. If they aren’t you’ll see “Enroll.”

You can learn more about KDP Select and all that it entails at Amazon’s FAQ page HERE.

If you are enrolled in KDP Select or are considering it, keep in mind that to remove your ebook from the program, you’ll either have to uncheck the “auto renew enrollment” and wait until the end of the 90 day term you agreed to, OR you can use Amazon’s contact form to request immediate removal (ASIN number required).
 

What does this all mean for you?

Subscription services are a great deal for consumers, but so far have not given so great of a payout for the content creators. This is why we recommend making deep connections with your readers. Establishing a relationship with your audience online makes them more likely to want to actually support you by purchasing your work and exclusive content you offer them. It’s up to you to decide whether or not you can take advantage of services like Kindle Unlimited to help you in establishing and strengthening those relationships you need to succeed.

 

What are your thoughts on Kindle Unlimited? Will you be participating? Do you already have an ebook enrolled in KDP Select? Has it been worthwhile for you? We’d love to get your input in the comments below or on Facebook and Twitter

 

Image from Amazon.com