Subscribe?

Amazon’s book subscription program is called Kindle Unlimited. For $9.99 a month, US-based folks can read all they want — from the books in the program. For an indie author, the only way to have your books in the program is to have that book enrolled in KDP Select, and that means your book must be exclusive to Kindle.

I think Amazon must be very confident that this program will benefit authors. At the moment, there is much FUD among authors, some of whom are convinced this is the end of self-publishing at a reasonable return.

At the moment, I think there are a lot of Indie authors who see this as yet another disincentive for Select.

The Fine Print

The TOS for the Unlimited program says this:

When your membership is cancelled, the titles you have selected from the program will be removed from your account, devices and applications.

And this:

We may take reasonable actions necessary to prevent fraud, including placing restrictions on the number of titles that can be accessed from the program at any one time.

A few preliminary observations

No subscription model with the word “unlimited” in it has EVER remained unlimited or actually been unlimited. There have always, eventually, or even from the start, but hidden in the small print, redefinitions of the word “unlimited.”

See above. The service is not, in fact, actually unlimited. Unlimited would mean, technically, that you could download ALL the books. Which, right. Not gonna happen.

Trad publishers get the wholesale price when a reader reads 10% of the book. But what about indies in Select? That’s less clear.

Amazon says this as to Indie Authors in Select:

When your book is selected and read past 10% from Kindle Unlimited or borrowed from KOLL, you’ll earn your share of the monthly KDP Select Global Fund.

The email sent to authors is vague on two key points:

1. It does not actually say that the Unlimited program is for Select only. It says that if you are in Select, you will get payments from the Global fund.

2. It does not say how payment are calculated.

However, the updated Select TOS says this:

Only books enrolled in KDP Select are eligible to be included in Kindle Unlimited and the Kindle Owners’ Lending Library.

So, that’s answered.

Another vague point; Amazon refers the curious to this page: Kindle Owners’ Lending Library FAQ for more information about how payments to Unlimited participants are arrived at. So, already, confusing, but it’s plain the information has been updated.

We base the calculation of your share of the KDP Select Global Fund by how often Kindle Unlimited customers choose and read more than 10% of your book, and Kindle Owners’ Lending Library customers download your book. We compare these numbers to how often all participating KDP Select titles were chosen. For example, if the monthly global fund amount is $1,000,000, all participating KDP titles were read 300,000 times, and customers read your book 1,500 times, you will earn 0.5% (1,500/300,000 = 0.5%), or $5,000 for that month.

I have heard other authors saying the Unlimited program also pays Select authors a percentage of price, that that is NOT what this says. This says Select authors are compensated for Unlimited reads via the Global Fund only, and those payments are not tied to price but to the amount of money in the fund.

If it works like the lending, then some authors will do quite well and others, not. The Global fund is a cap that limits Amazon’s liabilities to Indie authors.

There is at least the potential for this payment method to reduce income to authors. Amazon says this:

The size of the global fund is calculated to make participation in KDP Select a compelling option for authors and publishers. We will review the size of the fund each month to consider adjustments.

You could still come out behind in a given month, with no guarantee you’ll recoup any loss the next month — you might have fewer borrows or reads.

Is This the End?

While Bezos has been on record as saying he is willing to incur a long term loss for a longer term benefit, their model is similar to already existing ones. If you are paying authors/publishers a percentage of price, then for your business to be viable, that payout amount per month HAS to be less than 9.99 * (number of users subscribed).

This means a profitable user will read a number of books N per month where the payment due to venders is less than 9.99. The more books they read, the less the wholesale price has to be (obviously), and, at 9.99 per month, the wholesale price has to be less than 4.99 for 2 books per month, 3.99 for 3 books, etc.

Profit Model

The only two ways to make a profit from a subscription model are (assuming this is the only source of revenue — we all know it’s not for Amazon):

1. Most people read 1-2 books per month or fewer and/or go on to buy books anyway.

2. You find a way to pay authors/publishers a smaller amount per read.

The important thing is that trad pubbed authors are likely to be squeezed the most, because they are only getting 25% of NET. It will be important, I would guess, to read contracts carefully to find out how royalties are calculated on those “sales” — if they are even counted as sales.

Self-pubbed authors may be in a better position, depending on things like, does the subscription model bring in more casual readers (the profitable ones) — this may mean more readers. Or will voracious readers subscribe AND stop buying such that the program causes an effective reduction because there are more authors/more readers and a fixed fund for distribution.

Possibilities for indies include things like:

1. Everyone subscribes and nobody buys books anymore — royalty rates effectively lowered to whatever Amazon sets in the subscription model and authors not in Select see a drastic reduction in sales.

2. Readers continue to buy books, especially the voracious readers.

3. More readers in total because casual readers exhibit the same increased reading/buying pattern we saw with the shift to digital: they read more books.

4. Purchases increase because readers who loved your book want to own it. Note that the TOS says once you unsubscribe, you lose access to the books you read in Unlimited.

Is the Sky Falling or Not?

Probably not, I think. Hard-core readers tend to buy authors, not books. The requirement that Indies be in Select to participate means that the most popular, best-selling indies will NOT be in Unlimited– assuming Amazon hasn’t cut a separate deal with them. They may well have. It would be smart to do so.

Non-bestselling indies not in Select are unlikely (were they in Unlimited) to have been found by the casual Unlimited reader — those readers will be looking for “something” to read. Algorithms are unlikely to put those books before those readers.

What might happen is that a casual reader, through Unlimited, becomes a genre fan. Because so many indie Romance authors are not in Select, once that casual reader is looking for more good Romances (let’s say) they will have to read outside Unlimited. Thus, it’s possible buys go up outside Unlimited.

Post Sample Suck?

It’s also possible that Unlimited becomes a way to avoid Post-Sample Suck (TM). Post-Sample Suck describes that condition where a book’s quality takes a steep dive into rotten after the sample percentage. A reader who buys a lot of books might feel quite justified in spending $9.99 per month to be able to read books beyond the sample point. They can abandon reading at whatever point the book starts to suck. Assuming that’s beyond the 10% point, the author still gets paid. Other books by that author (presumably) would not be placed into that reader’s Unlimited shelves.

You can bet that Amazon will be paying attention to abandonment points because now it matters to their bottom line.

Prediction: at some point the payment percentage point will increase. Given that payment comes from a fund, it may be too complicated (though doable) to calculate payments amounts linked to percentage read.

Usually it’s the less experienced authors who are in Select. Once you get traction as an author, it does not make sense to be in Select. The downsides are too big. You give up too much by not being at other vendors.

Worst Case?

For indie authors, the worst-case scenario is that all the voracious Romance readers go to Unlimited and stop buying other books.

This is not the typical behavior–those readers know their authors. Since (among indie authors) Unlimited will only have books by Indies in Select, a lot of really great authors will be omitted. Not to mention, $9.99 is not budget busting for those readers. They’re likely to still buy other authors. I believe.

Interesting Thought

Given the potential benefit of a Casual Reader finding you and being converted to a fan, it might make sense for an Indie author to have one very good, non-series, book in Select. Fairness would dictate that you’d have another, very good, non-series, book that you do not sell at Amazon at all.

There you go, my initial thoughts on the matter.

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3 Responses to “Subscribe?”

  1. Commenting on my own post. Lame. Whatever. I’m too lazy to edit the post.

    Another possibility is that the Indie authors NOT in Select become much more important to the other vendors. B&N might actually have to stop suppressing the performance of their self-published Nook Books.

    Now is a good time for Apple, Google Play, and Kobo to make “come here with us” moves to Indie Authors not in Select.

  2. Ros says:

    It seems as though Amazon have already cut deals with some big name authors to be included in Unlimited without being in Select – Howey, Bella Andre, Barbara Freethy etc.

    The payment as a % of royalty is, I think, the deal that’s been offered to authors who are with an Amazon imprint (Montlate etc.) There’s been so much confusion and misinformation going around it’s been hard to keep up, but I’m pretty sure that’s what I’ve heard those authors saying.

    • My understanding is that Amazon imprint authors do get a percentage of cover price.

      I have no personal knowledge about indie authors who are in Unlimited under different terms than was offered to other indies. If I were Amazon, I would have gone to those authors and offered a deal of some sort. It seems obvious to me. But I don’t know.