Kindle Unlimited Screws Authors More Every Month
Okay, that title may seem a little dramatic. I assure you, however, that it's not.
If you've been following the numerous posts I've made about Amazon's Kindle Unlimited program, you know that I've regarded it with healthy skepticism at best and outrage at worst. I agreed to try the program for three months (since you must sell exclusively on Amazon during that time, a stipulation that is not applied to traditionally-published authors, only self- or independently-published ones) to see if Amazon would maintain its promise of approximately $2.00 per borrow, and when the first month paid out $1.80, I found my skepticism assuaged somewhat. At the time, it seemed like it was of great benefit to both readers and writers. For $10, you can read as many titles as you want, long or short, as long as they're enrolled in the program. That means that if a reader is strapped for cash, you can still reach them because to them, your book is "free."
Meanwhile, you make a tidy profit.
The next month, it dropped. The month after that, it dropped again to about $1.50/borrow. Despite Amazon funneling millions upon millions of dollars into the so-called "Global Fund" every month, they continued to pay lower and lower rates for borrows at a staggering rate, while also refusing to tell us what we'd be earning until the 15th of each following month. That means that whatever we earned in October would be up in the air until November. Specifically, until today.
Amazon fans who have had their blinders on have constantly assured me that I was panicking, that payouts wouldn't drop below $1.50, that Mother Amazon would take care of us all. Hopefully the figures released today will open their eyes.
For the month of October, KU's borrow rates plummeted to a measly $1.33/borrow. That's a full $0.20 less than last month's rate. Things aren't looking good for the holiday season.
Amazon has been deliberately opaque about the process and what authors are getting paid because they know the current model is unsustainable and completely unfair. For 90 days of exclusivity, you are rewarded with a pittance, a pittance with an ever-changing value, no less. You have no idea what you'll be earning month-to-month, and as Amazon has shown us now, they have no intention of settling anywhere near $2.00/borrow. We'll be lucky to see $1.00/borrow for November/December/January, peak buying months.
Why? Because as the number of KU enrollers rises, the profit margin diminishes. More and more people are subscribing, because to readers, it's a great deal. But that means Amazon has less money to dole out to authors, which means diminishing royalties for those of us who have signed a 90-day contract.
This results in hundreds, and sometimes thousands of dollars lost per author. Each month, the program itself results in paying out historic lows. The more people who enroll, the less the payout will be. Still, Amazon refuses to change the model, which means they're 100% A-okay with doling out royalties that will, at some point, be less than what traditional publishers pay.
Think I'm exaggerating? Let's say you decide to sell your novel on Amazon for $4.99. At a 70% royalty rate, you'll earn approximately $3.44 per unit after you take into account an electronic "delivery fee" that's about as bogus as it sounds (but that's a story for another time).
Meanwhile, if you're enrolled in KU, each borrow will pay out only $1.33 (or less, as time passes!), effectively instilling a royalty rate of 38%. That's just a shade over what most traditional publishing houses will pay you.
Which is about what Hachette was paying its authors, although Amazon was only too happy to paint Hachette as the bad guys for their 30% royalty rates.
And consider that Hachette prices its eBooks a little higher than $4.99. At this point, traditionally published authors are seeing higher royalty rates than authors enrolled in the KU program as long as they're charging $4.99 or more.
And they don't have to sign any exclusivity deal, either!
Some authors are catching on. HM Ward recently pulled her titles out of the program, stating that she hasn't been able to pay her son's medical bills due to the loss of money. Hugh Howey, the Amazon fanboy himself, pulled his lips away from their arse long enough to admit that he, too, was losing money in the deal.
For me personally, borrows make up 85% of my "sales," which means that my income fluctuates wildly depending on what Amazon decides to pay me that month. I've seen firsthand how it can take someone from four figures to three figures. And if you're a career author, that's not going to fly.
So, what can we do? We can demand reform. We can tell Amazon we're not going to take it anymore, and that they need to overhaul their broken system. We can expose Amazon's hypocrisy as they continue to try to shut down publishing houses while making themselves the new—and only—publishers around.
Like I predicted months ago, we're already in a position where Amazon's KU program is so strong that even pulling out of it wouldn't benefit us. Readers like paying $10/month for unlimited books. Taking away the ability to borrow our books will only hurt us more than a diminishing royalty program does.
I guess that what I'm saying is that at the end of the day, if Amazon takes our willingness to accept a pittance as payment as something they can extend to their non-KU royalty plans, then we'll have no one to blame but ourselves. Amazon is a company. Nothing more. Nothing less. It's those of us who acted like they were some kind of parental figure that are to blame.
Like the Lorax said: "Unless..."
Note: A previous version of this blog post listed the royalty rate for a $4.99 eBook under the Kindle Unlimited plan as 26%. It has been amended to reflect the correct amount of 38%.
