KINDLE UNLIMITED POLICY CHANGES
Now that Amazon pays KDP Select authors for pages read through Kindle Unlimited and Amazon Prime—instead of the number of borrows read to 10%—some authors are wondering:
- Should I keep my books enrolled in KDP Select?
- Should I opt out of KDP Select and publish elsewhere?
- Should I unpublish at Kobo, Nook, etc. and opt into KDP Select?
There are many things to factor into this decision.
Let’s start with the math.
The Kindle Edition Normalized Page Count (KENPC) is your book’s official number of pages as far as royalties for pages read through KU and KOLL borrows is concerned.
- Your KENPC isn’t the same as what you see listed on your book’s product page, and may be significantly different.
- Visit your Bookshelf and click the Advertise and Promote button to find out what the KENPC is for your book.
Amazon has set the KDP Select Global Fund at $11M for both July and August. Amazon also announced that 1.9B pages were read in June, 2015.
This leads to a projected royalty of $0.0058 per page read.
Multiply your book’s KENPC by $0.0058 to figure out what royalty you would earn if 100% of your book is read.
233 pages is the magic number for KENPC. If your KENPC is higher than 233 pages, your projected royalty for a book read to 100% is more than $1.35; if your KENPC is lower than 233 pages, your projected royalty for a book read to 100% is less than $1.35.
(Where did this $1.35 come from? That’s what KDP Select authors were paid for May, 2015.)
There are a couple of obvious complications:
- We don’t know if 1.9B pages will be read in July. Therefore, the estimate of $0.0058 could be significantly off.
- You don’t know how many of your customers read 100% of your book. If many customers don’t finish your book, your projected earnings for July are much less.
What may be more relevant is to compare your royalty for sales to your potential royalty for borrows.
- Visit your KDP bookshelf. Click on your book. Visit page 2 of the publishing process. Check your royalty for sales in the US (and/or the UK if most of your borrows come from there).
- Compare your royalty for sales to your projected royalty for borrows (multiply your KENPC by $0.0058).
How do these compare?
- If your projected royalty for borrows exceeds your royalty for sales, leaving KDP Select doesn’t make much sense unless you normally don’t get many borrows compared to sales.
- If your projected royalty is in the same ballpark as your royalty for sales, that really doesn’t change much unless you get few borrows compared to sales (or if many customers don’t read 100% of your book).
- If your projected royalty is much less than your royalty for sales, you need a huge amount of borrows to compensate for sales that you might earn outside of Kindle.
- List price = 99 cents, KENPC = 50 pages. Projected royalty = 50 x $0.0058 = $0.29. Royalty for sales = $0.34. Borrows pay nearly the same as sales. I’d be inclined to keep the book in KDP Select, unless it doesn’t get borrowed much.
- List price = $2.99, KENPC = 40 pages. Projected royalty = 40 x $0.0058 = $0.23. Royalty for sales = $2.09 (could be much less if there is a significant delivery fee). Borrows pay much less than sales. I’d be inclined to opt out of KDP Select and publish elsewhere, unless the book gets borrowed frequently but rarely sells. Or if some qualitative factor makes up for the financial differential (see below).
- List price = $2.99, KENPC = 200 pages. Projected royalty = 200 x $0.0058 = $1.16. Royalty for sales = $2.09. First, $1.16 isn’t too different than what borrows used to earn. If the book gets borrowed about as much (or more) as it sells, the sales rank boost may make it worthwhile to stay in KDP Select.
- List price = $3.99, KENPC = 500 pages. Projected royalty = 500 x $0.0058 = $2.90. Royalty for sales = $2.79. That’s a no-brainer. You stay in KDP Select unless (A) you hardly get any borrows compared to sales or (B) most of your customers stop reading partway through (and it will take a couple of months to really know if that’s the case—don’t expect short-term results in your report to paint the complete picture).
But there is more to this decision than just math.
SALES RANK BOOST
Every borrow through Kindle Unlimited or Amazon Prime helps your book’s Amazon sales rank.
That’s one of the benefits of being in KDP Select. It helps with visibility.
Another thing that helps with visibility: All those borrows help you land on customers-also-bought lists and other Amazon marketing.
You not only lose the royalty from borrows, you also lose these sales rank and exposure benefits, if you opt out of KDP Select (and access to Kindle Countdown Deals and AMS advertisements).
Look at the full picture and weigh that against the benefits of selling on Nook, Kobo, etc. when deciding whether or not to enroll in KDP Select.
If you can wait until August 15, you will have access to real data:
- Your prior months’ report will show exactly how much you earned for July via KDP Select borrows.
- You will know how much Amazon paid for KENP read (Kindle Edition Normalized Pages read) in July, 2015.
- You will know how many KENP read you had on average in July, 2015.
- You will have 15 days of data for KENP read in August, 2015.
- You will know if Amazon added anything to the $11M payout for July (seems doubtful, but who knows?).
- You can browse Amazon and see how many books there are in your subcategory (which will only make sense if you go there right now and see what the current number is). You don’t have to guess whether books are dropping out of your subcategory: You just have to look and see. (If some do drop out, maybe that helps you gain exposure. Exactly how you should interpret any change isn’t quite so obvious.)
- It’s possible that between now and then Amazon will make an important announcement (perhaps even tweaking the program for future months). You never know.
Before then, you really don’t know how accurate the projected $0.0058 will be.
Amazon is paying $11M in combined royalties to KDP Select books borrowed through Kindle Unlimited and Amazon Prime in July and August.
They will pay out over $100M for 2015 via KDP Select royalties for borrows.
What does this mean? It’s a huge share of the e-book market.
Kindle Unlimited subscribers are unlikely to buy books that aren’t enrolled in KDP Select when they can read their choice of a million books for free.
You’re probably going to lose access to this subscriber base if you opt out of KDP Select.
And it’s a relatively indie-friendly audience.
BEST OF BOTH WORLDS
Since KDP Select only entails a 90-day commitment, some authors enroll in KDP Select initially to take advantage of the benefits for 90 days or to test it out, intending to opt out when the enrollment period ends and publish elsewhere in addition to KDP.
If so, be sure to uncheck the automatic renewal box (and double-check this shortly before renewal) to successfully opt out. (You must also wait for the renewal date to pass before publishing your e-book edition anywhere other than Kindle.)
This strategy gives you the best of both worlds (though not simultaneously), and lets you test out KDP Select before deciding whether or not to publish elsewhere too.
You could even advertise to your audience that your book will only be in Kindle Unlimited for 90 days and after that subscribers will lose their chance to get your book for free.
Look at your numbers for the first 90 days. You might see reasons to stay in KDP Select or to opt out. The data may aid you in your decision.
POTENTIAL OUTSIDE OF KINDLE
The main reason to opt out of KDP Select is to get out of the exclusivity clause—to publish your e-book on Nook, Kobo, etc.
Many authors find that they don’t sell many e-books outside of Kindle. A few authors sell well outside of Kindle.
Note that iPad customers, for example, can read your Kindle e-book through Kindle apps, and anyone with a tablet, laptop, or PC can read your Kindle e-book with a Kindle app. That is, you don’t have to own a Kindle device to read Kindle e-books.
The real question is this: Does your unique book have potential to sell via other e-book retailers, like Nook and Kobo? Do you have specific marketing plans that may help improve your prospects of selling e-books outside of Kindle?
If you intend to opt out of KDP Select, you want answers to these questions. Visit these retailers, see what kind of e-books are selling in your genre or category. See how indie e-books are doing there. Find out how those indie authors are marketing their e-books.
Write happy, be happy. 🙂
Copyright © 2015
Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers
- Volume 1 on formatting and publishing
- Volume 2 on marketability and marketing
- 4-in-1 Boxed set includes both volumes and more
- Kindle Formatting Magic (coming soon)