KINDLE UNLIMITED MYTHS
There are many myths about KDP Select floating around.
We now have several months of data, including data released directly from KDP.
In some cases, these facts debunk popular myths.
Let me begin by answering a question that may be on many authors’ minds, and then I’ll get to the myths vs. facts about Kindle Unlimited.
WHAT DID KINDLE UNLIMITED PAY IN DECEMBER, 2014?
Kindle Unlimited paid $1.43 per download read to 10% in December, 2014.
This brings me to the first myth.
MYTH #1: KINDLE UNLIMITED IS GOING DOWN EVERY MONTH
Actually, it’s gone up a little the past two months.
In October, 2014, it was $1.33. It climbed up to $1.39 in November, 2014, and again to $1.43 in December, 2014.
Despite the extra holiday traffic in December—especially, the after-Christmas traffic with people who received new Kindles—the Kindle Unlimited payments went up.
I think that’s a great sign.
MYTH #2: MANY AUTHORS ARE DROPPING OUT OF KDP SELECT BECAUSE THE ROYALTIES ARE TOO LOW
Amazon released data today (January 15, 2015) that contradicts this myth.
According to Amazon’s announcement, the renewal rate for KDP Select has remained above 95% each month in 2014.
Have you heard that 25%, 50%, or even 70% of KDP Select authors are dropping out of Select? Have you heard that soon there won’t be any good books to read in Kindle Unlimited? Wrong!
Fewer than 5% are dropping out.
This also shows that the vast majority of KDP Select authors are content (at least) with the KOLL payments.
At least, many feel that the benefits of staying in outweigh the cons of leaving, or continue to wait one more month to see which way things are headed.
With another month of the KOLL payments increasing, they’re headed in a positive direction.
MYTH #3: AUTHORS ARE LOSING MONEY WITH KINDLE UNLIMITED
In an announcement released by Amazon today (January 15, 2015):
- KDP Select authors have seen faster “a la carte sales growth” than both KDP overall and Kindle overall during the five full months of Kindle Unlimited.
- The total royalties paid to KDP Select authors for the full five months of Kindle Unlimited “more than doubled” in comparison to the same data from 2013.
No wonder there is a 95% renewal rate.
For every author who is losing money with Kindle Unlimited, there are several others whose books are thriving in the program.
MYTH #5: KINDLE UNLIMITED FAVORS 99-CENT E-BOOKS
This myth comes from the notion that 99-cent e-books earn the same Kindle Unlimited royalty as $9.99 e-books. In fact, for a 99-cent e-book, the KOLL payment actually exceeds the list price. Imagine earning $1.43 for a 99-cent book, instead of the usual 34 cents.
The worry is that more authors will put out less effort, writing shorter and shorter books.
But wait! That doesn’t mean that Kindle Unlimited subscribers are suddenly going to start preferring e-books that reflect less effort! Most authors who write shorter e-books will discover that the shorts market isn’t easy to crack.
Here’s the FACT:
According to Amazon’s announcement today, “total earnings on titles priced $2.99 or greater are growing faster than the overall average. The same is true for titles 150+ pages in length.”
Aha! Kindle Unlimited subscribers aren’t diving down for shorter e-books after all. They’re looking for a good value, just as might be expected.
A related worry is that authors of $2.99 and higher e-books will put out of the program, so all that will be left are shorter e-books.
But here’s another FACT: There is a 95% renewal rate. With KDP Select authors seeing the fastest Kindle growth, many will be staying in the program.
MYTH #6: AMAZON DOESN’T CARE IF THE KINDLE UNLIMITED PAYMENTS GO DOWN
Back in the days where there was only Prime, the KDP Global Select Fund was around $1,000,000.
This jumped up to a few million when Kindle Unlimited came out.
In December, 2014, the KDP Global Select Fund started at $3,000,000.
Amazon added another $4,250,000 on top of this.
This brings the December, 2014 KDP Global Select Fund up to $7,250,000.
They more than doubled the three-million dollar starting value.
That’s a lot of money.
Amazon paid a huge sum of money, much more than originally announced.
Amazon did this to raise the KOLL payments up to $1.43 from November.
They could easily have dropped it down to the $1.20’s, not much lower than it had been, and this small difference would have saved Amazon a very large sum of money.
To me, this shows that Amazon wants to retain the authors who’ve remained in KDP Select, by trying to prevent the KOLL payments from dropping too low.
MYTH #7: AMAZON DOESN’T CARE ABOUT AUTHORS
I know, Amazon is first and foremost a business. The number one priority is profit, right?
But the customer is paramount toward long-term profit, and Amazon has proven itself to be focused more on long-term gains than short-term gains (sometimes to the dismay of its investors).
Amazon has also demonstrated itself to be strongly oriented toward customer satisfaction.
Amazon rolled out its red carpet to indie authors who were being rejected time and again. Amazon has thrived from this decision, and continues to do so.
Amazon pays upwards of 70% royalties to indie authors for sales.
Kindle Unlimited is benefiting indie authors. KDP Select authors are seeing faster growth than non-Select Kindle authors. Amazon released data to support this today.
In Amazon’s announcement today, they specifically mentioned great feedback that they have received from authors, and that they are considering this feedback and how to continue to improve Kindle Unlimited for both authors and readers.
Amazon needs the support of both authors and readers to make Kindle Unlimited work.
Amazon just poured $7.25 million into the KDP Global Select Fund for December to raise the KOLL payments to $1.43 per borrow. That’s a big investment in the program.
MYTH #8: AUTHORS ARE LOSING MONEY BY ENROLLING IN KDP SELECT
If your book is priced $2.99 or higher, your royalty is $2 or more (unless you have a huge delivery fee).
Some argue that if a customer borrows your book through Kindle Unlimited and you earn, say, $1.43, you’re losing money because a sale pays $2 or more.
But here’s the thing: The customer who borrowed the book probably wouldn’t have bought the book.
I’m a Kindle Unlimited subscriber myself. In the past month, I turned down several books that I was strongly considering, but which weren’t in Kindle Unlimited. If they had been in Kindle Unlimited, I would have borrowed them. But they weren’t and I passed.
There are now three main markets:
- Customers who aren’t in Kindle Unlimited who buy Kindle e-books.
- Customers who subscribe to Kindle Unlimited who borrow Kindle e-books.
- Customers who buy non-Kindle e-books.
KDP Select authors reach two of these markets.
The Kindle Unlimited market is a huge potential asset for indie authors. Customers might be willing to try a book they normally wouldn’t have read because they incur no additional cost to take a chance on that book.
MYTH #9: KDP SELECT WAS BETTER WHEN IT WAS ONLY AMAZON PRIME
The KOLL payments were higher when it was only Amazon Prime. The KOLL payment was usually $2 or a little more.
But Amazon Prime customers can only borrow one free book per month.
This means that most books didn’t receive many borrows when it was only Prime.
Kindle Unlimited is paying about 30% less, presently, than in the days of only Amazon Prime.
But there are many, many more borrows through Kindle Unlimited than there ever were through Amazon Prime.
Many KDP Select books are benefiting from these additional borrows. Not everyone, of course.
But according to Amazon’s announcement today, KDP Select authors are seeing the fastest growth, and most authors are content or happy enough to renew their enrollment.
MYTH #10: KINDLE UNLIMITED DOESN’T HAVE MANY CUSTOMERS
Amazon just put $7.25 million into the KDP Select Global Fund for December, 2014.
Yet the KOLL payment was $1.43 per download read to 10%.
That’s a very large customer base. There are millions of downloads read to 10% each month.
The KDP Select Global Fund continues to rise, a sign of a growing customer base.
Copyright © 2015
Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers
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