New KU Payout Structure

Has it been a full year since KU debuted? It feels like longer. And yet, the year seems to have flown right by. Weird how that works.

With another June coming and going, we enter KU 2.0. Starting in July, payouts for Kindle Unlimited authors will be based on pages read, not whether or not a reader gets through the first 10% of a work.

I love this change. It’s one many of us have been clamoring for and even expecting. If anything, I’m surprised it took this long.

What this means for authors is debatable. Those who write shorter works designed for KU may see a drop in income, while those who provide full-length novels may see a rise in income (depending on how many pages readers enjoy). My guess is that the vast majority of authors will earn about the same amount as before. That doesn’t mean their income won’t fluctuate, only that this change won’t be the reason for most fluctuations.

I’m sure affecting the length of works was central to Amazon’s decision. By adjusting the payout knobs, they can influence the page count of works made available to readers. They might even entice some authors who pulled their $2.99-and-up novels and published them elsewhere to consider moving back into Select.

Should it influence serial fiction authors? Not in my opinion. Serialization worked for me before KU, and with this payout structure, we are getting paid more commensurate with overall length rather than number of titles. If the story calls for episodic releases, then there’s no difference in how those pages are rewarded. If you can’t hook the reader to continue reading along, you won’t get paid either way. And more titles will continue to mean greater visibility on the bestseller lists. So that advantage remains.

I have a feeling we’ll see some knee-jerk reactions from authors without considering these pros and cons. Shorter works still make a lot of sense in KU. It’s hard to justify selling short stories for more than a dollar, and you only make 35 cents on that dollar under KDP terms. In KU, a 20 page story might earn just as much as a sale. What we should celebrate is that short stories will no longer earn the same amount as a novel, especially since the 10% threshold was much easier to reach on a short story. That system just wasn’t fair. The new system is a vast improvement.

To those who write works with a mind of maximizing their earnings according to Amazon’s algorithms, take note: It’s not a good idea. Not in the long term. Write the stories you enjoy and that you think readers’ will love. This remains the best way to game the system: Write great works.

Something I really like about this new structure is the way Amazon calculates page length. To determine what constitutes a “page,” Amazon will format all KU books identically (not for the reader to see, but internally), to determine the total page count. What they say they’re doing is simply using the same font, size, spacing, and virtual device in order to figure out page count equally for all titles. So padding with whitespace won’t mean higher earnings. A nice solution.

I think this modification highlights one of the big reasons Amazon dominates its competitors: They simply don’t rest. They aren’t afraid to change course. They aren’t afraid to fail, and to learn from their mistakes. From what I can see, as a reader and a writer, KU has been a huge success already, with the amount of money going to authors and with the increased participation readers are having with independent literature. With this change, KU only stands to get better, for both parties.

 

COMMENTS (82)

Hugh – I’ve been on the fence about KU for a while now. I think this is a really dramatic change for amazon – I’m encouraged. Amazon though, first of all, is a business and I’m betting that they will watch to see if this affects their bottom line. Yes this is more fair to writers of standard length novels, but that will go right out the window if amazon’s bottom line is affected with this change. But I don’t see that happening – for now this is really good news.

I write books for kids. This will probably not shake out in my favor. Obviously, adult genre fiction is a much bigger piece of the reader and author pie and Amazon is making this decision with an eye on that. However, unless they tweak the system for “what is normal in a particular genre” this will undoubtedly lower the payout structure for Kid’s authors. Out of self-interest, that disappoints me. I get why they’re doing it, but it still disappoints me…because, well, I like money.

I’m not going to argue that my 100 page kid’s book is or is not more worthwhile than some other genre fiction writers 400 page novel. But I will argue, and argue fiercely, that there is plenty of short, children’s fiction that is brilliant and worth as much or more than many 400 page adult genre novels.

And then there’s pictures. A good chunk of Diary of a Wimpy Kid is pictures. The pictures are a substantial part of the kid’s reading experience. How will this be factored in? Again, in the future, I would love to see Amazon continue to “not rest” and make an adjustment (sort of a handicap if you will) for what is considered typical in a particular category.

Daniel

Thanks for these further bits to chew on. I can’t see them paying more than a penny per page, to be honest. In fact, I’m betting on the average payout being around 0.008 cents per page. Even in the penny per page model, 25 page books are only going to get 25cents. So yes, as one commentor brought up, children’s book authors are going to take a huge hit. A penny per page is certainly more realistic than the ridiculous 10$ per page example they used in the email.

For me, these changes are not enough to bring my full length novels back to the program. That exclusivity requirement is still the #1 issue as far as I’m concerned. Until they wise up to that, I can’t see authors flocking back to the KU program in droves.

So you’d better be writing page-turners. That’s just fine with me. It’s what I strive to do. If my books hold the reader’s attention for the full 200 or so pages (which is the length of most of my books), it will pay as much as another writer’s 400-page book that goes off the rails after 200 pages.

Under Amazon’s current system, even if the reader gives up at the 11% mark, the writer is still be paid for a full read. Beginning July 1, your readers better stay glued to your book to the very end–if you expect to be paid for all the pages you wrote and not just some of them.

Amazon is paying us to write better books.

I think this is exactly the kind of propaganda authors will see in future KDP emails.

I don’t care who you are–Crichton, King, James Joyce–nobody writes books that are read through at 100%. Nobody.

What read-through rate is the industry average for e-books? Amazon and its competitors know that number for sure. But you and I don’t. No author does.

Amazon is free to set the terms of the deal using information known only to itself. (BTW check out what economists say about imperfect information in the market. It’s not pretty. Try trading on inside information with stocks, and we’ll jail you for it–that’s how much it can affect a market.)

So Amazon can easily set a price that seems “fair” as long as you’re using a layman’s assumption about how much people read. But if you have inside information that tells you that people actually read much, much less–even of very good books–then you know your payout is much less generous than it looks.

Best of all, you get to tell the authors it’s their fault, and up to them to do something about it–even though you know it isn’t, and they can’t.

Go look at Monique Martin’s post in the kboards thread. Kobo shared some actual data with her. Read-through of 50% is considered very good. Her results are considered outliers at around 78%.

It’s undoubtedly true that the average reader doesn’t finish the book. But that doesn’t punish authors, since that only increases the average payout per page, since the total pot is the same. It puts all authors on an equal footing. If your average page read per reader is higher than the average, you will get paid higher than average also. If lower, lower.

I also question the value of these “averages”. It is probably weighed down by the number of readers who buy or borrow a book, but never get around to reading it at all, or get through only a few pages. I’d be more interested in how many get a third of the way through, but don’t finish it. And where they actually stop reading.

In any case, this payout system rewards the more skilled authors who can actually keep their reader’s interest. If Amazon is rewarding those authors, and punishing those who can’t keep their readers reading, isn’t that justified? Blaming bad authors for writing bad books that readers don’t want to finish seems like a good thing.

Amazon KU doesn’t make much sense for me right now, as I only have 2 books out, but I’m glad it will be a better option for the future when I can leverage it in a long-term marketing plan. I’ve already seen much wailing and gnashing of teeth from genre authors convinced that the ‘Zon is out to screw them, AGAIN, but I imagine they’ll get over it once they quit hyperventilating.

I have several books in the program that range from 250 pages to 350 pages. Hoping all goes well.

So, in theory, an author could get paid over a period of months for the same book, if the reader is the type who starts several books and pokes through them. The idea makes sense, but it seems awkward. How will it show on the KDP page for sales?

This is a great question. I wish there was a way to streamline it.

My guess, or hope really, is that each month the Amazon author statement will tell you how many page reads each of your books got, regardless of what part of the book was being read. So if a reader read the book over several months, their page reads would be paid out for the number of pages read in each month.

I’m an indie romance author, and I refuse to participate in Select. KU payouts have nothing to do with it. The reason I refuse is the exclusivity clause. I have major issues with relying on one source of income from a place that’s known for being unreliable and changing things that end up massively affecting an author’s income. Amazon is no more a friend to the indie author than they are the traditional author. Amazon is a friend only to Amazon, and eventually they will turn on the indie author too and treat us the same way they treat traditional publishers. Except we won’t have the power to try and stop them.

The new payout terms will not entice me to pull my novels from my other retailers and go exclusive. I’m not alone in this either. More and more authors are starting to realize how important it is to diversity your income, thanks in part to KU. I think the new payout terms are due, in part, to the mass exodus of indies from Select. They’re trying to entice those people to come back, but I don’t see it working on the scale they’re likely hoping for.

As a reader, I made a conscious choice to not be part of the Kindle ecosystem, and I bought a Nook. I love my Nook. Should Nook devices ever go away, I’ll get a Kobo one. As an author, I’d rather make less and be able to sleep at night because I haven’t violated my principles. But I’m not convinced I could make more by enrolling in Select, since I’m an unusual romance writer who doesn’t cater to trends or popular tropes.

It’s the “Amazon is the enemy” attitude that I absolutely despise. Amazon is a business. It will no longer be a business if it fails to serve its customers. Amazon is not out to intentionally screw anybody, contrary to what many indie authors believe. It isn’t an “evil corporate enemy.” Its corporate management is doing what it has to in order to ensure customer loyalty and, by correlation, Amazon’s survival in the marketplace. Making this a “them vs. us” argument serves no one.

The changes are great, and make obvious sense, though the exclusivity factor still has yet to make sense for me. Even with B&N’s huge sales decline (for me), I’ve always sold more on Kobo and iBooks than KU/KOLL can make up for.
It seems like all the growth and big money-making is limited to the very top sellers combined with a huge number of enrolled authors who aren’t really making much – sort of an analog to “the 1%” economic paradigm.

This does seem like a change in the right direction towards a fairer system, and I applaud Amazon for being willing to try something new. I also wish they would let go of the exclusivity clause. Hopefully some day they will decide that it is better to offer a lot more books to their readers than to have exclusive books.

In the meantime, we are taking the approach of not having all eggs in one basket, so some of my wife’s and my books are in Select and some are not. This way we have a presence on all the various channels including Select.

It might sound like it’s beneficial to the authors of full-length novels, but let’s be real. Amazon doesn’t do anything that doesn’t benefit Amazon.
The goal here is twofold, to keep disillusioned KU subscribers who are tired of only getting short novellas by bringing in more substance, and to get more and more authors to pull their work from all of Amazon’s competitors, giving them the overwhelming lion’s share of the market.
If you think you’re going to get a penny per page, think again. Amazon determines what a ‘page’ constitutes, and it’s not going to be in your favor. Also, remember the $2/download you were tempted with to initially join KU? That turned out to be a complete falsity as well.
Once we all pull our works from iTunes, B&N, and other retailers, causing them to go under, Amazon can undercut and charge us whatever they want because we’ll have no where else to sell our work.
I see this as another gimmick by Amazon to take down their competition and give us less money in the long run.

Amazon thinks of indies as sharecroppers, which is why it gave them only two weeks’ notice to adapt or pull out. Nobody can retool an entire business strategy in that amount of time. Especially because there isn’t a single data point for people to plan what their income will be in the next few months.

I keep seeing this is for “the readers.” Here’s a hint I learned from a life in business. Every healthy ecosystem has multiple stakeholders. Anytime anyone tells you that everything is “all about X”–whether “X” is “the children,” the shareholders” or, in this case, the readers–hold onto your wallet. Because inevitably, that same person is going to appoint themselves the sole spokesperson for X’s interests, which are just coincidentally going to coincide with their own.

I can see using KU for visibility to launch a debut novel or new pen name or series. But as a permanent source of income? Seriously? In what other area of life do you sign a contract to sell someone a product, service or your own labor, then wait around for a month to see what they decide to pay you in their sole discretion? In many other parts of the economy, such an agreement wouldn’t even be legal.

If your business strategy is to write/publish books that users want to read, this shouldn’t require you to re-tool anything.

If your business strategy is based on the loophole in Amazon’s policies that make it worth a lot more to have short works or trick people into getting to the 10% mark before they abandon the book so that you get paid, then I think you deserve to loose out. You aren’t trying to provide the reader good books, your trying to produce as little as possible and take advantage of loopholes in the rules.

sorry, no sympathy from this reader

I find it a little unnerving that Amazon knows exactly how many pages of a book I’ve read… of course I’ve felt this way since they instituted the 10% rule. I had hoped that the 10% mark simply triggered a cue that notified them once you had hit that %… but now we know they have far more detailed information on our reading. How will this impact books that are more reference, like a travel guide with listings?

They have always know exactly how many pages you have read, which is necessary for them to know what page you are on when you switch to reading on a different device.

So glad they’re finally doing this.

I am curious as to how it will affect bestseller rankings. Will it now count as a sale (for ranking purposes only) when the first page is read? Or will it count as soon as it is downloaded, remain as it is today when it reaches 10% read, or at some other threshold? Seeing as the effective unit here becomes pages read, it seems like there could be a change in this area also, influencing sales rank based on total number of pages read. It might be much more complicated than that, factoring and rewarding the number of times a downloaded book is read to completion. I’m not sure how much Amazon is likely to say about this, but if there are also going to be changes to how KU units affect sales ranking, this could be more important in many ways than how it affects payouts.

Yes, this is very important, and Hugh and Data Guy will hopefully be able to figure this out before the next Author Earnings report. It could skew the next batch of data relative to previous reports if the algorithm changes in any dramatic way, not to mention that it will affect their assumptions about income relative to rank.

I’m with you on this, Hugh. A big plus for fair compensation, for all the reasons you raised. There will no longer be any financial biases toward or away from works of certain lengths. Authors of works of whatever length will be compensated for creating “page-turners” — literally. As long as you can keep readers turning to the next page, you’ll get that additional payout from the monthly “pool,” whether it’s a short story or a gargantuan tome. And homogenizing formatting to a standardized “page” for compensation pages will limit a lot of ways to try to game the system.

Also, a big “amen” to this: “To those who write works with a mind of maximizing their earnings according to Amazon’s algorithms, take note: It’s not a good idea. Not in the long term. Write the stories you enjoy and that you think readers’ will love. This remains the best way to game the system: Write great works.”

Yup. You want to earn money at this writing gig? Then write page-turners. Amazon has just taken a major step toward rewarding those who do that.

I saw this change and almost cheered. This is the first step towards equalized incentives for both authors and readers.

I read the new KU structure, and within minutes enrolled my novel into select. Amazon wins the ebook game, now it will be up to Indies to get physical distribution or print only right sales.

This is exciting… :)

Does anyone know if the example that Amazon shared (100,000,000 pages read per month across KU) is even close to reality? I have no idea.

Well, here’s one guess. I saw an author posit on KBoards that $1.35 per borrow is what Amazon likely is comfortable paying for a full read of a full length novel. She guesses this based off it being an average payout that Amazon has moved toward. Now, in the future, that may or may not be true. Who knows? But, as a thought experiment, let’s assume it is. Next guess is what does Amazon consider a full novel? For sheer out of my ass guessing, let’s assume 75,000 words. And let’s assume 250 words per page. That’s a 300 page novel. So, divide $1.35 by 300 and that gives you $0.0045 per page. Or less than half a cent. If on the other hand, Amazon is feeling generous then they might assume a full length novel is 200 pages. Dividing $1.35 by 200 gives you $0.0068 or more than 1/2 a cent. In reality, that’s not how they ‘said’ they’re going to do it. They’re going to take total pages read divided by total KU fund and that gives you the amount per page. But I’m fairly sure that KU fund is a floating fund and per the author’s above guess, it’s at least a reasonable guess that Amazon is comfortable paying the $1.35 per borrow. Could be more but probably won’t be much less than 1/2 a cent. Maybe as much as 1 cent though why the average borrow is now only $1.35 wouldn’t seem to make much sense in a world in which they were now willing to pay 1 cent a page unless they really think that this move improves the whole KU experience so much that they’re willing to pay a better borrow rate for that. Again, all out of my ass guesses :)

$1.35 per borrow is what Amazon will pay for all ebooks of any length. If they are paying less for shorter books, then it stands to reason, they will be willing to pay more for longer works.

Of course, we are all guessing at this point.

They’ve already stated the pot is staying the same or even increasing for at least the next couple of months ($11million I think).

So, if instead of paying that $1.35 for all those short works, they will now be paying probably $.30 or less. That leaves a whole bunch more money for the longer works.

My guess is Amazon wanted to make the KU borrow revenue closer to that of a sale for every kind of work. Most short story-type works are listed at .99 to buy. The author gets .35. A large portion of novel-length works are priced from 2.99 to 4.99. If Amazon ends up around a penny a page for those, you’re looking at 2-3.00, depending on length. Again, matching more closely to the revenue generated by a sale.

All that is, of course, contingent on the book actually being read. Authors with good stories that keep readers coming back for more will do well. Books that people stop reading for whatever reason won’t do so well.

Isn’t that about as fair a system as there can be? One that actually involves the merit of the work rather than length or price shenanigans?

Yup. A 99 cent short work was earning a buck or two sold through KU and KOLL. While a 6.99 one through KU was also earning a buck or 2. Was definitely disprobportionate.

Not to mention, a KU sale was attributed after reading 10% of a book, meaning the threshold was much easier to hit with shorter works. Getting a payout at 4 pages instead of 40 was kinda a big deal.

I’m not a huge fan of the per-page payout (kinda feel like there’s a point where you’ve bought the book), but at least this change is heading in the right direction.

Wonder if Hugh could answer this:

I’m really curious how they are going to tally reads and payouts that extend over multiple months, considering they’re pulling from different monthly pools.

As an newer indie author, I put my January release on multiple sites after reading so many places that readers prefer options. My sales were so low on these options compared to Amazon that I went Kindle Select with my April release. Based on the results so far, being Amazon only is working better for me, so I’ll continue with my summer release.

The next change I wish Amazon would make is having a separate bestseller/new release ranking for box sets, novels and shorts. That way a full-length, $2.99 or more novel isn’t competing with .99 boxes of 2-10 books or .99 novellas and has a better chance of moving up the lists. Example: In the top 25 paid medieval romance bestsellers right now, 8 are box sets and 2 are under 150 pages.

I hope they do something about that too, Ruth. And SOMEDAY I hope that they patrol the genre fences too, because it really irks me that my genre (Fantasy/Magical Realism) has the first 5 pages of best-sellers as erotic romances, which are only listed there because it is a smaller pond so they can get noticed easier. It is cheating. And it bothers me as both a reader and author. :/

The big problem with this is that not everyone syncs their Kindle. Some don’t have wifi, some don’t have a 4G version. Everyone can just download the books to their computers and sideload them onto their readers. So how does Amazon figure out the percentage read in that instance?

I’ve talked to Amazon before about this when KU started, since I tested it with my own books and found I could download as many books as I’d want, without ever reading them during my KU subscription, and other than getting only ten at a time, Amazon had no technical/software devices in place to prevent that happening. I emailed their tech support and basically got the answer “well, we can’t do anything about that”. It’s one thing to use KU and still get paid, but I can’t see this ending well.

So you could download 10 books, sideload them onto your Kindle, then return those and download another 10 books just an hour later? That does sound like a concern if a lot of people catch on and sign up for KU for a month, sideload several hundred KU books and then cancel their subscription….and never sync their Kindle. Of course, most people probably have no idea how to sideload a book onto their Kindle.

Then again, if a lot of people were abusing the KU system like this, Amazon would have to notice and then they would do something to stop it. Anyone who is borrowing hundreds or thousands of books a month would be suspect.

I think that would only be a problem under the old system. If you go to borrow another book (and if you have signed up for KU, then you probably read a lot and sync frequently), then it will see how much you’ve read of the other books. Since authors are getting paid by pages, you can’t “scam” it unless you borrow a bunch of books, flip through the pages without reading, and then go back and re-sync.

As someone (maybe Hugh) said, this is an incentive for authors to write stories that people actually READ. It weeds out all the jerks who were filling 5 page books with nonsense just so people would flip 1 page and they would get a paycheck for it.

And it’s only fair that I should get paid more for providing someone 300 pages of entertainment than someone who provided them with 30 pages.

I pulled my novellas from KU. I was waffling over it anyway, since borrow rates were so low, but this sealed it. Amazon already obfuscates what the pay out is, which I have an issue with. As a business person I like to know what I’ll get paid for my work. I also imagine they will determine a standard page count that will favor them, and I’ll get to just accept whatever that is. Plus, I highly doubt they’ll list pages read for each book for us, instead I think they’ll just let us figure it out based on whatever we get paid.

So… I’m not sure this is a good move, but who knows? For me, I already disliked KU for multiple reasons. This is just another on the pile and enough to convince me to try my luck elsewhere. I only had a handful of titles in anyway, preferring to be wide for stability’s sake, so it doesn’t really hurt me either way, but I feel for people who had their income cut in half or worse by KU, then adjusted their strategies, and are now going to have to scramble and adjust again.

More reason to be non-exclusive, I suppose. Means when Amazon does things that make huge waves, I get a lot less wet. :)

What an exciting development. If I understand correctly, a well-written 40 page short story will make more than a lousy full length novel that readers give up on after 20 pages. In my view, this is great. They *could* have bracketed books based on their length ($0.50 for short stories, $1.00 for novellas, $2.00 for novels, $3.00 for epics), but instead they are incentivizing authors to write stories that people want to read.

The only thing left is to expose this data (or fold it into the ranking algorithm) so that readers have an easier time finding those books. As a reader, I want to know which books tend to get read all the way to the end.

As a writer, I want to know where people drop off. If a large percentage of my readers stop reading right after the young girl defeats the dinosaur using gymnastics, that would be good to know.*

Questions that come to mind:
– Are traditionally published books in Select treated the same as Indies?
– Are books that were borrowed months ago, but not read until after June 1 paid out under the new system?
– What about books that were read to the 10% mark in June, but then read to the 100% mark in July?
– I assume that re-reading a book doesn’t count for anything, right? Fair enough, I suppose…
– I wonder if their system will require readers to “stay on a page” for more than a second, to prevent scammer services from flipping through a book quickly.

Interesting times!

Geoff

*This was a fictional hypothetical example. There aren’t any kids in my dinosaur novel. Besides, no one would ever tell a dinosaur story where a young girl defeats a dinosaur using gymnastics.

Right?

Now you made me think. I like a challenge. ;)

“If a large percentage of my readers stop reading right after the young girl defeats the dinosaur using gymnastics,”

Funny! I got a good giggle out of that!

Dinosaurs can NOT handle gymnastics – the fossil evidence is clear. They tried to follow the movements with their eyes and twisted their heads right off their necks!

No – Amazon doesn’t treat publishers the same. I have 2 books with Kensington Publishing, who put all their titles in KU and I just got an amazing Dec 2014 royalty pay out as each KU borrow was treated as normal royalty rate as for any sale.

It’s making me think I earn more now off a TP in KU?

cheers

I should say being with Kensington also allows my books to be on all other platforms too! A win as well.

I started my 1 novel:6 short stories pattern well before KU came out, so I’ve had a year’s worth of kicking ass. It was as if they tailored KU to my own personal publishing strategy.

While I agree that this change is a wise and fair move on Amazon’s part, I think it’s going to be a massive kick in the nuts for my bottom line.

I think this move is a good one but something is still bothering me. If the payment is worked out by the amount of pages read this means that a book that is downloaded in April might take till July to be read if the person is a slow reader. At what point does Amazon decide the reader has finished reading and calculate the payment? Or do they total up the number of pages in each book at the end of each month and pay accordingly? Does this mean that a writer could get several small payments over a period of time?

Yeah. I have the same question.

Also, that each month has a different pool. Meaning not only a different total amount to be divided, but a different number of people to be divided between, depending on how many pages are read in a given month.

You could see the pool go up, but your pay per page go down because there’s more people reading through KU — on the same book bought by the same person.

Why wouldn’t they just pay out how many pages were read that month? The pay is just a share of total pages read. They don’t care if the reader is switching between three books that month, and finishes them next month. Each page is a page is a page.

They say in the announcement that they pay the first time each page is read. I don’t see any reasonable way to read that other than that they will pay for the pages read each month.

Yes, let’s cheer from the highest mountaintop. Fairness has one in the end! And children’s book authors, once again, get screwed.

I wonder what percentage of readers do what I do: if I don’t like a book after a few chapters, I skip to the end to see what happened, and use that to decide whether to read the rest of the middle (usually not – my radar knows what I like). It’s curiosity, after I’ve invested a bit of time in a beginning which appears to go nowhere.

If this counts as reading the whole thing – ie, Amazon doesn’t notice how little TIME it takes me to go from chapter 3 to chapter 3-from-the-end – it will count as a whole book read. I don’t like that – I will have to stop finding out ‘what happened,’ because if I don’t like a book, I certainly don’t want to reward its author.

Time to pay MUCH more attention to Look Inside the Book!

OTOH, it will keep me from sampling things I’m pretty sure I won’t like. Maybe I’m a minority in this curiosity. Anyone else?

they say that they page the first time each page is read, so that would seem to mean that they don’t pay for the pages in the middle.

but test it in a couple of weeks.

I’m sure that if there’s something obviously broken like this, Amazon will fix it fairly quickly.

I love the change. I can write a short story in less than a week, while it takes (let’s say) a month or two to finish a full length novel. Nowhere but in KU discussions would anyone suggest both works should be paid at the same rate. Really, if you walked into your local B&N to buy King’s latest for $15, and saw he’d also release a new short story for $15, would you pay it? Similarly, why would we, as writers, expect the same payout for a short work as a full length novel?

Those negatively affected by the change, writers of shorts, were only playing by the rules, so no slight intended toward them. The new rules, though, appear to make a lot more sense, answering many of the complaints about the previous version of the program.

The whole episode does, however, make me think about business models. Whatever we think of this particular change, it suggests that if we are overly dependent on a decision made by a single provider–be it Amazon, Apple, or the others–we’re taking too much risk at that provider.

Since we have a 90-day escape hatch (and the option to use an immediate eject button with this change), I’m not so sure there’s anything they could do that would be overly concerning. Going forward, I will do my best to keep it that way…

Great post, Hugh!

I’m so glad you think it’s fair that authors who made a living at this for the last year because of Amazon’s arbitrary payout rules now have no idea if they’re going to be able to pay their rent since Amazon made up some exciting new arbitrary payout rules overnight.

As long as you think it’s a vast improvement, I’m sure it will all work out.

Hugh, while I greatly respect you, I would be curious to know your thoughts if you think all digital earnings on ebooks should be based on pages read?

I understand we are talking about a voluntary program here, and I am not trying to play Chicken Little and say the sky is falling in terms of Amazon will suddenly port over how borrows are paid out to the catalog of book at large.

But I DO think the method of payment opens the door for the question to be asked, why aren’t readers just charged this way now on the digital books they’re buying only a license to? When someone clicks to buy a $4.99 ebook and only reads 50% of the pages, why aren’t they only charged $2.50? We all know Amazon calculates where we are in a book at all times across all of our devices . . .

My thoughts, exactly, Hugh. It WAS drastically unfair. I heard of people purposely writing shorter and shorter books in serial fashion just so that someone would reach the 10% mark easily. People were working the system, because it was flawed. I’m glad to see this flaw has been fixed, and I have a feeling I will end up on the side of the fence that benefits from this change. Exciting. :)

Somebody over on PG made a good point. That this move is really about bringing high quality longer books into KU. As this poster put it, you can’t build THE library of all subscription libraries.

And I think this is just a good point, that it swings both ways.

If Amazon does not find a way to make an exception and/or handicap this KU royalty thing for kid’s fiction (which whether in the form of picture books, chapter books, or some middle grade is mostly quite a bit shorter than adult genre fiction) and treat Kid’s fiction like its own animal with its own history of what is considered a standard sized work, then they risk pushing high quality kid’s fiction out of KU. And, I don’t see how you can build THE library of all subscription libraries without having a kid’s section.

Should have read…’can’t have THE library of all subscription libraries without having these high quality long books in it.’

Sorry

A very positive change! It makes a lot more sense to pay out by pages read. Plus, I think the theory I’ve seen others state is correct…that Amazon is attempting to bring in some longer works to beef up their KU selection.

I imagine it’ll see some results! I’m definitely excited to try KU one of these days, just as soon as I have something available for it. Not everything I write will end up in KU I’m sure, but I’m also not going keep everything out of it either. Anything that’ll help me experiment and reach more readers is a good thing!

Since I write longer books, I’m happy to hear about this change. I hope that Amazon will also pass along information to us regarding where readers quit reading. That could be extremely useful! With luck, we’ll see a new report available on the KDP Reports page.

I read an article a few months ago that most people didn’t make it past the 10% mark in The Goldfinch, but that most readers complete romance novels.

What’s the way to game this new system? Write engaging page-turners that keep people up well into the wee hours of the morning!

Now when people read my 850 k word The Wardstone Trilogy, I will be earning the equivilent of 6 Morgan Rice/Hugh Howie novels, instead of just 3.. :-)

I’m pretty stoked about this too! Since KU has come out, it has been a good chunk of my income. In months I received very few or no sales, I still made something with KU. Which means my work was still being read. It’s what keeps me in KDP Select. I know a lot of people are preaching diversity, but at the moment it pays for me to stay put and keep my business simple. Of course, I will always keep an eye on the market and never grow complacent. You never know what will change down the line, but for now this works for me.

Keep in mind that Amazon ALREADY has the numbers. Don’t for one minute believe that the amount Amazon will be paying out will increase. That hope that they will be paying out more is laughable.

They will be paying out less. Bank on it except you’ll have less to bank on it.

What Amazon is not sharing is their analytics that tell them most readers who buy a book do not finish it, and many never even open it. They intend to use this to their advantage to further lower the pay to authors, and make sure they churn out content at slave wages less than minimum wage. The only way to escape the downward pressure on pay is to bailout of KU with a mass exodus. I am sure they would respond by lower they pay of books, but it would certainly be better than KU.

To take an example, if a book is opened 60% of the time, and finished up to 60%, then a 250 page book paid at $.01 (guessing, only time will tell the rate) would pay $2.50 x . 6 x .6 = $.90 a book, and these are well performing books. It will be even less pay for average books. Amazon has the analytics to know how to reduce the pay to authors while they rah rah their own unfolding destitution. They must be having a good laugh right now at the U.S. Open 2015 with their $1200 tickets.

This isn’t how KU works. They don’t have a set payment per page. They have a fund that they pay out in its entirety to all authors. Paying by the page only determines who gets paid and how, not the total amount being paid to authors. So while it’s true that many readers don’t finish the books they borrow in KU, that doesn’t reduce the author’s income unless his readers read less of his books than the average. If the author’s readers read more of his books than the average, that author will actually make more money, not less. And if they are just average, it stays the same, basically. Depends on total page views. But what it doesn’t mean is that authors overall get paid less, and Amazon pockets the difference. As it stands now, it’s almost certain that Amazon is actually losing money on KU, but doing so to compete with similar services.

I like the change. Being at the beginning of my career, I have much shorter works, so it will be sad to see the $1.30 go for my 18 page story. However, as I write and release more, my over all page count should go up. I think the policy favors more established writers, as it should. New kids on the block like me should be focused on getting readers, refining their work, and establishing themselves over the money they make. Once you have the fans and presumably enough short stories and novels to make your overall page count high, you should see the rewards of this pay structure.

I write very long books. I cannot blame Amazon if a reader puts them down before reaching the final page. That means I didn’t do my job well, or it just was not to the reader’s taste. My bug bare with this new system is that Amazon has the power to tell us what, when, why, and how we are being paid for our product. If I went to a restaurant, ordered a steak, but didn’t eat it all, I would NOT ask for my money back, or a percentage of money back for the bit I didn’t eat.

I take seven or eight months to publish a book. I have overheads. My editor demands a certain amount, so does the book cover designer, promotions, etc. They know exactly how much they will be paid, and they get paid. Why then must I play a guessing game every month, at Amazon’s convenience? It could take a reader three months to read a longer book because of many reasons. Payments being split, over months, and the goal posts being moved every five minutes does seem to end up with us authors being paid less and less by Amazon.

I think this whole concept is ridiculous in so many ways. I don’t think KU should even exist.

Having ranted, I will now admit that all my books are with KU, at the moment, and I’m not going to do anything drastic until I see where this all leads. Down the rabbit hole, we go. Thanks for all your great comments, by the way.

The long-expected amazon hammer begins to drop. No doubt they plan to expand this to all kindle books. Just as doubtless, they will not be cutting their own take in a similar fashion. The accuracy of their numbers will not be verifiable–and even if it were, what kind of business model is this? Shall carmakers be paid less by those who drive fewer miles, or chefs by percentage of meal finished? There’s no way this makes any kind of sense at all–except to the gatekeeper. If they persist with this, it marks the beginning of the end of amazon as a viable market for ebooks–and a huge opportunity for some as-yet-unknown competitor.

“Rich Meyer
JUNE 15, 2015 AT 4:39 PM
The big problem with this is that not everyone syncs their Kindle. Some don’t have wifi, some don’t have a 4G version. Everyone can just download the books to their computers and sideload them onto their readers. So how does Amazon figure out the percentage read in that instance?”

Very easily: 0% read, no pay for you. Many people sideload and read NOTHING on Kindle. Now amazon has found a way to make that good news for amazon, and perhaps even enlist the aid of authors in badmouthing Kindle competitors. A lot of thought went into this, and nothing good will come of it.

If you’re writing a strong book with a strong opening, they will read past the 10%. If you’re surgically arranging your words to game the algorithms, you’re bound to lose eventually anyway, because these things always change. Write a good book with a good opening, and you’ll win in any system. The readers deserve that anyway.