The 14th century was a seriously bad time marked by The Black Death and The Hundred Years’ War. After the plague, to combat the wage inflation caused by there being 30-50% fewer folks standing around, the nobility said, “Sure, I’ll pay you twice what I used to pay you,” and then they turned around and devalued the coins they used. Thus, even though you were now paid 6 sous each day, with their value cut in half they’d only buy you 3 sous worth of goods. Complain as you might, you were powerless to change it.
Amazon is like that. No, not like the Black Death. Like medieval nobility. (Though you could make an argument for the Black Death, too.)
When Amazon started up its Kindle Unlimited and Kindle Owners’ Lending Library (aka KU/KOLL), every author I know was skeptical, but many were willing to give it a go (including me). The programs promised greater visibility and access for an author’s titles, and for customers it offered a way to get as many books you wanted for a flat annual fee. Naturally, it was presented as a win-win but, while definitely a boon for customers, it has turned out to be a bust for authors.
Here are some details from my own experience.
I’ve priced most of my e-books at $4.99. I’ve read all the screeds on low vs. high price points, and I’ve tried everything from $7.99 to 99 cents. In my experience, $4.99 is a good performer: a low enough price to be in the “impulse buy” range, but high enough both to reflect the book’s value and provide a decent royalty.
I get 70% royalty on e-books sold through Amazon’s Kindle Store. That means we take my $4.99 cover price, subtract Amazon’s “delivery cost”, and multiply the result by 0.7. In real terms, it means that I get between $3.40 and $3.44 for each title, or about 68% of the cover price.
Enter KU/KOLL, where Amazon dumps money into a global “fund” and pays me a royalty for each title a subscriber purchases. The subscriber gets my book for free, and I get a slice of this global fund. Sounds good, no?
Amazon completely controls the amount of money it dumps into this global fund, and even though they dump in millions of dollars, when divided up by all the authors and titles involved, it has effectively dropped my royalty rate by more than half. Instead of getting a net royalty of 68% on each book sold, during the first quarter of 2015, Kindle Unlimited purchases of my $4.99 titles only earn me $1.34 to $1.38, or an effective royalty of only 27%.
And this “alternate rate” does not apply to books from publishing houses, only to independent/self-published titles.
The theory, of course, is that I will sell more copies via this scheme, but the numbers simply don’t support that. There may have been a slight uptick in sales, but with each title worth less than half of what it used to, I need 2.5 KU/KOLL sales to match a single regularly purchased title, and that just hasn’t happened.
End result: Amazon has devalued my book, my creation, and my work product. I’d have gotten a better deal from Jean le Bon in 1354.
I’m not getting rich on my books–the percentage of authors who are is vanishingly low, especially these days with the explosion of self-published authors and titles–but no one can support a 60% cut in revenue, and no amount of majestical hand-waving will make that a sustainable model.
But, like the medieval peasant, what am I to do? I can boycott the KU/KOLL programs, but does that hurt Amazon? Conceivably, but it would likely hurt me more. I could remove my titles from Amazon entirely and go over to B&N or iBooks, but with their smaller market share, again I’d likely be the only one who suffers by it.
For me, with my pitiable book-based revenue stream, it’s an unfair system that cheats me out of my due, but for others, authors who depend on their independent book sales for a portion of real income, it can be a disaster.
For more reading on the topic, try these articles:
- Indie Authors and the Question of Kindle Unlimited
- Author discontent grows as Kindle Unlimited enters its fifth month
- Kindle Unlimited: Good for customers, not so good for authors?