It looks like Kindle Unlimited lent out nearly 110 million ebooks last year, with my estimates adding up to a grand total of 107.76 million, which means over the year the average payment to authors was $1.21 per borrow.
The total KDP Select global fund paid out over 2015 was $131.6 million, so dividing that by total borrows gives an average of $1.21 paid out to an author per borrow. That’s 10% down on the last KU flat-rate figure in June 2015 of $1.35 but it’s not a like-for-like comparison as, under the KENP system, plenty of authors will have got paid more per borrow as more pages will have been read and plenty will have got less.
Until the switch to the KENP pay-per-page system in July 2015, it was relatively easy to work out the number of monthly borrows simply by dividing the total KDP Select global fund by the payout rate. But after July that would only give you the total number of KENPs (Kindle Edition Normalized Pages) read rather than the number of ebooks borrowed.
However, Amazon, in an uncharacteristic bout of transparency, revealed the total number of pages read in June 2015, which was the last month of the flat-rate KU payment system. This meant I had the total number of pages read in June and the total borrows for the month so I could work out that the average borrow was 228 KENPs.
I’ve used this figure of 228 KENPs to estimate the total borrows for the rest of the year after the pay-per-page system was in operation by dividing the total number of KENPs read for the month by 228 which should give at least a decent ballpark figure.
The figures show that monthly borrows more than doubled over the year from 6.15 million in January to 13.15 million in December.
It wasn’t an uninterrupted story of big leaps forward every month though, as there was a fall in February from the January total before a strong increase followed by much lower growth. You can see the plateaus in the graph which generally last a couple of months or so before taking another stride upwards.
We’ve heard all about how the Big Five’s ebook sales volumes were down last year, although the latest reports indicate they fell by only 2-3%. They might well be looking at these 100 million-plus borrows and thinking that’s where some of their customers have gone. However, there’s some consolation for the Big Five in their bank balances for ebooks as they raised prices massively during the year in a return to agency pricing so although sales fell, receipts rose. Whether that’s a Pyrrhic victory in terms of cash reutn at the expense of market share remains to be seen.
If Kindle Unlimited borrows double again during this year, then the total will be well over 200 million at the end of 2016. At present, I would make a rough estimate that Amazon now has a total of somewhere approaching 2 million Kindle Unlimited members paying the equivalent of $9.99 a month, probably more than doubling over 2015.
That’s working on the premise that an average total number of borrows per month is around 6-7 per member. If that’s figure’s in the ballpark, then Amazon could be getting a KU income of up to $20 million a month at present, although that would be reduced by the month’s free trial for new KU members.
In any case, it looks like Amazon could have cracked the ebook subscription profitability conundrum that’s put contenders such as Oyster out of business despite repeated rounds of venture capital funding.
The financial details on Kindle Unlimited would make very interesting reading but making an early profit has never been Amazon’s primary aim as it always looks to dominate a market rather than concern itself too much about profits.
Amazon has just recalculated the way it counts ebook pages with the advent of KENPC v2.0. The company claims the new counts should be within 5% either way of the old totals but many authors have seen bigger falls. The new version of KENPC (Kindle Edition normalized Page Count) came into operation on February 1 so we won’t see any effects on payments until March 15, when the figures for February are released.