The final flat-rate payment to authors from Kindle Unlimited didn’t exactly go out in a blaze of glory as Amazon shelled out the second-lowest royalty rate of $1.35 per borrow for June despite a massive new KDP Select fund of $11.3 million.
A new pay-per-page-read system started operating on July 1 for KU and the first payouts on that scheme will be revealed in mid-August.
The June payout of $1.35 followed a rate of $1.37 in May, $1.36 in April and $1.33 in March, which was the previous lowest pay rate under KU.
We now have a full year’s figures available for Kindle Unlimited, although the July 2014 result of $1.86 is very unrepresentative as KU started halfway through the month.
The rate fell sharply to $1.54 in the first full month of operation in August 2014 and $1.51 in September before plunging to the low point of $1.33 in October 2014, which brought an exodus of authors from KDP Select after complaints that their income was taking a hammering.
The next four months saw a slight recovery of sorts as the payout rate hovered around the $1.40 mark before hitting $1.33 again in March 2015.
Despite the low rates, Amazon has been pumping ever increasing amounts of money into the KDP Select fund, which is divvied out to pay authors. In June, the fund was set at a record level of $11 million and was topped up with $300,000 to make a total of $11.3 million. This was well above the May fund total of $10.8 million, which was the first time the fund had topped $10 million.
The economics of the ebook subscription business, however, mean that increasing numbers of members and borrows mean that bigger funds don’t translate into higher payout rates to authors.
In the 12 months from July 2014 to June 2015, Amazon paid out a total of $89.5 million to self-published authors through the KDP Select fund.
In the first six months of this year, the KDP Select fund has paid out $57.7 million, with payments to All-Star authors of $500,000 a month taking the overall total to around $60 million.
The July fund has already been set at an initial $11 million, so the total for the 2015 calendar year should in the region of $120 million or higher.
Amazon says the switch to pay-per-page-read came after pressure from authors who considered the flat-rate system to be unfair as it paid out after just 10% of a book was read, encouraging a mini industry of very short books where the payout could be triggered after just a few pages were read.
Some authors seem to be pleasantly surprised by the figures so far in the new system, which shows the number of ebook pages read (KENPs — Kindle Edition Normalized Pages). A KENP seems to comprise around 185 words and statistics of KENPs read are now shown in authors’ Kindle Direct Publishing accounts under the Month-to-date Unit Sales heading.
The expectation is that the likely pay rate per page read is going to be around half a cent per KENP when the first results are announced.
This estimate of $0.0057 per KENP is based on the fact that Amazon recently revealed that 1.9 billion ebook pages or KENPs were read by Kindle Unlimited members in June ($11 million fund/1.9 billion pages read).
Dividing the eventual June fund of $11.3 million by the payout rate of $1.355 gives a figure of 8,339,483 borrows during the month — a massive increase of over a million in just two months from April’s figure of 7,205,882 and up by nearly half a million on May’s total of 7,883,211.
On the previous figures given by Amazon, I calculated that the average borrow amounted to 243 KENPs. It’s possible to be more exact now by dividing the Amazon official figure of 1.9 billion pages read in June by my figure of 8,339,483 borrows in June, which results in 227.8 KENPs per borrow, which I’ll round up to 228 KENPs.
If the $0.0057 per KENP applies, then this means the average borrow will bring a payout of $1.30 for an author (228 pages x $0.0057), which is a few cents down on even the lowest flat-rate payout.
However, it should be remembered that a KENP is only around 185 words, representing about half or even a third of a print book page, so 228 KENPs is ‘only’ 42,180 words — half or less of an average-length novel.
If a borrower reads the whole of a book of that length, then the author will be paid around $2.60 on the estimated rate, well up on flat-rate payouts and almost on a par with the 70% royalty on an outright sale of a $3.99 ebook. A fully-read borrow of a 130,000-word ebook would bring in a payment of $4 at the estimated royalty.
Amazon says it will pay per page read if a book is read over a series of months, so payment on a borrow could be split over several months.