Amazon adds huge bonus for Kindle Unlimited and $500,000 for KDP star authors

Amazon added a massive bonus of $2.7 million to more than double the Kindle Select Fund total for August 2014 to $4.7 million, by far the biggest-ever for the fund.

But, as I reported earlier, the August payout for borrows under the Kindle Unlimited/KOLL scheme sank to $1.54 per borrow from $1.80 in July, which was a partial month as it was launched on July 18.

Amazon, in their usual less than transparent way, decided to reveal the bonus in a very low-key way, with a discreet announcement on the KDP Community site.

The bonus does bring a new development in Kindle Unlimited, with $590,000 being paid out in cash awards to top-performing authors, and $80,000 to non-US authors disadvantaged by the US-only KU.

For August, Amazon will pay out All-Star bonuses to the top 100 most-read authors and also for the top 100 most-read titles, with the top 10 authors getting a very useful $25,000 apiece.

The stars will be picked by combining books sold plus qualified borrows from Kindle Unlimited and the Kindle Owners’ Lending Library (KOLL) during the month. Calculations only include sales and qualified borrows for titles enrolled in KDP Select, so it’s an overall incentive to enrol in KDP Select rather than an award for the most-borrowed authors. The first shining stars will be contacted in the next few days.

The top 100 most-read KDP Select authors will each get:

  • Authors 1 through 10 will receive $25,000

  • Authors 11 through 20 receive $10,000

  • Authors 21 through 30 receive $5,000

  • Authors 31 through 50 receive $2,500

  • Authors 51 through 100 receive $1,000

Authors of the top 100 KDP Select titles will each get:

  • Titles 1 through 10 receive $2,500

  • Titles 11 through 50 receive $1,000

  • Titles 51 through 100 receive $500

All-Stars authors will be denoted on detail pages, and the Kindle team at Amazon expect the approach to this will evolve over time.

There is also a bonus for authors outside the US who get most of their most of their borrows through the KOLL and have not been able to benefit from the growth of Kindle Unlimited as it is just for US members at the moment, although international membership is expected to open up in September or thereabouts.

Amazon says the ability of non-US authors to compete within the wider pool of KDP Select loans has been affected and they are adding an additional bonus of $80,000 to be paid out on all KOLL loans outside of the US.

Amazon says they have continued to see significant significant early trial response from customers to Kindle Unlimited  and the $2.7 billion bonus is ‘similar to what we’ve done in the past around holiday spikes in borrowing activity’.

If the fund can be considered to be $4,030,000 (the total of $4,700,000 minus the $670,000 set aside for All-Stars plus non-US authors), then the total number of books borrowed under Kindle Unlimited/KOLL during August would show a rise of a million to 2,616,8883 from July’s total of nearly 1.6 million, which certainly is a significant early response.

The concern must be that if the borrowing figures stay around the same area for September, then the payout rate on borrows could sink further. The September fund is presently at $3 million, although obviously with the track record so far for adding bonuses in July and August, that could rise. But if it stood at that size and borrows stayed at around 2.6 million, the borrow rate could slump to just $1.15. If borrows reached three million, then the payout would be just $1.00 per borrow.

I feel Amazon will have to maintain the payout rate at around the $1.50-$1.60 level at least if they want to keep the support of the authors they already have and attract others, otherwise the whole Kindle Unlimited venture could turn into a bonus of contention.