Kindle Unlimited authors’ payout slumps to $1.33 for October

The payout for authors from Kindle Unlimited slumped to $1.33 per borrow in October from $1.51 in September, despite Amazon adding $2.5 million to the KDP Select Fund which had been set at $3 million for the month.

The $5.5 million total KDP Select fund was a new high but the payout still fell by 12% from September. Since Kindle Unlimited launched in July this year, the payout for borrows has fallen by over a quarter (26%) from the July payout at $1.80, although that was only a partial month for KU as it started midway through the month.

The payout for August, which was the first full month of operation for Kindle Unlimited, fell to $1.54, with the KDP Select fund totalling $4.7 million, and then slightly down to $1.51 in September from a KDP Select fund of $5 million.

Kindle Unlimited started off as a US-only service but soon added the UK and Germany and earlier this month was extended to Spain and Italy.

Amazon also added KDP Select All-Stars with hefty cash awards each month for the 100 most-read authors and 100 most-read titles. The cash bonuses for All-Star status on the Amazon.com website range from $25,000 each for the top 10 most-read KDP Select authors to $1,000 apiece for authors placed 51-100. The top 10 most-read titles get $2,500, 11-50 get $1,000, while 51-100 receive $500.

KDP Select All-Stars cash awards added for UK and Germany

Now Amazon are adding KDP Select All-Stars cash awards for the UK and Germany. The top 10 KDP select authors on Amazon.co.uk will get £2,000 each, while 11-20 get £1,500, 21-30 get £750 and 31-100 £500 apiece.

The top 10 KDP Select titles on Amazon co.uk are to get £500 each, 11-50 get £250 and 51-100 get £100.

The top 10 KDP select authors on Amazon.de will get €3,000 each, while 11-20 get €2,000, 21-30 get €750 and 31-100 €500.The top 10 KDP Select titles on Amazon.de get €750 each, 11-50 get €500 and 51-100 get €250.

To calculate the rankings, Amazon combines the total number of books sold, plus qualified borrows from Kindle Unlimited and the Kindle Owners’ Lending Library during the month.

Amazon don’t reveal how many ebooks have been borrowed in a month but if we divide the total KDP Select fund for October of $5.5 million by the payout of $1.33 per borrow, then we arrive at the figure of 4,135,338.

This is only a ballpark figure as it’s difficult to ascertain exactly how Amazon allocates the various funds for the Kindle Unlimited payout, but the October total borrowing figure is a big rise, on the same basis, of 24% from 3,311,258 loans in September, which was up by 27% from 2.6 million in August, and shows a continuing strong uptake for Kindle Unlimited from readers.

Estimates of total membership of Kindle Unlimited depend on how many books are borrowed per member on average. The maximum a member can borrow at any one time is 10, so if each member borrowed 10 new (new to them, rather than necessarily newly published) books per month (4,135,338/10), then Kindle Unlimited would now have around 413,533 members. But if they borrowed or ‘churned’ only five books a month on average (4,135,338/5), there would be around 827,067 members, while if they borrowed seven books (4,135,338/7), the figure would be close to 590,762.

At the lower figure of 413,533 and averaging the monthly subscription fee globally at $9.99, Amazon would be collecting $4,135,330 per month from Kindle Unlimited, while at the mid-point of seven books a month, they would be collecting $5,907,620 a month. At the five books a month figure of 827,067 members, Amazon would be raking in $8,262,399.

To break even on a $5.5 million fund, Amazon would need to have over 550,000 members of Kindle Unlimited paying at full price.

These figures don’t take into account the large number of people who are on a free first month’s subscription. Plus, of course, Amazon also pays out well over $600,000 a month on KDP Select All-Stars awards.

The KDP Select fund also pays out loans on the Kindle Owners’ lending Library service, which is a benefit for Amazon Prime members.

The major intangible financial figure, however, on Kindle Unlimited is on how much Amazon pays out to the traditional publishers who do take part in KU. The Big Five have not yet been tempted into Kindle Unlimited but Amazon pays trad publishers the same royalty for a borrow as they would get for a sale.

It’s early days yet and Amazon has never been too bothered about making a profit so much as building up sales and growing the customer base. I believe Amazon already has the financial scope to be bolstering the KDP Select fund further to restore a decent level of overall payout on Kindle Unlimited or face growing disillusion from indie authors and withdrawals from KDP Select.

How Kindle Unlimited can pay off for authors

The mathematics of Kindle Unlimited

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