My last post on ranking garnered a great comment that deserves an answer long enough to be its own post:
I have a number of favorite authors who offer all of their books through Kindle Unlimited. How does writer compensation work with K.U. does the availability of work to loyal readers pay off? I loathe loss leader marketing schemes that offer the introductory books for free the following books for a more or less fair market price, with the final book at a ballooned pricing to make up for the free first book. When I find these schemes I put it in the review of the first book. Do you believe that loss leader marketing works for most readers or authors?
Great questions, Scott.
So KU has an interesting compensation model.
On a straight-up sale of one of my books at $4.99, I get a 70% royalty — about $3.40 (there’s a few cents Amazon charges on top for a “delivery” charge – basically for storage and bandwidth).
For KU, it’s a per-page payment, based on the pages read. A “page” is determined by how the book would render on a predetermined Kindle device. Queen’s Pardon, for instance, is considered to be 682 standard Kindle “pages”, no matter how you display it on your personal device. In general, we get about half a cent per page, so Queen’s Pardon gets me, roughly, $3 for a KU read. Very close to the full sale royalty, and an amount I’m happy with.
There’s a bit of an unknown each month, though, because KU is a sort of a split-the-pot game. The actual amount per page varies month-to-month, but stays around $0.0044 and $0.0051 per page. Even that little tiny change can make some big swings in total royalties for an author with hundreds of thousands or even over a million page reads a month. Queen’s Pardon,for instance, got just over a million page reads in its release month.
What Amazon does is setup a “pool” of money each month and then splits that pool by the total page reads for all authors to determine that month’s rate. They don’t actually say so, but I think it’s sort of a percentage of all the KU subscription dollars for a month, less their cut, then sometimes they add to it to keep the page rate up and keep author’s, if not happy, then satisfied.
a lot of any transparency on how that pool’s really determined though.
The thing about KU is that it makes it really easy for readers to try new authors with little or no risk. That’s what I like about it. I’ve found a number of great authors for my own reading through it, and I know it contributes to people being able to access my own work.
It’s the same with my use of a loss leader on Into the Dark by making it free. It lowers the barrier to entry for a new series considerably.
Both KU and the first book being free also increase visibility, because even if someone’s just collecting free books and never reads Into the Dark, I get the “sales” ranking boost as soon as they click the download button. That gets me more visibility to other potential readers.
With regard to pricing on later books, I don’t think authors make the latest book a higher price to make up for the free one, but I do think there’s a tendency, led by publishers, that the newest book is more expensive. It’s sort of an early adopter thing — those who don’t want to wait will generally be willing to pay more.
Now, I’m of two minds on this, and I had to give it some thought to clarify even that.
Yeah, I’m all for more money, and the latest, greatest thing generally costs more, but these are books, not iPhones or even first-run movies. There’s a certain author-reader thing that makes that unpalatable to me. The readers who preorder my next release, who start reading at midnight on release day, who’ve made the last four years, honestly, the best of my life — I can’t see gouging them for a few extra dollars for the latest because they love Alexis’ story that much.
On the other hand, I can see publishers doing this sort of thing because they really don’t care about anything but the money. As evidenced by the outrageous ebook prices on traditionally published books. Personally, I won’t pay more than $9.99 for an ebook and use eReaderIQ to track and notify me when those drop to my price point.
For my own work, I think $4.99’s a fair price for both me and the reader, even for a new release. In fact, being self-published means that I see more from that $4.99 than a traditionally published author sees from a $9.99 ebook sale. To me, that’s a win-win for both author and reader.
Have you read any of Jack July’s books?
I’ve just finished the first two “Amy Lynn” books, and loved them.
This has been a change from most of my KU authors. I’ve mostly Space opera/etc. stuff. But also non-KU like David Weber’s Honor Harrington series (I’m a Harrington!)
I’ve read over 300 kindle books in the less than two years I’ve had my Kindles. I’m stuck at home with Alzeimers.
What’s incomprehensible to me – both as a scheme for authors/publishers and the readers – is doing it the other way around; having the first few novels as “traditional” buys and the later novels on Kindle Unlimited.
Granted, maybe there’s something going on in the background I don’t know about (availability elsewhere or who knows what). But that just feels like increasing the hurdle for new readers for no good reason. I guess some would just start with a later book? I don’t know. Just doesn’t seem like a good idea.
Putting up the first book for free or cheaper is I feel a valid strategy. Not deceiving or otherwise nefarious about it. Sometimes make me feel a little bad as I feel the author would deserve some money for their work, but, well, it’s their decision in the end ^^;
Pyo, I’m with you on first-free making sense. The subsequent titles in KU make sense to the author for the first 90 of sales in a behind-the-scenes way because the book must be exclusive with Amazon to be in KU (for indies). Amazon gives KU and exclusive titles preferential promotion, which is crucial during the first 90 days to maximize the book’s visibility. Big publishers negotiate a non-exclusive with Amazon to be in KU.
The ones I haven’t figured out are the “boxed set” freebies. I saw a lot of boxed sets last year, mostly in romance, but also in other genres where three to six or more books are given away for free, usually during a Bookbub promotion. I haven’t figured that one out yet. Maybe something to do with ranking like Sutherland said in this post. Not sure that’s a strategy that I’ll ever try out without data to back it up.
One thing that some etailers, like DriveThruRPG, do is give indies the option to make titles “free” in a Pay What You Want mode, so that you can tip the author if you think it’s worth more than $0.00USD. I don’t see Amazon, Apple Books, or Google Play making that an option anytime soon because it will increase the scrutiny that governments give them for money laundering schemes, but it’d be nice! Instead, I buy Sutherland’s non-free books as gifts for others and promote his books in my newsletter because I appreciate the freebies.
JA – first thank you for your books. I am an on call IT guy and Goodreads said I read 588 books last year. Most KU, some paid and many read twice. (I spend A LOT of time waiting for 48 hours of intense work.)
I have two concerns to make sure KU authors are paid. 1) For security reasons (my policy) NO WiFi or wireless is allowed in my work area, basically only ‘airplane mode’. I try to make sure that when I finish a KU book to ‘rate’ it and mark it read when I return home with WiFi on. Are we sure you get ‘credit’ for my pages when I delete in airplane mode? 2)Do you get credit the second time I read your book?
If I pay Amazon $14.99 for a book or the KU fee, I want the author to be compensated. I would appreciate your response, but I think it would be helpful to all to have any gotcha’s to help at the end of all books.