I've seen a lot of big name authors, and small ones too, hating on Kindle Unlimited. There are some definite concerns with the program, but I want to put my experience with Kindle Unlimited up and let readers decide for themselves.
What is Kindle Unlimited?
“Kindle Unlimited is a new service that allows you to read as much as you want, choosing from over 700,000 titles and thousands of audiobooks. Freely explore new authors, books, and genres from mysteries and romance to sci-fi and more. You can read on any device. It's available for $9.99 a month and you can cancel anytime.”
That's Amazon's official answer. I picked it up myself, and I've really enjoyed it. For ten bucks a month, I get to read as many of their books as I want. Since I read a fair amount of books for research, this has helped out my book buying budget significantly. I'm still limited by the Kindle selection (as authors have to opt in to the service) but I've read more this month because I didn't have to stop and think, “Will my husband freak out at another $2.99 book charge this week?”
So, from the reader's side of things, you pay ten bucks and you get to check out ten books at a time. You don't get to keep them, but you can read them as many times as you want as long as the book is enrolled in the Kindle Unlimited program. It is kind of like a paid library with the option to buy if you want.
The Author's Side of KU
A little bit of back-story is necessary. To start, you need to know how Amazon authors are normally paid for sales.
We get 70% royalties on anything priced $2.99-$9.99, and 35% on anything below $2.99 or above $9.99. (This is why you see most books priced at 99cents or $2.99. The price point of $1.99 just isn't viable with this pay scale.)
Thus, for a $2.99 book, the author earns about $2. Most indie books are priced here since it's a nice sweet spot.
In order to become part of KU, authors must be exclusive to Amazon. This means they cannot have their e-books available on any other retailer (like Apple or Barnes and Noble). There are some authors that were allowed in to KU without having exclusivity due to their popularity. For the rest of us, if we make our books exclusive with Amazon, called KDP Select, we do get some benefits other than being in KU. For every 90 day enrollment period, a book gets 5 free days, Prime borrows (from Amazon Prime members), and a couple other sale opportunities.
Amazon is the largest book seller in the world, but for authors who have a strong presence on other retailers, going exclusive can be a difficult choice. Do you risk your sales on other retailers for the opportunity to get KU borrows and KDP Select benefits?
Once an author is exclusive with Amazon and part of KU, they can earn borrows. An author gets paid when a reader selects their book and reads at least 10%. At the end of the month, Amazon tallies up how many borrows each author earned and then how many borrows there were in the entire store. This is the part that authors get squeamish about because the amount paid changes every month based on the amount of total borrows, and there is no guarantee as to how much it will be.
Amazon pays all the borrows out of one large pot. The KDP Select Global Fund usually starts out around 3 million dollars, but since KU began, they have added extra funds each month due to the popularity of the service. This is more than a little nerve racking for authors as we honestly have no clue what we are going to be paid that month. (and the fact that we don't find out until the 15th of the NEXT month)
For example, using the 3 million dollars as the prize pool, if only 3 books are borrowed in the entire KU service, then each borrow would receive 1 million dollars. If 6 million books are borrowed, then each book only receives 50 cents. This volatility, with no set bottom or upper limit, understandably makes authors very anxious.
KU has only been around for a few months, and during that time it has paid out between $1.33-$1.80 per book. October was the most recent month and paid at $1.33.
KU For Me
I'm sure you've all seen the posts saying that KU pays authors peanuts. That it's a raw deal for authors or that it just isn't fair. And to be honest, seeing $1.33 royalty instead of $2 or even $3.50 smarted a little until I realized that KU brought me more borrows than I ever would have had of sales. KU brings volume. If you think of it as KU buying books at wholesale, and thus selling way more of them because of it, things start to look a lot better. $1.33 sold 4 times (earning $5.32) instead of one sale at $4.99 (earning $3.50) isn't a bad deal.
There are those that say that KU is destroying the market and devaluing books. That if you're not enrolled in KU, you won't make it. This simply isn't true. One of my good friends just made the NYT best seller list for the first time and she isn't exclusive. KU has certainly changed the landscape, but it hasn't destroyed it. The service has only been around since July, so the market and reader's expectations are still struggling to catch up.
I've been exclusive to Amazon for a long time in order to take advantage of the benefits of KDP Select. It was a no-brainer for me to enroll my books in KU, as I was already exclusive. My sales on other retailers have always been far, far lower than on Amazon. Plus, I love being able to use my free days.
I had my best month ever in October, and it was due to KU.
With two books hitting Amazon's Top 100 list (Barefoot Kisses and Hurricane Kisses) and Saltwater Kisses getting close to breaking into the list for the third time, I was the 10th best selling author in KDP Select.
I gave away close to 100,000 free books.
61% of all my books sold were actually borrows.
Due to the lower royalty percentage on 99 cent books, 66% of my earnings actually came from borrows rather than sales.
The bottom line is, I can attribute well over half of my earnings to Kindle Unlimited. Without it, I wouldn't have had the best sales month of my career. Did KU cannibalize my sales? I don't think so. Maybe some, but I think KU actually introduced me to far more readers than it cannibalized.
For authors, KU isn't for everyone. I know that many authors don't like giving Amazon exclusivity as they feel it puts all their eggs in one basket. If Amazon decides to only pay out 3 cents next month, we would all be hosed. Amazon has had plenty of opportunity at this point to reduce the royalty rate to “peanuts” and they've never done it. I don't think they ever will. If borrows get too low, authors will drop out of the program and readers will end their subscriptions because there's nothing to read.
For readers, however, it's great! As a reader, I know I've read far more books since buying this service because I get them for “free.” I've read a couple of books I never would have bought at full price. I even read a series I had been holding off on purchasing because I didn't want to have to buy that many books. That author never would have gotten a dime of my money if it hadn't been for KU. I'm sure there are plenty of other readers out there that have experienced something similar.
People have told me that KU allowed them to read all nine Kisses books for ten dollars instead of thirty-five, and that they never would have been able to do that if it wasn't for KU. I love that people are getting to read my work at a price they can afford.
Every month, my husband and I sit down and look at what is happening in the publishing world and figure out a plan for what we are going to do next. Will I always be in KU? I don't know. That will depend a lot on how Amazon continues to run things. Right now, it looks like I'll be exclusive for a while, and I hope that you'll continue to read my books as long as I continue to write them.
Thanks for listening to my thoughts and you can count on me working hard on my next Kisses book, due to be released in January 2015.