The indie-author intarwebz have been buzzing this week with the news that Joe Konrath is pulling all of his books out of KDP Select. Konrath mentioned it almost offhandedly in a comment on his own blog post fisking an open letter from MacMillan CEO John Sargent.
I won’t quote Konrath here, because Amazon has so many programs that it’s easy to mix up the acronyms, and I think Konrath himself was writing quickly and not being as careful as he could have been. The gist of it, though, is that Konrath’s titles will all be out of Select when their current enrollment period ends next month. This comes in the wake of complaints by author H.M. Ward and others that Kindle Unlimited borrows are gutting their sales, to the point where it’s affecting their livelihood.
To clarify the terminology, I offer this glossary:
* Kindle Direct Publishing (KDP) is the platform we all use to get our eBooks published for sale at Amazon.
* KDP Select (KDPS or KDP-S or Select) is the opt-in program that demands Amazon exclusivity for eBooks, and in return allows authors to sign up for free days and Countdown deal promotions.
* Kindle Unlimited (KU) is Amazon’s subscription service that’s similar to Oyster or Scribd. Readers pay $9.99 a month for unlimited borrows of books in the KU program. Books enrolled in KDPS are automatically enrolled in KU. Currently, there’s no way (that I know of) to opt out of KU while keeping your book in KDPS. Authors don’t get paid for KU-borrowed books until the reader gets to 10% of the book – if they borrow and bail, you don’t get paid.
* Kindle Owners Lending Library (KOLL) is the Zon’s other eBook-borrowing program. It’s open only to readers who are Amazon Prime members. Every KOLL borrow pays out, whether the reader cracks open the file or not.
Got that? Good. Let’s proceed.
The blogosphere blew up in part because Konrath is a long-time champion of all things Amazon. He was among the first to sing KDP’s praises and encourage authors to go indie. And he was crazy complimentary about his treatment by Amazon’s publishing imprint when they were brand-new. That he’s pulling back now, even while hedging about his reasoning, is quite a departure from his usual stance.
Konrath says in his comment that he can’t tell whether KU is cannibalizing his earnings or not. That’s why he’s pulling out of Select – to see what the effect is on his bottom line.
The problem with KU is the payout. Amazon has a fund out of which it pays for both KOLL and KU borrows. Before KU began, the payout per borrow hovered around $2.00 (making borrows quite lucrative if your book was usually priced at 99 cents!). Amazon sweetened the pot after KU got started, but even with the larger fund, the payout has decreased. Prior to July 2014, payouts for borrows hovered around $2 each. For July, the payout was $1.81 per borrow. It dropped to $1.33 per borrow by October. November saw an uptick to $1.39 per borrow, which is better, but the numbers have to come up by a lot to be back to where they were pre-KU. (We won’t know December’s payout per borrow for another couple of weeks.)
Authors who price their books at $2.99 lost one-third of their royalty every time a reader opted to borrow instead of buy in November. The hit is even harder for those who have set their list prices higher than $2.99. For those of us who don’t have a lot of borrows, the difference isn’t devastating. But if you typically sell a lot of eBooks each month, you could lose a lot of money if your readers borrow your books instead.
The Zon has never been cagey about one thing: Content is king. It has routinely lost money on its Kindle devices, figuring the real money was to be made on the stuff we buy to put on them. And the Zon is also big on exclusivity. So it makes sense to me that if authors begin fleeing Select in droves due to KU borrows gutting their earnings, Amazon will either modify KU or beef up the payout fund. But I’m only guessing. What do you think?