Let’s Talk: Amazon’s Changes to KDP Select Payment Methodology in July

abyssal plushiesEarlier in June 2015, Amazon announced that it was making substantial changes to its KDP Select system. Instead of a flat rate for any book with 10%+ read, authors will be paid by page.

The Abyssal Plush Army watches with interest.

This excerpt is taken directly from the email sent to KDP Select authors regarding the changes:

We’re always looking at ways to make our programs even better, and we've received lots of great feedback on how to improve the way we pay KDP authors for books in Kindle Unlimited. One particular piece of feedback we’ve heard consistently from authors is that paying the same for all books regardless of length may not provide a strong enough alignment between the interests of authors and readers. We agree. With this in mind, we’re pleased to announce that beginning on July 1, the KDP Select Global Fund will be paid out based on the number of pages KU and KOLL customers read.

As with our current approach, we’ll continue to offer a global fund for each month. Under this new model, the amount an author earns will be determined by their share of total pages read rather than their share of total qualified borrows. Here are a few examples illustrating how the fund will be paid out. For simplicity, assume the fund is $10M and that 100,000,000 total pages were read in the month:

•       The author of a 100 page book which was borrowed and read completely 100 times would earn $1,000 ($10 million multiplied by 10,000 pages for this author divided by 100,000,000 total pages).

•       The author of a 200 page book which was borrowed and read completely 100 times would earn $2,000 ($10 million multiplied by 20,000 pages for this author divided by 100,000,000 total pages).

•       The author of a 200 page book which was borrowed 100 times but only read half way through on average would earn $1,000 ($10 million multiplied by 10,000 pages for this author divided by 100,000,000 total pages).

We will similarly change the way we pay KDP Select All-Star bonuses which will be awarded to authors and titles based on total KU and KOLL pages read.

We think this is a solid step forward and better aligns the interests of readers and authors. Our goal, as always, is to build a service that rewards authors for their valuable work, attracts more readers and encourages them to read more and more often. We welcome your continued feedback and ideas about how we can further improve Kindle Direct Publishing and Kindle Unlimited.

In the coming days we’ll share more details about this change. In the meantime, for further information (such as how we measure pages read) you can read more here:  https://kdp.amazon.com/help?topicId=A156OS90J7RDN.

There has been a huge spectrum of reactions to these changes, a lot of questions, and many concerns.

In the interest of being upfront and honest, I like the proposed changes and really look forward to seeing them in action. I am enrolled in KDP Select for many reasons. In the interest of disclosure, before I go into the specifics of the common questions and concerns I've seen, I want to state why I am still in KDP Select and I likely will not be leaving it soon.

1: I make substantially more money being enrolled in KDP Select. I'm a low list author. I make a profit, which is a bit unusual, but at the end of the day, I'm a small fry. KDP Select sales currently account for half of my income.

2: I've been treated well. When I have questions or issues, Amazon is very quick to address them.

The fact it is half of my current income makes a huge difference. Changing away from KDP Select, which I have done, hasn't increased my base income by much. The sales gathered from other venues have not made up for the loss of KDP Select. In time, I may try again to break into ePub, but for now, my income is with amazon, as that is where my audience is currently located.

Yes, I have had people ask for ePub versions of my books. If every person who asked about ePub versions of my titles actually bought the books, I wouldn't be enrolled in KDP Select. The truth of the matter?

Just because someone expresses interest doesn't mean they'll buy. In my case, very few have actually bought the ePub versions. Most of my readers use kindle app or a kindle e-reader of some sort.

There are going to be those who will not like my opinion on this, but yes, money does matter. Right now, stacking my cards with KDP Select is the best financial decision for me. I attempted to break out into ePub with the release of Winter Wolf, which failed miserably. (I made less than $20 on ePub when I spent a bit over $1,000 in advertising for it. Kindle made me around (ball parking) $500. They were advertised together, purposefully selecting cross-over audiences instead of focusing on kindle-specific readers.

In the long term, it's entirely possible I could get an equal following of ePub readers, but it simply doesn't make sense at current to switch away. Do I have a shrine set up to Amazon? No. But, unless the competition comes up with a marketplace allowing me to break in and have tools similar to KDP Select, it's what I primarily have to work with.

Onto the real discussion: KDP's new ruling.

Some things of note: When I first learned of the page count changes, I was unaware that there should be timing mechanisms so that people can't cheat and just flip through books willynilly so authors are paid. Apparently, that's now a factor.

My Opinion on the Changes

Once again, for purposes of full disclosure, I'll open with my opinion on the changes. I love them. I write long books; 400+ pages for my regular novels, 100 pages for my short story collections per volume.

Being paid by page should prove more profitable for me in the long run, since it takes readers longer to go through my books. Instead of getting the same $1.40 a short story author gets on a loan, but they have 50 short stories… I'll get paid for what the reader consumed.

I'll discuss the advantages and disadvantages of this later.

Public Service Announcement

There will be hard love in this post. I'm in that sort of mood today.

Fair Pay

I have seen a lot of discussion on whether or not KDP Select's new and old systems include fair pay for authors. This subject is pretty volatile. It's opinion, no matter what people say.

On one hand, authors get royalties for library-style books. In real libraries, authors only get a single royalty payment even if the book has been read a thousand times.

It's a toss up. Could the pay be fairer? Probably.

But, I also acknowledge public libraries and realize that authors may have one thousand books read and only get paid a quarter (under traditional contracts) for the book. Indie authors could see anywhere between pennies to a couple of dollars for library-purchased titles. Libraries are super important, but that doesn't mean authors are fairly paid for the usage of their books. In that, KDP Select is head and shoulders above the competition.

No, I am not suggesting that library systems should be dismantled or changed. I'm simply pointing out that the reality of author royalties when it comes to their books being in a library.

Fair Assessment of Number of Pages Read

When it was originally announced, the new system was a very, very simple metric. Total fund divided by total number of pages read equals royalty per page.

The formula is still the same, but for a page to count as a page, there are some checks amazon is doing, including time spent reading the page. Like many systems, the exact specifics are a guarded secret.

This metric has caused a lot of discussion. Some folks think that it will completely damage authorial careers and bring about massive changes on how people write stories. (IE, page turners will be par for the course.) Others don't think much will change.

I'm of the opinion that this change will level the playing field. If people aren't reading past page 2 of my story, I'm not engaging them as an author.

What I'm hoping is that amazon's changes will include number of readers so I can figure out where I'm losing people, on average.

I will not change how I write my stories to try to benefit from the system. I will, however, continue to work hard at writing better, more engaging stories.

I can't say I will shift to writing page turners, because those are typically the type of stories I already write. If anything, I've been expanding away from page turners, trying my hand at urban fantasy romance with my Tales of the Winter Wolf stories.

And no, I did not start writing short fiction to try to get a bigger part of KDP Select's pie. I started writing short fiction because I wanted to learn how to do it, I wanted to tell stories about Nicolina and Richard, and I got hooked after writing a few of them out.

At the end of the day, here's the deal.

If an author writes a 1,000 page novel, and a reader reads all of the pages, he'll be paid for 1,000 pages out of the fund. The problem with the fund? It's an arbitrary amount set by Amazon. Yes, I believe that a set pay per page would be the fairest, but until Amazon dives in with that, we are stuck with an arbitrary amount that fluctuates each month.

That is a problem with the system, in my opinion.

Anyway, let's take a look at short story authors. If a short story / short fiction author has written 1,000 pages split across 100 projects, but a reader reads all 100 projects, they'll be paid the same amount as the author with a single 1,000 page work.

It is equal, and I support that.

Quality Matters More

The days of people releasing ten page stories to get $1.40 royalty when the reader hits 10% ends with the last day of June.

Quality becomes the distinguishing factor in an author's financial success. I do not mean perfect books, perfect grammar, no errors–I mean quality books. They have that ‘insubstantial something' that keeps a reader reading in spite of the presence of errors. That's what I mean by quality.

Granted, it'll make clean, professionally edited novels more important. That's a good thing for readers.

It's a terrible thing for authors who don't feel they can afford the editorial payments. Many can't. But, the readers are placed in front of the authors in this case, as the authors will be encouraged to write stronger, more entertaining and engaging novels/short fiction in order to receive payment.

I'm competitive by nature, so I say, “Bring it on!”

Unfortunately, it could mean a lot of financial disasters for authors who were already struggling. How much will a page pay?

That's what we really do not know.

Amazon is Satan!

This section is to address the standard arguments that Amazon is satan and is ruining the publication industry.

Amazon is what it is; is it ultimately fair? Questionable. Does it create a way for authors to find readers? Yes.

But ultimately, I feel like the current Amazonian kerfuffle relates to the fact that readers, ultimately, are in full control of how much an author will be paid for their work.

Here are a collection of the complaints I've heard so far:

1: In the old way, readers paid once to get a title. That's it, that's all. It didn't matter if they only read one page. The author was paid.

My opinion: I'd rather know where I'm failing entertain my readers so I can fix it and tell better stories. Yes, I got paid for the read–even if they hated the book.

What I didn't learn is whether or not I'm actually keeping readers around. Sure, I'll get paid less this way, potentially. However, since I write 400+ page monsters as well as the newer 100 page anthologies, I might get paid more. It's a mystery until it happens.

2: How will we know if Amazon is crediting pages properly?

We don't, same way we don't know if Amazon is recording all of our actual sales, same way we don't know if Amazon is actually crediting us when a reader hits 10% in the KDP Select system.

We don't know.

Same way traditional authors have no idea if their traditional publishers are actually recording the number of sales accurately. Sorry, but that's fact. There's a certain amount of trust one must have–or put up with. We simply do not know the truth of the matter.

We assume we are being credited fairly, because we have no other choice but to form that assumption.

We have no way of proving whether or not we're credited properly, which doesn't help matters any at all. After all, we know there are those who pirate books by buying them, grabbing the download on the sly, and immediately returning them. Some of these people do so to get the book for free. Others turn around and load the book onto illegal sites.

Some returns are even legitimate.

But as authors, we are not even permitted to see the refund excuse. Sucks, doesn't it? We have a tendency to look the other way, mainly because we currently do not have a choice but to look the other way.

So, July 1, 2015 signals many changes for Amazon exclusive authors.

By August or September, I guess I'll have a better idea of whether or not I will allow my exclusivity period to expire or not. For now, it's the best choice I have available to me, since my ePub sales ventures have been lackluster at best.

Leave a Comment:

1 comment
Gail says July 1, 2015

Well said! I am a small “nobody” author, too, so much so that I still get thrills and chills when I actually top $10 in total sales a month. I work hard on my books and hate the crap that some people (I refuse to call them authors) have been putting out there just to make a quick buck. I seriously doubt if Amazon’s new way of paying will affect my sales personally, because they are so low, but at least I will be on a more level playing field as I shoot for the next Gone With The Wind.

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