Indie Authors and the Question of Kindle Unlimited

Old post alert! This was published in 2014 and some aspects of Kindle Unlimited have changed. If you’re investigating whether KU is right for you, you’ll need to go further than reading this post.


Recently, Amazon joined the e-book subscription playing field alongside Oyster and Scribd to offer subscribers unlimited access to more than 700,000 e-books and 2,000 audiobooks for the monthly price of $9.99. This service is called Kindle Unlimited.

When a player as big as Amazon enters a market, it signals a big shift for the entire industry. The question is whether this shift will be positive.

What’s Different About Kindle Unlimited?

Kindle Unlimited is similar to competitors such as Oyster in that readers pay a low monthly fee for unlimited access to a large selection of e-books. The main advantage of Kindle Unlimited is convenience for those who already have an Amazon account, and it’s economical for readers who already buy several books each month.

Although Amazon’s library is larger than both Oyster’s library (500,000 titles) and Scribd’s (400,000 titles), none of the big five New York publishers are so far participating in the Kindle Unlimited program.

Why Authors Should Be Cautious

Exclusivity: Independent authors who want their books available through Kindle Unlimited must be members of KDP Select, which requires exclusivity to Amazon. Oyster and Scribd have no such exclusivity requirement, but self-published books must be distributed through Smashwords to make it onto Oyster’s shelves, whereas authors have the option to go through Smashwords, INscribe Digital, BookBaby, or Draft2Digital to be included in Scribd’s library. 

I don’t think it’s smart for authors to agree to sell through only one outlet, but more on this later.

Vague payout: It’s unclear how much self-published authors make by selling through Kindle Unlimited. The program provides royalties to indie authors via the KDP Select Global Fund when at least 10 percent of their book is read. According to Amazon, “The fund amount is variable and announced on a monthly basis.”

One blogger, Roger Packer, explained that the system “has to keep its Kindle Unlimited authors on its side, so I would expect payouts to stay above $1.50 per borrow.” Packer believed that authors would appear to lose money on any KU borrow on books priced higher than $2.50; to make a profit, indie authors would need to write books under 150 pages and priced around $3.99.

Amazon kept close to Packer’s prediction, announcing the borrow rate as $1.54—which Packer said was “bound to discourage many authors who either had already enrolled their books in KDP Select or were considering doing so.”

According to the October 2014 Author Earnings Report, “The rate per borrow has averaged $1.62 over the three months since KU launched.”

Note that traditionally published e-books downloaded through KU are paid the same amount as a sale, but independent authors are paid this alternate borrow rate.

Loss of control: Once an author is enrolled in the program, the rules are subject to change at any time. Authors can choose not to re-enroll in KDP Select after 90 days, but these short-term promises can have long-term consequences for traction in other ebookstores.

As Mark Coker, founder of Smashwords, pointed out in his post on Amazon’s exclusivity, “Authors who go exclusive at Amazon become more dependent (the opposite of independent) upon Amazon. Just as any financial adviser will advise you to avoid placing your retirement nest egg in a single basket, indies should think twice before locking their books into these three-month, automatically renewing KDP Select contracts.”

Does Kindle Unlimited Make KDP Select Worthwhile?

Authors who enroll in KDP Select are required to participate in Kindle Unlimited, as well as Kindle Owners’ Lending Library. The big question is whether the increasing possibility of your book being accessed for free subtracts from your sales, or if those sales wouldn’t have happened in the place.

Authors report that the benefits offered by KDP Select have significantly declined. When the program launched, it provided authors with a strategic way to increase exposure and, ultimately, book sales. In fact, KDP Select initially enabled downloads to even boost authors’ paid rating—but with an algorithm change and an increasingly crowded market, KDP Select is no longer the effective promotional tool it once was.

The one benefit of Kindle Unlimited is, of course, exposure, but much like the KDP Select program, this is primarily helpful for authors who have other books that they can drive readers to through a Kindle Unlimited title.

For an author who only has one book, offering it exclusively through KDP Select and Kindle Unlimited probably won’t be beneficial to her overall sales and ranking.

The Uncertain Future

It’s difficult to know where the e-book subscription industry is headed. Many were skeptical of its viability at first, but now that Amazon has joined the party, it might prove the credibility of this model.

As long as indie authors and publishers are being fairly compensated and making a comparable percentage of what they would in the typical e-book market, I think subscription services will be a success. Problems arise when services charge fees that are too low, making it difficult to sustain a model in which authors and publishers are compensated according to industry standards.

For now, though, indie authors just have to watch and wait to see how Kindle Unlimited will affect their business.

Are your books available through Kindle Unlimited? What are your thoughts about the program?

Note from Jane: For more on authors’ experiences with KDP Select and KU Unlimited, read “Author Discontent Grows As Kindle Unlimited Enters Its Fifth Month” by Nate Hoffelder.

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Jennifer Tzivia MacLeod

This has answered a few questions for me, as I really had no idea what the royalty sharing worked out to via Kindle Unlimited. Indie writers should know that Amazon “deals” have backfired before for us. We should venture into this very carefully and be prepared to pull out if it’s not working. That said, the lending aspect totally changes the game and does make KDP Select viable again for many of us. Coincidentally, I just posted about juggling your KDP freebies and a two-step system writers can use once they have more than a couple on the go.
Thanks!

C.S Janey

I pulled all my books to join the program when my sales tanked 70% on Amazon after KU was introduced, because while they were making sales on other sites, Amazon was the major portion. In October, my per borrow pay was $1.33, down from $1.52 in September (where they were only in for half the month). I will not be renewing my books in KDP and will be putting them everywhere else again once my 90 days are up at the beginning of January for the majority of my books. I did look at it as people reading my books who may not have paid for them, but while my royalties went up nearly triple what they were for one month, they pretty much tanked again in November. I didn’t even hit $200 in sales between the US and UK and if I go by the payment in October, I will not even hit $500 total. By the way, this is a big drop from what I was making which is over 1K a month for almost half the year. I will be looking at other strategies to garner interest after this, and I will not recommend authors enroll their books in KDP Select at all.

A. Grace

I have several books at $.99 that I was earning about $.33/sale on so getting >$1.50 per borrow has been a godsend. Agreed that for higher priced books, there isn’t an advantage unless you just want to “get copies out there” via free promotional days. That can significantly boost sales for sequels but doesn’t do much for an author with only one book or standalones.

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Ernie Zelinski

I won’t participate in either Kindle Unlimited or Kindle Select. I also refuse to price any of my ebooks below $5.97 unless it is a book of quotations. Offering my books for free or 99 cents or even $2.99 would cheapen what I have to offer.

Marketing guru Seth Godin called the strategy of low ball pricing:
“Clawing Yourself to the Bottom.”

Seth stated:

“Trading in your standards in order to gain short-term attention or profit isn’t as easy as it looks. Once-great media brands that now traffic in cheesecake and quick clicks didn’t get there by mistake. Respected brands that rushed to deliver low price at all costs had to figure out which corners to cut, and fooled themselves into thinking they could get away with it forever. As the bottom gets more and more crowded, it’s harder than ever to be more short-sighted than everyone else. If you’re going to need to work that hard at it, might as well put the effort into racing to the top instead.”

In short, when your book doesn’t measure up, the answer may be to charge a lot less for it and loan it out through subscription services. If you have a great book, however, the answer is to charge a lot more for it than the substandard competition charges for theirs. At the same time, there is no need to loan out a great book through subscription services because people who appreciate quality are willing to pay for it.

Ernie J. Zelinski
The Prosperity Guy
“Helping Adventurous Souls Live Prosperous and Free”
Author of the Bestseller “How to Retire Happy, Wild, and Free”
(Over 225,000 copies sold and published in 9 languages)
and the International Bestseller “The Joy of Not Working”
(Over 275,000 copies sold and published in 17 languages)

Diana Stevan

Ernie, I appreciate your comments here. I’m of the same mind. I’ve worked too hard to offer my debut novel at bargain basement prices. I’m currently enrolled in Kindle Select but plan to leave when my 90 days are up. In hindsight, I’m still not sure if it was a good idea or not to enroll. It’s been not quite 60 days since I published A Cry From The Deep. Time will tell, huh?

Toby Neal

Just to contradict some of the commenters here, KU has been awesome. Borrows exceed sales on my books and and I’m still doing way better there than I did out of other platforms.
Volume is key with multiple books out, and series books that cause binge reading are key, but last month I earned one of their “KU All Stars” bonuses. I’m doing better than ever being exclusive to Amazon. Why fix it if its not broke?
Every author has to experiment until they find what works for them.

Jane Friedman

Appreciate your perspective here, Toby—thank you. Can you offer insight as to your pricing on your books? I’m hearing that KU can be particularly beneficial for lower priced titles (see earlier comment); any thoughts on that? Are you in a similar situation?

Toby Neal

I’ve been working the Amazon KDP select benefits like a boss, rotating monthly freebies through my first four titles to hook new readers and then doing ,99 cent sales monthly on newer titles. This sounds like a lot of discounting but I have eleven books out and only do one sale or giveaway a month. These bring in new readers who buy/borrow the rest. Those first four older titles are 3.99 and newer ones are 4.99. It helps that my books have tons of great reviews; I am thrilled to be developing a loyal and engaged fan base.
Yes, I could make more on actual sales, but I tried a book out in all venues, and I made more with it in one month in KU than I did in four months on all platforms. So, while I keep a close eye on trends and am prepared to flood Smashwords with my submitted titles if this stops working, it’s hard to argue with the numbers I’m bringing in now and I’m skeptical that Oyster and Scribd would pay more in their subscription services… Not to mention the way Amazon cross promotes via email and algorhythm to anyone who’s ever looked at or bought anything. You can’t pay for that kind of nimble marketing!

Diana Stevan

Toby, I agree with you about Amazon’s cross promotes via email. That’s been surprising. I’ve seen my book title come up in subject headings and friends have stated the same thing. So, yes, that kind of advertising is much appreciated.

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Lucas Bale (@balespen)

I think it’s easy to talk about pricing in the way we have been doing – as the primary issue – but it really isn’t. For newer authors, even those with great products, exposure is far more important. Getting eyes on your work is absolutely vital. If I sell one book at $4.99 (a $3.49 “royalty”, for want of a better term) vs. 11 books at 99c ($3.30 royalty), those 11 sales are far more important to me. More reviews (let’s say, as in my experience, 1 in 200 amounts to a review), more are likely to sign up to my mailing list, and more are likely to spread word of my book. So I think it’s short-sighted to view this only in terms of money earned. Also, remember KDP Select allows me to offer my books for free. A free-run still has value – launching one book and making the first in the series at that launch offer huge marketing potential and has had a positive impact on my visibility and, again, on reviews. I agree completely with Toby’s analysis and I think, although there is a strong argument for pricing in the way Ernie has described, that’s only real possible when you have a stable fan base, given how Amazon’s algorithms work and the sales ranking/popularity/hot new release charts and rankings. Get into those three charts and you will sell your books, even at higher prices. But price high, and no one will even see your work.

Also, I have had my books on other platforms and they simply have not sold. KU has brought in borrows and, although I am making less on the more expensive second book in my series ($1.50 vs. $2.79), the opener, which is 193 pages and priced at $1.99 (so $0.70 royalty per sale) is actually making me more in KU. And I am still selling the second book outside KU too. So, in terms of visibility, the main aim I have for the next 12 months, KU/KDP Select is definitely worth my time. Maybe I’ll take another look at Smashwords, or deal with Kobo, Nook and Apple directly myself, at the end of my Select period, but I’m not sure right now if I’ll bother.

Michael E. Henderson

I think that the exposure argument for selling your books cheaply, or giving them away, is a fallacy. For one, it assumes people will like your books. What if you got a very negative review from someone who only paid 99 cents, or didn’t pay anything at all?

Cheap and free ebooks is killing indie authors. Sure, run a special to attract attention to the next book, but don’t sell yourself short. I personally sell as many books at $5.99 as I do at 99 cents. People will buy your book if they want it, whether it costs 99 cents, or $9.99.

I’ve also found that giving away books does not result in reviews.

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