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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