Saturday, January 3, 2015

On the Kindle Unlimited

The landscape that is self-publishing is changing yet again.

A long time ago, Amazon introduced Amazon Prime. The original idea behind it was to build customer loyalty by granting free shipping & handling in exchange for something like 90$ a year. As time went on, they began tacking on added benefits.

One such benefit was the Kindle Owner's Lending Library. The idea was, you could borrow any book that was enrolled in this library by publishers (traditional or self-published). You could only borrow one at a time though, and only once a month.

Now, however, Amazon has unleashed the Kindle Unlimited. For just 10$ a month, Kindle owners can now borrow as many books as they want from the KOLL. I imagine there are a lot of happy readers out there right now.

Now, let's look at this exact same thing from the author's point of view, specifically, self-published authors.

When Amazon set up the KOLL, they set aside a fund of several million dollars per month for those who had enrolled their works in the KDP Select Program. The down-low on that is if an author puts their books in the KDP Select, they agree not to sell/give away the book anywhere else and return, Amazon grants the author certain perks. One of these perks is having your book inserted into the KOLL.

Now, at the end of each month, Amazon would add up every book that had been borrowed from the library and divide that by the amount of money that resided in the KOLL Fund, the number they got was how much each Borrow was worth. Up until the Kindle Unlimited initiative, each borrow was worth roughly 2$. Which was pretty great for authors. It became less so as time went on. Originally, 99 cent novels were all the rage. At 99 cents, the author saw 35 cents on every sale. Then 1.99$ was the new magic price point, which meant 70 cents per sale.

When 2.99$ became the new selling point, the author saw 2.05$ out of every sale. That was about equal to the 2$ Borrow, so it was still good. If anything, it was great because the reader didn't have to pay a thing, so it felt like they were getting a free book, and they might go on to purchase the author's other books if they liked them enough.

Now that the magic selling point for self-published novels is 3.99$, which nets the author about 2.75$ per sale, that 2$ Borrow isn't look quite as appealing, but whatever, there were still a lot more sales than borrows.

Then the Kindle Unlimited came along.

Now, indie authors are reportedly seeing a marked dip in sales as everyone is borrowing their books instead of buying...or ignoring them completely as they suddenly have access to all 700k+ titles enrolled in the KOLL. The Borrow payout has gone down from 2$ per to something like 1.40$, which is still decent, but I imagine it'll go down further. On top of that, getting borrowed no longer guarantees getting paid for the borrow. The reader must read a minimum of 10% of the book for it to count.

There's a lot of doom-saying going on, many authors are predicting massive crashes and a flattening out of sales across the board.

I think it's a little too early to make many definitive predictions, but the horizon doesn't necessarily look as bright as it did at the beginning of 2014.

However, there may be some hope.

I think this might be the perfect time to see the return of serial fiction. The more I think about this, the more I keep thinking about people talking about 'binging' on whole seasons of shows from Netflix. If someone wrote a serial fiction, lets say 10 'episodes' to a 'season', and put them all in the KDP Select, it's not much of a stretch to think that you could garner a lot of fans who would binge-read the entire season, borrowing every title.

Let's try a thought experiment.

You have a 90,000 word novel at 3.99$. That's 2.75$ per sale. Now, let's say you take that same novel and chop it up into 6, 15,000 word a piece bits, and put each one up for 99 cents while enrolling them in the KDP Select. Someone nabs the first one and reads it, becomes addicted and borrows every single title. Even at only a 1$ per borrow payout, suddenly you're making 6$ on the exact same novel, and the reader is technically paying nothing except for their initial 10$ a month investment.

Isn't that amazing?

I thought so. A lot of authors are railing against this, which I think might be a bit pointless. Amazon will, unfortunately, do whatever Amazon does. So far, most of it has been good. What makes the most sense is to not put all your eggs in one basket. I'm still going to write novels, I'm also going to write some serial novels.

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