Why Kindle Unlimited Is A Bad Deal For Authors And Publishers
Many authors think they are going to make a huge amount of money when they first self-publish. A lot of them think that they’ll make even more if they sign up for Amazon’s Kindle Unlimited Program. However, Kindle Unlimited is not a good idea if you want to make money as an author/publisher.
The pay-out is low, but it also has other detrimental effects on your business outside of that. Those are what this article is about.
Amazon Get Their Money Up Front – You Don’t.
One of the key cornerstones of operating a business is that you have some idea of what you’re likely to earn. You don’t get that with Kindle Unlimited. In fact, if you’re in Kindle Unlimited, then people are probably reading your books right now, and you don’t have any idea what you’re going to be paid for that.
If I write a short story, and an estimated one hundred people will read it in a year, then at $2 royalty I will make $200 from that story. The figures might be off, but if the figures are accurate, then I account for that $200 making its way into my account at some point.
Whereas, if I put that same story in Kindle Unlimited, then I won’t get the same earnings from one hundred readers. The pay isn’t the point though – the point is that there is no way to account for the value of that story. Amazon sets the price arbitrarily two months after the fact.
If Amazon decided to set the borrow rate at one tenth of a cent for any given month, then on a fifty page story I would earn $25 per hundred readers. If they set it at one cent , then I’d earn $250. But there’s absolutely no way for me to know.
There’s no way to pay your bills or budget as a writing business if you have no idea what your income is going to be.
Exclusivity Kills Your Business, Improves Theirs
The real problem I have with Kindle Unlimited isn’t anything to do with pay. Ultimately, we all get paid what we demand we’re worth. If people want to sell their stories for ninety-nine cents on Amazon and get thirty-three cents in royalties, then good luck to them.
Exclusivity does ruffle my feathers though.
You should never put your eggs in one basket. That’s a saying that’s been passed on for god-knows-how-many years, and it rings true today in all walks of life.
Yet plenty of writers are putting their eggs solely in the Kindle Unlimited basket.
Another phrase is, “You reap what you sow.”
If you license your books through Kindle Unlimited, the upside for your publishing company is that you might get some borrows and make enough money to buy a packet of biscuits.
The upside for Amazon is that it gets exclusive rights to your property for 90 days.
The downside for Amazon is that they’ll have to pay you less than pennies for that period.
The downside for your company and brand is that you devalue your own service (people can read your work for free!)
The other downside is that you aren’t building your brand on all the other numerous platforms that are out there.
A third downside is that Amazon is the brand that people are paying for, as opposed to you.
Amazon doesn’t even give you customer data. If you register a borrow, unless that person signs up for your mailing list via blurb you’ve left at the back of your book, you have no idea who they are, where they come from, or anything else about them.
Amazon, however, have all that data – all thanks to your hard work.
The Pay Is Terrible – And Actually Contradicts Itself
Amazon don’t let you sell a book for less than ninety-nine cents. (You shouldn’t be doing this anyway.) Yet if you put a book that is 150 pages long, you get 75 cents for it if somebody reads it in full.
The fact is, half a cent per page is not worth any of this. It’s not even really worth the money you get for it.
There is Only One Reason To Be in Kindle Unlimited, And These Aren’t It…
I replied in a thread on Kboards.com recently about the Kindle Unlimited Program. I stated that I couldn’t see any reason why people weren’t jumping ship from the program when the new payment system came into place, and then the payment decreased two months in a row.
Someone responded to me, giving me rhetoric that could have essentially come from an Amazon employee.
I like to think it’s because writers are a trustworthy bunch, but really it’s because people have poor business sense. Here is a list of not-reasons that writers have stated about the KU program:
- Kindle Unlimited 2 is designed to be fairer to novelists.
- Exclusivity is worth it because Amazon is the biggest game in town.
- It’s worth getting borrows because it increases your sales rank/profile on the site.
- We can now write longer works instead of shorter ones.
- Amazon needs to make money from their program, so it’s part of the game.
- Readers won’t go elsewhere.
- It’s not an attempted monopoly because Kobo exists.
- We can write ten short stories in the time it takes to write one novel – so nothing has changed.
- We all share the pot equally… so it’s fair.
These were the result of looking through two discussions on two forums. I haven’t had to cherry pick anything. Whilst general sentiment is now turning to an anti-KU one, there are plenty of people who think that it’s a great idea for writers. Even those that don’t aren’t pulling out of KU. I can only assume this is a Stockholm Syndrome type thing.
Why Going Wide Is Your Only Option
If you’re an author and not represented by a publisher (and, I’d argue even if you are,) then you are in the publishing business. You are a publisher.
Amazon doesn’t care about your publishing business. Just like it doesn’t care about its independent seller’s businesses in the Amazon marketplace. It makes absolutely no difference to Amazon if you go bust and your children starve to death, freezing in their little frost-bitten blankets because you can’t afford to turn on the central heating.
To Amazon, there’s always going to be someone else who’ll fill your space.
Amazon isn’t evil in this respect. It just cares more about its own bottom line that it does about your bottom line. If Amazon can get away with selling books for a penny, then it will… you only have to look at the used paperbacks on the site.
This isn’t a rant about capitalism, but it is a message to everyone in Kindle Unlimited: The money you get paid will continue to go down for as long as it benefits Amazon to do so. Conversely, you’ll get a pay rise should Amazon ever value your work at more. I don’t rate the chances of that happening very highly.
Going wide is better for your publishing business. Don’t go with any flat-rate borrow scheme, whether it’s done by Amazon or by another company now or in the future. You need to be able to set the rate at which you get paid, and you need to know in advance what you’ll get paid for each sale.
Going wide is more work, but it isn’t that much more work. The process of uploading a book is simple – and if you find that it’s too difficult, then you simply need to spend a few hours getting as familiar with the Nook, Kobo, D2D, Apple etc. process as you are with the Amazon process.
To be honest, even if you aren’t going to put the effort in to go wide, you should still pull out of Kindle Unlimited.
What’s The One Reason To Be In Kindle Unlimited
The only reason to be in Kindle Unlimited is if you’re directly using a book as a loss-leader for a marketing campaign.
I have thought about this over and over again, and that is the only reasonable idea.
All other reasons are putting the cart before the horse. If you’re a publisher, then you need to put the horse before the cart. The question is “How does this (solely) benefit my publishing business?”
Using KU as a loss-leader is a marketing strategy, in the same way a free e-book is. I’d argue it’s not the best strategy in the world, but I suppose if you used it as a temporary means of getting people on a mail list or giving them a prologue to a story which you’d have outside KU, that could work.
If anyone can think of anything else, feel free to drop it in the comments. Otherwise, I’d avoid Kindle Unlimited like the plague if you’re an author/publisher.