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Sunday, July 05, 2015

New subscription models for Kindle Unlimited


I've just come across the interesting post by Hugh Howey.

The below is copied and pasted from his blog.

KU 1.0 Compared to KU 2.0
Here’s some math from the brilliant author Susan Kaye Quinn. It compares the old payment system to the new system.
Under KU 1.0:
98k novel = 414 pages* = $1.34 per borrow = 0.0033 pennies/pg
15k novella = 51 pages* = $1.34 per borrow = 2.6 pennies/pg
*the number on the product description pg
Under KU 2.0 (Assuming 100% page read):
98k novel = 553 pages** = 0.6 pennies-per-pg*** = $3.32 per 100% read
15k novella = 85 pages** = 0.6 pennies-per-pg*** = $0.51 per 100% read
**KENPC page count
***estimate from June
Under KU 1.0, most indies were making more for a borrow of a short story than for a sale (the exceptions are those able to charge $2.99 or higher for the sale of a 15k story). I haven’t seen a good argument to defend this part of the old system, or the fact that KU 1.0 was paying a third of a penny per KENPC page (which would be more like .0017 per print page).
Under KU 2.0, we can see what Amazon is trying to do with their per-page calculation. They’re trying to reward KDP Select authors for a borrow by paying the same amount as a sale. Holy crap. Really? Actually, the prices on my works are lower than average, and these borrow rates would pay me more than I currently make for a sale. But as someone else pointed out, these borrow payout rates are very close to what Amazon’s pricing tool recommends for works of this length.
That is, Amazon is funding their KU payout pool to simulate a paid sale for every borrow.
This is what it appeared they were doing under KU 1.0. The first borrow rates were coming in close to $2.00. That number slid over time, even as Amazon piled on more money. Why? Because authors realized they could maximize their income by splitting up novels and by concentrating on short stories. Kris Rusch and others (myself among them) have referred to this as “gaming the system.” That creates outrage among those who game the system. Guess, what? I game Amazon’s system every day. I do it with permafree, which exploits Amazon’s price-matching policy to get more free days than they want to hand out (only 5 per 90 day KDP Select period). And I’ve been serializing novels since before it was a thing. I’ve also been putting short stories into KU and profiting from it.
I guess the difference is that I’ve expected from the beginning that KU was broken and would be fixed. Someone dug up an interview I did ten months ago, when KU was only two months old, and I predicted Amazon would move to a per-page remuneration system. The old model was broken. The people who profited from that should be glad Amazon waited so long to fix it. Those who love to write short stories still should. May I suggest a bit of back matter? Or some constructive ways for us to help authors without screwing consumers?"

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