Let’s All Freak Out About Amazon’s Pay-Per-Page-Read Scheme!

freakoutAny time Amazon makes a change to the way it pays authors, people freak the hell out—and not without reason: Amazon currently controls over 60% of the ebook market, so for authors like me who subsist primarily on income from ebooks, Amazon has a lot of control over our lives.

The latest freak-out has to do with Amazon’s decision to pay authors by the number of pages read, rather than paying them per download, in some cases. That “in some cases” is in italics for a reason: Amazon will continue to pay authors / publishers the same as before for ebooks that are actually purchased; the change only affects books downloaded from the Kindle Online Lending Library or through Kindle Unlimited. (You would probably have missed this important point if you read some of the media hand-wringing about this change; whenever Amazon is involved, journalists trip over themselves to make Amazon look bad, regardless of the facts.)

KOLL, as the name indicates, is Amazon’s online book-lending service. KU is Amazon’s book subscription service, which allows consumers to pay a flat monthly rate to download as many books as they like. For authors / publishers, enrolling your books in KOLL and KU is completely optional. If you want your book to be included in KOLL/KU, you sign up for Amazon Select, which means your ebook is exclusively available on Amazon. If you don’t like the idea of “giving away” your books, you can opt of Amazon Select, continue to sell your books on the site (and other sites), and make a set royalty per copy sold (generally 70% of the price).

This move makes perfect sense from Amazon’s perspective: under the previous pay-per-download model, I could split one of my novels into twenty separate “books,” invite all my friends to borrow each book through KOLL (or download it through KU) and make money on every single download, while providing very little value to the readers and clogging up Amazon’s system with crappy, five-page-long books. Presumably enough authors were engaging in this sort of behavior that Amazon decided it needed a better system, for the sake of both its bottom line and the integrity of its library. So they implemented a system where the author only gets paid per page read. (And yes, it’s a little creepy that Amazon can tell what pages of a book you’ve read, but that’s been the case since Kindle first launched, so you’re about five years late with your Big Brother concerns.)

So what has really changed for most authors under this new system? The short answer is: not much. Despite articles with titles like “Amazon set to pay self-published authors as little as $0.006 per page read,” it turns out that for now at least, Amazon seems to be paying very close to what they would be paid if someone bought the book. The system is a little arcane and counter-intuitive, but basically it works like this:

  • Every month Amazon establishes a fund used to pay authors for KOLL/KU page reads.
  • Amazon determines how many pages of each book were read during the month, using its Kindle Edition Normalized Pages (KENP) algorithm, which is a fancy way of saying that you can’t get away with that trick you used in college of making the margins smaller and using 14-point font to make your paper seem longer.
  • Amazon divides the fund amount by the total number of pages read and pays you your share.

For example, the May fund total is $10.8 million. The total number of pages being read per month, according to Amazon, is around 1.9 billion. That means authors will be paid about ($10.8 million / 1.9 billion = ) $0.0057 per page read. It should be noted that a “page,” according to the KENP algorithm, seems to be somewhat shorter than a normal paperback page: my novel City of Sand is 255 pages long in paperback, using 6” x 9” paper and pretty standard margins and font size. But according to Amazon, it’s a whopping 455 pages using the KENP algorithm. So if someone downloads City of Sand and reads the book in its entirety, I would make about (455 x $.0057 = ) $2.59 per copy read.

Previously, I was making around $1.30 per copy downloaded through KOLL/KU, so I’m actually making more under the new system than I was making previously (assuming people actually read my books). Of course, authors of short fiction who were cleaning up with twenty page short stories at $1.30 per download are doing worse. But overall, the system seems pretty fair to me: when I sell a copy of City of Sand, I make 70% of the sales price of $3.99, which comes out to ($3.99 x 70% = ) $2.79 per copy. So if someone downloads City of Sand through KOLL/KU and reads the entire thing, I’m making twenty cents less per copy than if they had bought it. Sure, I’d love to have that additional $.20 per copy (and I’d love to get paid even if they never read the book), but I’m not going to shed any tears over it.

So what’s with the freak-out? Well, most of it is just ignorance and knee-jerk anti-Amazon sentiment on the part of the media. But part of it is legitimate concern on the part of people who are going to lose a lot of money because they can no longer game the system like they used to. Consider this quote from the Guardian article:

Casey Lucas, a literary editor who works with self-publishing authors, says she has lost six clients already. They have decided to stop writing after “estimating a 60–80% reduction in royalties”.

This almost has to be hyperbole. The only way it’s possible for someone to be losing even 60% of their royalties because of this change would be if they were making the vast majority of their income from unpaid downloads of books that were either very short or that very few people actually read. In other words, they deliberately took advantage of a loophole in Amazon’s system that allowed them to make a lot of money despite the fact that they were providing very little value to Amazon’s customers, and now Amazon has closed that loophole. If you have a stable full of clients using that business model, you aren’t a “literary editor”; You’re a scam artist, and not a very good one, because your scam was built on the premise that Amazon wasn’t going to catch on to what you (and people like you) were doing. Pardon me if I don’t shed a tear while you go look for a real job.

So should you as a self-published author make your books available to download through KOLL and KU? That’s going to depend on your feelings about being highly dependent on Amazon for your income. The only way you can get your books into KOLL/KU is to enroll your book in Kindle Select, which means your ebook is exclusively available on Amazon. Whether you want to give Amazon that much control over your livelihood is up to you. Hugh Howey enrolls all his books in Kindle Select. Other authors, such as my friend Denise Grover Swank, prefer to diversify, making their books available through Apple’s iBooks and other marketplaces in addition to Amazon. For me, it makes sense to enroll my books in Kindle Select because a lot of my books are published by 47North, an Amazon imprint, so they are exclusive to Kindle anyway. Putting some of my books on other marketplaces wouldn’t make me enough money to make up for the lost KOLL/KU income, and it would probably frustrate people who can’t find the rest of my books. So for me, enrolling my books in Kindle Select makes sense.

One big caveat to this conclusion: Amazon is in sole control of the amount of the Kindle Select fund, and could change the terms of the deal anytime they like. If you’re a self-published author, this is something you’re going to want to keep an eye on. Don’t assume that because KOLL/KU is a good deal now, it will always be. Amazon is a business, and isn’t in this to help you earn a living. That said, they also aren’t in this to screw you. If you write quality books that people want to read, it’s in Amazon’s interest to make those books available to consumers.

On the other hand, if you write short, lousy books nobody wants to read… well, maybe you’ll get quoted in the Guardian some day. :)
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