Amazon has
just come out (July 18, 2014) with a program known as “Kindle Unlimited”. As of now, it only applies to the U.S. site
(Amazon.com), but if successful it will no doubt be rolled out to other Amazon
sites around the world. It is not clear
to me if the program applies to non-Americans who have accounts on Amazon.com. The basic idea is that for $9.99 per month,
the subscriber gets unlimited access to all of the books in the KDP Select
pool, about 600,000 titles at this time. They can download up to ten titles at a time,
but have to read or delete one or more of these titles before they can download
another one.
Note that
any Amazon book can still be purchased outside the Kindle Unlimited program, in
the “regular” Kindle ebook store. This
could be the case for people who want to “own” a copy of the book rather than
rent it or who simply don’t want to sign up for a monthly subscription
fee. Amazon Kindle Unlimited subscribers can
still purchase books at full price, if they prefer.
The writer
or publisher gets paid a fee every time one of his or her books is downloaded
and read up to the 10% mark. That’s the
point at which a customer is assumed to have committed to the book, similar to
the 10% sample available on the regular Amazon kindle website. This ensures that readers don’t load up their
kindles with books that they never get around to reading, and thus don’t drive
down the unit price per download unnecessarily.
The writer’s
cut is based on dividing his or her downloads into overall pool of money
e.g. if the pool of money was $2 million, and there were 1 million
downloads, each download would be worth $2.
If an author had 10 downloads that month, he or she would receive
$20. Presumably, the pool will be based
on the number of subscribers to the program.
The details of that are still unclear, but for this July the pool is set
at $2 million.
To be
eligible for the program, books must be enrolled in a program called KDP Select
– that program requires the writer/publisher to be exclusive to Amazon. Any book that is in that program is also
automatically enrolled in Kindle Unlimited.
So, for example, if one wants to enrol a book in Kindle Unlimited that
is currently published on Kobo or iBooks, that book would first have to be
“unpublished” on the competing site. By
the letter of the contract, you shouldn’t even have the story available for
free on your own blog or website. It’s
up to the writer/publisher, whether or not to enrol a book in the program. On the one hand, it is another revenue stream
from within Amazon; on the other hand, it means you can’t make any money on
other ebook retail sites and can’t make your book available to people who use
those sites. In our case, for example,
it would mean taking books off Kobo, where we know we have some loyal readers.
One
interesting wrinkle of the program is that any book downloaded and “read” would
be worth the same amount of money to the author/publisher, regardless of length. So, a 25 page (10,000 word) $0.99 short story
ebook would pay the writer as much as a 500 page (200,000 word) $3.99 epic
length novel. In the non-subscription
part of the Amazon store, the 99 cent short story would pay the
writer/publisher about 35 cents, while the $3.99 novel would pay about
$2.80. So, depending on what the fee per
download of the subscription service ends up calculating out to, it would
probably be more profitable for the writer/publisher to have short books
downloaded by subscribers, but have longer books purchased by
non-subscribers. But, that’s clearly
something outside of the writer/publisher’s control. Readers will do what is best for them,
depending on whether they think they will save money in the long run by going
subscription, or whether they think they would be better off buying books on a
one-off basis (including downloading free promotion copies, when
available).
One wonders
how long Amazon will maintain the 5 days out of each 90 days that a
writer/publisher can offer books for free, if enrolled in KDP Select. The free days obviously represent no value to
Kindle Unlimited subscribers – they can get as many books as they like for
“free” anyway, as long as they pony up $9.99 per month. Free still has value for non-subscribers,
though. It seems to me that it would be
to Amazon’s advantage to drop “free” in the near future, as that would
encourage cost-sensitive voracious readers to sign up for Kindle
Unlimited. As long as “free” is a
possibility, voracious readers may want to stay out of the new program, and
just read free books as they come up.
Note that if Amazon does abandon “free”, it will probably be done
incrementally, in stages over a year or two.
Putting on
my strategic thinking cap, it seems to me that Kindle Unlimited is an effort to
further monetize the “long tail” in the ebook market. The long tail constitutes that vast majority
of books that are not hits or best-sellers (i.e. that don’t sell in the
hundreds of thousands to tens of millions).
That’s anything from the solid mid-list books, purchased in the tens of
thousands to the niche books that are only purchased by a few dozen
people. Amazon has already been quite successful
at making money from the long tail – they basically created that market via the
development of the kindle and their independent publishing outlet KDP and they
have made a lot of money doing that. But
I suspect that they think that there is a lot of value left in that long tail
market, that is currently being siphoned off by free books. I think they want to turn that into cash.
The other
strategic consideration for Amazon is to get writers to commit to being solely
available on their store. That would put
the other retailers at a competitive disadvantage, being unable to offer a
selection as large as Amazon’s. And in a
long tail world, large selection and an effective user-generated referral
system (like Amazon reviews and Also-Boughts) are the keys to success. That’s why the big box print bookstores (like
Chapters or Barnes and Noble) beat the small scale shopping mall book stores
during the 90’s and 2000’s, and that’s why the ebook retailers are prevailing
over the big box print stores in the 2010’s, in their turn.
Another
interesting aspect of Kindle Unlimited is that, as of the date of the writing
of this blog (July 21, 2014), none of the “big five” publishers have signed on
to the program (Penguin/Random House, Harper-Collins, Hachette, MacMillan, and
Simon and Schuster). That primarily leaves
books produced by the mid-size publishers to independent/self-published
writers. Will that stifle the
program? My guess is that Amazon thinks
not. The kind of “long tail” consumers
that they are after are often voracious, experimental readers who are content
with Indies – indeed they may even prefer them to the safety of the big
publishing houses. Plus, not all of the
biggest best-sellers are published by the big five. For example, Hunger Games is published by
Scholastic and it will be in the program, as will the Harry Potter books. So, the new program will have some big name
draws, even without the Big Five.
Some Indie
writers have worried that Amazon and other retailers may eventually push them
into an Indie and self-published ghetto, where they will languish, since they
assume that most readers will automatically go to the part of the store
dominated by the big name publishers and writers. Other Indies have expressed what amounts to a
“bring it on” attitude. They think
consumers don’t care about the publisher, and only want good books at a good
price. Since Indies have far lower
overhead costs than big publishers, they think a lower priced Indie section
would attract plenty of readers, especially their coveted loyal, voracious
readers.
Indeed some
of the big publishers have lobbied for just such a development. They may be
getting their wish. At this moment, it
looks like Kindle Unlimited may be a de facto Indie section. How that plays out is yet to be seen, however. It may be that it is the big publishers who will
be forced to cry uncle and sign up with Kindle Unlimited, if a significant part
of the Amazon book buying public chooses to sign up with the subscription
service.
So, there are
a lot of interesting possibilities for readers, writers, publishers and
retailers coming up. Everyone will be
trying to figure out what this new Amazon program portends for them. Readers will be trying to calculate whether
it will save them money, or cost them money to enroll. Writer/publishers will be trying to estimate whether
they will gain more from downloads than they lose in sales, on Amazon and other
sites such as Kobo and Nook. Other big
ebook retailers, such as Kobo, will be trying to determine how they can best
respond, in a strategic business sense.
And Amazon, as always, will be watching their data carefully, refining
their algorithms and adjusting their business strategies in the manner that they
feel best advantages them.
As for our
little venture, Dodecahedron Books will enrol some of our shorter fiction in
Kindle Unlimited, hoping it gets some downloads and drives some business to the
longer books, like the Kati of Terra series and the Witches’ Stones
series. Other than that, it is a matter
of observe, write, publish and try to enjoy the ride, which is all that anyone
can do in the long run or the long tail J.