Monday, 17 August 2015

Thoughts on Kindle Unlimited, V2 – Payment per Page


Amazon has recently come out with the July payments to writers and publishers for the Kindle Unlimited program. The payment per page that had been bandied about by writers, previous to Amazon's announcement, was 0.6 cents per page, or 60 cents per hundred pages. The actual amount turned out to be 0.578 cents per page, or 57.8 cents per hundred pages, a remarkably close figure. Evidently, somebody out there had a reliable source of information.
This payment schedule obviously incentivizes writers to produce longer works. In our case, the Kati of Terra books all clock in at 1000 to 1100 standardized Kindle pages. At the current pricing schedule, that works out to $6 per borrow, a very nice rate indeed. And the Kati books have had a nice burst of borrowing, by our humble standards, since the change in pricing took hold. :)
Each of the Kati of Terra books have a word count of about 250,000 pages, and a standardized Kindle page count of something over a thousand pages. That means a standardized Kindle page works out to about 250 words. Interestingly, that's about the speed at which your average reader reads – 250 words per minute. So, a typical reader costs Amazon about 0.6 cents for every minute of reading, or 36 cents for every hour, or about a dollar for every 3 hours. Assuming that Kindle Unlimited customers pay Amazon about $10 per month to be in the program, that means the average reader can access about 30 hours of reading, before Amazon begins to lose money.
That's about 7 hours per week, or an hour per day – not a high rate of reading for a lot of us, but I am sure that Amazon's data scientists did a lot of research to determine the point at which readers were satisfied, on average, and where Amazon makes a tidy profit. Most subscription services, in any industry, take advantage of the fact that most users will only make light use of the service. Think of all you can eat salad bars – most of us get filled up pretty quickly, so the restaurant can afford this apparently limitless offer. Similarly with spas and gyms – their deals are predicated on the expectation that most people simply will not make as much use of the service as they think they will.
In the previous version of Kindle Unlimited, writers got paid by the download, generally about $1.50 per download, regardless of the length of the book (assuming that readers got to the 10 percent point of the book). So, Amazon was losing money once readers downloaded and read 7 books (7 X $1.50 = $10.50). If the reader focused on short stories (say 10,000 words), that meant Amazon might be losing money before the reader hit even 75,000 words, or 5 hours of reading time. That's quite a difference from Amazon's current break even point of 30 hours reading.
As it happens, Dodecahedron Books is in the happy position (so far) of doing better under the new system than the old, since our novels skew to the longer length. In fact, since the switch, our borrows have gone from about 50:50 short stories versus long novels, to nearly 100% long novels. That may just be a coincidence, or it may be that Amazon is doing guerrilla marketing for the longer books. After all, we Indies don't have much of an idea of what Amazon is doing in the background, via its emails to customers or other marketing vectors. There are no doubt times when our interests align with theirs, to a more than typical extent. And Amazon does seem to be pushing longer works, right now.
All that being said, Amazon's business tactics and short-term objectives are constantly in flux. While writers can't help but be influenced by Amazon's tactics (as they see them), the writer's best strategy is probably to write in the genre, and at the length that they do their best work.

P.S. One other interesting thing about the new payment system, is that a publisher or writer can get a pretty good idea of their books' completion rates and time-to-completion rates. By that, I mean the percentage of books that are completed and the time it takes a typical reader to complete a book. By both measures, the Kati of Terra and Witches' Stones books are doing admirably well. In fact, I am rather surprised by just how voracious readers can be – the fine art of enjoying a good read is far from dead.
And here are some links to these excellent books :)
Kati of Terra Book One:
Kati of Terra Book Two:
Kati of Terra Book Three:
Witches' Stones Book One
Witches' Stones Book Two


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