Amazon Creates a Fair Royalty System, and Everyone Hates it

Last week Amazon did something drastic. They changed how authors are paid when Kindle books are borrowed. But let me give you a little more information before I get into the good stuff.

Are you familiar with the Kindle Owners’ Lending Library (KOLL)? No? Okay. KOLL is set up for Prime members who also happen to own a Kindle device. These individuals are able to download one free eBook per month as part of their Prime subscription. Authors are compensated from a fund that Amazon sets up at the start of each month that is divided up among all downloads. Let’s just say that for a given month the royalty per download is $2. If your books are collectively downloaded 100 times, then you’ve made yourself $200. Got it? Okay.

Second, are you familiar with Kindle Unlimited? No? Okay. It’s Amazon’s eBook subscription service that allows for subscribers to download and read as many books as they want to for $9.99 a month. Keep in mind that not one Big 5 publisher has its titles enrolled in the program. Got it? Okay.

In the past, authors would receive their royalty when their book was downloaded as long as the reader read 10 percent of the book. This threshold applied to all books. It didn’t matter if it was a 50 page novella or a 1000 page brick. The reader had to read 10 percent or no royalty would be paid out. And what were people doing? They were publishing very short works and enlarging the print so that it would be incredibly easy to reach that 10 percent mark. They would get their royalty just the same as someone who published a novel worthy of Big 5 publication.

My book is 216 pages, right? Which is very short for a book. Does it seem fair that someone would need to read 22 pages of my book in order for me to get my royalty when there are works published that are even shorter in length than that? No. It wasn’t fair and Amazon knew it.

The entire system has been overhauled and now authors will be paid per page read. The 10 percent threshold has been eliminated. How is this new system unfair to anyone? How can people be writing article and blog post after blog post denouncing Amazon for this? THEY MADE IT MORE FAIR!

Just to give you an idea of the kind of people who have spoken out against the new system, one blogger who claimed to be an author and reader said that Amazon has invaded her privacy by tracking how much she reads of a given book. How the hell does she think those lists are compiled each year about the books being read on Kindle? Magic? I mean, get a fucking clue. Her Kindle is MADE by Amazon. Her Kindle is BOUGHT from Amazon. Her Kindle is REGISTERED ON AMAZON.

Remember guys, this new system applies only to books enrolled in KDP Select, which automatically enrolls them in Kindle Unlimited and KOLL. This does NOT apply to books purchased, only books borrowed. A book bought is a book bought, no matter if the reader reads the whole thing or two pages. And also don’t forget that no one says any book has to be in KDP Select at all.

You can read exactly how the system will work by clicking here. It goes into effect July 1.

I’m ready to open the floodgates. What do you think of Amazon abandoning the 10 percent threshold for a pay-per-page model for books borrowed?

 

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23 thoughts on “Amazon Creates a Fair Royalty System, and Everyone Hates it

  1. I was researching self-published niche erotica yesterday (for business purposes, I swear! If I could make thousands of dollars a month pumping out short stories about bangin’, then I’m hella onboard. I can put all that NC-17 fanfic experience from high school to good use :P). Anyway, I saw an article from an erotica writer’s POV talking about this, basically comparing it to going to a movie theatre and asking for your money back if you only watch 10% of the movie, or sending back 50% of your meal at the diner and asking for it half price. I think that’s a stretch, because as you said, this is not for books purchased. This is for books borrowed.

    I get where you’re coming from – that it isn’t fair that someone will get 100% royalties for the first 2 pages of their book instead of the first 20 pages of yours. Even if your book costs 4 or 5x as much as their short stories, therefore making your royalties higher, you’re still dependent upon readers crossing that 10% threshold. Or else you get nothing. So, I guess some money is better than no money, and it will ultimately only affect novelists. Most erotica writers will have 100% of the audience who clicks on the first page, as those readers have probably hunted down their work specifically.

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    • I agree. That comparison is not a good one. Honestly, I say why not try publishing some erotica if you think you could make a little money off it from KDP? I KNOW I couldn’t write that stuff at all. But I’ve seen random erotica short stories that get terrible reviews and have high sales rankings and tons of reviews. Which means people are definitely finishing them.

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  2. What happens if someone starts to read a book and then returns to read the rest much later (after the royalty has been paid) – as some would do with a paperback? And what about reference books that people rarely read from cover to cover?
    I do publish on Kindle but I don’t own a Kindle, nor do I read anything other than ‘real’ hard copies of books, so maybe I’m not understanding this properly ?
    Why don’t Amazon just pay out per book downloaded? I can see the problem with short books getting big royalties needing sorting out, but the ‘royalty per page’ seems to be designed to help Amazon rather than authors.
    As I said, I have limited understanding of all this electronic reading stuff so I may be confused !!

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    • First, you are aware that this only applies to borrowed books, right? Second, the royalty paid out is relative to the number of overall pages read. The total royalty depends on the number of pages in the book and the number of pages read by that author as part of the total number of pages read by every other enrolled in the program for that given month. So if someone starts a book and then returns to read more at a later time, the author has only been paid for what has actually been read. Third, I don’t see why someone would self publish (because that’s who this really affects) a reference book and enroll it in any of these. Lastly, Amazon doesn’t pay out regular royalty rates per book borrowed because that’s not fair.

      I probably made no sense at all. I think you should just click the link in the post because that links to their press release.

      Liked by 1 person

  3. I think this revised system sounds okay. I don’t care if Amazon knows how many pages I read, in fact if they are tracking anything I do then they are going to bored as shit. I think that no matter what Amazon does there will always be people who will gripe for the simole need to demonize something.

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    • Honestly, it’s becoming ridiculous. And it doesn’t even matter that I love the company. People need to grow up. Amazon could announce that they’ll be donating their share of all book sales to the Red Cross for a year and still people would find something to gripe about. Amazon is a business, and just like every other business, needs look at the bottom line at all times. But that doesn’t mean they aren’t also looking at the consumers and authors they deal with too.

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  4. I knew nothing of the royalty systems before this post. So it was really more informative. I don’t know how I feel. It’s all a big marketing and money game and I rarely understand those. But this new version does sound more fair to me.

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  5. It was a ridiculous system at the git-go. But from my point of view, as I was just getting ready to publish about 20 serialized novelettes (average length 8300 words; some as high as 15,000), it looked advantageous. So I figured I’d go with Kindle Unlimited, even though some have told me that they never use Amazon’s gimmicks but simply sell their books at a set price with an occasional freebie or low-cost promotion.

    However, this new scheme looks a lot less useful. The problem is, people don’t read in a linear way. Unless you’re reading something for a course that presents with you a deadline and an exam, you tend to read things at your convenience. Convenience, as we know, is often interrupted. Like many of us, I often will begin a book, have to do something else, then come back to the book after that project is done…or find something more interesting to read, set aside the first book until I’ve finished the “more interesting” find, and then come back to book #1. The interim can be days or it can be weeks. Sometimes it can even be months.

    So, no: author gets paid by number of pages supposedly read is not fair to author.

    As for the snark about the blogger who objects to Amazon counting the pages she reads: the argument is a bit specious, don’t you think? I buy my underwear at Costco and do not expect Costco to count the number of times I put them on or run them through the washer. The fact of the matter is, this is one reason some of us don’t read books on Kindle: a few folks still don’t want a megacorporation (or anyone else…) reading over our shoulder.

    The problem with Kindle books — and in a dystopic world that’s not hard to imagine, it’s a BIG problem — is that you don’t own them. At any time Amazon can reach into your Kindle and remove whatever you think you’ve purchased. It has done so in the past. You own a right to peek at the copy in an electronic format. That’s different from owning the book. It’s not enough to keep me from selling content on Kindle to people who don’t understand or care; but it surely is enough to make me think twice about “buying” or borrowing through that medium.

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  6. What a fascinating concept!! Which is to say, “isn’t it fascinating how this only applies to specific programs that do not deal in specific sales?” I do agree that anyone who would claim Amazon has invaded their privacy clearly needs to review and refresh their Understanding of the Internet in General!!! Srsly.

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  7. As the times change, so must the rules of conduct. I’m sure the 10% rule seemed fair at the time when the majority of the books offered were on a semi-even playing field. Then, those who are always looking for a way to cheat the system for their own ends began to short-cut it so Amazon needed to do something to level the playing field again. Seriously the only people who can complain about something like this are those who were getting unfair advantage by cheating anyway. They ought to keep their mouths shut if they don’t want to look as stupid as they sound.

    With regard to the “invasion of privacy”… well, nothing is really private anymore and nothing at all if any part of it is conducted online. Really, thinking a company whose system is used to create and provide the ebooks can’t/shouldn’t record info for their own stats is ludicrous. Don’t like it? Buy or rent a print book instead and they won’t know how much you read or if it just collects dust on your shelf.

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