Scribd’s Traditional Royalty System Proves Costly

Last week I wrote about how Amazon has changed the way royalties are paid out to authors when their books are borrowed from Kindle Unlimited or Kindle Owners’ Lending Library. They went from paying out a royalty when a reader read 10 percent of a particular book to paying out a royalty per page. I applauded the system because it’s more fair than the previous one. Now we’re given a prime example of what happens when you use a traditional royalty payment system for borrowed books.

Scribd does. They pay out a royalty for every book borrowed, regardless of how many pages are read. And it’s coming back to bite them in the you know what. They announced last week that they will be removing many romance and erotic titles basically because they can’t afford to keep paying the royalties. People are reading them too much and the $8.99 a month subscribers pay just isn’t going to cut it. So, titles are being removed from their catalog.

Now think about this. What if you subscribed to one of these services (Kindle Unlimited & Oyster being the other two) and your genre of preference is romance. And you’re reading along every month enjoying all these romance novels. And then the service decides to remove thousands of books that all happen to be in your favorite genre. Wouldn’t that be a little irritating? I think so. And it just goes to show that a traditional royalty system is not the answer to subscription based book services.

What do you think about Scribd having to remove romance titles because people are reading them too much?

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?