Amazon has recently announced a major overhaul of how it will calculate royalties to be paid on Kindle Unlimited and Kindle Select Lending Library borrows.
Since most authors seem perplexed at how the new system works, and will affect them, here’s a roundup of reactions from people who’ve done some analysis.
Over on the Melville House blog, the outlook on these changes is gloomy:
When Kindle Unlimited was first formed, it offered royalties to authors as long as book borrowers read 10% of the text. Now authors are likely to make less money each time the book’s borrowed, unless his or her readers complete a considerable chunk of the text (or even–gasp–read the whole thing).
Trent Evans isn’t so sure, and he lays out a very detailed and intricate financial analysis to back up his theory that the changes could be a good thing for authors, since they will very likely force authors to stop slicing and dicing their books into much shorter novellas in order to get more borrows:
The more I think about this, the more I suspect this change is almost wholly focused on combating the rampant gaming of KU that’s been going on. The absurd ease with which KU (in its current form) can be ruthlessly gamed is one of the many reasons why I stayed far away (after my initial experiment with it).
C.E. Kilgore is in agreement with Evans on the “gaming” aspect, but her overall opinion of the changes is still negative and she calls Amazon’s sample payout scenarios into question:
Now, being paid per page means that the 25 page novellas filling the pool are going to be earning significantly less than their 250 page swimming-buddies. But, exactly how significantly less isn’t being honestly represented.
In [Amazon’s] redonk [payout calculation] example, they are giving each page a $10 worth. Excuse me for a moment while I LOL at that. Authors, please – stop right there and don’t even get any ideas about that actually happening. No way is Amazon EVER going to pay out anything close to $10 per page.
A more reasonably achievable figure is 1 penny per page (but I believe it will end up being something more like 0.006 cents – 0.008 cents per page ‘ i.e. not even a penny per page) payouts.
Read the different perspectives and analyses before making up your mind about the likely impact on your own Kindle books.