Amazon Changes Terms for KDP Select, Will Now Pay Authors Based on Pages Read

7540816300_024236f792_bOver the weekend I explained how Amazon was using the payment terms in KDP Select to manipulate the supply of ebooks in Kindle Unlimited, and damned if they didn't just do it again.

Amazon has just announced that starting 1 July, they will no longer be paying authors based on the number of times an ebook has been loaned and read in Kindle Unlimited. Instead, the new payment term will be based on the number of pages read.

Ever since KDP Select launched with the Kindle Owner's Lending Library in late 2011, Amazon has counted the number of ebooks which were loaned and read and used that number to divvy up a pool of money. The pool started small, but it has since grown to exceed $10 million in May 2015, and is expected to pass $11 million in July 2015.

That $11 million is going to be divided based the number of pages read, and not the count of whole books.

  • This means, for example, that longer ebooks are going to be worth more than shorter ebooks (assuming that they're read cover to cover).
  • It also means that quality matters more now; if a reader loses interest a third of the way in then the author will not be paid for the rest of the book.
  • And last but not least, this change might make it worthwhile for authors to submit longer novels once again.

Amazon explained that they made this change in response to authors who had been telling Amazon that "paying the same for all books regardless of length may not provide a strong enough alignment between the interests of authors and readers".

That is true.

Hugh Howey is one of the authors who had been pushing for the new terms. He wrote today that the change is "one many of us have been clamoring for and even expecting." He added, "If anything, I’m surprised it took this long."

Later in his post he writes:

I have a feeling we’ll see some knee-jerk reactions from authors without considering these pros and cons. Shorter works still make a lot of sense in KU. It’s hard to justify selling short stories for more than a dollar, and you only make 35 cents on that dollar under KDP terms. In KU, a 20 page story might earn just as much as a sale. What we should celebrate is that short stories will no longer earn the same amount as a novel, especially since the 10% threshold was much easier to reach on a short story. That system just wasn’t fair. The new system is a vast improvement.

I agree.

As I explained over the weekend, the old payment terms had been encouraging authors to submit short works to KDP Select. A short ebook was worth the same as a long one, so authors were writing to suit the market.

And now they're going to have to write to suit a different market. While it is too early to say how this will impact authors, I do think that readers will benefit. They'll be able to enjoy longer stretches of stories without having to switch between one ebook and the next.

images by kodomut, seanmfreese

About Nate Hoffelder (11375 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

11 Comments on Amazon Changes Terms for KDP Select, Will Now Pay Authors Based on Pages Read

  1. Actually, Nate, I think this proves you wrong. Amazon wasn’t trying to manipulate the market, because otherwise they wouldn’t have made the change. There was no conspiracy to try to get writers to write short fiction and serials. (Particularly along the lines of that being argued by Ursula K Le Guin.)

    Amazon started KU with what they thought was a reasonable (and simple) way of rewarding writers. Writers complained, and they changed it. All this conspiracy talk about them trying to force writers to write short works because they want them to return to the Amazon site to buy diapers turned out to be untrue.

    This does seem like a slightly fairer system, but any system of payment can be gamed and can be perceived as being flawed. It could be argued it’s unfair to writers of short works because it’s harder to get someone to make that initial click and download than it is to get someone to turn the page. It could be argued it might encourage writers to pad books to make them longer, or to use more chapter headings and short paragraphs to bump up the page count. (Clearly there is a conspiracy against people who write long paragraphs, because Amazon should be paying per word, not per page!)

    I will say, overall (as someone who wrote a longish novel and no short short works) this does seem fairer. And probably less likely to be gamed in a bad way than before.

    But… once again, it shows Amazon is not trying to manipulate the market (manipulation implies hidden intent) to encourage writers to write in any particular way, except in a way that will appeal to the most readers.

    That all being said, you are, as always, very on top of the pulse of what is going on in the digital publishing world! So, yes, you were totally right that this was a key issue, and you were very much ahead of it!

    • Nope.

      I didn’t say Amazon was trying to manipulate the market. I laid out how their actions had created a market and then changed its nature. Today’s news of Amazon’s plicy change is just another example of how Amazon is affecting this one segment of the market.

      Hell, today’s news proves me 100% right, nor wrong. Amazon concluded that “paying the same for all books regardless of length may not provide a strong enough alignment between the interests of authors and readers”, so they changed the payment policy. That, by itself, is proof that I am right.

  2. I checked and you didn’t say “Amazon was trying” to manipulate. But in the comments you did say:

    “And then Amazon launched KU. They let the payment drop to the point that novels were no longer profitable. Amazon also let KU subscribers read as much as they want, thus encouraging snacking on short works.

    And Amazon continues to manage the pool each month so the payment remains low.

    So yes, they do manipulate this market.”

    So, you said, yes they “do” manipulate, but no they don’t “try.”

    I’m not trying to argue over semantics, but there’s bigger point here. Did Amazon structure the original payouts to try to encourage (manipulate) writers to write short fiction? I think the answer now is clearly “no.” If you agree, great.

    And again congrats for being ahead of this topic.

  3. Let’s take a look at this. Most authors are so excited about getting a bit more for borrows. Personally, no one borrows my books much anyways, so it won’t have a huge effect. What’s more, I think it’s important to realize that Amazon is doing this because they were hurt. They were hurt by authors pulling titles from their publishing service and putting those titles onto competing publishing sites.

    We’ll never know the true extent of this damage, but I suspect it was substantial, or the long-term losses were looking substantial. You can say they did it out of concern for authors, but I’m not going to buy that reasoning. I’d say they did it more out of concern for their publishing ‘monopoly,’ for they don’t want to see it jeopardized, now or in the future. I still think their subscription models will run into problems in Europe.

  4. Certainly good news for those of us who publish serious nonfiction. I’m still going to aim for relatively short books, but for what I write that translates to 50,000 words or more. My basic rationale in fact is that readers are more likely to finish the book if it’s not too long, so this only reinforces my existing motivation.

    It seems to be an illustration of the dangers of failing to work through the consequences of what your payments structure motivates customers to do.

  5. The idea that Amazon has done this in response to author concerns is nothing if not amusing.

    The simple reality was that subscribers wanted to get their money’s worth. If you pay 9.99 a month you want to read that much or more in list-price value to make it worthwhile. Reading lots of short titles, even at 0.99 list price, meant a subscriber could be notionally up on the deal.

    Just three 0.99 downloads a week means a subscriber gets twelve bucks worth of reading. Three bucks up on the deal.

    Those same twelve downloads read just 10% through – just opening at page 1 for a ten page short – would cost Amazon nearly seventeen dollars at 1.40 per pot payout, leaving Amazon down nearly seven dollars on the subscription fee.

    As more and more authors tried to game the system by churning out super-short works or breaking up longer works into small parts, so the losses mounted for Amazon because no-one in their right mind was going to actually buy this stuff at regular price whereby Amazon could pay just 35c.

    But Howey is right to be surprised this took so long to happen.

    For readers nothing changes. They’ll still gravitate towards shorter titles to get their subscription fee covered, and all these micro-books created especially for KU will be of no value on a regular retail site so will stay in KU and keep getting borrowed. But Amazon will be paying out a lot less.

    Amusingly authors are now talking about gaming the system in the opposite direction and stringing together titles to create really long books, and so get a bigger share of the pot. There’s talk of ten title anthologies being thrown into KU because that’s 2000 or more pages. Loads of money according to the Amazon example pay out.

    But the average-speed reader is not going to touch these in KU. If that anthology takes a month to read it’s cost them ten bucks instead of the far lower list price if they just bought it outright.

    There are only two winners here. Amazon, and the selected authors who will get all the visibility courtesy of the algorithms and get the big payouts Amazon is shouting about.

  6. For me this is potentially a good change. Not necessarily in terms of how much money I’ll make, though that would be good of course 🙂

    My reason for liking this payout plan is because it’ll reward work that readers finish. It encourages writing a story to fit the story, regardless of length.

    And if completion reading rate is rewarded with better buyer visibility, then that’s huge!

    I’m not here to say all this “is” the intent or probable result, but simply how I perceive this payout change.

  7. As someone who has published both novellas and full length novels on KDP, I say bring it on. The main beef I have isn’t with payment, however. My sales aren’t great, but my loan numbers are by far lousier. I currently have two works enrolled in Kindle Select and no idea how to promote for loans. Is there a party going on somewhere that I wasn’t invited to?

  8. Just another way ‘the Man’ is putting more of the squeeze to Indie Authors. This post explains it in layman’s terms: http://rmarcejaeger.com/2015/07/02/the-problem-with-the-new-kindle-select-plan-how-amazon-should-fix-it/

  9. David Batterson // 23 August, 2015 at 7:07 pm // Reply

    Maybe this move will slow the influx of less valuable writings into the Kindle Store. What I mean is; the ebook market has been overloaded with so many book series over the past couple of years that I think it hurt authors who pumped out 50 – 80k word novels. This is good news! Maybe these authors who pump out one novella after another will actually have to sit down and complete an entire novel for once in their careers, which will eventually help to balance out the flow of books going into the bookstore and offering more value to the reader across the board as well as the author.

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