Are Authors Really Losing Out in the Kindle Unlimited Pay-Per-Page Scam – Or Is It Amazon?

7540816300_34120e40da_hAs The Guardian and other parts of the mainstream media begin to notice the month and a half old story on the Kindle Unlimited page count scam, it's time that we consider just who is being harmed.

In early March David Gaughran discovered, and Amazon confirmed, that scammers were taking advantage of a loophole in how Amazon tracks reading behavior in Kindle Unlimited.

Starting in July 2015, Amazon paid publishers and authors who have books in Kindle Unlimited based on the number of pages read. The changeover was a response to authors who were gaming the system by releasing short works and were being paid at the same rate as Amazon was paying for novels.

This system worked great right up until scammers figured out that Amazon cannot track the actual pages being read. Instead, Amazon tracks a reader's location in an ebook as a distance from the beginning of the ebook.

Scammers are taking advantage of that limitation by padding their titles out with filler text like multiple machine translations and random gibberish, and then tricking readers into clicking through to the end of the ebook.

Amazon records that jump to the end of the ebook as the ebook having been read, and pays the scammer (up to approximately $14, based on the page count cap and the current payout rate).

No one knows the scale of the problem, but many have concluded that authors and publishers are being harmed by the scam. From The Guardian:

All the authors who choose to make their books available on Kindle Unlimited are paid, not a flat rate for each page read, but a portion of funding pool that Amazon provides. The size of the pool fluctuates, from $11m last summer to $15m last month, but it’s set by Amazon. No matter how successful the scammers are, Amazon doesn’t lose any more or less than the $15m it sets aside to pay Kindle Unlimited authors.

But other authors do lose out. The same pool goes to pay more “pages read”, reducing the fee for each individual page read.

That's one way to look at it, but can you really prove that is the case?

In retrospect, there is evidence that Amazon has known about this problem since January, and has been changing the rules and adjusting the Kindle Unlimited pool to compensate for the scams.

Amazon demonstrated that they were aware of this scam in January, and we can see that in the changes Amazon made to the Kindle Unlimited rules on 1 February.

The retailer adjusted how they measured a page size, and they also set a hard limit on the number of pages paid for a given title. That cap of 3,000 pages was ridiculously large (most novels run to 300 to 400 pages in Amazon's system) and was likely intended as a response to the scammers.

And ever since January, the per-page rate has held steady, suggesting that Amazon may be increasing the funding to compensate for the scammers.

Note: The monthly funding pools were announced after the fact.

  • In January 2016, the funding pool totaled $15 million and the per-page rate $0.00411.
  • In February 2016, the funding pool dipped to $14 million while the per-page rate rose to $0.00479.
  • In March 2016, the funding pool rose again to $14.9 million as the per-page rate dipped to $0.00478.

The per-page rate has not fallen through the floor like The Guardian assumed would happen as the scammers cheated their way to higher revenues.

So unless you are going to argue that the rate would be higher in the absence of the scammers, we have to consider whether Amazon is aware of this problem, and is keeping authors from being harmed.

What do you think?

image by seanmfreese

 

About Nate Hoffelder (11594 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."

17 Comments on Are Authors Really Losing Out in the Kindle Unlimited Pay-Per-Page Scam – Or Is It Amazon?

  1. Third paragraph: “Starting in July 2016,” should be 2015

  2. The bottom-line is that the program is huge and the scammers are relatively few; meaning that there’s little impact from them. That’s what your data shows. Amazon has made a lot of mistakes but this program isn’t one of them

  3. It seems Amazon is adding extra money into the pool. Subscriptions aren’t covering the entire amount. KU is probably a write off.

  4. Marshall Glickman // 26 April, 2016 at 3:38 pm // Reply

    Indicates how terrible a deal KU is for authors. If all 300 pages of your book are read you get less than $1.50. That’s meager.

    • Considering that is a rental and not a sale, I think it’s pretty good.

      • Marshall Glickman // 26 April, 2016 at 9:05 pm // Reply

        pls explain to me why you think there is a functional difference between it being a rental and sale in the KU program? Maybe I’m missing something, but seems to me that the book is read and can be accessed again if desired [or I assume so; I don’t subscribe to KU]. And if a novel, highly unlikely would want to be referred to again anyhow. The net result is the author has sold their substantial work for less than $1.50.

        • If a subscriber stops paying, they lose access to the ebooks. If authors pulls their ebooks then the subscribers lose access.

          That’s not how the rest of the Kindle Store works. Once you pay for an ebook, Amazon let you download and read it forever (barring acts of God).

          So yes, KU subscribers are renting ebooks.

  5. When you’re talking about hundreds of millions of dollars, there is likely to be some scams and abuse. But I doubt it’s very large or that Amazon will have trouble weeding out the worst of it. It’s likely to be wack-a-mole, but odds are we’re talking thousands of dollars in scams, not hundreds of thousands.

  6. I can’t speak to the money/harm issue, though I believe Amazon acts quickly when their bottom line is affected and far less quickly when not. However, I think it’s probably incorrect to say that Amazon cannot count words — from words you can easily derive pages — however you define pages. What is correct is that they are not counting pages. The idea that Amazon cannot seems really suspect to me.

    There might be lots of solid reasons why it didn’t look economical to count when there were super easy shortcuts — like only going off position.

    Greater accuracy is totally achievable but what that accuracy might cost them in server trips or increasing local device storage for some additional metadata is another issue altogether.

    So, it’s not cannot count. It’s does not count. That right there says a lot.

    Whether KU is a loss leader for them is another thing I’m not certain is true. The pool of funds is a hedge against the kind of losses that killed other subscription services. However, I have heard that KU subscribers go on to buy something like 4x more books. So, perhaps a loss when you look only at KU but not when you look at the bigger picture. I can’t recall where I heard that, so that could be incorrect.

  7. Another scammer trick which you have not touched on is boxing up a series of books, publishing the content over 20 to 30 different books with different ASIN’s and using click farms to get to the end of the book. I recently downloaded one of these so called books and licked through to the end in 5 minutes. It is not only money taken from the fund to pay these scammers, hurting other legitimate authors but there is an issue of visibility. They will keyword stuff the title, the blurb and even the author name to get their books on the first few pages of a reader search. I have noted 2 such authors (admittedly a small number but I can’t spend too much time on this) and reported them to Amazon, as violating the terms of service. One week later, these two scammers are still quite visible on Amazon. If I, no expert in searching and finding this kind of scam, can identify them, why doesn’t Amazon DO something about them? Your article minimizes a problem that is bigger than what you make it out to be and impacts legitimate writers more than you think.

  8. It isn’t zero-sum.

    Scammers don’t take from other authors. Amazon decides the pot after the month is over, so no author is being cheated.

    Amazon is very aware of scammers, and it’s a priority for them. Whenever I talk to Amazon folks, I urge them to inform the writing community about developments when things like this happen, but that just doesn’t seem to be Amazon’s MO.

    But we aren’t getting smaller payouts because of scammers.

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