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

Are Authors Really Losing Out in the Kindle Unlimited Pay-Per-Page Scam - Or Is It Amazon? Kindle (platform) As 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

 

Nate Hoffelder

View posts by Nate Hoffelder
Nate Hoffelder is the founder and editor of The Digital Reader: He's here to chew bubble gum and fix broken websites, and he is all out of bubble gum. He has been blogging about indie authors since 2010 while learning new tech skills at the drop of a hat. He fixes author sites, and shares what he learns on The Digital Reader's blog. In his spare time, he fosters dogs for A Forever Home, a local rescue group.

21 Comments

  1. fahirsch26 April, 2016

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

    Reply
    1. Nate Hoffelder26 April, 2016

      Whoops. Fixed it, thanks!

      Reply
  2. BDR26 April, 2016

    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

    Reply
    1. Nate Hoffelder26 April, 2016

      I think they were pretty common in January, but then Amazon dealt with most of the scam ebooks in KU. That would explain the rise in the per-page rate.

      Reply
  3. Fbone26 April, 2016

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

    Reply
    1. Nate Hoffelder26 April, 2016

      Amazon always adds extra money to the pool after the end of each month, yes.

      Reply
  4. Marshall Glickman26 April, 2016

    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.

    Reply
    1. Nate Hoffelder26 April, 2016

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

      Reply
      1. Marshall Glickman26 April, 2016

        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.

        Reply
        1. Nate Hoffelder28 April, 2016

          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.

          Reply
  5. Mackay Bell26 April, 2016

    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.

    Reply
  6. Carolyn Jewel26 April, 2016

    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.

    Reply
    1. Nate Hoffelder26 April, 2016

      Thanks for pointing out the distinction, Carolyn.

      Reply
    2. Frank27 April, 2016

      I have heard from an verified Amazon employee that they cannot count words because that is not included in the Whispersync info sent to the server.

      Reply
  7. […] Is Kindle Unlimited’s pay-per-page rate costing Amazon more? […]

    Reply
  8. […] cheating the system by preemptively pushing readers to the end of their books. It turns out that this was not as impactful as many […]

    Reply
  9. Martin25 May, 2016

    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.

    Reply
    1. Nate Hoffelder25 May, 2016

      That scam was mentioned in an earlier post.

      Reply
  10. Joe Konrath26 May, 2016

    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.

    Reply
  11. […] My Friends (1) Stay Honest My Friends (2) Stay Honest My Friends (3) Stay Honest My Friends (4) Stay Honest My Friends (5) Stay Honest My Friends (6) Stay Honest My Friends (7) Stay Honest My Friends (8) Don’t Sweat the […]

    Reply
  12. […] other words, it looks like the fears that authors were being harmed by the KU page count scam were indeed […]

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to top
%d bloggers like this: