11.19.2014

Why Bailing From KDP Select Right Now Is An Awesome Idea

When Amazon unveiled its Kindle Unlimited subscription service earlier this summer, a lot of folks expressed some worry about whether the service would affect author earnings.

As a refresher to those who aren't familiar with how KDP Select works, it's a service offered to authors who publish on the Kindle Direct Publishing platform. In exchange for giving Amazon exclusive rights to sell your work in 90 day chunks, they give you the following:

1. 5 free promotional days OR 1 Countdown Promotion (where you have timed discount tiers over the course of several days starting at $.99 and gradually increasing to the full price again by the end of the promotion).

2. Enrollment in the Amazon Prime Lending Library, where readers can borrow up to one book per month as part of their Prime subscription.

3. Enrollment in Kindle Unlimited, the "all-you-can-eat" service that people can join for $9.99 a month.

All downloads that authors incur as a result of items 2 and 3 are paid for through a designated Global Fund, which is anywhere from 2 to upwards of 7 or 8 million bucks Amazon sets aside every month. Depending on the total number of downloads all enrolled authors incur (Amazon doesn't share that info with us), your earnings can fluctuate anywhere from over two bucks a download, and as we're seeing now, all the way down to $1.30 range. Really, that Global Fund number is meaningless without any additional information. It's just used to put stars into our eyes. But I digress.

Ever since the unveiling of Kindle Unlimited, downloads have increased dramatically for many authors while the earnings per download have fallen. October's $1.33 was the lowest number yet, and it was also the month that Amazon put about two million fewer dollars into the Global Fund. It was also the month Amazon had a less than stellar quarterly earnings report. But again, I digress.

As you can imagine, this creates a lot of instability for author earnings. We have no idea what we're going to be making on borrowed or Kindle Unlimited downloads from month to month, and with said downloads slowly starting to match and outpace actual sales, that means very volatile monthly earnings for authors in general. Amazon doesn't release earnings figures until the 15th of the following month, either, so the reason you're hearing murmurings about October's disappointment is because we just learned about it ourselves.

To give you a taste of how Kindle Unlimited is affecting author earnings, here is a list of the previous earnings Amazon was paying out up to and then after the unveiling of the program:

12/11: $1.70
01/12: $1.60
02/12: $2.01
03/12: $2.18
04/12: $2.48
05/12: $2.26
06/12: $2.08
07/12: $2.04
08/12: $2.12
09/12: $2.29
10/12: $2.36
11/12: $1.90
12/12: $1.88
01/13: $2.23
02/13: $2.31
03/13: $1.94
04/13: $2.27
05/13: $2.24
06/13: $2.24
07/13: $2.04
08/13: $2.26
09/13: $2.42
10/13: $2.51
11/13: $2.46
12/13: $1.86
01/14: $1.93
02/14: $2.24
03/14: $2.10
04/14: $2.24
05/14: $2.17
06/14: $2.24
******************INTRODUCTION OF KINDLE UNLIMITED**********************
07/01/14: $1.81
08/01/14: $1.54
09/01/14: $1.52
10/01/14: $1.33

At this point, unless Amazon starts dumping in millions more dollars to shore up the Global Fund to compensate for the increased downloads through Kindle Unlimited, there is no reason to believe the figures will rise above the $1.33 low water mark. In fact, they will probably dump even lower than this as the holiday season commences. $1.33 is a fine return on a $.99 download, but if you're getting that on a $2.99 and up title, that's far below what you get when you sell it outright.

And lest you think that increased downloads will help you make up any loss in per-download revenue, there are several authors already seeing losses in the thousands of dollars. This program is hurting more than it is helping.

And lest you think KU customers aren't cannibalizing your sales, that the people downloading on that program are different from the people who buy books outright, don't expect that to hold for long. As the program attracts more big name authors and publishers, more and more people will sign up for the program, and they will stop paying money for individual books. It will become the norm, in fact, just as services like Netflix and Spotify have become the norm. In fact, the chief worry was that Kindle Unlimited would cannibalize Amazon's existing sales base, and actually hurt Amazon in the long run and not just authors.

It's too early in the game to say whether or not that will happen, and Amazon is nothing if not nimble and forever changing, but the current trend just doesn't look good for anyone involved.

Of course, none of this would be nearly as big a thorn in authors' sides if Amazon weren't demanding exclusivity. At the very least, we could accept lower revenue streams if we knew we could try to recoup those losses through other vendors.

But Amazon doesn't want that. Amazon wants to kill its competition and it wants to employ its legions of devoted KDP authors in that fight by making it so the work of millions of authors is available at only one store: Amazon. Once enough of the midlist and indie segment is enveloped under that umbrella, people will just naturally buy the bestsellers there too. We're already seeing that happen.

But this competition-killing mentality is killing our bottom lines, and Kindle Unlimited is, essentially, a slow rot.

Will the authors do the right thing and revolt until Amazon comes back to the table with fairer terms? When Amazon decides to nix their unfair exclusivity clause? It's hard to say. Some authors are so beholden to Amazon for "giving them a career," that it likely won't happen until earnings fall below a buck. And even then, who knows. Writers are notoriously bad at math, and they'll cling to their vastly shrinking islands with the notion that there is nothing out there but endless, empty ocean.

Then again, taking your work out of KDP Select does come with a caveat. As most authors will tell you, enrolling in the program has a way of improving your standings in Amazon's almighty algorithm. Once we take our work out of the program, many of us seen our sales fall dramatically down to a trickle of what they once were. It's hard to say how long it can take for them to bounce back. I'm coming off the worst summer I've had since I entered this business in 2010, which also happens to be the summer I attempted to redistribute my work via Draft2Digital and Payhip. After three months, my complete lack of sales drove me to re-enroll certain titles, and I've since seen my sales (and borrows) return.

So right now, the prevailing wisdom seems to be to give up KDP Select for good. Quit the sauce entirely. Or at the very least, remove all titles that are over $2.99 and leave in a few cheapie short stories or loss leaders. All new work gets automatically distributed wide to all markets. As for the stuff that was enrolled in Select and boasts the taint of bad Amazon Algorithm Voodoo, the only answer for that I guess is to be patient. To hope that the sales of the newer, shinier titles will help pull the other ones out of the gutter. Gaining a presence in other markets takes a lot of time and patience. I squandered what I had built on Barnes & Noble and Apple two years ago, and getting that back won't be easy, but it will be worth it. Amazon will only continue these abusive policies as long as it has authors willing to line up and hand them their work without question, to take smaller and smaller cuts of the pie because they believe Jeff Bezos is a benevolent god.

I've unchecked all my renew boxes and this time they will stay unchecked this time. I'm battening down my hatches and preparing for a long and very dark winter. Let's just hope spring comes early.

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