Pros & Cons of Kindle Unlimited For Readers & Writers
There are a lot of strong opinions about Kindle Unlimited and I've tried it, and I've researched it, so I'm going to tell you what I know. I have a business degree. I tend to look at the business aspect and the big picture, long-term. Let me state, up front, that I love Amazon. It's a great platform with a lot to offer authors and readers... it has revolutionalized publishing.
That said, let's talk about Kindle Unlimited; Amazon's borrowing platform where readers pay a monthly subscription price of $9.99 to allow unlimited borrows of books. It's not really "unlimited": KU allows readers to borrow 10 books at any one time. This is a significant increase over Kindle Select, which only alllows readers borrow one book at a time.
This sounds great in theory; however, not all books available on Amazon are available on Kindle Unlimited. Some of the bestsellers you want to read most may not be available because publishers and authors have to OPT in. For the most part, there have been books (such as Hunger Games, etc,) that have been added by Amazon without the publisher's permission. This isn't hurting them because Amazon doesn't pose the same limitations on some of the big publishers and bigger indie authors that it does on the masses. This discrimination is my main issue with Kindle Unlimited. It doesn't treat all authors the same, mainly in how they are paid and the restrictions it imposes.
Let me explain.
Subscription fee of $ 9.99 a month for "ulimited access" to borrow books on Kindle Unlimited.
1. You may still have to buy a book you want to read, in addition to your KU subscription.
2. Not all books are available through Kindle Unlimited
In reality, it's a good thing that not all books are available on KU. If all authors participated in KU, you wouldn't be able to purchase books anywhere but Amazon and/or borrow through subscription on KU. In that case you could expect the subscription price for KU to increase; as would prices on books you wanted to buy.
How it differs for Traditional and Indie published authors
1. Indie published authors must be exclusive to Amazon. (You can't sell your book on any other platform.)
A few very successful indie authors and traditionally published authors are not required to be exclusive.
2. The top 100 bestselling authors enrolled in KU are paid a stipend ranging from $1000 - $25,000 a month, before a book is borrowed, which adds up to a huge payout of $550,000 a month. This skews the results and analogies of author earning reports. When Amazon sweetens the "total earnings pot" by throwing $550K extra into the total, makes it look like authors are cleaning up if they enroll in KU. But... the bulk of the money is paid to only a few. So, make sure you take that under consideration. These "stipend" authors, earn the borrow rate when their books are borrowed by subscribers, in addition.
3. Traditionally pub'd authors are paid the same price for a borrow that they are paid for a buy... if 10% of the book is read, they earn the same $ as if a reader bought it.
BUT indie authors are only paid the borrow rate, which is arbitrarily determined around the 15th of the current month. How the fund is determined is a mystery. It's stated somewhere on Amazon that it is determined by the "borrows" of the previous month, but bottom line, no one really knows how Amazon comes up with the KU slush fund total. The borrow rate, per book, is then determined by the fund total divided by the total number of borrows. For example, if 100,000 books are enrolled in KU and the fund is 200,000, if there are 100,000 books borrowed, the "borrow rate" will be $2.00.
4. Borrow rate is $2 or less... when I was enrolled in it, it was around $1.12. But, because the number of borrows/fund ratio is in flux, we dont' find out the borrow rate until around the 15th. (This is arbitrary. Amazon determines how much a "borrow" is worth and there isn't a way to know how they come up with the number. It changes at their discression from month to month).
5. In my opinion, KU has created a monster.... I've seen several extreme serials crop up (10 page short stories). This length will equte to the 10% read requirement to deliver "borrow" rate if the book is just OPENED. This is just silly and poor planning on Amazon's part... it's not illegal, but it's ethically questionable behavior on the author's part. For legit authors who write serials and sell at $0.99, KU is a good deal beause the "borrow" rate will probably be higher than the "buy" rate.
6. A KU author gets the 70% royalty on all price points and markets.
Traditionally published books get 70% in all price points and markets REGARDLESS of exclusivity.
7. KU "borrows" count toward sales ranking equally to a purchased book. This is a carrot dangling in front of aspiring authors everywhere, but the reality is, it won't likely make the book a bestseller. Amazon will boost those top 100 authors who are getting the stipend because, they have a vested interest in the outcome: they want that money back from sales. Just as $0.99 price point can't guarantee a spot on the bestseller lists, KU enrollment can't guarantee it, either.
It's important to keep ranking and pricing in perspective. What are we in business for? To rank? Or, to sell enough copies to make a living? Higher ranking does not always translate into a measurable income increase, and more copies might not either. Between KU and $0.99 trend, it's harder and harder to price your book fairly, and compete in a flooded market.
8. How does KU affect download rates and revenue? Downloads increase about 14% but earnings on KU titles dropped 26% and by 34% for non-KU titles. (Because it boosts the KU titles, but mostly the top 100 KU titles are boosted that are getting the stipend (Stipend amounts to $550K for 100 authors and they want that money back). Those earnings of the top 100 skews the totals and makes the KU payout look better than it is.)
What happens when Amazon owns all the readers? Amazon will have the power to take away author's pricing freedom. They will possibly determine not only how much they think our books are worth, they may also be able to reduce the royalty percentage at their discretion. If and when there is only one platform to sell your book, Amazon can do what they want with us. Then, it is likely prices on subscriptions and books for sale will increase because books cannot be purchased elsewhere. This is red flag for the future health and logevity of publishing and the ART of writing.
I'll close by saying monopolies in any form are are not good for the future of self-publishing. Amazon is a great platform, and if they offered Kindle Unlimited without the limitation of exclusivity, I'd be all in. But, to put all your eggs in one basket gives the entitity who owns the basket all the power. Personally, I want my eggs in as many baskets as possible, in front of as many readers as possible, at prices that are fair to the writer and the reader.
Keep in mind, readers have the opportunity to read a sample of any book they are interested in, which helps them determine if the price is fair. Also, pricing your book at $0.99 on release will train your readers (and all of our readers) to never buy your books, or anyone's book above that price. We must hold price integrity. Readers may feel that they are getting a great deal when they ONE-CLICK for $0.99, but isn't it better to read the sample, then buy one book you really want to read for $4.99 than impulse buy five books at $0.99 that end up unread on the shelves of Kindle oblivion? An unread book, does not gain you a reader, only a sale, ONCE. You can't build a career that way.
For the record, when I was enrolled, I didn't see an increase in total copies sold/borrowed, so my income decreased. Also, when I found out that not all authors were held to the same restrictions, I pulled.