Business Musings: Go Wide or Run Away or Amazon Fail
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[Note on 5/5/23: As most of my regular readers know, I’m dyslexic. I have a first reader to catch errors, but this post–which was late–went live without the assistance of that first reader. As a result, I made two typical errors for me, which have been discussed in the comments. Normally, I leave my mistakes and let the comments speak for themselves, but because the KU people are here, these two small errors have grown all out of proportion. At the request of a few folks, I’ve removed the mistaken passage and corrected a math error, but I’m leaving all the comments, which I think are valuable. If you want to read the actual removed section, download the audio version. The errors remain there.]
I’m writing this on the last day of April. I’ve been planning this post for months now, as the drumbeat of bad news out of Amazon escalated from rumors to asset sales to major layoffs. The reason I’m posting the date in this blog is because by the time you read this, there might be even more news that has somehow affected writers.
I’ve been worrying about this year since at least 2011. Maybe longer. I knew at some point, the world’s largest retailer would mess with their ebook program(s). Amazon is not a book retailer. They’re no longer a bookstore, and haven’t been one since the last century.
They’re an online retailer, currently the largest in the world by most measures, but they might not be number one by the end of 2023. Others are rapidly climbing the list, and aren’t suffering from the same kind of missteps that Amazon made during the past few years.
When big companies have bad earnings reports, the people running the big company must make changes—even if changes aren’t warranted. The CEO answers to the stockholders, not to the customers, and stockholders generally demand some kind of change…or the CEO gets fired.
In the past two years, Amazon has had bad earnings reports. 2022 was terrible. The company lost all of the gains it made during the pandemic. CNBC reported this on December 19, 2022:
Shares of Amazon have tumbled 49% in 2022 and are on pace for their worst year since the dot-com crash of 2000, when the company lost 80% of its value. Among the highest-valued tech companies, Meta has had the worst year, down 66%, followed by Tesla at 57% and then Amazon.
Keeping an eye on earnings reports, both expected and actual, are important for writers to do with any business they’re tied up in, because then the writer isn’t blindsided by changes that come from above.
The losses started in mid-2021, but they were small. Year over year, though, which is how most publicly traded companies now look at earnings, were devastating in 2021. After all, 2020 was filled with phenomenal growth. A year later, the growth was slowing, and by 2022, reversing.
Amazon made a lot of money during the pandemic and, like many tech companies, seemed to think that the gravy train would continue. Apparently no one in the company thought it through: what we were going through was a true Black Swan event. It happened worldwide at the same time, and no one alive had gone through anything remotely similar.
Rather than seeing the event as something unique, with its own set of rules, the people in charge of the tech companies decided the future had arrived. We would all be shopping online forever now, talking to friends and family on Zoom, and never leaving our homes. Apparently, these starry-eyed CEOs and prognosticators weren’t listening to their own friends and family, who were probably chomping at the bit as much as everyone else, waiting for the day when they could burst out of their little bubble and return to “living” again.
When living returned, the tech companies saw quarter to quarter losses, and many of those losses were major. Some companies are doing just fine because they didn’t expand during the pandemic. But others are doing poorly.
Like Amazon.
Amazon spent the newfound wealth like it was a growing start-up again. They bought or rented warehouse space all over the country, and added a huge number of employees.
And now, with the financial losses, Amazon is reversing a lot of those decisions.
Most writers wonder why that’s important. After all, big companies are just big companies, right? They have money. They’ll continue.
But they don’t always continue. Take a look at Bed, Bath, And Beyond. In fact, take a look at this article in Business Insider, which is illustrated with large bold subheads. It gives a quick overview of how a company can go from a juggernaut 20 years ago to bankruptcy and possible closure today.
For more than a decade now, I have fought with writers old and new about relying solely upon Amazon. I’ve written blog after blog recommending that writers go wide, and yet many writers never listen.
Most of them give me the same song and dance: Amazon is the biggest retailer in the world. It’ll never go away.
I have not gone back in my blogs to see when I started writing about going wide. I do know that I actually used the picture of eggs in a basket several years ago to encourage writers to go wide. And if you look at any of those old blogs, particularly from 2011 or 2012, you’ll see the kinds of statements I mentioned above littering my comment field.
I kept saying that someday Amazon will change, and that change will hurt writers, particularly those who tie their entire writing career to Amazon. The writers who have gone exclusive through Amazon via Select are really going to be in trouble.
And the trouble has already started.
Some of that trouble was built in from the start. What actually got me taking notes for this blog post was a Facebook post from one of the best-known Kindle Unlimited writers who claimed that writers never have a passive income off their work. Writers must constantly write and release to be successful.
Um…what? Really? News to me and most writers who have gone wide. One of the best things about writing is the passive income. If Dean and I quit tomorrow, we will continue earning for years to come. Sure, some of the revenue will go down a bit if we don’t put out new product, but mostly, the income will plateau.
Apparently, goosing payment through new releases is one of the few ways that K.U. writers survive. And if they don’t do it, they don’t get paid as much or as well. Or maybe not at all, given what he (and all of the people in the comments) said.
But that’s built-in trouble. Add to that some significant changes in the way Amazon is doing business.
In March, writers who are in Kindle Unlimited reported that their earnings went down. Lindsay Buroker posted this on her Twitter feed to warn her fans that her books would soon be leaving Unlimited.
The amount Amazon is paying authors for Kindle Unlimited page reads is on a pretty noticeable downtrend this year. I’m going to take my Star Kingdom and Dragon Gate series out of the program in a few weeks.
— Lindsay Buroker (@GoblinWriter) April 14, 2023
Smart move. And very smart to warn her KU readers ahead that the books will no longer be available through the program.
The financial loss for writers was significant. And it’s worse if you look at a historic timeline for the KU payments.
First, though, let’s go over what Kindle Unlimited is, and, more importantly, where the money comes from.
Writers who have their books in Kindle Unlimited must be exclusive to Amazon through a program called Kindle Select. Those writers get paid in two ways: they get paid for “page reads” in Kindle Unlimited itself—the program of all-you-can-eat books that goes to subscribers. The writers also get what the rest of us get: a percentage of the sales price if their ebook gets purchased.
None of these writers can go wide. Their fortunes are tied 100% to Amazon itself.
The payment for their “page reads” comes out of something called The Kindle Select Global Fund. The fund is based on the subscription fees paid by Kindle Unlimited Subscribers.
And here’s how writers get their share of the fund, according to Amazon itself.
The share of fund allocated to each country varies based on a number of factors, such as exchange rates, customer reading behavior, and local subscription pricing. Author earnings are then determined by their share of total pages read. They are able to earn a maximum of 3,000 Kindle Edition Normalized Pages(KENPC) read per title per customer.
First, I’m not going to attempt to explain the Kindle Edition Normalized Pages.
The point of Kindle Unlimited is to bring readers into Amazon’s ecosystem, where they will then shop for other things. In other words, Kindle Unlimited is an advertising program, a loss leader if you will, to get people to spend money elsewhere on the platform.
The Global Fund’s payouts to individual writers have gone down dramatically in the past ten years. While the total amount paid by the fund has grown (because more and more authors/books are in it), the amount per title has decreased.
In 2015, the fund paid nearly 60 cents per every 100 pages read (which, to me, is a ridiculously small amount, on par with traditional publishing). By 2022, the fund was paying about 46 cents per 100 pages.
In March, the amount dropped to roughly 40 cents per 100 pages.
You can find the numbers on Written Word Media. If you want to see a chart, head to this chart that Daniel J. Tortora maintains.
The scary thing about the Global Fund—about KU in particular—is that it can be whatever Amazon wants it to be. They’ve already changed the terms of KU to exclude things that were once included, like magazines.
This a program that is Amazon-controlled. That’s important on the small scale—such as excluding things like magazines or dropping the rates—but it’s also important on the large scale.
Amazon can shut down Kindle Unlimited if it outlasts its usefulness or if it doesn’t earn to expectations. I’m not even sure what earning to expectations means. Maybe it’s not money. It might be a set number of subscribers.
Either way, Kindle Unlimited/Kindle Select exists at the whim of Amazon, which, in this fraught economic moment, is quite a risk for writers.
Amazon can and does shut down author accounts all the time for perceived and actual problems. Perceived? A writer friend of mine, award-winning and bestselling in both traditional and indie, had her account shut down for a reason that I can’t even remember right now. The reason was that minor. And terribly frustrating, because she hadn’t done anything wrong. But it took nearly a week of back and forths to get the account reinstated—and that wasn’t even in Kindle Unlimited. That was a straight Amazon account.
The problem is even worse for Kindle Unlimited authors who have pledged exclusivity to Amazon. As TorrentFreak reported in February, writers in Select have had their books pulled because the books were “freely available all over the web.” In other words, the books had been pirated.
Writers had their accounts suspended. If they could prove that their books were “freely available on the web” due to piracy, the accounts got reinstated. After a loss of revenue, however.
Amazon can remove books for any violation of their terms of service. It can be difficult for the writer to find a human to handle the complaint. It takes time.
Everything about Select smells of traditional publishing to me. The historically low payments, the take-it-or-leave it terms. The fact that a career can disappear virtually overnight.
This is why I repeatedly urge writers to go wide.
But it’s not the only reason. Amazon is clearly reevaluating their business model on all levels, and that includes books.
When Jeff Bezos was CEO, books and the book division were untouchable. Bezos started the company as a bookstore, and had a firm love for books. The new CEO does not have that love of books. He came from Amazon web services, and is proudly stating that he’s not going to run the business “the Bezos way.”
I’m not exactly sure what that means. Does that mean he won’t make the business as innovative? As profitable? (If so, he’s succeeding.) Or is that simply a matter of style?
Whatever the difference is, it is clear that the new CEO’s priorities are very different. In November of last year, Amazon announced that it would cut employees in its books and devices divisions. Shock resounded through the book world. Everyone thought books and Amazon were synonymous. Even if Amazon was having financial trouble, it wouldn’t touch the books.
Whoops. That’s no longer true.
Then the cost-cutting continued into 2023, and in every single department. 18,000 jobs in January, 9,000 in April.
All of these cuts have had an impact on customer service. The complaints about Amazon have only grown in the past six months, from both consumers and from writers. Nothing moves quickly at Amazon anymore and if there’s a problem, a robot deals with it first. I’ve heard more customer complaints about Amazon in the past year than I ever have.
I also don’t think it’s a coincidence that some vendors noted a glitch in the late April/early May payments. About the time that writers were fretting that they couldn’t get anyone to answer their complaints, an Amazon employee had uploaded a video of her firing on TikTok. She’d been chronicling her day, and happened to open her email account in front of a live video feed.
There, in her email, was notice that she had been fired. Her reaction went viral.
Employees aren’t the only part of the business being cut. In April, Amazon announced that it was closing Book Depository. Book Depository delivered paper books worldwide, using warehouses in strategic places all over the globe. The company was a boon to readers who preferred paper editions.
The fact that Book Depository disappeared was just further proof that Amazon is no longer giving special privileges to its book division. Readers no longer get special consideration. (Writers are only an appendage of readers, in Amazon’s view.)
What that means is that the book division now gets lumped into everything else. From the vantage of the people who run the company, the folks who answer only to profits and stockholders, everything at Amazon can be cut, altered and changed.
The new CEO came in and began cutting and retooling the company into his own image. He presided over the massive losses, which, to be fair, weren’t entirely his fault, and responded the way an average CEO would respond, with cuts that reduced pretty much everything that makes Amazon special.
The cuts did what they were supposed to do. The first quarter of 2023 actually was better than experts had predicted. But as Gizmodo noted in its April article about Amazon’s continued cost-cutting,
In the long-term layoffs are a time-tested bad strategy for a company’s sustainability. But in the short-term: big number go up, overhead go down.
Layoffs and cost-cutting also change the internal company dynamics. Amazon employees are claiming that the company’s culture has changed from a Day One company to a Day Two company. As Modern Retail explains the difference in an article titled “‘Day 2’: How cracks began to emerge in Amazon’s e-commerce empire in 2022”
The Day One mentality meant that, despite being 28 years old, Amazon still approached each day as if it were the first day of their brand-new startup. And Bezos often said that day two is death for companies.
Whether or not Amazon’s Day Two status will mean the demise of the company is far in the future. What it does mean is that Amazon’s position as an innovator and a company that prided itself on the customer experience is part of the past.
Amazon is a different company now, one that does not prioritize books over shoes. Both are widgets that the company sells. And if the book division is not making as much profit as expected, Amazon will retool it.
Retooling it might mean getting rid of Kindle Unlimited.
Writers who are exclusive to Amazon need to follow Lindsay Buroker’s lead. These writers need to let their readers know that they’re moving out of Kindle Unlimited. Then the writers need to go wide. The writers can and should stay on Amazon, but not exclusively.
Yes, it will take months, maybe years to replace the Kindle Select income, but that Select income has become unreliable at best. It will remain so. Or, it might disappear altogether.
Writers who are already wide still need to keep a weather eye on Amazon. They need to know what changes are coming to the company. Amazon is a behemoth, and even writers who are wide make a lot of their income in Amazon’s ecosystem.
Those writers need a plan for what they will do if Amazon changes its publishing program and cost-cuts at the expense of programs writers rely on.
I learned over many years that having a single client for your company is bad for business, even if client is a billionaire or, say, the biggest retailer in the world. Your business is inextricably tied to someone else’s business. If their business tanks through mismanagement or some unexpected surprise, yours will too.
The best way to run a business is to make sure your income comes from a variety of sources. At minimum, for writers, that means going wide. (There are other sources too, like Kickstarter.) This exclusivity thing? It only benefits Amazon. It doesn’t benefit the writers at all.
If writers stay exclusive with Amazon after the changes this past year, then those writers will get no sympathy from me when their businesses disappear one day, through no fault of their own. I’m really not all that sympathetic now. But I do understand that many writers are lazy opportunists. They put their books up exclusively on one site, did a handful of things that Amazon told them to do, and didn’t really learn business at all.
Because if people who are exclusive to Select understood business, they would understand the problems of exclusivity. They would understand that they were relying on a company that had no fellow feeling for them to make their living. They would understand that their writing careers were precarious and subject to the whim of an international conglomerate that can change its policies at will.
That’s not running a business. That’s covering your eyes and hoping for the best.
I too hope for the best for these writers. I hate watching careers get destroyed. For decades, I’ve watched traditional publishing shatter writers’ dreams. I have a hunch the next few years will be about watching writers’ dreams shatter as collateral damage in Amazon’s changes to its business model.
For those of you who can listen, please do. Go wide. Do it now.
Because you’re really and truly running out of time.
****
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I do control this website. (If I have hosting issues, I find a new host.) Whenever new tools show up, I evaluate them to see if they will help me build a stronger and more solid writing business. And if they do, I figure out a way to incorporate them.
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“Business Musings: Go Wide or Run Away or Amazon Fail,” copyright © 2023 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / studiostoks.
52 responses to “Business Musings: Go Wide or Run Away or Amazon Fail”
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I’ve never been in KU, and I don’t regret the decision. There are too many horror stories about authors having their accounts suspended. If that ever happens to me, I don’t want to know all of my income is suddenly gone. In the past, Amazon has made me prove I own my books when I have changed the price or updated the book description. If I couldn’t prove it, they were going to take down the books. This happened on and off for two years. That was enough of a headache in itself. I may not make as much as other authors, but I sleep a lot better at night knowing I have additional sources of income coming in.
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Hi Kristine
I’m new to publishing though not to writing. I have 24 unpublished but completely finished and completely stand alone novels that I’ve never published anywhere (years ago before the internet I tried to publish a few books with New York but they were all ignored).
I understand your side and have read the comments of those who disagree with you.
My question is can I not go wide with say half of them and put the other half (or less) in ku so that I can have the “best of both worlds”? Is that a good compromise in your opinion. I value your expertise about this stuff.
Also, does KU demand I stay exclusive during the exclusivity period for only the novels I put in there for is it for ANY thing I write (ie contract binds me not the particular title(s) I put in),
Pardon me but I am confused about that.
No worries, Pat. You can have half your work in KU and the other half wide if you want. You’ll be building 2 different audiences that do not talk to each other. And you’ll be frustrating your wide audience because there will be books they can’t get unless they go to Amazon. I did this years ago, experimenting in KU with a secret pen name. I found KU restrictive and difficult, because it depends on advertising and playing in the system to build your name recognition. I’d rather work wide and let readers get the book where they want to get it, rather than keeping my readers out. But your mileage might vary.
Do remember that in the last 5 years, KU has cut its pay rate per page to authors by 1/3 (20 cents per 100 pages), and I fully expect them to continue doing so. So the gamble might not be as good a gamble as it was, say, in 2015.
First of all, Kris, thanks for this blog post! I always enjoying reading your offerings.
I also wanted to point out that if anyone is considering going wide, you might check out the Wide for the Win Facebook group (they’ve also added a Circle group), which is a great source for information, tips, and strategies.
Writers can only earn a maximum of 3,000 page reads per title per customer. Which means if one of the writers’ books really, really, really takes off in KU, the writer’s earnings are capped.
There are several errors/exaggerations in the article but I’m curious about this one specifically. Length of books is capped because of book stuffing. This is true. Each title can get a max of 3K reads per title per customer. A 90,000-word book is between 500-600 KENPC for me. So that means it would take roughly 500,000 words for a book to hit the cap, give or take. How many authors are writing books that long? Omnibuses are also easily covered. It’s a very strange argument.
Also, it’s already been pointed out that your math is wrong on the money for the 100 pages. It should also be pointed out that pages are not the same as KENPC. Your KENPC is longer than your print length, a lot of the time close to double, so that math tends to fall by the wayside too.
And, while I love being called a lazy opportunist while writing more than two million words a year (by a person who has a PayPal link for donations at the end of her article no less) I’m also curious why, if everything you say comes to fruition, people can’t just go wide then?
What’s wrong with a PayPal link?
And as I said in an earlier comment, I made an error. I admitted it, and kept it in because other points in the commenter’s post were good, and I didn’t want folks to wonder what the hell he was talking about.
Why aren’t your 2 million words wide? I have written more than a million words, sometimes several million words per year since I started in the 1980s. Almost all of my books are in print (except a few I can’t pull from trad publishers) and all are wide. I’m referring to the business practice of staying in KU, not to how much you write.
Because I make vastly more in KU. Vastly more. I have had series wide. I’ve tested multiple times. Just for example, one of my old finished series was wide and I lost more than $60,000 in three months alone on it. I prefer the money. There are a lot of people out there who make great money from KU. Are there plenty of authors who don’t? Sure. That are plenty of wide authors who make nothing though too. Pretending that nobody is making money in KU is disingenuous. Most of the six and seven-figure authors I know are in KU. Not all by any stretch of the imagination, but most…and I know quite a few. Pretending people in KU don’t understand the business comes across as ridiculous as well when this is a genre decision. If you don’t want to be in KU, good for you. Nobody is calling you ignorant because of it. There are plenty of people out there who understand the business, though, and they’re in KU for a reason.
Because it makes good business sense for them.
Yep, most people who have been in KU a long time lose a lot of money when they go wide.
That’s what happens when you build your business exclusively on one platform. You’ll make money…until the platform changes or disappears. And then you have no backup at all. It is not a genre decision. It is a business decision, one you made a long time ago. If KU gets shut down or continues to decreases its pay rates or bundles into another program not covered by the current TOS, you will lose money and a good portion of the readership you built up. Because you’ve only appealed to readers in the KU system, not as many readers as possible.
I would suggest that you start taking some of your newer work wide, so that you can slowly move out of this system. You can’t do it overnight. The readers you cultivated are mostly Amazon only. Time to cultivate some new readers, which is, as you might remember from the beginnings of KU, a slow process.
I’m telling readers to watch their backs. If your account gets canceled (which happens even more to KU people than non-KU writers) or if KU changes again, you might get caught in the crossfire. Do you really want to lose most of your income based on a business decision that you have no control over by suits you don’t even know?
That’s basically asking if I would prefer to make less than half of what I currently make (and that’s being generous) a year. KU is the same size as the wide vendors combined with an incentive to draw in whale readers.. Will it last forever? I have no idea. Very little lasts forever, though. For me, it seems to make sense to make as much money as possible and then live off my investments, doesn’t it? Why not make bank and then have my investments bring in the big money if KU does go away? Why gut my income now? If I do have to go wide, I have more than 300 titles on multiple names to launch at the other vendors and something tells me I’ll be fine. Why would I shoot myself in the foot now?
For me, it seems to make sense to make as much money as possible and then live off my investments
We all make our own choices for our own careers. Sounds like you have made yours, and are happy with it. Good luck to you.
Kris, it’s vital to remember a few critical things about KU:
1) It represents about 17% (possibly a little more than that by now) of global English language ebook ‘sales.’
2) That means it is bigger than Apple, Nook, Kobo, and Google Play combined. Just KU, not including Kindle.
3) KU readers buy VERY few books. Basically, only books by old (pre-KU) favorite authors or very strong recs from a friend. In general, KU readers *do not discover new-to-them writers if they’re not in KU*.
That last bit is critical, because it means if you are not in KU, there is 17%+ of the market for whom you basically do not exist.
It’s about as likely for an Apple reader to go to Kindle and buy a copy of a KU book as it is for a KU reader to buy an ebook from an author they don’t already love. It happens with the same frequency because it’s the same cause: a trusted friend recommended the book, so the person went out of their way to get it, either going to a different retailer or buying instead of just borrowing.
This means “wide” is a misnomer and has been for years.
We can say KU and non-KU. We can’t really use “wide.” Because KU books have about 86% market share reach, and non-KU books have a roughly 84% market share reach.
“Wide” books actually reach a smaller share of the global English language ebook market than KU books do, because to KU readers, non-KU books functionally don’t exist (barring exceptions as noted above).
Is KU as good a deal as I’d like it to be? No.
Is KU problematic in many ways? 100%
Would I lose at LEAST half of my income, if I dropped out of KU? Even if I put it all wide and marketed the hell out of it? Absolutely.
Remember, the average KU book out-earns the average non-KU book by over 100%.
Kevin, cite your sources.
If this information is more than 2 years old and coming from Amazon, it means nothing. Things have changed dramatically in 2 years. As for Amazon, it famously does not report its numbers, something that has irritated book people for years.
Your numbers are also ebook only. Writers should be in as many formats as possible, from ebook to print to audio.
Remember this as well: writers publish books on platforms that do not report, like their own stores. Many writers are now reporting that direct ebook sales are increasing dramatically. Platforms like Patreon, Substack, Kickstarter, Storybundle, and Humblebundle do not report either. All of those places are places you cannot put an ebook on because of your exclusivity agreement.
That means that all of the sites above have invisible ebook sales. They’re not factored into the statistics you just quoted.
But, for the sake of argument, let’s say your number is correct. 17% of all ebook “sales” means that 83% of all ebook sales happen outside of KU.
I’d take 83% over 17% any day. Even this math-challenged dyslexic knows that 83% is much greater than 17%.
I can’t cite this source, unfortunately. It’s privileged information. I’m allowed to share it, but I am not allowed to reveal the data source.
I *can* say that this source is more reliable about overall ebook sales than Bookscan is for trad pub print. Believe it if you want, don’t if you don;t; but in all the years I’ve known you, I’ve literally never lied to you.
Those numbers are absolutely ebook only, but since ebooks are what we are talking about, that’s what matters. My ebooks are in KU. My print and audio are as widely distributed as possible. 🙂 That’s just common sense.
Writers absolutely publish on sites that do not report. Frankly, I think that’s smart: I am building a subscription service and working on direct sales myself. 🙂 The numbers I gave were solely for retailer-to-retailer comparison.
But it’s not 83% vs 17%.
It’s 84% for non-KU vs 86% for KU.
Do the math (all numbers approximate and change periodically, so this data is rough and might be off by as much as half a percent or so for any given number).
For major retailer global english language ebook market share:
Kindle: 69%
KU: 17%
Apple: 10%
Kobo: 1.5%
Google: 1.5%
B&N: 1%
If you’re in KU, you gain access to Kindle and KU, or 86%
If you’re not in KU, you lose access to the KU portion, leaving only 83%.
‘Wide’ books have access to FEWER readers than KU books do.
So…assuming your statistics are correct, which really, sorry, as a former journalist, I learned that the trust-me thing isn’t worth the paper it’s not printed on…I should give up control of where I market my work, make it completely exclusive to some corporation that I have no control over, for a 2-3% advantage? I help them build their audience and will lose my entire readership if they make some kind of corporate change that gets rid of KU?
Sorry, that math doesn’t track, Kevin, for me. Especially as non-Amazon markets are growing all the time.
Also, look at KU’s terms of service. You can’t go direct with your ebooks while you’re in KU.
Nope. 🙂
YOU should do whatever it is you want.
MY point was just this: Wide really isn’t wide; non-KU books have slightly LESS reach to global ebook readers than KU books.
Which makes it a choice.
On average, KU books outearn non-KU books about 2::1. BUT, KU has the ebook exclusivity clause (that I am WELL aware of, which is why I’ll have print and audio on my site, and pre-release ebooks for subscribers) which means users are forced to take on a higher level of risk.
Or, go non-KU. On average, you will earn less income. However, your risk resistance is significantly higher if you can spread the income out more widely.
Like, the person earning half their income from Apple is no better off than the person earning half their income from Amazon. Any person – day job workers especially – earning more than about a quarter of their income from a single source are taking significant risks.
KU users take on somewhat more risk than non-KU users, in return for higher average returns.
Smart KU users find other monetary streams to support this so they’re not putting ALL their eggs in one basket. 😉
My March payment got skipped. Judging by the amount, they made up the lack in the most recent payment. But skipping a payment? I’m not alone to have this happen to, and it’s a Serious Red Flag. I joined a thread on FB about it, and a *lot* of phone calls had to be made by people (writers) to get it straightened out.
This week and next I have too many commitments (local politics and Extensive Plumbing), but after that I’m taking my books out of KU and will spend a lot of this month taking them as wide as I can.
Hi, Chris
Very true about having too many eggs in the basket can run into problems. I’m in Washington, DC, land of the beltway bandits (contractors who work fo the government). Years back, I worked for one of the bandits. They had a major contract with the agency that I was under, but they also believed in spreading the out the contracts to different resources. So when my agency dropped the contract–27 people–employees were laid off, but the company survived it.
My contract was picked up by another company. They grew expansively in the first year or two, but their pool of contracts was much smaller. The government shrank the contracts again, and the company is no longer in business. I don’t even think they made five years.
During the pandemic, Amazon moved into a grocery store building.. They did extensive work on it and actually finished it maybe 2 years ago. It’s sat empty since.
The worst part about when a company starts having losses like this is that they often react with bad decisions, rather than thoughtful ones.
I suspect Amazon will spin off the store as a separate company. There really isn’t a lot of synergy btwn the two halves of Amazon. The store’s core competence is logistics and internet-based commerce. AWS’s core competence is raw computing power. Not really that much crossover.
If AWS spins off the store their financials instantly get better. The current CEO can go run the business he really cares about.
The store will have to shrink to a more sustainable level, but it will probably get a leader that actually cares about internet commerce. Both good things and bad things for writers here. Less money for special programs. More attention from people who care. I think the people who say KU will become more like the music platform are probably right.
I really DON’T believe the Amazon store is going out of business any time soon. But I think big changes are ahead. It would be wise for all of us to pay attention. Thank you Kris for paying attention on our behalf!
Heya Kris. 🙂
As always, love your articles. However, you have some factual inaccuracies in this one. Full disclosure: my books ARE all in KU, so I’m intimately familiar with the program and its downsides – to the point where I’ve deliberately branched out with a few dozen trad books and a subscription service for fans, so I have other revenue streams.
That said:
“What actually got me taking notes for this blog post was a Facebook post from one of the best-known Kindle Unlimited writers who claimed that writers never have a passive income off their work.”
I don’t know who this was, but they were WILDLY misinformed. ALL of my fiction is in KU. I’d say that over 90% of my annual income comes from books published in year prior to this one, and that’s been true for a long time now.
In short, there is ZERO issue with KU writers maintaining earnings on books for years at a time. It just requires some light, ongoing advertising.
“Writers can only earn a maximum of 3,000 page reads per title per customer. Which means if one of the writers’ books really, really, really takes off in KU, the writer’s earnings are capped.”
Your first sentence is accurate. If your book is over 3000 KENPC long (that’s roughly 600,000 words, FWIW, give or take about 10%), you are still capped at earning only 3000 KENPC worth of income. If the book is a million words long, you’re still only getting paid for the first 600,000 words. This impacts maybe one author in a thousand.
Earnings, however, are NEVER capped. If you have a 600,000 word book, you get 3000 KENPC every time someone reads it (or partial credit if they read part), no matter how many readers download it, you’ll still get 3000 KENPC each time one reads it.
“The scary thing about the Global Fund—about KU in particular—is that it can be whatever Amazon wants it to be.”
THIS IS IMPORTANT – and most KU authors don’t understand it at all. You nailed it, Kris. 🙂
KDP sets the Global Fund manually.
It’s not based on (Total Subscribers x Income Per) – (Assoerted expenses) * (KDP Profit Margin) – this is what most writers think goes on. What actually happens is Amazon sets the Global Fund to whatever they want each month.
If too many authors leave KU, the pot goes up the next month. If not enough people leave, the pot stays low. As KU has grown in importance – at present, about 17% of Global English langauge ebook ‘sales’ are KU borrows. KU is larger than Apple, Kobo, Nook, and Google Play combined and has been for years, in terms of gross units moved. (NOT in terms of income to authors, however!)
KU isn’t likely to go anywhere, though.
Right now, KU has at least 6 million subs, probably a lot more. Costs of the program are minimal, so they’re walking away with something in the realm of $10 million a month in profits from KU alone. This is a drop in the Amazon bucket, but even Amazon doesn’t generally trash profitable programs.
ALL of that said…? I agree with your core message and always have. If the readership for my genres wasn’t so intensely KU focused, I’d probably try wide. As it stands (have tested), I’d lose at least half my income. So I’ve created different forms of backups: the subscription I am building, the trad books. Probably other stuff I’m forgetting, since I try to add new irons to the fire often.
I’m not sure the math is correct on this line. Looks like you moved the decimal point by a place when you transliterated the source. It should be 46 cents or $0.46 per 100 pages.
“In 2015, the fund paid nearly 6 cents per every 100 pages read (which, to me, is a ridiculously small amount, on par with traditional publishing). By 2022, the fund was paying about 4.6 cents per 100 pages.”
Still very damn low. For a 300 page book, that’s $1.20. If you price the book at $5.99 on Kindle, you’ll get 70% of cover, which is roughly $4.20.
It’s absolutely crappy. 🙂
Basically, for a typical 100k word novel, it’s about 500 KENPC, or about $2 under the current, record low payment.
I strongly, STRONGLY suspect KDP will boost the rate next month, likely significantly enough that it eases the upset the author community is feeling. That’s the key takeaway folks often miss: *we are being managed*. The rise and fall of the payment has less to do with number of subscribers and more to do with KDP constantly testing to see how low they can go before people quit.
And exactly how many people will take a chance on a $5.99 book? Because however many that may be, way more people will be taking a chance on a book that they can get from their KU subscription. In the end, the KU author still earns more … which is the entire point of why certain authors are so reluctant to leave Kindle Unlimited.
Oh, wow, really? Okay. Sure.
There are so many false assumptions in your post that I’m just going to shake my head and walk away. There’s no arguing with religious beliefs.
Never so happy to have my own store! I’ve been watching a lot of business news lately…especially when it comes to tech industries, like Amazon, Google, Apple, etc. Knowing what to expect (or even a possible scenario) helps us pivot that much faster when necessary.
Right? 🙂 😉
I’ve just started down this road myself. Have a lot of work to do, but it’ll be worth it!
My core business rule: Assume that any one provider or partner will become unusable at any time, and have a basic plan to pivot away from them. Every company places its own well-being ahead of their customers and vendors. Eventually, every platform will turn to crap.
Cory Doctorow has an interesting essay on the life and death of platforms like Amazon, Google, etc. There’s a nicely formatted version at https://www.wired.com/story/tiktok-platforms-cory-doctorow/ . The sad thing is, this applies just as much to Draft2digital and Shopify as it does to Amazon. They’re simply not big enough to get away with it, yet.
Long term careers mean being prepared pivoting when the inevitable rot becomes apparent, with or without notice. Because my writing career is more precious than Amazon’s survival.
Very timely. I’ve been wide for years but just decided to stick my toe into selling direct. Partly because I had a paperback kerfuffle. After a lot of research I looked into Shopify and they have a start-up option for $5/month (plus payment processing fees). For those of us nervous about jumping into another long-game project, that’s a god-send. (The next tier is $39/mo) They integrate with Bookfunnel to deliver ebooks and audiobooks which is free. They have an app to link to Lulu-Direct for print which is cost + shipping. Apps are restricted at that level, but basic is fine for a start.
Using a couple of programs I already have/subscribe to (Bookbrush, Bookfunnel, Atticus) I’ve got my store all set up for a test with a fantasy series – book 6 will come out at the end of the month and I will debut the store to my newsletter.
Loading everything and linking it up is time consuming but not too technical for this dinosaur. I’m reading a lot of forum threads where authors say teaching their readers to buy direct isn’t as hard as they feared. Fingers crossed that’s true.
I’m about to do all of this too, but using Bookvault instead of LuluDirect. Plus Klaviyo for marketing automation, newsletter, and data analytics.
And the ONLY links that I will provide in the back matter of all past, present, and future titles will be back to my own storefront. I appreciate the Books2Read tree of universal links but it’s much smarter to train future readers to come back regularly to one’s own storefront.
I feel like we’re finally entering phase 2 of the publishing change that initiated in 2008/9. We can be mini-publishers with full distribution in all 3 formats!
There’s too many bad signs wafting from Amazon to be ignored. You’ve mentioned a bunch of them.
Here’s another: When a company goes bankrupt, the first to get shafted are the creditors. Amazon failed to pay hundreds of writers this month (including me). Our accounts were put on hold sometime during the month, which included the 20th, when payment notices go out. Then they were reinstated on/around the 28th. On the 29th, when everyone should have got paid, we didn’t. As Amazon haven’t bothered to explain the issue, everyone has assumed that this was a glitch, as the money has since arrived in our accounts (only 5 days late).
But holding back that money for five days, multiplied by the hundreds of authors who were impacted, represents a tidy sum of money that could be used in overnight money markets to beef up dwindling funds….
Regardless of what happened, it’s a clear signal that Amazon doesn’t care about the book division any more and is playing fast and lose with the infrastructure. It never did care for authors, but this is the first time monthly payments haven’t been paid on time.
I’m just glad that over the years I’ve whittled down my Amazon revenue to less than 50% of my total revenue because adding all the signs together gives you a bottom line that is disturbing.
Tracy
Actually, it’s not the first time. We had something similar in previous years, as did several other people. The most recent was in November…during another round of layoffs. I hate to say it, writers, but even hundreds of you are small potatoes to Amazon. This is most likely due to the layoffs and systems breaking down. Still exceedingly concerning, but not like they’re failing to pay rent on all their buildings.
And please understand, folks, I’m not defending Amazon. I am saying that realize where writers fit into this megacorporation. We’re barely a drop in the bucket, which is why Select could disappear at any moment. It’s a small fund in a large company.
Not to mention Amazon’s other subsidiary– Audible. Some time ago, Brandon Sanderson blogged about how they mistreat authors:
“However, they treat authors very poorly. Particularly indie authors. The deal Audible demands of them is unconscionable, and I’m hoping that providing market forces (and talking about the issue with a megaphone) will encourage change in a positive direction.”
https://www.brandonsanderson.com/state-of-the-sanderson-2022/
A bit unrelated, but I found this interesting: A single word in the contract meant his income went from $240,000 to $0 overnight.
https://mstdn.social/@Devilstower/110299576469326182
Thanks for the second post. I’d seen and blogged about Brandon’s but the second link. Yep, that’s why I tell people to watch contract language. It can hurt you or help you.
Besides Amazon I have my ebooks on Draft2Digital and fiction print books available through IngramSpark. Is there anything else I should consider doing?
Thanks for compiling and commenting on all this in one article, Kris.
I think Amazon will roll Kindle Unlimited (the reader side) into Amazon Prime as they have done with Music — 100m songs + however many million ebooks.
https://www.aboutamazon.com/news/entertainment/amazon-music-amazon-prime-benefits
I also think that Jassy’s focus is AWS and with the launch of Bedrock and Titan, they will be focusing on expanding that to enterprise level to go up against Azure and OpenAI through Microsoft.
I also went to a talk their CTO did on quantum computing at WIRED live last year. It was gob-smacking in its ambition.
So I think they ARE a Day 1 company, but the focus is not on the entertainment side of things.
Perhaps Movies, Music, Books, the store etc could be spun off into a separate company, as the Day 1 mentality takes Amazon into the AI/quantum future.
Amazon already has “Prime Reading” and “Prime Music” programs – pared-down versions of KU and Amazon Music, with more limited selections and features, available to anyone with a Prime account. I don’t think they’re going to fold KU into Prime subscriptions; they count on people with Prime getting used to some free access and then wanting to add the $10/month (or so) for everything else.
The Prime Music “expansion” is basically, “here, have a taste of more freebies BUT if you want access to the actual songs you love, in the order you’d like to listen to them, you’ll need that extra subscription.” I could see them doing something like that with KU books (although they might have to renegotiate contracts for that?) – “we’ve added 10,000 books to Prime Reading! Click here for the 20 genres available; we’ve added 500 books in each; they’ll phase in and out every few months”… most of which are Book 2 of a series, and some of which are new public domain works.
(There’s also Prime Video, but I don’t think there’s a comparable paid-subscription streaming movies/shows option. Prime Video gets substantial content and is comparable to Netflix/Hulu/Disney on its own.)
… Writers can only earn a maximum of 3,000 page reads per title per customer. Which means if one of the writers’ books really, really, really takes off in KU, the writer’s earnings are capped.
Interesting post but not understanding your point above. My longest book is 822 KENP. A single reader (“customer”) would have to read that same book 3.65 times through to reach the 3k cap. My shortest book is 272 KENP and they’d have to read that same book 11 times. How is that being “capped”?
Thanks for your feedback.
Yeah. Sometimes I’m math challenged. Whoops.
It’s not a math error. It’s an incorrect reading of the terms of service. I was with you until I got to that line, but the blatant misreading of the TOS made me wonder about the accuracy of the rest of your information and research. It’s worth editing, because it really discredits the whole article,
To be clear, if a writer’s book really, really takes off in KU, they earn a buttload of money on millions of page reads, but if the book is 3001 pages long, that last 1 page is not counted. Since the average book is probably closer to 400-500 pages and authors have the ability divide a very long book into multiple volumes, this is a non-issue.
I’m leaving it because I’m human, made a mistake, and owned up to it in the comments. If you want to check my research and work, the links are in the post for that very reason. So rather than “question” it, research it yourself.
Would you consider linking to the correction or noting it in the article itself?
Done.
Excellent post. Also, it’s worth noting Amazon started a rewards program for buying ebooks, desperate to move more units.
I’m wide because I’m old enough to remember cycles such as Barnes & Noble crushing other chains and mom and pops only to be crushed by Amazon. I remember Blockbuster crushing chains and mom and pops only to be crushed by Netflix and On Demand. I can go on and on.
The history of retailers is the history of behemoth companies dying an ugly death. Amazon’s web services is where the long-term actions is but that’s subject to their constant lobbying in Washington, anyway.
Finally, as an Amazon customer I’ve witnessed the decline in service. In fact, no one seems to talk about how they quietly loosened their 2-day Prime shipping to mean “well, MAYBE 2 days for SOME items.”
Given that many writers use Amazon for POD services, what are your thoughts on whether that needs reevaluating as well? ie should publishing be split amongst POD services? (Though my understanding is that there really are only two majors in that area.)
Yes. Use as many different services for things as you can.
But isn’t there only Amazon for POD direct to customers and Ingram Spark for POD to retailers/libraries?
And Lulu and other places. Do your research.
BookVault is a new option with many features that no POD is capable of thus far with many more on the horizon. Their distribution has some hiccups but I’m confident they’re going to see it thru in time.
Draft2Digital does POD now … and gets you into Ingram without the challenges inherent in dealing with Ingram.