Quote:
Originally Posted by fjtorres
And there lies the promise and the peril of KU.
KU is really a family reading plan.
Most reading families already share their Kindle purchases--so KU with its ten book at a time limit can easily keep a couple or even a big family reading for a modest sum.
The peril lies in the resulting author payouts...
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I thought about that too, and came to this conclusion:
I read somewhere, maybe here on MR or on Amazon that the payout to authors is based on how much and how often a book is actually read. Just borrowing and sending it back will not result in any payment, I would not think. Amazon has been storing reading patterns on their servers for years. And likely there will be many KU users that won't read enough for the $9.99 a month it will cost Amazon. Of course there will be those that Amazon is willing to take a loss, if those with a profit pick up the slack.
If you switch from a different provider than Amazon, Amazon will likely gain their business for actual ebook purchases as well. There will be (some even mentioned that here on MR) users of KU that use it as a worry free way to explore new authors, borrow books for free (or small flat fee) and if they like, they buy for keeps. If that happens, then Amazon does not have to pay twice - they paid the first time (some) of the $9.99 of that person, but if they later decide to buy the book outright, then they only may need to pay the difference.
We would have to ask some indie publisher that is in KU on how exactly the contract is worded - as in what conditions have to be met to equal the same amount of money as a purchase. It might be more money than they would get through traditional libraries.
We will see how much money KU rolls in for Amazon: if after a few months the amount of books in the KU system keeps growing since Amazon can afford to make contracts with bigger publishers. Maybe at first it will be backlists. On the other hand: How much money is Amazon willing to lose with KU in order to get customers to switch over and buy their ebooks at Amazon?
Edit: Oh, forgot to mention. If in KU the actual cost to Amazon is not 10 $0.99 books a month - on a sale Amazon keeps some percentage, on KU they only have to pay royalities, not themselves or at least not the same amount ...