Kindle Unlimited 2.0 - early assessments

[fjtorres]

The first reports are filtering in on the switch from checkout-based payouts to page-read payouts.

The Digital Reader Blog has a summary with some analysis:

http://the-digital-reader.com/2015/0...-read-in-july/

Several authors have shared their experience and or numbers but two stand out for different reasons:

Konrath:

http://jakonrath.blogspot.com/2015/0...d-numbers.html

My assessment:

Under KU 1.0, Amazon was rewarding writers for enrolling in KDP Select. Amazon wanted as many titles as possible, to build their Kindle Unlimited catalog. Shorts are easier and faster to write than novels, so Amazon rewarded short stories by paying authors much higher for shorter works, way out of proportion with novels and with the paper short story market, in order to get more titles into KU so it appealed to more subscribers.

Under KU 2.0, Amazon is rewarding writers for being good writers. Amazon wants writers to hook readers for longer than 10% of the ebook. Amazon wants good, meaty novels, which my numbers point to readers liking more than shorts.

My takeaway:

Under KU 1.0, I should have written a hundred short stories and made a fortune. Amazon was paying ten times more per word for shorts than they paid for novels. There was no incentive to write well, or to engage readers. The main incentive was to put out a lot of shorts and hook the reader for 10% of the length of the story.

Under KU 2.0, I'm continuing to do what all professional fiction writers have done throughout history; write novels. It's what readers want. With the rare exceptions of a few authors, no one made a living selling shorts. There was a brief moment, during KU 1.0, where shorts were valuable. Their market value has now dropped. Novels are going to earn writers more money. But they have to be good novels.

That said, shorts are still worth more than they were in the legacy paper world. I got $0.075 cents per word writing for EQMM. I got $0.5 cents a word for writing Whiskey Sour. In other words, as a professional mystery writer, I made about seven cents a word selling to a top short story market, and fifty cents a word selling to a top mystery novel market.

Under KU 2.0, I make the same per word/per page whether I write mysteries, or novels. And I like that a lot.

(He clearly means he makes the same whether it is a short story or a novel.)

Howey:

http://www.hughhowey.com/kindle-unlimited-knockout/

Howey's long been concerned about KU exclusivity:

I knew within a week that I’d made the right decision to join KU. My KU ebooks saw an immediate boost in ranking. Not only were the page-reads mounting, but the sales of those ebooks were also on the rise! My overall income doubled, even with the loss of the other retail outlets, and I’m reaching more readers. This is like advertising that I get paid for, and advertising that leads to more paid sales. The only cost is exclusivity.

I’ve written at length about exclusivity, but I’ll sum up here what might seem paradoxical at first: You can sometimes reach more readers by making your products available with fewer vendors. By concentrating sales in one location, sales rank gets a boost and more reader reviews are compiled in a single place. This means more visibility and more word-of-mouth sales. It can also mean more readers.

If you were an author and you had to choose between 1,000,000 sales to readers in the state of Illinois and 100,000 sales to readers all around the world, which would you take? Arbitrary designations of where readers come from are just that: arbitrary. The total number of readers is what should matter. This is especially true considering the fact that Kindle ebooks can be read on practically anything that has a screen. More and more readers are moving to cell phones for their consumption, and even Apple devices can read Kindle ebooks. What’s more, I don’t put DRM on my works, so they can be downloaded, converted, and read as epubs or PDFs. By concentrating my works in a single place, I’m not making them unavailable to anyone; I’m just amplifying the signal of all those purchases and reader reactions. It’s a funnel, not a sieve.

He also points out:

What is the collapse of Nook doing for the adoption of ebooks? Barnes and Noble goes back and forth on whether or not they’re going to support their own device. That causes those who bought a Nook to become wary of committing to buying more digital books. And what about Apple’s refusal to make iTunes a web-based store rather than an application? This makes sharing links and buying ebooks more difficult across devices. And let’s not even start on B&N’s storefront. Or Google’s hubris when it comes to dealing with authors.

Indiscriminate business partnerships does not move the industry forward, and making my ebooks available at places that don’t provide the best reader experience does not help my career. When I saw that KU was going to help me reach more readers —and more than make up lost income from all other outlets combined — I was swayed.

This... has happened before, in gaming consoles:

Early this Century, when Nintendo fumbled the GameCube generation and Dreamcast imploded, Sony was the only credible console player left standing and they ended up with an enormous amount of exclave-by-default games; not because they offered developers incentives to go PS2 exclusive but simply because the remaining platforms, the GameCube and late-arriving XBOX, didn't command enough market share to be worth the effort of porting.

It took billions of Microsoft money and a whole string of Sony missteps to restore long-term competitive balance to the market.

If current trends of Amazon excellence and competitor missteps continue we may end up with a similar market in ebooks.

Amazon provides at least two-thirds of the ebook sales revenue in the industry and now are adding an extra $100M a year in rental revenue.

If competitors don't get serious about competing we're likely going to see more "exclusives-by-default" joining the million titles already in KU.

Much more at the sources.

[Cinisajoy]

Great post. I think your 100 million may be a bit low. I remember when KU2 started. Could not convince some that the money wasn't changing just how it was distributed.
Reminds me, I need to call a friend.

[fjtorres]

Originally Posted by Cinisajoy

Great post. I think your 100 million may be a bit low. I remember when KU2 started. Could not convince some that the money wasn't changing just how it was distributed.
Reminds me, I need to call a friend.

Well, that's what the monthly payout pools for the *past* year add up to.
(Nate's been tracking them.)

The next year will doubtlessly be bigger if they keep growing by a million or so per month.

And since it is the authors' aggregate take home, it is easy to compare KU aggregate payouts to aggregate Indie Incomes at Kobo and Nook. Which explains why so many are willing to go exclusive to get into KU.

(Mileage varies, of course.)

[Fbone]

With KU1.0 authors were trying to maximize their revenue; short stories, serials.

Now with KU2.0 they are trying to find ways to increase their KENPC and, therefore, their revenue; single line spacing, illustrations, lots of chapter breaks, space before each paragraph.

[JSWolf]

The problem is that these authors don't get a damn about competition and innovation. By going exclusive with Amazon, they are getting people to buy Kindles. This means less market for ePub and less market for different Readers. The H2O (for example) is a really fine piece of hardware. Do we want to only have one choice? Author's like Hugh Howey who are now a big name are helping Amazon to take over and that's bad for all of us.

[eschwartz]

Originally Posted by JSWolf

And what these authors are doing is making sure that innovation is killed by helping to make Amazon the only company to make Readers. They are making it such that people will buy Kindles and that will stifle innovation such that all we'll be left with is the Kindle. Not good at all. We need better hardware & software. We have such with Kobo, but if Kobo was to go under, then we may as well go back to paper.

If Amazon runs a program called Kindle Unlimited, people will read books from it.
If people read books from Kindle Unlimited, people will buy Kindles to read their books.
If people buy Kindles, they won't buy Kobos.
If people don't buy Kobos, Kobo will go out of business.
If Kobo goes out of business, Amazon will be the only company to sell e-ink ereaders.
If Amazon is the only company to sell e-ink ereaders, they won't have any competition in the ebook market.

And then Amazon will take over the world and dominate our minds, so we may as well go back to paper if Amazon runs a program called Kindle Unlimited.

[Cinisajoy]

Originally Posted by eschwartz

If Amazon runs a program called Kindle Unlimited, people will read books from it.
If people read books from Kindle Unlimited, people will buy Kindles to read their books.
If people buy Kindles, they won't buy Kobos.
If people don't buy Kobos, Kobo will go out of business.
If Kobo goes out of business, Amazon will be the only company to sell e-ink ereaders.
If Amazon is the only company to sell e-ink ereaders, they won't have any competition in the ebook market.

And then Amazon will take over the world and dominate our minds, so we may as well go back to paper if Amazon runs a program called Kindle Unlimited.

Hi. Please note that while Amazon has the US market, Kobo dominates in other parts of the world.


Yes, let's go back to paper. After all, books don't take up that much space.
Note: I am waiting on my friend to return my call about KU.

[eschwartz]

Incidentally, if anyone did not catch the reference, my previous post was modeled after If You Give A Mouse A Cookie, or at least, one of several parodies thereof.

[fjtorres]

Originally Posted by JSWolf

The problem is that these authors don't get a damn about competition and innovation. By going exclusive with Amazon, they are getting people to buy Kindles. This means less market for ePub and less market for different Readers. The H2O (for example) is a really fine piece of hardware. Do we want to only have one choice? Author's like Hugh Howey who are now a big name are helping Amazon to take over and that's bad for all of us.

Oh, those authors care about a lot of things.
You ought to try talking to them.

Thing is, they care a lot about making a living and they don't give a darn about what may or not happen to the magical format called epub.

As for helping Amazon?
Well Amazon helps them make money which, as they point out, Apple, Kobo, and Nook don't. So it really doesn't matter if Kobo makes fine hardware or not if their website doesn't help them sell ebooks. And if they don't help them sell, why bother listing with them?

Not everybody shares your priorities.
Nor are they going to sacrifice their own interests in service of yours.

[AnemicOak]

Originally Posted by Cinisajoy

Hi. Please note that while Amazon has the US market, Kobo dominates in other parts of the world.

Cite?

Not doubting necessarily, but I've seen speculation to this, but never any kind of source that backs it up.

[Cinisajoy]

Originally Posted by AnemicOak

Cite?

Not doubting necessarily, but I've seen speculation to this, but never any kind of source that backs it up.

Just what I have heard from readers in other parts of the world.
Mostly Germany and Australia.

[HarryT]

Originally Posted by Cinisajoy

Just what I have heard from readers in other parts of the world.
Mostly Germany and Australia.

Can you post some references, please. You posted it as a definite fact, so presumably you have some evidence to support your claim?

[howyoudoin]

I was a little sceptical of the changes made, but now I've come around to the fact that KU 2.0 is the better system. There will always be authors who game any system, but this one seems fairer and more meritorious. This system removes the incentive for all those short multi-part ebooks that should have been a complete book to begin with.

[Josieb1]

The problem with Kobo is they are too expensive, almost every ebook I look at costs more kobo. There is a book out today I want that is £3.23 at kobo and £2.56 at Amazon. The publisher price is $3.99

[darryl]

Originally Posted by Fbone

With KU1.0 authors were trying to maximize their revenue; short stories, serials.

Now with KU2.0 they are trying to find ways to increase their KENPC and, therefore, their revenue; single line spacing, illustrations, lots of chapter breaks, space before each paragraph.

Fortunately Amazon has been very smart about KENPC. My understanding is that KENPC is formulated so as to prevent the types of tricks that you mention. To quote from Amazon:

To determine a book's page count in a way that works across genres and devices, we've developed the Kindle Edition Normalized Page Count (KENPC). We calculate KENPC based on standard settings (e.g. font, line height, line spacing, etc.), and we use KENPC to measure the number of pages customers read in your book, starting with the Start Reading Location (SRL) to the end of your book. Amazon typically sets SRL at chapter 1 so readers can start reading the core content of your book as soon as they open it.

This standardized approach allows us to identify pages in a way that works across genres and devices. Non-text elements within books including images, charts and graphs will count toward a book’s KENPC.

But the really impressive thing about KU 2.0, as pointed out by Hugh Howey, Joe Konrath and others is that it encourages authors to write in a way that readers finish the whole book. Personally I call this encouraging quality writing. If an author publishes a 500 page book which is so boring that readers don't get past the first 10 pages, then the author only gets paid for those 10 pages. Some writers of literary fiction should be afraid. Very afraid.