Stat of the Day: Kindle Unlimited Author Reimbursement

Amazon’s Kindle Unlimited is an eBook subscription service that lets you “borrow” an unlimited amount of books from their catalog for $9.99 a month. You won’t find many personal finance and investing books from major publishers on KU, but the service appears targeted more towards high-volume fiction readers that otherwise might upwards of $100 a month on books.

Kindle eBooks have allowed many self-published authors to gain a readership and income stream that they may not have pursued or achieved otherwise, so I’m always interested in this marketplace from an entrepreneurial point of view.

The NY Times recently published two articles about author reactions to this new-ish program (it started in July 2014) here and here. Inside, there were a couple of notable tidbits:

• In November 2014, an author got paid $1.39 for each qualified eBook borrow. October 2014 was $1.33. July 2014 was $1.80.
• An author only gets paid if the Kindle Unlimited subscriber reads at least 10% of the book as measured by the Kindle device or app.
• For a normal eBook purchase, the author gets 70% of the price paid, for example a $5 eBook would net you $3.50. (But you get to keep the book digitally forever.)
• An author gets credit towards their Amazon popularity ranking as soon as a book is downloaded by a subscriber. They don’t have to read a word.
• Kindle Unlimited is an optional program, but authors fear their books won’t get promoted as much if they don’t join.

This changing of the incentive structure has resulted in authors pushing out a higher number of shorter books. That makes sense – you’ll get more borrows and it’s easier to reach the 10%-read hurdle.