Amazon Revises Its Kindle Unlimited Contract

Early this summer, Amazon announced a major change to its payment structure for Kindle Unlimited. Because Amazon ultimately affects the sales of all writers, it’s important to understand the implications of the change and what, if any, effect it will have on your digital sales.
Kindle Unlimited is a subscription service established by Amazon in 2014 that allows subscribers ($9.99/month) to read an unlimited number of e-books in the Kindle Unlimited (KU) library, which currently has about one million books. KU is part of Amazon’s optional “KDP Select” program. Let me repeat – KDP Select is OPTIONAL, contrary to what many bloggers have written. If you agree to make the digital version of your novel exclusive to the Kindle Store, your book automatically is included in KU and the Kindle Owners’ Lending Library (Amazon Prime members only, who can borrow one book a month from the library). KDP Select authors also get a guaranteed royalty of either 35% or 70% of the list price (the higher royalty only if the book is priced under $9.99), and access to multiple promotional techniques.

Amazon designates a certain amount of money into a payment pool – the KDP Select Global Fund – and until the recent change, paid KDP Select writers a portion of the fund after readers read 10 percent of the e-book. Naturally, that encouraged authors to write short works to get to the 10% mark as quickly as possible, to the dismay of writers of longer works who had to compete with the many “mini-novels” and short stories for their piece of the pie.

Under the new system announced in June, you will get paid for each page of your book that is read. This payment still comes out of the KDP Select Global Fund, which varies monthly. On its face, this seems to reward successful books — assuming you equate more pages read with success — and also means that authors of short works will not earn as much. One blogger noted that if readers consume four thousand pages of his books and two thousand of Stephen King’s, he would get twice as much money as Stephen King. Right, except that King’s books won’t be on KDP select, most KDP Select books are from Amazon’s self-publishing platform, from small presses, and back titles by traditionally published authors. Major publishers don’t put their books there – even many small presses don’t, because they want to be able to sell e-books from their own, and other web sites.
Other bloggers have complained that because KDP Select authors have to give Amazon exclusive rights to their work, they’re powerless to do anything when the terms change. Actually, the KDP Select agreement allow authors to terminate KDP Select any time, so Amazon’s exclusivity is only for as long as the author wishes.
Obviously, the change to Kindle Unlimited won’t be good for all books. But it does seem somewhat fairer than the previous system. For authors who acquire the rights to their backlist and place digital versions with Amazon, it should be a net gain.