Kindle Unlimited service earns authors $1.62 per ebook read for October

authorearnings-2014oct

Hugh Howey, author of the WOOL series and proponent of self-publishing, has organized the October 2014 Author Earnings Report for Amazon-exclusive authors.

If I’ve understood it correctly, I should be getting $1.62 for each of my books that someone (a) read more than 10% of, (b) while borrowing it through the Kindle Unlimited service, in October. Kindle Unlimited is a $10/month ebook membership that lets you read as much as you want from a select library of content, in a manner similar to a Netflix streaming-only membership for watching movies.

I’ll confirm whether or not my royalty rate prediction is correct once I get paid, probably at the end of November. If this estimate is close to correct, I’m quite happy. Some authors won’t be happy, though. Why not?

When people can borrow your ebook for cheap, they are less likely to buy it. Typically, authors who can command a good price for their ebooks — say $3.99 and higher — would earn more from a sale (in this example, at a $3.99 price they’d get a 70% royalty and earn $2.79). The Kindle Unlimited payout system is not based on the price of the ebook. It’s a flat rate, determined month-to-month, based on the pool of money Amazon decides to invest in the system.

In my case, my ebooks are currently priced at $1.99 each, so my royalty from a sale would be $0.69 (you get a 35% royalty for content priced below $2.99). For October, I’d earn more from a KU borrow ($1.62) than from a traditional sale ($0.69).

Further, as a new, self-published writer, people are more likely to give my work a shot if they can just borrow it for no additional cost through a membership they already have.

So, for someone like me, making my work available on Kindle Unlimited — which requires me to remain exclusive to Amazon and not publish via iBookstore or B&N — is worth it. Amazon has 70% of the ebook market, and most of my readers will be ebook sales/borrows. For established authors, giving up 30% of the ebook marketplace to cannibalize their own sales for rentals may not make sense.

It’ll be interesting to see how this all plays out in the coming months. For some of the best vitriol on the whole self-published young punks vs old Mr Burns-type traditionalists, I recommend Joe Konrath’s blog, A Newbies Guide to Publishing.

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