Analysis of KU Royalty Change

http://publishingperspectives.com/2015/06/marketing-subscriptions-prompts-amazons-royalty-payment-pivot/

Marketing Subscriptions Prompts Amazon’s Royalty Payment Pivot

Editorial by M.P. Rey

The writer is an author of short stories available through KDP Select, and therefore in the Kindle Unlimited subscription program. I found his article intelligently analytic. If you’re an author publishing through KDP, I recommend you read this to better understand Amazon and your potential future with them.

His analysis reflects my thoughts:

1. To be fair, long books should be paid more than short stories.

2. The old policy encouraged authors to serialize their books, even when that was not best for the story or reader.

3. Quality books will earn more that junk. (Although, to quote Rey, “I’m not sure that reader engagement is the right way to access the quality of a book”.)

Rey goes on to talk about the financial impact of the royalty method change on authors, on Amazon’s management of this change (not good, in his opinion), and especially on what he sees as the business drivers for both the old and new methods. “Clearly no one in their right mind can think that the new change in policy is just out of kindness to the long form story writers.”

One reason Rey highlights is Amazon’s need to “clean up the storefront” to attract top authors to their platform. He says, “An insane amount of books are now available on Amazon, but—let’s face it—most of them are unsuccessful and a large part are pure junk.” Best-selling authors and books are hard to find in the clutter. Best-selling authors are not inclined to come to Amazon Publishing or to give them exclusivity when they feel their books don’t get the best visibility and discoverability. “Amazon knows perfectly well that it is not going to make huge profits with a smorgasbord of barely read indie books. […] the actual money is elsewhere. Publishing houses earn the majority of their income from just few titles — the bestselling ones.”

So he views this change in royalty method on borrowed ebooks to be an effort by Amazon to discourage less profitable authors and offer temptation to top authors to consider publishing exclusively through Amazon.

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