(Note to readers: I try to keep this blog a place for readers, but occasionally I’ll do a writing or business related post intended for other writers. This will be one of those posts. I hope you’ll find it of interest too, but if not, rest assured, we’ll be back to regularly scheduled programming shortly:)
Disclaimer — What follows are numbers and results of my experience with KU. The rest is my opinion only. YMMV 🙂
I’m an Amazon fan, and I believe they’ve done more for writers than anyone in the past half century — perhaps ever. That said, as much as I like Amazon, I like writers even more — and I want to make sure writers know what they’re potentially getting into when it comes to KDP Select, and specifically, Kindle Unlimited (KU).
As an experiment, I put a standalone novelette, and a five part serial into KU for Q4 2014. I also had to pull the full novel of the serial from other retailers since the serial installments (which share the same text as what’s in the novel) were going into KU. This latter factor would prove to be huge.
So, one standalone, and five serial installments went into KU, plus the serial’s novelization that had to go Amazon only. What was the verdict?
I believe KU is a bad idea for many writers. I’ll explain why below.
Now, there are all kinds of exogenous factors that can skew results somewhat (e.g. sales cycles, promos, too much time since last release, etc), but a quarter/quarter comparison is a good start. I compared Q4 results of the experiment with Q3 when I had no titles in KU. Q3 is typically my slowest quarter for sales, so I felt this would give the most “benefit of the doubt” to KU. As you’ll see below, it still didn’t help make the case for going with KU.
I’ve reached several conclusions based on the data from my own experiment, the consequences of pulling titles from other retailers, and my observations of the market/industry as a whole.
1. In my KU experiment, most meaningful metrics were worse.
Based upon my data, for the titles involved only:
Total Revenues were 59% lower
Total Units sold were 66% lower
Average revenues per unit were 53% lower
A few metrics were better.
Ranking was better. The problem is that ranking is virtually meaningless when we’re discussing things that matter — unit sales, unit average revenue, and aggregate revenues. What’s worse is the “ghost borrow” effect that KU has on ranking. A borrow of a KU title immediately gives a bump to ranking… but the writer won’t see any borrow revenue unless/until that reader reads at least 10% of the book.
This phenomenon renders ranking even less meaningful vis-à-vis revenues.
The standalone novelette moved 50% more total copies in KU. However due to the much lower borrow rate, it actually brought in much less aggregate revenue. It’s a tiny part of the revenue picture though.
I moved significantly more copies of the serial installments when they were in KU, enough to make up for the reduction in unit average revenues those installments suffered due to the much lower borrow payout rate. Isolated out of the overall revenue picture, the serial installments made more money, in aggregate, when they were in KU. Great, right?
Not so fast.
Since the installments were exclusive to KU, and since Select rules requires that the text in the serial installments not appear anywhere else (including the novelization that collected all five installments into a single work), then that meant I had to yank the novel from all the other retailers for the duration of Q4. At $4.99 list, that novel was one of my primary revenue generators as the installments funneled readers into it; at the time, parts II-V were $2.99 list, so the novel was a big savings over buying each installment on its own.
So, since the installments had gone into KU, during Q4 that novel was gone from everywhere but Amazon. The result was disastrous: unit sales for the novel declined nearly 75%.
Not only was the novel simply not available at other retailers, but KU also cannibalized sales of the novel at Amazon itself since KU removed any incentive for readers to buy the novel rather than the five separate installments. That decline in sales of the novel is responsible for most of the huge drop in total revenues for the titles involved.
Based on my data, I’d say that if people want to write ONLY serials, and not also sell them as a higher priced collection/novelization, then KU makes sense.
But in my opinion, that’s really the only way KU makes sense.
2. KU is effectively a reduction in retail split…unless you’re charging $0.99 list price.
I refuse to call sales from e-books “royalties”, because they aren’t — they’re a retail split of product sales. So what KU is, in effect, is a change in the usual 70/30 retail split we see from Amazon. For novels priced at $4.99, that means you’ve gone from a nominal $3.45 profit on each sale to — depending upon what Amazon decides it wants to pay per borrow that month — less than $1.50/borrow.
Even if Amazon decides to peg the borrow rate at $1.50, that’s almost 57% less revenues per unit sold for a book that lists at $4.99. At that rate, your borrows need to be 2.3 times your sales volume in order to make the same money. Will some make up that difference in volume? Sure, some might. I did.
But as you saw in point #1 above, even though I made up that difference in volume on the serial installments themselves, I still experienced a sharp decline in total revenues.
All that said, if you’re slinging words at $0.99 per title, KU seems quite viable. For now. However, I think the exclusivity requirement hurts writers in the long run, regardless of how they price, as it stops cold any potential sales and readership growth at other retailers, and restricts revenue to a single source.
3. KU may not result in an expanded readership.
One of the benefits of KU promulgated by its fans is that KU increases total readership by helping us sell more total books. Based on my experiment, I moved (sales and borrows) significantly less total copies than I had before KU. Perhaps over 12 months that trend might change? Who knows? I’m not sticking around to find out though.
4. KU can potentially hurt sales and readership growth at other retailers.
My sales were growing at all the major retailers for months until I moved those titles into KU. They weren’t huge sales by any means, but the trend was definitely going in the right direction. Once I put the serial into KU and pulled both the serial and the collection from the other retailers, my sales at those retailers collapsed. This despite the fact that approximately half of my catalog was still available at those retailers.
This withering of sales at Amazon’s competitors is, in my opinion, one of the primary functions of KU. I believe Amazon may have been spooked by the success of Scribd and Oyster as subscription platforms. Perhaps Amazon didn’t like the long term trend of erosion of their own market share in e-books? I see KU as Amazon’s effort — through its exclusivity requirement — to starve its competitors of content. Maybe I’m wrong?
When e-books really first took off in 2009, Amazon had something approaching 90% of the e-book market. Now? It was 65% last year, and I wouldn’t be surprised if it was closer to 60% by the end of 2015. To me, KU was Amazon’s most obvious effort to date to really take it to their competition. That’s fine. That’s business; I’d do it too, if I were Amazon:)
But just as Amazon can be expected to “look out for number one,” writers need to do the same, regardless of any warm feelings we may have for the retailer. Writers need to understand what’s really going on here… and what’s going on here is, in my opinion, not good for many writers, especially writers who go exclusive with Amazon.
5. KU seems to be a direct challenge to the concept of “free” as a loss leader within the Amazon ecosystem … but maybe that was an accident?
It’s become fairly clear now that KU has rendered permafree significantly less effective than it used to be. Nobody knows if that was part of the purpose of KU, but no matter what, it has made the permafree loss leader a less viable tactic on Amazon. However, the concept of free or $0.99 as a loss leader in a series is still very much alive on other retailers, and it shows no signs of stopping either. I didn’t realize how true this was until I pulled my serial (and its permafree Book 1) from all the other retailers in order to experiment with KU. Practically overnight, my sales went POOF at all the other retailers. They’re recovering now though… because I pulled the serial out of KU:)
I tend to believe KU was more a bid to starve Oyster and Scribd of content than anything else. But KU showed signs of trouble (e.g. the roll-out was seemingly hasty and haphazard, and the program is shockingly vulnerable to gaming by scammers) from the very beginning, trouble that might have been prevented had the program been allowed to “bake” a little longer. What’s more, I wonder if Amazon didn’t fully think through the sales implications on their own ecosystem once KU took hold. All conjecture of course, but it’s something worth thinking about.
6. KU may not be a good choice for “backlist” novels/novellas.
Some writers have postulated that putting low-performing “backlist” novels or novellas into KU is a good tactic “since they really aren’t selling anywhere anyway.” On the surface, this seems logical, but when you take a step back, and realize how dramatically “backlist” has changed, you see that KU can be counterproductive.
The reason for this is because the entire concept of “backlist” is a relic of traditional publishing and brick & mortar retailing. In digital publishing the concept of “backlist” no longer really applies. Take any book — with a very few exceptions — and the vast majority of readers will have never read it. Nearly as many readers will never have even seen the book before. What may be “backlist” to the author, and to some extent, the retailers, is brand new to the vast majority of potential readers. What does that mean? That means that a “backlist” book (assuming it’s a quality book) should, with consistent, competent marketing, continue to sell as new readers are exposed to it. I’ve watched some very savvy writers selling the same book for years and years, far beyond the time when said book would’ve been relegated to “backlist” in the old days of publishing.
A book only truly fits the old definition of “backlist”, when the writer and/or publisher ceases marketing it. And for those writers or publishers who no longer want to market that particular book, then perhaps throwing it in KU might indeed be attractive:)
Which writers MIGHT benefit from KU?
Writers who can produce serials fast and publish them regularly, stand to make seriously good money in KU. My own small experiment bore out the viability of the “serials only” route in KU.
Perhaps writers of short stories might see some success, provided they have a huge number of short stories in their catalog.
Brand new writers might as well try KU, at least for a single 90 day term. They’re starting from zero, so it probably won’t hurt.
…and that’s about it.
All of the above options are completely dependent upon Amazon throwing enough money into the KU kitty each month to keep the borrow payouts even in the same zip code as “reasonable.”
As more and more internet marketer types get the ghost farms really cranking out the scamlets and randomly generated stories, along with the obvious gaming going on (large borrow rings are almost certainly in play), KU is in danger of becoming a cesspool. Sure, it’s going to have a ton of content, but more and more readers are likely to pass it by when they can’t find any of their favorite writers there. Most importantly, readers talk, and when the word increasingly becomes that KU is filled with low quality content, it’s going to have a long term negative effect on subscription levels, and only further dissuade writers and publishers from putting any of their content in KU to begin with.
I think writers should look at KU as one of many possible tactics in their overall strategy. Nobody is forcing you to use KU, it’s simply one of many available options. Perhaps other writers will try it and have results completely different from mine. Entirely possible, of course:)
I’m largely a novelist, so for me, KU in its current form just isn’t a good fit. I think Amazon could make KU into a valuable tool for almost all writers though, if some changes were made to the program.
The fluid payout level is absurd, as it makes revenue planning much more difficult for writers — and introduces a level of uncertainty into any cost-benefit analysis that makes it difficult to determine whether or not a given product might be successful in the program. What other supplier (and that’s exactly what indie authors are — suppliers) would be okay with a retailer saying to them: “Hey, sign up for this cool new service, but we won’t tell you how much you’ll make per unit sale until the month following the sale. Oh, and the amount per unit sale will be determined entirely at our whim.”
The exclusivity requirement is the worst feature though. All roads seem to lead back to this — and it alone is the single biggest reason why I think KU is a bad idea for many writers. If Amazon were to drop this exclusivity requirement, I think KU would see a flood of new quality content on a Biblical scale. What would be even better (from Amazon’s point of view), is that I think dropping exclusivity would actually be more of a challenge to competing services like Oyster and Scribd.
Right now, those two services are doing just fine — and growing — despite the presence of KU. Why? Well, it’s tough to know for sure, but we do know a few things. Those services don’t have an exclusivity requirement, and they make it clear how much writers and publishers will make on each transaction. Since publishers and writers know how much they’ll be paid per sale, and because there is no exclusivity requirement, perhaps plenty of said publishers and writers are trying out the services?
If big name trad and indie writers avoid KU due to the low payouts and business-strangling exclusivity requirement, and readers mostly want to read same big name trad and indie writers, then it doesn’t take a rocket scientist to see what kind of future that potentially spells out for KU. I’m guessing these other competing subscription based companies are actually benefiting from KU’s exclusivity requirement, rather than being hurt by it — because they’re increasingly going to have the quality content readers want.
I really hope Amazon fixes the payout amounts, and drops the exclusivity requirement. If they did those two things, I’d put everything I have into KU, like yesterday.
But until that day, for writers looking to increase sales and revenues… KU in its current form looks like a mirage.
Christina Mandara says
I have only one book in KU… which is a leading book for the start of my new series. The only reason I put it there was to advertise it with all the freebie book sites eg Digital Book Today and see if I could rock the charts. It managed to get itself up to #109 in the free kindle charts with about $50 of help and I managed to give away approx 6,000 copies.
The trouble with even that, is that not everyone is going to jump straight in and read it. Sometimes that book may be on a persons eReader for years before they actually come to have a look at it.
The bottom line is I’m in full agreement with you. Amazon is trying to be far too greedy. Authors are not stupid. Unless you’re brand new in the world of books, or like J A Huss – you can bring out a $0.99 series of books in relatively short order – KU probably isn’t the place you want to be and with the exception of a few big names like J K Rowling and Susan Collins, most authors agree with you 😉
Trent Evans says
The thing that frustrates me most about KU is what a missed opportunity it is for both Amazon, and most importantly, readers. I’ve no doubt that a subscription model does reach another cohort of readers and that putting a book into that model can enhance visibility for the author. But the exclusivity clause and ridiculous payout scheme just drives a wedge between authors and readers.
Readers want — and deserve — great, quality stories. The problem is that KU drives those stories away. Not too late to fix the problem though, and I do hold out hope that Amazon fixes the program. Someday:/
Thanks for reading and commenting, Christina:)
Kathy Lewis says
Sorry you has to experience that first hand. As soon as I saw it, I knew it wasn’t in favor of authors. I also like to have my books always so I can read them again. I also think I don’t spend the monthly amount in books every month.
Hope you can recover from KU.
Trent Evans says
Oh, it’s quite all right, Kathy; I’ll recover just fine:) But thank you! I believe in experimentation, so I gave it a shot to see how it went. Nothing ventured, nothing gained and all that.
I hope this helps a few authors make a decision on whether or not to give KU a try. The more data we all have, the better.
Your points from the readers’ perspective are critical ones too. Amazon is (rightly so) focused like a laser beam on the customer. And what you’ve said is something I suspect Amazon is hearing from a LOT of customers. KU needs to be fixed — for readers and writers both:)
Thanks for stopping by:)
Rollin Hand says
I gave up on Amazon’s exclusive licensing in early 2013. KU is even worse. I sell enough on other platforms to easily outperform anything I could expect to see from KU. For me there is no point at all. I agree with you on one thing. It might work if you released tons of short .99 cent pieces.
Trent Evans says
Yep, what you’ve reported is something I’ve heard from other authors too, Rollin. I thought I’d at least give it a shot to see if it worked, rather than dismiss it out of hand (as was my first instinct).
I probably should have listened to that first instinct…
Maggie Carpenter says
Wow. This is so interesting. Apparently I’m the only one who has seen a positive result. Older books that weren’t selling at all, saw a significant bounce, especially in rankings, and I know that rankings aren’t the end all and be all, but I’ve picked up new readers. I’ve had the same experience with every book I enrolled. I do intend to pull them when their time is up, and reintroduce them back into the other marketplaces, but for me, it has worked.
Sorry that it didn’t work for you, Trent. I didn’t put any serials in there, just older novels that had died. It definitely breathed new life into them.
Trent Evans says
That’s great that it worked out for you! One of the factors I didn’t list in my post is potentially the most important one: the book’s gotta be a damned good one, no matter what.
Your books are very good indeed, so I have no trouble believing they’d do well in KU:)
It’s possible that the books I put in there might not have hit the mark for KU readers. No way to know, of course, but I really appreciate you sharing your experiences with it. I think this sharing of experiences really helps other authors who might stumble across this post.
Thank you for commenting, Maggie!
Cara Bristol says
I think what you’re reporting is very typical to other authors’ experiences.
Trent Evans says
Alas, yes. I’m just stubborn enough to find out things for myself. More’s the pity:/
Thanks for reading, Cara.
Helen Karol says
Very interesting points, Trent. I have had quite a bit of success with KU but then I write a lot of serials although not at .$0.99 – the royalty splits not worth it. I agree re the payment – it bugs me. The Kindle All Stars pisses me off as well! I wrote and told them so. Not that it made much difference.
My last release I created two versions one of which I split for KU and the other I sell outside of KU. My complete novels I keep out of KU or rotate them. I have experimented and frankly the jury’s still out. I have noticed a drop in sales but an increase in overall revenue although that’s tapering off.
Unlike you I have always been in KDP Select. I find the other platforms too difficult to use and don’t make enough off them to compensate with the benefits KDP select provides for me. What platforms do you use? Maybe I should try again and persevere.
My latest release The Rancher’s Woman with Stormy Night has done very well and it is not in KU. I have yet to see how it has done on the other platforms but it will be a good comparison for me.
Thanks for the post.
Trent Evans says
Thank you for sharing all of this! Very interesting, especially the “KU versions” you created of the same works.
Every writer’s experience will be different, of course, but I HIGHLY recommend writers go as wide as possible with their work. Though Amazon would have us believe otherwise, they are nowhere near the only game in town anymore. The other retailers are really starting to get their acts together.
Amazon used to regularly be 90-95% of my sales. Shortly before I tried my experiment, it had dropped to around 75%. Now, following my ill-fated experiment with KU, I’m drifting back down to about 80% Amazon, and it’s getting lower each month. That 20% may not seem like much, but I assure you, that’s meaningful money, and if you stick with going wide, you are giving your work the chance it needs to take hold at those other retailers, and to reach the significant (and growing) cohort of readers who aren’t part of the Kindle ecosystem.
Here are the retailers where I publish:
Barnes & Noble
I utilize both aggregators (Smashwords and Draft2Digital) in order to get into several other smaller retailers, subscription services, and libraries.
Smashwords — Along with Smashwords’ own store, I use Smashwords to get into Oyster (subscription service), Baker & Taylor, and OverDrive (libraries).
Draft2Digital — This gets me into Apple (I don’t have a Mac, and D2D is crazy easy to use), Scribd (another subscription service), Page Foundry, and Tolino (this is yet another aggregator in Germany that gets my books into several other German retailers I otherwise wouldn’t have access to).
Hope this helps, and thanks again for sharing:)
Sophie Kisker says
Trent, I’m the new author that you described above, who put her first 3 novels (big ones!) into KU. They’re coming out at the end of 3 months, for the reasons you described. I’ve already done the preliminary work to set up distribution to other outlets and am just awaiting their parole 😉
Thanks for the time you took to pull this post together!
Trent Evans says
I think you’re going to be very glad you’ve gone wide. It can take a while for books to take hold at some of them, but once they do, sales will generally increase. Permafree first in series seem particularly effective at Apple and Google Play, though they seem hit-or-miss on Kobo (at least for me). I routinely see far more downloads of my permafrees at both Apple and Google than I see at Amazon. I attribute this directly to the KU effect:/
Good luck, and I’d love to hear sometime how it’s going for you over at the other retailers.