Amazon’s New Royalty Payout System – Unfair to Authors?

Kindle UnlimitedKindle Unlimited Royalties Changes – What Authors Need to Know

Amazon’s announcement that it is changing the way it pays authors whose books are part of the Kindle Unlimited program is causing controversy in self-publishing circles. Starting on July 1st, books that were downloaded but not read beyond 10% of total pages will not be eligible to receive royalties. Essentially, Amazon will pay authors only for what is read. Not for what is written.

Amazon explained the change on its site, saying that the unusual royalty scheme is due to a demand from authors. “Beginning July 1, 2015, we’ll switch from paying Kindle Unlimited (KU) and Kindle Owners’ Lending Library (KOLL) royalties based on qualified borrows, to paying based on the number of pages read. We’re making this switch in response to great feedback we received from authors who asked us to better align payout with the length of books and how much customers read. Under the new payment method, you’ll be paid for each page individual customers read of your book, the first time they read it. “

Many are skeptical of the claim that author requests were responsible for the change, since the policy primarily benefits Amazon, not authors of longer books or books that borrowers read all the way through.

Meville House Publishing points out the difference between the new Kindle Unlimited royalty policy and policies of traditional publishing. “…an author with a traditional publisher will receive royalties on each hard copy of the book sold to libraries (or a percentage of the e-book sold at a library rate).”

In addition to the change in royalties paid to authors, the new contract requires that authors sign an agreement that grants Amazon exclusive rights – meaning that the work cannot be sold by other retailers. The exclusive rights clause is another divergence from publishing industry norms.

Some authors are applauding the new system. Hugh Howey takes the position that the old system was unfair to those who wrote longer fiction and non-fiction books. He believes the changes will ultimately benefit authors, saying, “It’s hard to justify selling short stories for more than a dollar, and you only make 35 cents on that dollar under KDP terms. In KU, a 20 page story might earn just as much as a sale. What we should celebrate is that short stories will no longer earn the same amount as a novel, especially since the 10% threshold was much easier to reach on a short story. That system just wasn’t fair. The new system is a vast improvement.”

However you feel about the new rules, authors with work available through the Kindle Unlimited Program need to be aware of the changes. They begin on July 1st, 2015.

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One thought on “Amazon’s New Royalty Payout System – Unfair to Authors?

  1. It’s all kind of confusing. On the surface, it seems that the guaranteed payment upon reaching 10% would be the safer bet than the per page option for most authors.

    After all, you borrow a book, you’re curious, you flip around through it, you as a reader/borrower could very well hit that 10% target and trigger a payment to the author quite easily.

    But with a longer book, is someone going to read hundreds of pages and then give up?

    Sure it happens all the time, we borrow books, read half way, life intervenes, we forget to go back to it but I don’t know.

    I’ve yet to self publish anything so I don’t know if this is a good idea for authors or not.

    Like

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