A New Twist in the Amazon

If you pay attention to the indie writer scene, it would be hard to miss the community's reaction this week to an announcement from Amazon. In the past, Amazon compensated writers for the borrowing of their books according to how many books were borrowed, as long as a reader made it at least 10% of the way through the book.

This financial incentive encouraged writers to make books available for borrowing through Kindle Unlimited (KU, which is Amazon's Netflix-style subscription service for avid readers) and the Kindle Owners' Lending Library (KOLL). This week, Amazon announced a radical revision to the compensation structure, where writers will be paid according to how many pages are read, regardless of percentage.

At first glance that might not sound like a big change, especially if you're looking at it only as a reader, but this is actually a fundamental revision: Nowhere else are books paid for by the page. This change takes effect on the first of July, just over two weeks after it was announced. Readers presumably won't see any difference, but writers with e-books exclusive to the Kindle, via KDP Select, will see a big change. There have been positive, neutral, negative, and wait-and-see responses from other writers. Read on for my analysis.

Overview of the Change

Before digging into what this change means for writers, it's important to understand what we know and don't know about how things will work starting in July. In brief (and correct me in the comments if I'm wrong):

  • Writers will be paid according to how many pages are read, with payment being divided among authors from the KU/KOLL payment pool that has been used all along for books enrolled in KDP Select.
  • Amazon claims to have developed a way to normalize what a “page” means, to avoid variations from differing choices in page formatting, and that this determination will take into account illustrations, charts, and similar content.
  • Amazon claims to know how to determine that a page was read by a reader, which is different from content being displayed.
  • Writers will only be compensated for the first view of each page by any given reader.
  • Writers do not know how much they will be paid per page.
  • Writers do not know how “pages” will be calculated, including what role illustrations and related content will play in that determination.
  • Currently there is a 1:1 relationship reported by Amazon regarding readers and books that are read at least to 10%; starting in July, no such relationship will be reported, only the total number of pages read will be reported with no indication of how those pages were divided among readers.
  • This change does not directly impact sales, it is only for payments from the KU/KOLL payment pool for books that are borrowed. (Whether there will be indirect impacts on sales is a matter of individual opinion.)

My Analysis

The first thing I realized about this change is that it will likely mean a loss of most or all compensation for children's books that are rich with illustrations but don't contain much text, such as Two Boys, Two Planets. The basic reason for this is that such books typically have fewer than 50 pages. In a system designed to compensate novel-length works fairly, 50 pages is tiny, and so will be the compensation. This will be even worse for children's Kindle books that use a fluid layout, like Two Boys, Two Planets, instead of a fixed layout, because Amazon's page calculation may compress the fluid-layout book into even fewer “pages,” potentially five pages or less. The reason this may happen is that there is no natural relationship between image size and e-book pages, and if Amazon assigns such a relationship they will leave themselves open to rampant abuse by people trying to game the system.

Another negative impact, at least for those (like me) who want to keep close track of the earnings and distribution performance of their books, is that compensating based on pages instead of books erases the notion that the book is the base unit of a transaction. Up until June 30, we can see how many people we have (potentially) reached, because that is equal to the number of books sold or given away. After June 30, for anyone with books enrolled in KDP Select and thus eligible to be borrowed via KU or KOLL, the person/book relationship disappears and so does the ability to track the number of books distributed.

A broader impact that also seems negative to me is the precedent this sets for compensation for creative works. If you go to a movie theater and decide partway through that you don't like the movie, do you expect to get a pro-rated refund on your ticket? Even if the theater gives that to you, to make you a happy customer again, do you think everyone involved in making the movie will be paid only based on the number of minutes you watched? If you buy an MP3 song or a CD, do you think the artist should only be rewarded for the number of minutes, or seconds, you listen to it the first time? If you go to a museum and stop to look at a sculpture... okay, maybe these analogies are imperfect, but the point remains: We do not reward creators for fractions of their creation, we reward them for the whole thing. The new KU/KOLL compensation model only rewards for fractions.

I've tried to look at positives and negatives about this change, and honestly I don't see strong positives. There are some neutral or wait-and-see aspects, like whether this will really encourage higher-quality works, or whether scammers will find it harder (or easier!) to abuse the system, or whether a person who actively products (n) words per month will see much of an income difference depending on whether those (n) words are together in one book or spread out in multiple books. But truly positive aspects of this change? None stand out to me.

My Plan

Right now my books get so little attention that I could probably ignore this change and not really feel any impact from it. However, I like to think that eventually I'll reach larger numbers of readers, so I still take seriously my attempts to strategize how I prepare, present, and market my books.

Coincidentally, the enrollment of my children's book in KDP Select ended right when this change was announced. I was planning to re-enroll it, but now I have no plans to do that. Instead I've “gone wide” with it, making the e-book edition available on the NOOK and Kobo platforms with more distribution to come.

For other works that are still enrolled in KDP Select, I have not yet decided what I will do, but I'm strongly leaning toward pulling them out before July. The per-page rather than per-book/per-person tracking is a major obstacle to me, I feel that it muddies already-murky water.

NB: If you subscribe to Kindle Unlimited and want to take a look at one of my books while they're still available that way, the two titles I still have in KDP Select are Extra Credit: Loyalty! and Take Five! for Better Photos.

That's my view of this change right now. Maybe I'll see it more favorably later. You're welcome to share your thoughts on it in the comments.