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Amazon Kindle’s New Payment Plan

authoreBooks2go  on  Friday |clock-iconAugust,28, 2015| 7:07 AM

Recently, Amazon has change their royalty payment plan for their Kindle Direct authors by changing how to calculate author reimbursements. Amazon’s old royalty payments were based on book rentals by Amazon subscribers while the new system is on a pages-read basis. What does this mean? Authors will only get paid if an Amazon subscriber downloads the book and actually reads the content within the ebook. The reader has to spend a pre-calculated amount of time on the page to have it deemed as “read”, and if a user is only flipping through the book, Amazon will not credit you for those page turns.

To better illustrate how you’re going to be paid by Amazon we will compare the two payment methods.

Usually Amazon sets aside a pool of money for Kindle Direct Publishing Select Authors. These authors are typically self-published.

For the sake of visualization, this month’s pool is:

$3,000,000,000

The amount of money an author received for a borrow can fluctuate based on the book borrows during the month along with the amount of subscribers to Amazon’s Lending Library and Kindle Unlimited programs.

Let’s say that this month’s borrow will amount to:

$1.50

Your book generated:

50 Borrows

Based on the borrows, you would receive

$75

This system was flawed in the eyes of Amazon because it encouraged authors to write shorter pieces of works to generate borrows. In this system, an author who wrote a 100 page book would be paid the same amount as an author who wrote a 50 page book for each borrow.

In order to rectify this flaw, Amazon will now pay authors as follows:

The author of a 100 page book that was borrowed and read completely 100 times would earn $1,000 ($10 million multiplied by 10,000 pages for this author divided by 100,000,000 total pages).

The author of a 200 page book that was borrowed and read completely 100 times would earn $2,000 ($10 million multiplied by 20,000 pages for this author divided by 100,000,000 total pages).

The author of a 200 page book that was borrowed 100 times but only read halfway through on average would earn $1,000 ($10 million multiplied by 10,000 pages for this author divided by 100,000,000 total pages).”

Author 1 and Author 3 would receive the same payment ($1,000) because the same amount of pages were read by users for the month (10,000 pages)

Unfortunately, Amazon’s new payment system does not work for all authors. For instance, children’s books authors typically have shorter books than other authors. While pages read is a good system for standard books, authors with a niche audience may not benefit from the new system. A children’s book author with an illustrated book that has fifteen pages will have a difficult time recouping the investments and effort it took to make a book that specifically appeals to children. Some could argue that the amount of writing investment an author puts in writing a children’s book is not comparable to novels because of the book’s scope, but this is not the issue with the new system.

Some would argue that this creates a better environment for authors and consumers because it encourages authors to write their best work so that people finish reading their books. While this sentiment has some truth, this new system also comes with some drawbacks. Since authors will be paid based on the pages read, they will also be encouraged to write longer books could potentially be filled with “Fluff”. It is somewhat known in the writing community that some books are padded with content so that the book is “valued more”. It does not necessarily mean that the consumer gets the best book experience based on book length alone because authors are encouraged pad books instead of making sure it has the level of polish people should expect.

Amazon as a company has a very good consumer focused culture, but the company sometimes loses sight on how their policies affect their supplied (authors). Since Amazon is one of the largest book and ebook channel globally, this change will affect thousands of people’s livelihood. Only time will tell how these new changes will affect the author community in the years to come. Thank you for reading eBooks2go.

Where do you fit in the spectrum? Do you think this is a good system or does it make being an author much more difficult? Let us know! If you are in a writing slump, maybe you’ll want to check out our most recent blog about writing outlines.

http://bit.ly/1L2bZqy

 

About eBooks2go

eBooks2go, Inc is an end-to-end provider of services to the international publishing industry. With the revolutionary change in the publishing industry from a print led to an electronic media led industry in a very short space of time, it became obvious to us at Gantec Publishing Solutions that in order to continue providing the services the publishing industry needed, we had to re-think our business strategy. Thus eBooks2go was formed.

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