I did an earlier post on the impact of Amazon’s new Kindle Unlimited option on book sales for MLG Publishing’s benefit anthology OUT OF TIME. My theory, based on limited data, was that Kindle Unlimited would add new lenders without impacting sales much. The process was only a few weeks old, and I promised an update after a few more months. Here’s the update:
To review, Kindle Unlimited (KU) and Kindle Owners Lending Library (KOLL), from the author’s point of view, both do the same thing. They make the book available for Kindle users to borrow. Amazon pays the author for each borrow instead of paying a royalty for each paid download. The amount paid, unfortunately, is up to Amazon’s discretion. They set aside a pile of money and then divide it equally, one share for every borrow. A 99 cent short story earns the same as a thousand-page $14.99 piece of high fantasy. People’s concern was that the overall impact on sales, and more importantly, income, would be negative.
OUT OF TIME went on sale in 2013 as a 99 cent benefit anthology for Doctors Without Borders. It sold hot straight out of the gate and we’ve sent thousands of dollars to this worthy cause. The initial spike in sales calmed down after a few months and settled into a steady weekly volume. All the graphs you will see below start at the point the volume appeared to be steady. All volume numbers are just relative references. Let’s look at sales first:
KOLL was always active, but KU kicks in week 17 on this chart. Sales volume through week 21 is pretty uniform, then there is a drop through week 30, and a bottoming out at a new level from week 31 to 44. Volume spikes back up in weeks 45 through 47, but I attribute that to the release of a second time travel anthology by the same authors, STILL OUT OF TIME, which I think spurred a new set of sales.
Now let’s look at lending:
Week 17, KU kicks in and from then on lending rises through about week 30, then pretty much stabilizes when you average the high and low weeks that are coincidentally next to each other most of the time.
So sales are down, lends are up. The sum is shown below:
The overall trend holds with the sales trend. Starting at week 31, total units moved goes to a “new normal”, roughly 45% less than before KU went active. Sales of any item drop over time, so it may be presumptuous to think that OUT OF TIME would sell at the weeks 1-20 level forever, but it does look like KU is a pretty good suspect for the sudden drop, even though the book is popular through KU itself.
An economist might say that demand, with some product being available free, could be measured not in dollars, but in readers’ time available to read. This fixed demand is now spread across a larger supply, because free books extend the reach of the reader, despite limited disposable income. This relationship (more supply, fixed demand) will depress most individual sales, though the sum total over all books will most likely rise until readers’ available time to read is filled.
Read that a few times so it sinks in. End result, the reader wins. Amazon goal #1 met.
Does the self-published author win? Hmm. First let’s see what the self-pub guy gets per sale. These are the dollars earned per unit of OUT OF TIME over the last few months:
June is the last month with KOLL only. KOLL had a much richer payout, by design, than KU does. Amazon won’t be going back to any $2.24 payouts any time soon. But let’s say they stabilize at $1.42.
Using this data, for every 100 books you sold pre-KU, you would sell 45 less. At the minimum royalty of $0.33, you would lose $14.85 in royalties. But you would gain 15 lent units at $1.42 and earn $21.30. You move fewer books, and make more money.
Unless your royalty rate is higher. Then you lose. The break even point is only $0.47, or having your book at a price point of $1.42 on Kindle. Anything above that and this “new normal” is a financial disaster. Amazon spends less to deliver content. Amazon goal #2 met.
So do you pull out of KU? Maybe if you are a big name who people must buy as soon as your book leaves a press. But not if you are a small fry. If the theoretical economist a few paragraphs up is correct, overall demand per seller is down. Drop KU, and you may lose the lends, and gain no sales in return, as individuals continue to get a percent of their content free, just from someone else. Authors making more money doesn’t appear to be on Amazon’s list of goals.
Of course, all of this is based on a data set of one, which is just a step away from “My cousin Leroy told me this story about a guy…” So pop over the my Facebook link for this post and link me to anyone else’s story abut the impact of KU, stories that contain actual numbers, please. Love to see what other authors have experienced.
And if you want to read a copy of OUT OF TIME, it won’t hurt my feelings, and 33 cents goes to Doctors Without Borders, $1.42 if you just borrow it.