Welcome to the Site!

As soon as my novels became available on Kindle Unlimited, there’s been lots more traffic on the website here, which tends to be behind the times. Writing time keeps getting spent on fiction instead.

So if you are visiting for the first time: Hi!  Expect irregular postings when the mood strikes, and some really excellent contributions from other authors. I only post items from the people I love to read, so consider their inclusion here a wholehearted endorsement.

Follow me here on Facebook for new releases and updates to the upcoming convention schedule. Here’s all the other nastiness available on Amazon for your reading pleasure, including some sci-fi benefit anthologies.

Hope to hear from you soon.

 

-Russell James

Update #2 The Impact of Kindle Lending

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:

oot chart sales 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:

oot chart lend

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:

oot chart total

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:

oot chart ku cash
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.

 

-Russell James

 

 

 

Kindle Unlimited’s Actual Impact

 

July 18th, Kindle announced Kindle Unlimited. With this new service, all works enrolled in Kindle Select would be available for anyone to read at the monthly rate of $9.99. This is the Netflix model applied to books. Authors would be compensated by a payment from a central fund for each time the book was viewed, and the viewer read more than 10 % of it. There was much wailing and gnashing of teeth throughout the Internet. The Evil Empire was taking one more step that would destroy authors’ livelihoods by making books available without purchase.

Well, it’s been a month, so I thought I’d see if the naysayers were right. Admittedly, a month isn’t a long time, but I’d certainly see of sales had driven off a cliff.

Out Of Time Final FullI looked at the numbers for OUT OF TIME. This collection of time travel stories from the Minnows Literary Group is a benefit for Doctors Without Borders. It has been out for over a year and after an initial big spike, now sells a consistent, stable number of copies each month, enough to keep it on the Amazon Top 100 Sci-Fi anthology list every week. It has always been Amazon exclusive and Kindle Select.

That means it was part of the Kindle Lending Library (KOLL). Here a Kindle owner could offer up a virtual copy of the book to read to any other Kindle owner. Again, the author was paid out of a pool of money set aside to compensate for each time that happened.

Here’s a sales chart of relative sales over time for the last few months so you can see the trend. The Y axis is just a reference number. Sales are very stable.

oot sals only

Now let’s see what happens once the apocalypse of Kindle Unlimited arrives. This graph adds KOLL and KU units moved each week in blue. A big jump happens as soon as KU kicks in. Note that borrows of any kind are a small percentage of total units moved.

oot sales 16 week

Now here’s the ratio of sales to lending for the last seven weeks. The ratio remained relatively constant all year at .05 under KOLL, and then triples after KU starts.

oot sales ratio

So KU, even with the limited impact of only early adopters to the system, has tripled the number of time OUT OF TIME has been borrowed. But what has not happened is any corresponding decrease in sales. KU and sales are not a zero sum game.

Why is that? Because these two venues seem to serve different markets, with apparently minor overlap, the same relationship between library users and book buyers, or between Netflix watchers and movie goers, or between people who rent a jet ski and people who buy one. It looks liket what Amazon has done is open a new revenue stream for authors without pinching off the old one.

The only variable in the equation now is that pool of cash we all get paid from. As far as I know, it is disbursed per unit moved without relation to cost. So Stephen King’s $11.99 MR. MERCEDES earns as much as my $0.99 TALES FROM BEYOND, the only time the two of us will ever be considered equals. If the payout was a dollar per event, Mr. King would no doubt be taking a loss and lament it. But compared to my 33 cent payout on a sale, I would cheer. In fact, under KOLL, OUT OF TIME has always made more money per lend than per sale. Doctor’s Without Borders should praise the parsimonious. The risk here to authors is that Amazon will get skimpy with that fund for payouts.

So what if they do? Remember, if these numbers hold true, it is not a zero sum game. The $1.00 you get through KU isn’t in place of a $1.25 from a sale. It is in place of getting nothing. But if an author is unhappy with the revenue per unit, he can uncheck the KU box and opt out. It probably won’t hurt sales.

I’ll watch these numbers over the next five months and post another update. We put out a second time travel anthology before the end of the year and I’ll post what impact KU appears to have on a new release.