A thought experiment

What if Amazon killed Kindle Unlimited?

I’m asking the question without any actual information that this is going to happen, so consider this a thought experiment, with a half-decent understanding of the indie marketplace sprinkled in. It’s not an alarm.

Although…maybe it could be, because there are signs out there, if you want to look for them.


What is Kindle Unlimited again?

If you’ve heard of Amazon’s Kindle Unlimited at all, it’s likely as a consumer, rather than as an author.

From the consumer’s perspective, it’s this: pay $9.99 a month for the opportunity to download as many as 10 ebooks at a time (you can download more than 10 in a month, you just have to return one before downloading another) from the entire library of books Amazon makes available. Importantly, this is not all ebooks for sale on Amazon, only books that are a part of the Kindle Unlimited program.

The reason that last part is important is this: Kindle Unlimited not worth it to the consumer if she can’t find books she wants to read.

Kindle Unlimited is a little different, from the author’s perspective. Indie authors who want to include a book in Kindle Unlimited (this is also referred to, on the author’s side, as KDP Select) have to make their ebook exclusive to Amazon. The plus side is access to a dedicated pool of over three million customers; the negative, is if they don’t do well there, the book isn’t in any other marketplace.

Example: in addition to Amazon, my indie books are available on Kobo, B&N, iTunes, Google Play, and a few other places, which means I’m published wide. (“KU vs. wide” is a perpetual conversation on indie boards.) I can’t, because of this, list my indie books in KU as well.

I should note that large publishers do not have to abide by the above exclusive-to-Amazon restriction. For an example of that, you don’t have to go any further than my Amazon author page: The Spaceship Next Door (my one non-indie book) is available in both Kindle Unlimited, and elsewhere.

However, most publishers don’t list books in KU. Without deigning to speak for the entire traditional publishing industry, I expect this is some combination of: not liking the terms being offered by Amazon for a book downloaded in KU; not liking KU at all.

(To the first point: when the first ebook subscription models turned up online, the publishers wanted to be paid the full cover price for a borrow, even though the subscription company wasn’t getting nearly that from the consumer. Amazon’s not offering that, so for the most part the publishers aren’t agreeing to put books in KU. To the second point, I suspect that it remains an industry assumption that KU downloads leech ebook sales.)

An important thing to keep in mind is that Kindle Unlimited is an artificial marketplace. It was invented by Amazon to answer the need customers had for an inexpensive ebook subscription service. When I suggest that it could go away, I’m not talking about the world’s largest bookseller deciding to stop selling ebooks; I’m talking about the world’s largest bookseller deciding to stop offering a subscription service.


The signs

As I said, there are indications that KU could be endangered. Here’s what I’m thinking.

1: Kindle Unlimited, on its own, may be unprofitable

Most of the books listed in KU are indie books (from the same indie authors who have to agree to list their books exclusively), which means most of the author-publishers involved are getting paid by the page-read.

Here is how that’s supposed to work. Every author has a tally of their total pages read, month-to-month, but they aren’t told how much they’re going to be paid for each page until Amazon does some math, based on the total amount of money in the KDP Select Global Fund.  By dividing the balance in the global fund by the total number of pages read that month, Amazon comes out with a per-page payment amount for the same month.

I went over the ups and downs of this in Kindle Unlimited Is Not Here To Make Friends, so I won’t do it again now, but I do want to point out that Amazon has been adding money to that global fund on top of the base pool. (The monthly emails announcing the size of the fund used to include the amount added. It no longer does. I don’t think this means Amazon stopped adding money to it; I believe it means they stopped making that public. This is obviously up for debate.)

Now, all this really means is that KU’s global fund isn’t being propped up entirely by those monthly $9.99 subscriptions. It’s possible if it were just that, the per-page amount would be so low, none of the indie authors would stick around. (The relative stability of that per-page, which goes between $0.004 and $0.005 each month, suggests Amazon is adding enough funds to get the figure into that range.) It’s also fair to argue that adding money to the fund makes perfect sense, given a KU subscriber means either a new Amazon customer or a more loyal Amazon customer, and that’s a hard-to-put-a-dollar-sign-on-it kind of metric.

However, since the birth of Kindle Unlimited, Amazon has developed a better way to monetize this kind of thing.

2: Prime Reading has moved in

Those new/more loyal customers signing up for Kindle Unlimited are opportunities for Amazon, to get more Prime subscribers. But Amazon’s since flipped that around, by offering Prime Reading. If you’re already a Prime customer, there are over a thousand books you can download and read for no additional charge. Unlike the books in KU, Prime Reading’s list is curated, and changes regularly.

Prime Reading still satisfies the concept of an ebook subscription service, but now the subscription service is Prime itself, and the books are an ancillary benefit.

We’re talking 1000+ books in Prime Reading, rather than the millions in KU, but since these are handpicked titles from traditional publishers and some very successful indies, it’s not as difficult to find a decent book. This may be important to Amazon, because…

3: there’s a question of quality regarding KU books

I’ll try to make this point as delicately as I can.

While it is absolutely true that there are both exceptional and awful indie books, and, there are both exceptional and awful traditionally published books, the sheer volume of indie books on the marketplace can make it a lot harder to find those exceptional indie books.

This is a problematic truth about the Amazon marketplace as a whole, but recall that Kindle Unlimited is being supplied almost exclusively by indie authors, so what you end up with is a higher per-title concentration of “bad” novels in KU, than anywhere else on the Internet.

(I’ve put “bad” inside of scare quotes as a nod to the point that we all have our own definition of a ‘bad novel’. Subjectivity doesn’t change the observation.)

Books in Kindle Unlimited are also given an artificial visibility boost in the Amazon bookstore as a whole.

Amazon sales rank for an ebook will be boosted as soon as it’s downloaded (or, in preorders, as soon as the order is placed). This is true whether it’s a bought-and-paid-for book, or a borrowed book. But there’s a huge difference between borrowing a book in KU and buying a book in the regular marketplace. Kindle Unlimited does cost $9.99 a month, but it costs that whether one downloads 5 books or 500. In other words, borrowing a KU book, psychologically, costs nothing.

What I mean is that there’s no monetary commitment behind downloading a book in KU; the commitment is to the service, not the book. It’s a lower psychological hurdle, much closer to downloading a free book than to buying one.

But while Amazon long ago split the sales ranks for the actual free ebooks, from the sales ranks for paid-for books, a KU download and a sale have the same impact on sales rank.

This translates into Kindle Unlimited books getting higher sales ranks, on average, than paid-for books. A higher sales rank means higher visibility. This is one of the reasons why, when you look at the Amazon best-seller lists, the top of the charts are taken up mostly by books available in Kindle Unlimited.

From Amazon’s perspective, I’m sure having Kindle Unlimited books dominate the top of the sales charts is a great way to promote Kindle Unlimited. It’s also a loophole for fraudsters.

Simply put: a book in KU could be a best-seller on Amazon, having sold no copies, and without being read by anybody.

A clickfarm with millions of new email address and perpetual opportunities to try KU for a free trial period can artificially boost a junk book to the top of the sales rank without spending a dime on that book. (Because, again, the download registers as a sale.) And—although this is a step further than I want to go in this article— throw in ‘flip through the download as fast as the e-reader lets you’ to the service provided by that clickfarm, and we’re talking about junk book authors effectively stealing from the KDP Global Fund, and every author in KU.

High visibility for bad books, mis-categorized books (because putting a book in an underserved category in which it doesn’t belong is another visibility trick,) or junk/fraudulent books, only reinforce the impression that KU has bad books.

In sum

Any one of these things—unprofitability, duplication of service, quality—could be enough on its own to spell doom for Kindle Unlimited. If it happens, it will probably be a combination of all of the above.

For example, I can imagine a scenario where Amazon saw quality as a problem from day one, and so from day one have been trying to woo traditional publishers to sign on with the program. Because that didn’t happen, KU has failed to be as profitable as the company hoped. Brainstorming on how to create a subscription service that did appeal to traditional publishers and either turned a profit or became an added-value product, Amazon came up with Prime Reading. And now it’s not a question of if Kindle Unlimited is going away; it’s a question of when.

But again, I’m just speculating.


Then what happens?

There are two ways to discuss this: from the perspective of the consumer, and from the perspective of the indie author.

1: Consumers

Here’s something that didn’t even occur to me before now: a year of Kindle Unlimited costs the same as a year of Prime membership. They’re pitched differently, but $10 a month for KU is $120 a year, and Prime is also $120 a year, so if you’re a consumer (and I’m trying not to turn this into an advertisement) with only $120 a year to spare for reading ebooks, the answer to how you spend it may depend on how much, and what, you like to read.

There is a population of readers who are best served by Kindle Unlimited: voracious readers. I’m not talking book-a-week readers, I’m talking book-a-day readers. What they’re reading, mostly (but not exclusively) is romance and erotica. There is a lot of detail hiding underneath that one fact, going back to the start of ebooks, the wild success of authors who were historically underpaid finding readers who were historically underserved, and so on. I won’t dive into it here; it warrants another article entirely, and I’m probably not the guy to write it.

But: fans of romance and erotica consume a lot of books. So many, this one genre can single-handedly turn a subscription model into something unprofitable. This is not an exaggeration. When Scribd—a subscription model that pre-dates Kindle Unlimited—was floundering, the company decided the only way to survive was to remove most of their romance and erotica titles.

The genre is largely supplied by indie books, and they’re the kind of books that aren’t going to be making it into Prime Reading. Or if some do, it won’t be in the kind of volume necessary to serve this community of readers.

If Amazon decides to eliminate Kindle Unlimited, it will be hurting heavy users, who may not have another place to go. Then again, heavy users can destroy a subscription model (another fun example of this is MoviePass) and there’s plenty of evidence Amazon has been subsidizing this model for a while.

So, I don’t know. If Amazon looks at this portion of the KU users as a group in need of rescuing, they’ll have to either keep Kindle Unlimited running, or come up with a solution that isn’t Prime Reading. But there’s a decent chance Amazon doesn’t see them that way at all. Eliminating KU, offering everyone using it free Prime membership for a year, and riding the negative PR for a few months is probably how this would get handled.

2: Indies

Here’s where this will hurt the most. There are a lot of authors who publish exclusively to Kindle Unlimited, because they make more money by publishing to KU than they did when publishing wide. The problem is that if Kindle Unlimited went away, some of those authors aren’t going to be picking up their losses elsewhere; there will be no elsewhere.

I don’t mean that there aren’t going to be other venues in which to sell their books. Like I mentioned above, there’s Kobo, and B&N, and Apple, and Google Play, and a bunch of other places too. But if there’s no platform for the voracious readers, there’s no place for the writers making their careers by marketing to those readers.

I have a cynical and non-cynical perspective on this.

The cynical version is this: Kindle Unlimited was a life raft for the authors who wrote the kind of product that only really sold well (before KU) in the early days of ebooks, when the demand was higher than the available units, and authors of mediocre things made six and seven figures. The larger the ebook marketplace on Amazon grew (and the more the algorithms changed in response to the growing marketplace) the more important quality became, and the harder it was to sell the mediocre.

The cynical conclusion to this cynical argument is that mediocre books have a better chance of doing well—even very well—in Kindle Unlimited, than they do wide.

The non-cynical version is this: some authors do better in Kindle Unlimited because what they write caters to the especially voracious readers. It isn’t that they can’t make up that income by publishing wide, it’s that their income is being inflated by an artificial marketplace that simply doesn’t exist anywhere else.

Both of these are probably a little correct, but that hardly matters. The result is the same: With some exceptions, authors succeeding in KU will largely not succeed without it.

If Kindle Unlimited is shut down, it will result in the largest income loss the indie marketplace has ever seen. And while I can argue that Amazon might be sensitive to their heavy use consumers of the product, suggesting they might go to bat for the indies—hold open KU just for their sake—is a much harder sell.


Conclusion

I can think of only one group that would benefit from Kindle Unlimited’s hypothetical cessation: all of the authors and publishers not in KU.

There would be a visibility boost, because book sales would no longer contend with KU book borrows, so our books might make it further up the charts. I’d like that, and I imagine so would traditional publishers.

The downstream impact on other platforms would be pretty immediate too. Kobo, B&N, Apple, and Google Play will see a surge in indie books as the KU authors go wide. (Amazon holding open KU, specifically to prevent this from happening, is absolutely worth considering here.) It could mean those of us already wide will be facing a sudden influx of competition, which may hurt our visibility. It’s also possible if the indie marketplace on these other sites was larger, it would get more attention from these platforms than it does right now.


Again, this is just a thought experiment. I have no information, and I’m just speculating. But unlike even a year ago, I think this is something indie authors need to take seriously, and to plan for. Kindle Unlimited is an artificial marketplace that only exists as long as keeping it running holds more value to Amazon than closing it. And it looks like the scales are starting to tip.



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6 Comments

  1. Nick on March 12, 2019 at 4:18 pm

    Interesting observations.
    I am not in Ku but admit I do often buy by price and genre.
    For instance I look for books as part of a boxset. Otherwise like books to be over 300 pages and always am attracted to books that are either zero to try or 99c.
    I will agree that makes me pretty much a cheapscate and probably not a reader that authors like but that is what is on offer by Amazon and like others I would suggest take full advantage of the oportunity.

    Cheers nick

  2. Kim on March 12, 2019 at 4:53 pm

    I do not buy ebooks books from Amazon and never have, for the simple reason that I do not like programs like Kindle Unlimited which lock an author and/or a series of books into one platform.
    I buy my books from Kobo. Several authors whose series I bought shifted to KU because of a guaranteed income. Do you know how irritating it is as a reader to have a series cut off in its prime? Moreover, all of their previously published books were no longer available except on Amazon.
    There are other authors who have some of their series available across all platforms and some which are only on KU. Again, this means that I am unable to access an author’s entire output.
    Having corresponded with several authors it’s pretty clear that financially they feel they have no option but to go to KU. I understand that, but they have to understand that I’m not going to compromise my principles even if they are a favourite authors, so they have lost a loyal reader.
    For me it’s all about choice, and I choose not to be forced into having no choice at all.

  3. Loredena Frisealach on April 1, 2019 at 8:31 am

    I’m actually in case 3 – I have Prime, but I also have a KU subscription. Surprisingly, because I have KU I don’t get access to Prime Reader. But I don’t have much incentive to switch because I am a voracious reader. I would be badly hurt from a reader perspective at the loss of KU. There are also a ton of authors, including more-traditional ones, whose books I buy only because I found them on KU first.

    • Loredena Frisealach on April 1, 2019 at 8:34 am

      BTW, that includes you. I found Spaceship Next Door on KU, and I bought the sequel, and I found your blog post because I’m considering Fixer.

      • Gene Doucette on April 1, 2019 at 9:52 am

        you can’t do prime reading with a KU subscription! That’s wild, I had no idea.

        RE: Fixer. Keep your eye on it, there will be a markdown for the first week of April, in advance of Fixer Redux.

  4. Dale Roberts on April 9, 2019 at 8:57 am

    The best overview of Kindle Unlimited I’ve read yet. Bravo! Agreed on all accounts.

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