There are a few different ways that an author can make money through digital publishing without actually selling their content directly to consumers. For example authors can publish writing on blogs, and generate advertising revenue through advertisements on their blog sites. Authors can also use crowd-funding sites like Kickstarter and IndieGoGo in order to raise funds for the production of new books. A third way that authors can gain revenue from giving books away to readers for free is through the Kindle Select program, part of Amazon's direct publishing tools. Kindle Select is a unique program that pays authors based on the number of pages of their e-books read by Kindle users.
Authors gain access to royalty payments by enrolling their books as “KDP Select Units” which earn royalties under Amazon's Kindle Unlimited (KU) and Kindle Owners' Lending Library (KOLL) programs (Royalties in Kindle Unlimited and Kindle Owners' Lending, 2015). In this program authors are paid based on the pages read by Kindle users. A user that reads an entire book therefore generates more revenue for the author than a user that stops read partway through, or for example a user that just skips to the end of the book and reads the lats page. This system has benefits to both authors and consumers. Authors gain greater access to a large number of readers because their is a lower price barrier. Kindle Select readers can borrow digital copies of books for a limited time without paying a fee for the price of the book. KU readers pay a monthly fee to get unlimited access to all books published as part of the program. Readers can therefore sample books without paying for them directly, which allows them to avoid paying for books that they do not enjoy or read. Authors benefit because they get paid a fee for readers that sample books by reading part of them, and are also paid based on the value books provide to customers. Authors that provide a large amount of value to customers, in other words have many pages of their books read every day, are paid the highest amount.
The Kindle Select program bases royalties on the Kindle Edition Normalized Page Count (KENPC). It is a page count calculation based on standard settings for font, line height, line spacing, and other presentation factors. KENPC is measured from the place a reader starts reading, the Start Reading Location (SRL) to the end of book. This standardized approach works across genres and devices and allows authors to be paid a standard royalty despite the form or nature of their work. The use of KENPC therefore reduces the differences in author compensation between genre, although authors who cater to genres with a large number of readers will make more money from the KENPC royalty system. Pages that include non-text elements like images, charts, and graphs still count toward a book's KENPC. Page count in the Amazon Kindle Select program is therefore completely independent from both word count and book formatting.
There is also another issue besides the use of KENPC that influences author revenue. Royalty payments made for both the KU and KOLL programs are based on the size of the KDP Select Global Fund which is announced monthly on the Amazon KDP community forum, the amount of the fund allocated to each country, and the total number of pages read each month. The amount allocated to each country depends on several factors including exchange rates, customer reading behaviour and local subscription pricing. Shifting fund allocations between countries is a way that Amazon maximizes regional profits for itself and authors. The Amazon direct publishing website provides some examples of what authors are paid based on a fund size of $10 million and 100 million total pages read in the month. An author of a 100 page book that was read completely 100 times would earn $1000, based on the $10 million fund multiple by this author's 10,000 pages, divided by the total number of pages. A 200 page book read completely 100 times would earn $2000, while a 200 page book read halfway 100 times would earn just $1000. As of July 2015, the fund has been boosted to $11.5 million dollars providing slightly higher returns for authors, although it was only as of May 2015 that the fund reached its target size of over $10 million (Kindle Unlimited Paid Authors $0.0058 Per Page Read in July, 2015). This July Amazon paid authors just over half a cent, or $0.00578 per page read, which is right on target for what the company said it would pay when the program started.
The example of several authors is given by The Digital Reader, who have had success with the KU program and Kindle Select royalties. Kate Wrath's fiction novel E for example earned $2,132.07 in July 2015 based on 368,924 pages read by 795 people reading the book cover to cover. This equals a payment of $2.68 each time the book was read, earning Wrath $0.68 more for each read than the $2 royalty from the $2.99 price of the eBook. Another popular author Hugh Howey has stated that KU is a viable program for authors of shorter fiction in the 7,000 to 12,000 word range, who went “all-in” to Kindle Select with his backlist of novels and new short stories. Furthermore Howey states that books enrolled in the KU program saw an immediate boost in ranking leading to higher sales for the paid eBook versions. The Kindle Select program acted like advertising the author got paid more leading to greater profits from both direct sales and lending channels. It had a major benefit to the author as well as readers. For Amazon as a publisher, this program promotes higher quality content that is more engaging with readers. With more positives than negatives for authors, readers, and publishers, this program has a positive impact on the industry as a whole.
Authors in the Kindle Select program also have the opportunity to get extra payments based on their author and title rankings. Rankings are based on the total KU and KOLL pages read for the first time by KU and KOLL customers in a given month, and authors are notified by email if they achieve a top spot. These “All-Star” bonuses are different from Amazon.com, Amazon.co.uk, and Amazon.de. Authors on Amazon.com with an author ranking in the top ten receive a $25,000 bonus per month. Authors in with a rank from 11 to 20 receive $10,000, for rank 21 to 30 receive $5,000, for rank 31 to 50 receive $2,500 and for rank 51 to 100 receive $1,000. For titles ranked 1 to 10, authors receive an additional bonus of $2,500. For titles ranked 11 to 50 the additional bonus is $1,000, and for titles ranked 51 to 100 it is $500. Authors also receive additional bonuses for title rankings in illustrated kids books published on Amazon.com. An illustrated kids' book with a title rank in the top 50 earns an additional $1,000 to $150 extra per month on Amazon.com. Illustrated kids books ranked 1 to 25 published on Amazon.co.uk earn a bonus of just £100. There are no additional bonuses for illustrated kids' books published on Amazon.de.
Although the response from many authors has been positive, there have also been criticisms of this program. Under this program authors that publish a $1.99 book must write 220 pages and have readers read the book cover to cover to make the same amount in royalties as with the paid model (Hern, 2015). The need for readers to read an entire lengthy book to make the same royalties has caused some authors to stop writing, according to a literary editor named Casey Lucas who works with self-publishing authors and lost clients after the program was implemented. According to Lucas and other critics, the program favours longer books over short ones, since authors are paid based on pages read. This creates a bias against some kinds of books, such as cookbooks, which are used as reference and not generally read cover to cover. Despite the criticisms from some concerned authors, however, the KDP Select program does appear to reward books based largely on quality. A short story that is read multiple times by the same reader, for example, may pay the same or more as a longer novel that is read only once. The program also rewards authors for creating engaging content that keeps readers interested for the whole course of the story.
In conclusion, the Kindle Select program offers an opportunity for authors to self-publish books and reach a wider audience than the traditional paid download pricing model. The Kindle Select program can act like free advertising for authors, leading to increased sales of paid eBooks on top of providing royalties based on books enrolled in the KU and KOLL programs. The potential to earn large extra bonuses by achieving high author rankings encourages writers to compete aggressively by publishing multiple high quality works in popular genres. For niche writers in smaller genres besides illustrated kids' books, however, it will be difficult for authors to achieve the rankings needed to acquire financial bonuses. The Amazon Kindle program is therefore mostly recommended for authors of popular genres with large reader bases, like romance, mystery, and science fiction or fantasy, as well as authors of popular illustrated kids' books on Amazon.com that qualify for additional monthly All-Star bonuses.
Hern, A. (2015). Amazon set to pay self-published authors as little as $0.006 per page read. The Guardian. http://www.theguardian.com/technology/2015/jul/02/amazon-pay-self-published-authors-pe\n\nr-page-read-kindle
KDP Select All-Stars. (2015). Kindle Direct Publishing. https://kdp.amazon.com/help?topicId=A2X66QXB12WV
Kindle Unlimited Paid Authors $0.0058 Per Page Read in July. (2015). The Digital Reader. http://the-digital-reader.com/2015/08/15/kindle-unlimited-paid-authors-0-0058-per-page\n\n-read-in-july/
Royalties in Kindle Unlimited and Kindle Owners' Lending Library. (2015). Kindle Direct Publishing. https://kdp.amazon.com/help?topicId=AI3QMVN4FMTXJ
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This paper does a reasonable job of explaining some of Amazon's offerings for authors. It describes the way the models work, and how they may or may not be lucrative for authors. However, although it describes those in sufficient detail, the paper does not delve into the implications of such a model for authors, readers, of the publishing industry as a whole. The lack of analysis is unfortunate, as the Amazon payment models are having an influence on the market, and the implications of the growth of such models would be tremendous.
Your argument is laid out well and your writing style is easy to follow. Your essay could have benefitted from one more proofreading: there are a few grammatical errors, some spelling mistakes, and quite a few missing/misplaced commas that distract from the flow of your writing in some places. Although I don’t know if this is possible on the Winnower, linking to websites as you mention them (Kickstarter, IndieGoGo, Kindle Select, etc.) could have been useful. It feels like you are missing some citations when you explain how the payment for KU and KOLL works based on the KENPC. In general, your paper could have been improved by including some scholarly research on the topic of this new way of paying authors by the time readers spend with their texts and whether this impacts what authors write. You could have also included some voices from people making predictions about how dominant this model might become. About midway through your essay, you state that “with more positives than negatives for authors, readers, and publishers, this program has a positive impact on the industry as a whole,” which is a very intriguing claim and could have been a great starting point for your argument. You do describe how the model works for readers and what its advantages are for the consumer and you clearly illustrate how different authors, like Kate Wrath and Hugh Howey, have benefitted from this model, and what content is most lucrative with this model. You also indicated for what type of author and content the model does not work quite as well. Unfortunately, you do not consider the impact of such a business model on publishers and the industry as a whole. You also do not really make clear whether Amazon functions as a distributor or a publisher under this model.
I think you picked an intriguing business model to discuss, which has a lot of prospect, and you wrote a solid essay about the model and some of its implications. However, you did not address creative commons licensing in your essay at all. My understanding is, that with Kindle Select authors retain traditional copyright over their work. Furthermore, the text is not technically free to the reader as KU is a subscription program, and KOLL is only available to Amazon Prime members, both of which are paid services. Would this model still work with CC-licensed content? Would readers choose to read on an ad-supplemented platform if they were allowed to download the text, reproduce it elsewhere or could find it somewhere else on the web ad-free?
Overall, a good essay that did not address the essay prompt in its entirety.
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