Amazon is more than merely “considering” a subscription service for books similar to the popular Spotify music service.
For a few minutes in the early morning hours, this page appeared on Amazon:
Amazon already offers the Kindle Owners’ Lending Library to members who subscribe to the Amazon Prime service. Amazon Prime includes other benefits such as free two-day shipping on most purchases and access to a rather lackluster video streaming service. Members of the KOLL can check out one book per month for free. Then they have to wait until the first of the next month to check out another title. Before they can download the new title, they have to “return” the previous month’s selection by deleting it from their Kindle.
Publishers are paid from a pool–currently $1,200,000–which is divided equally among all titles that are “borrowed” in a month. Average pay-out per book usually amounts to about two bucks. Two dollars is a great deal for those who normally sell their books for $2.99 or less (who would receive a royalty of that much, or less), but it’s not such a good deal for anyone charging more than that… unless the publisher equates “exposure” with “payment” as some self-publishers do.
This new service, Kindle Unlimited (KU), promises “unlimited access” for a monthly fee of $9.99.
$9.99 seems to be a magical price point for Amazon. It’s been Jeff Bezos’s idea of the proper price for a single ebook, much to the chagrin of publishers who would like to charge $15 or more. Now it appears to be his notion of the proper price for all of the ebooks a person can read in a month.
How would this price point shake out in payments to publishers? That’s anyone’s guess.
If KU were folded into KOLL with no increase to the million-dollar pool, the results would be disastrous for publishers (and publisher/authors). The payment per title borrowed would plummet with the success of the KU program.
If a portion of the KU subscription fee went into the pool, the payout could conceivably remain about the same depending on the number of subscribers and the number of books they borrowed each month.
In KU alone, someone reading a book per week would pay the equivalent of about $2.50 per title. If a publisher actually offered a title at $2.50, Amazon would pay a 35% royalty or $0.875. If Amazon paid their full 70% royalty, the amount would double to $1.75.
Voracious readers can zip through two novels a day. For them, the price of an ebook would be less than $0.20 per book. At Amazon’s current royalty rates of 35% and 70%, the author/publisher would receive $0.07 or $0.14 per book.
So what would Amazon actually pay? It’s impossible to say at this point, from an outsider’s perspective. But it’s safe to predict: Far less than they’re paying now.
Comparisons with Spotify will undoubtedly point out that Spotify’s current royalty rate to musicians is about $0.006 to $0.0084 per stream. A tune has to be streamed a helluva lot of times to earn the musician(s) a check.
Obviously, it takes much longer to read a book than it does to listen to a song. I don’t believe that anyone except the most penurious readers believes that a fraction of a penny per book is a reasonable or sustainable price. What that reasonable and sustainable price is, however, is bound to be the subject of extremely spirited debate.
Amazon apparently considers $2 to be about right, judging from its payout to KOLL publishers. Many self-publishers are on board for that price point, while many others aren’t. You can bet that traditional NYC publishers find the amount equivalent to theft.
The Kindle Unlimited page that was posted briefly, labelled (if you were able to drill down through the pages) “KU Test,” engaged in some wishful thinking. Look at the titles offered: The Life of Pi, The Hunger Games, the Harry Potter series… all titles available through the Kindle Owners’ Lending Library, but I can’t help but believe that publishers would balk big time at making these titles available on a subscription service.
Mostly, the service would launch on the backs of self-publishers and maybe some small presses. Where it would go from there, I wouldn’t venture to guess.
Was the page an actual test of a forthcoming service? Was it a mistake, accidentally leaked to the public? Maybe it was a shot across the bow of Hachette and the other big publishers, Amazon’s way of saying, “See–it could be much worse!” A preemptive threat, perhaps, like building a Doomsday Machine. Or maybe the Kindle Unlimited service is exactly the sticking point that’s bogging down the current negotiations.
Whatever it was, it’s made for an interesting morning in the self-publishing world.