Last year we took a look at Kindle Unlimited and what it means for authors and publishers. The program is still going strong, and Amazon is continuing to market Kindle Unlimited heavily around the Kindle store. We decided to take another look at the current state of kindle unlimited royalties and conjecture on what is to come.

What is KU?: A Recap

For Readers: Kindle Unlimited (or KU) is a subscription service that Amazon launched in July of 2014 (think Netflix for books). Readers who subscribe to KU can read an unlimited number of titles from the KU library, for just $9.99 month. A KU subscription also includes access to many popular magazines, as well as access to the audiobook versions of many titles in the library.

For Authors: In order to be included in the KU Library, authors must exclusively publish their title on Amazon through KDP Select. That means the title cannot be available for purchase on any other retailer (Barnes & Noble, Apple, Kobo etc).  Authors whose titles are part of the Kindle Unlimited library are not paid by “purchase” or by “download”, instead they are paid by the total number of pages read in any given month. The payout for pages read has been around just under 1/2 a cent per page ($0.00488  per page to be exact) for over a year now.  At the end of every month, Amazon sets aside a pot of money (recently around 17 million dollars), called the KDP Global Fund, to be paid out to authors whose titles are enrolled in KU. Each author receives a portion of the pot proportional to how many pages of their titles were read. The more pages read the bigger the payout.

Let’s take a look at the growth of the KDP Global Fund over the years, and see where it may go next.

Growth of the Kindle Unlimited Royalties and the KDP Global Fund Since Inception

The first Kindle Unlimited fund was $2.5 million back in 2014. In January of 2017 it was $17.6 million. As no traditional publishers offer their titles in Kindle Unlimited, that $17 million pot is being paid out mostly to indie authors and small presses.

 

The fund has been on an upward trajectory since its inception with the biggest payout month ever being in January 2017 at $17.8 million. The fund has gone up more sharply in January for the past to years, followed by a dip in February. Why would that be? Well, some months have 30 days, other have 31 days, and February has 28 days.  More days in a month means more days when readers are reading and therefore more pages can be read. We didn’t want the length of the month muddying up our data, so we graphed the average payout per day below to control for the length of each month.

Average KDP Global Fund By Day

 

This chart helps to control for the different number of days in each month. Once you control for February being the shortest month, we can see that there actually was not a “drop” in February. This tells us that Amazon makes the fund smaller in February because there are fewer days, not because they want to pay authors less money. What you can see here is that the size of the KDP global fund is growing pretty consistently and in February, Amazon was paying out about $600,000 per day to authors in KU, the most yet.

KDP Global Fund Projections

How big will the KDP Global Fund be in 3 months? 6 months? at the end of the year? Nobody knows for sure (except Amazon), but we can make some educated guesses based on the historical data.

The average increase each month from February to December in 2016 was 1.1%, so we assumed that level of increase for the rest of the year to see how it would look. In this scenario, the fund is about $628,000 per day (just shy of $20 million / month) by the end of the year.

 

 

Next let’s get a little crazy (we are here to dream about possibilities, right?). The KDP Global Fund increased 3% from November to December 2016. What if they were to keep this trend, and continue to grow the Fund size by 3% every month? That would look like this, and the Fund would be a whopping 23.2 million dollars by the end of the year:

 

This scenario is fairly unlikely unless a lot more readers start using KU, but it’s fun to think about 🙂

Back to what we know:

KENP Payout Per Page

This is the rate that authors are being paid for each page that a KU reader consumes. As mentioned above, the average payout is $0.00488 and hasn’t changed much since Amazon started paying by page read. The dip down to $0.0041 that we see in January of 2016 was due to a change in the way Amazon measured a Kindle page, but as you can see, they straightened that out fairly quickly and page values returned back to their previous amounts.

The fact that the per page payout has stayed fairly static over time, while the KDP Global Fund has grown, tells us that there are more readers using KU every month. If Amazon wasn’t seeing more pages read in KU, then they wouldn’t keep making the Fund bigger in order to keep the per page rate the same.

 

Based on February’s KENP Payout of $0.005, an author would earn $1.50 for a 300 page book, $1.25 for a 250 page book and $1.00 for a 200 page book (assuming the reader completes the book). Whether to enroll a title in Kindle Unlimited is a choice every author has to make for themselves, as there are pros and cons to the program.

These graphs paint the picture of a service that is actively growing in users, and proving to be lucrative for some authors. What’s next? We can only guess. We’ll keep you posted on our blog as new developments arise.

Are your titles in KU? What has your experience been with the program?

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