Everywhere I hang out as an author, I see blog posts discussing the effect of the introduction of Kindle Unlimited (KU) on authors’ sales. For those authors just waking up to this discussion, Kindle Unlimited is the subscription service Amazon introduced in July. Subscribers pay a monthly fee and can borrow all the books they want that are in the KU library. For most books by indie authors to be part of that library, the book must be enrolled in KDP Select.
If you have ever read my blog before, you will know that I found that enrolling the books in my Victorian San Francisco Mystery series in KDP Select was very rewarding—even though it meant accepting the terms of enrollment that prohibited me from selling my ebooks in other stores. If you are interested, click here for a list of the posts I have written on that subject.
In fact, last winter I announced that my strategy for 2014 was to keep my books in KDP Select and use the new promotional tool called the Kindle Countdown as my major form of marketing.
Which I did, quite successfully.
However, when Amazon announced the introduction of the Kindle Unlimited program, I, like many authors, was very interested in how this new program would affect my income.
Now, after using the KU program for five months, I have come to a conclusion. The overall impact of the introduction of Kindle Unlimited has been negative for my books.
As a result, I decided to remove my series novels, Maids of Misfortune, Uneasy Spirits, Bloody Lessons, and my short story collection, Victorian San Francisco Stories, from KDP Select.
However, my experience may not be representative of what is happening for all authors, so I would like to share how I came to that decision. To that end I will:
1) Briefly evaluate why the strategy of keeping my books in KDP Select and using the Kindle Countdown promotional tool worked for most of 2014 (and might still work for your books.)
2) Describe what happened to my books when Kindle Unlimited was introduced.
3) Describe why I think the program had a mostly negative effect on my income.
4) List what strategies I intend on pursuing for 2015.
1) KDP Select and the Kindle Countdown promotional tool:
Last February, 2014, I wrote a post called Is Kindle Countdown the New Free? Keeping Books Visible in 2014. I analyzed the promotions I had recently done on my books that were in KDP Select. I compared the results of two strategies: using the free promotional option (where you can make a book free for any 5 days during the three month contract period); and using the newly introduced Kindle Countdown option (where you can discount a book below $2.99 for up to 7 days consecutively during the three month contract period—while still getting the full 70% royalty rate). When I used the Kindle Countdown strategy, I usually priced my books at 99 cents for the full seven days.
My conclusions were as follows:
- KDP Select Free promotions, particularly when advertised with BookBub, were still a very effective way to increase sales after the promotion, get higher visibility in category lists, and increase the number of reviews.
- But it was more difficult to achieve a successful free promotion because of increased competition with traditionally published books, changes in how free books are listed in the Kindle Store, the limitation of only one BookBub ad per book every six months, and the increased competition and cost of getting a BookBub ad. (I have been extremely fortunate in getting Bookbub ads for my books—but it is important to realize that most books don’t get these ads—and not everyone can afford them.
- While KDP Select Kindle Countdown promotions were not yet as effective as KDP Select Free promotions, they did offer an alternative for those authors who had their books in KDP Select and didn’t want to use the free promotional option.
- I also speculated that, as more readers discovered the Kindle Countdown page, a Kindle Countdown strategy would become more effective.
Based on those conclusions, I decided that my strategy for 2014 would be to run a Kindle Countdown promotion every month for a different book in my Victorian San Francisco Mystery series.
As stated earlier—this strategy proved successful. Between October 2013 and August 2014, I ran nine Kindle Countdown promotions––cycling through my three novels, Maids of Misfortune, Uneasy Spirits, and Bloody Lessons. For those Kindle Countdown promotions with a BookBub ad, I averaged $1.359 in profits (counting sales of the promoted book minus marketing costs.) For the Kindle Countdown promotions without BookBub advertising, I averaged $888 in profits. And, perhaps more significantly, the improved visibility in the Kindle store resulted in a consistently high number of regular sales and borrows for all my books and short stories. So, between October and August 2014 I averaged $4700 a month in sales. (I have 3 novels, 3 short stories, a short story collection, and a boxed set of my novels—not a lot of product compared to many successful indie authors.)
In short, my strategy worked. Doing Kindle Countdowns for a different book every month (and getting the higher royalties on the discounted prices) resulted not just in profit, but, even more importantly, it resulted in continued visibility for my books, which translated into decent sales.
2) Then in July 18, 2014 Amazon introduced the Kindle Unlimited (KU) subscription service.
For most indie authors this meant that if our books were in KDP Select––they were automatically enrolled in Kindle Unlimited. As with every change in KDP Select policies in the past four years, this caused a lot of controversy among authors. Some authors took their books out of KDP Select (you could un-enroll before the usual 3 month contract was up). Others put their books in KDP Select to see if having their books available in KU would increase a book’s sales and visibility (because, for ranking purposes, Amazon apparently counts a borrow the same as a sale).
Initially, I wondered if people would stop buying my books if they could get them for free as part of their KU subscription. I was also curious to see how much Amazon would pay for each borrow of a book. If the amount was significantly less than what I was making on each sale of a book at full price ($4.99), would an increase in sales and visibility compensate for the lower rate of return on borrows?
I hoped that these concerns would be unwarranted because similar concerns about the effect of the Kindle Owners Lending Library (where members of Amazon Prime can borrow one book a month) had proven unfounded for my books.
So I decided to keep my books in KDP Select and see what happened.
Initially, I saw a sharp increase in borrows. In July (when KU started) and August, my borrows more than doubled from their normal level. Sales also remained high. This was primarily because I did Kindle Countdown promotions that were supported by BookBub ads in both months—making my books highly visible within the regular Kindle Store and the Kindle Unlimited browsing categories.
In September, however, when I didn’t do a promotion of any of my three novels, my sales dropped to the lowest level in a year. And, while the number of borrows were still higher than normal, they also started to drop. So, without a promotion to keep my books visible, sales and rankings of my books were falling. This meant that, when readers browsed the Kindle Unlimited list of books, the books weren’t showing up high enough in the ranked categories for readers to find them there.
An additional problem was that the amount Amazon paid for each borrowed book began to drop. For most of 2014, the average amount for borrows was around $2 per book. In September the amount dropped to $1.52 and in October and November $1.33 and $1.39 (which is less than half what I normally got for my $4.99 books.) That was another blow to my total income.
October introduced a new wrinkle. Author after author reported that their most recent Kindle Countdown promotions that didn’t have BookBub ads behind them had failed miserably. They sold so few discounted books that — even with the higher royalty rate — they barely broke even after deducting marketing costs, and they saw little discernible bump in sales or borrows after the promotion.
This is exactly what happened to me. In October, 2014 I had a Kindle Countdown promotion for Maids of Misfortune, the first book in my series (which has always performed the best in promotions). After subtracting marketing costs I only made a profit of $82. Even worse, there was no discernible increase in sales or borrows of this book or my other books after the promotion ended, so my overall income dropped drastically.
In October, I made only a third of my average income from the eleven months before, and it appears that, in November and December, I will make only a fifth or less of what I was averaging for the earlier, pre-KU, months of 2014.
3) What do I think happened?
What I think happened was that the voracious reader — the person reading multiple books a week who is also the smart bargain hunter — has at least temporarily deserted the Kindle Countdown lists for Kindle Unlimited. Why would someone look for my book at 99 cents in a Kindle Countdown list on Amazon when they can get the book for free as part of KU? In fact, if they were subscribed to KU and they happened to click on my book as part of a Countdown promotion and saw the book was in KU, why wouldn’t they then decide to download it that way rather than buy it at 99 cents?
I don’t blame Amazon for this; I suspect it wasn’t what they hoped would happen because they want high quality, successful self-published books to remain in KU. That is probably why Amazon has started offering bonuses to the authors (All stars) of the highest selling books in KU.
I have always accepted that Amazon’s support for indie authors was, in part, a response to the unwillingness of traditional publishers to embrace ebooks and experiment in the new online/ebook environment. Just as I have always accepted that they are going to put the needs of their consumers (the reader) over the producers (authors or publishers.) And it is therefore my responsibility, as an author, to figure out how best to respond to that fact.
At the start, Amazon needed enough Kindle ebooks to attract readers. They needed authors who were willing to price those books within the range that Amazon has determined will get readers to buy these ebooks. And they needed authors who were willing to experiment with things like free promotions, bundling print and ebooks, and offering their books as part of subscription services. All of that means that, for much of the past five or six years, Amazon needed self-published authors.
Amazon also wanted indie authors to sell exclusively through Amazon in order to remove the competition for those books with other bookstores. So, in exchange for exclusive contracts, Amazon offered self-published authors tools like free promotions and the Kindle Countdown, which they believed (correctly) would help us sell our books.
For those of us who had books that large numbers of readers wanted to read and who were willing to experiment, the rewards of working with KDP and putting our books in KDP Select and using its promotional tools have been substantial.
I also suspect that Amazon hoped that the success of self-published books would nudge traditional publishers to use similar tactics. And I believe that has worked to a degree. The main category my books are in––historical mysteries––is much more competitive in pricing than it was in former years because many traditionally published books are now offered at various discounts.
However, I think that when Amazon decided to offer its Kindle Unlimited subscription service (a service similar to Oyster and Scribd), they knew that it might be a hard sell to indie authors—just as KDP Select has been a hard sell to many indies. The evidence for this supposition is that they offered a special deal to selected indie authors in order to keep their books in KDP Select; Amazon paid them the same amount for each borrow as for each sale.
But I don’t think that they anticipated that KU would have such a drastic negative effect on many authors’ incomes or on the effectiveness of Kindle Countdown promotions. If they did foresee this happening, maybe they hoped that the benefits of increased borrows would make up for the losses in sales. Personally, I haven’t seen evidence of increased borrows making up for lost sales—at least not for those authors who had previously been successful. There is, however, some evidence that putting a book in KDP Select may give some needed visibility and more sales to those authors those whose books have not yet sold well.
But who knows what will happen in the next year?
It could be that enough indie authors will see their incomes increase when they enroll a book in KDP Select to keep a decent number of self-published books enrolled. Or, perhaps Amazon will increase the amount paid for each borrow. Or, perhaps some of the people who subscribed to KU will leave and go back to browsing the Kindle Countdown lists, making it an effective tool for authors again. Or, maybe authors will discover tactics that will make KDP Select and KU work better for them.
Or, maybe Amazon will make it possible to have a book in Kindle Unlimited without having to enroll it in KDP Select (with its exclusivity clause.) Something that authors like Hugh Howey have recommended.
But my immediate concern is not what Amazon will or will not do in the future or what the benefits of KDP Select and KU are for other authors. My immediate concern is how to continue to get my books discovered by readers so that those who like the cover, the blurb, the genre, and the sample chapter, will continue to buy them.
In short, once again it is time for me to makes some changes.
Which brings me to the title of this piece. Recently, a number of authors started to use the word “pivot.” Hugh Howey, in a piece called the Tankers are Turning, compared indie authors to traditional publishers saying self-published authors “are nimble. We can pivot on a dime and publish at the drop of one. If we have an idea, we can implement it the same day, see how it works, share our result’s and at the same time learn from others.”
A few weeks later, in a piece entitled Don’t Wait for Permission: Why Authors Should be Entrepreneurs (on David Gaughran’s blog), Joanna Penn said, entrepreneurial authors “act, they experiment, they see what happens and then they pivot if necessary, adapting to the new situation.”
And, a few days later, Kevin O. McLaughlin applied this idea specifically to the strategy he was using in response to KU. He has started writing short serials for KU because works priced at low rates like 99 cents can generate more income from borrows than sales. Yet he has built-in his ability to pivot quickly: planning on bundling these short pieces into a longer piece that he will take out of Select if the short pieces aren’t being picked up by readers.
4) So, I’m pivoting; and here is my strategy for 2015:
- I have taken my longer books out of KDP Select and made them available in a wide range of ebookstores. If you have followed my blog posts for the past few years you know I have done this before but found that the sales I picked up in other bookstores didn’t compensate for the sales (and borrows) I lost on Amazon. Right now, my sales on Amazon are so low that I am assuming this will no longer be true.
- Since the fourth book in the series, Deadly Proof, will be out in a few months, I am also trying the strategy of making the first book in the series a semi-permanent loss leader. To that end I have made Maids of Misfortune free. And in January I will do a BookBub promotion of Maids with the goal of achieving better visibility in all bookstores.
- I am continuing to offer audiobook versions of my books. This is the fastest growing sector of the publishing industry. The audiobook version of my second book, Uneasy Spirits, should be out within the week. I am delighted with my current narrator and we will be working together to produce Bloody Lessons by the end of March and Deadly Proof by June.
- I will continue to write my historical fiction short stories since these are easy to write and they funnel readers into the longer books in the series. However, I will keep my short stories in KDP Select because they make four times as much for each borrow in KU as they do for each sale.
- I am starting to work on a new collaborative science fiction project (about which I will post more shortly) and my strategy will be to publish the first part of the work in short story or novella-length chunks. Each story will be a stand-alone that I will put in KDP Select and in KU. Once the series of shorter-form works are complete, I will put them together as a full-length book. I will make a decision at that point whether or not to enroll that full-length book in KDP Select—depending how my sales have been going and whether or not the negative effect of KU on sales and income is still occurring for other authors.
In summary: While KDP Select has worked very well for me in the past (and may still be working well for others), once again it is time to take advantage of being an indie author with the ability to pivot quickly in response to external changes. While the current drop in my income is distressing—particularly at holiday time—I can’t help but look forward to the next year with a fair degree of hope and excitement—hence the rather joyful photo at the top of the post!
For those of you who are primarily readers—have you subscribed to Kindle Unlimited, or Scribd, or Oyster? If so, do you feel you are buying fewer ebooks?
For those of you who are authors––do you have books in KDP Select and if so, do you feel the effect of KU has been positive or negative on your income?
What are your plans for the coming year?
I do appreciate feedback on these subjects—shared data is the possibility of shared success!
M. Louisa Locke
December 18, 2014
P.S. For those of you who might have been waiting for my books to go off KDP Select: You can now find the following books in the following venues!