KDP Select and the Myth of “The Pot”

So we all know by now that Amazon is changing their payment scheme for Select borrows from a flat-rate payment triggered at 10% read, to a payment per page. They’ve delivered a laughable example of $0.10/page for this new system, which comes into effect next month. I think we all know it’s going to end up being something less than a cent per page when it actually happens, with the old payment of around $1.30 per read being the top-end of payouts for a full-length novel.

Plenty of people have already written about this change, but I want to talk about the entire payment model, premised on a “pot” of money set aside each month for payment to be made from. Allegedly this pot comes from the $9.99 monthly subscription from people enrolled in Kindle Unlimited.

Except it doesn’t.

From day one, Amazon has topped up the pot from its other coffers. They’ve added undisclosed amounts to account for paying a full, fixed amount to large publishers as well as providing incentive bonuses to Select’s top performing authors. Everybody else believes they get a share of what’s left after Amazon has cherry picked those it wants to pay more.

But let’s think about that share. It sounds good, telling people they’re going to “earn” an equal amount of a large sum of money. Each month is almost like winning the lottery. But how do we know that anything is equal?

Amazon says the pot comes from subscriptions. How many subscribers do they have? They won’t say.

Amazon says authors earn a share based on the total number of books borrowed. How many books is that? Amazon won’t say.

Amazon now says they’ll pay based on pages. How many pages are read in an average month? They won’t say. How many readers skim enough to trigger a borrow but don’t read past maybe the first quarter of a book? Amazon won’t say.

Don’t be disillusioned, they know all of this. They know, or can very accurately predict, how many books, how many pages, how many subscribers there will be in a month.

And isn’t it curious how the value of a borrow never seems to fluctuate much?

Select is Amazon’s way of eradicating list prices and 70% royalties they never wanted to offer to begin with. When you sign up, you’re agreeing to let Amazon pay you whatever they want, and trusting them to play fair. Do you think $1.30 on a $5.99 listed title is fair? Because I don’t.

Select authors rely on Amazon’s word that there is a pot and that it’s divvied equally. I would dispute both those claims. Amazon knows what it’s going to pay month on month for Select borrows. The minute fluctuations of a few cents a month are all part of the illusion. The pot is an illusion, a golden carrot dangling before its stable of authors. You hear there are millions up for grabs and like any gambler you buy a ticket. Then, when you don’t get millions, Amazon tells you it’s because you didn’t earn it. It’s all your fault, and nothing to do with the fact they paid out a couple of hundred five figure “bonuses” before they even thought about paying you. It’s nothing to do with the fact they put best sellers like the Hunger Games books in KU and had to pay the publishers the full sale price, however many of the borrows you got.

Amazon could tell us tomorrow what they’re going to pay for July, because they already know. Look beyond the talk of subscribers and pots and equal shares. Open your eyes. Amazon holds all the cards, they have all the data, and they know what they need to put into the pot each month to trigger a price per borrow (soon per page) that they’re happy paying out. All the mythical pot does is distract authors from the fact Amazon has already determined exactly how much they’re worth.