Kindle Unlimited: Is a borrow better/worse than a sale?

KU_FAQ

As an author who has some books enrolled in Kindle Unlimited. I often get asked questions by readers (and other authors) about KU and how it works from an author’s perspective. I may end up writing more than one post about KU, but today I’m answering the most common question I’ve been asked by readers, which is some variation of:

Which is better for the author a sale or a borrow?

Firstly I’d like to say that every author I know is always grateful for any sales/borrow/interest in their books. And readers who care enough to ask about which is best for the author, make me want to reach through the screen and give them a hug 🙂 But seeing as more than one person has asked me this, I will break it down and give you an answer.

However, before I do that, I think I need to explain what KU is. This is a very brief description for anyone who isn’t familiar with the concept.

What is Kindle Unlimited and how does it work?

Kindle Unlimited is a subscription service run by Amazon for books. It’s basically Netflix for readers. A reader pays a monthly fee of $9.99 (or the equivalent in their country). Once you’ve signed up, you are allowed to borrow and read any book that is currently enrolled in KU. There is no limit on how many you can read, but you are only allowed to borrow ten at a time.

Authors are paid by pages read. So if someone borrows a book and returns it without reading, the author gets nothing. If someone borrows a 200 page book and reads it all the way through, the author gets paid whatever the going rate per page is x 200. At the time of writing, the last known rate was $0.0048 per page. So for that 200 page book, read cover to cover, the author earns 96c.

Authors who self publish can choose whether or not to enroll their books in KU. In order to use the program for a book, the author has to make that title exclusive to Amazon while the book is enrolled. The minimum time is 90 days. If an author is with a publisher then the decision whether to use KU or not, is in the hands of the publisher.

So… back to the question above that I’m answering today.

Does an author earn more from a normal sale, or from a borrow on Kindle Unlimited? Which is better for the author?

The short answer

Authors usually earn more from a sale than they do from someone reading it on Kindle Unlimited. The exception to that rule would be a long novel with lots of pages, that is priced at $3.99 or lower.

The long answer

Because some people might be interested, and I’m a bit of a number crunching geek… I present to you my (hopefully accurate) calculations of what different lengths of book earn on Kindle Unlimited.

Please note that for the purpose of these calculations:
(1) Book length is calculated at 147 words per page (based on those of mine that are in KU). This ratio may not be the same for all authors.
(2) KU earnings are based on $0.005 per page which was the rate at the time of these calculations. It is slightly lower at the time of posting this blog post. So far the trend has been downward every month.

Update Feb 2016: With the advent of KENPC v2.0 my books are more like 190 words per page, so they are all earning less per borrow than they were at the time of these calculations. The payout per page is also less than at the time of writing. Currently $0.0046.

Short story
A 10k short story is approx 66 pages on KU
KU earning for a full read = $0.33
Royalties based on selling price of 99c = $0.34
For a book of this length and pricing, there is no significant difference. The author earns almost the same for a sale as a borrow. For a short priced higher than 99c, the author would earn more on a sale.

Novella
A 35k novella is approx 233 pages
KU earning for a full read = $1.17
Royalties based on a selling price of $2.99 = $2.09
Difference in earnings = $0.92
The borrow earnings are only 56% of the sale earnings. A sale is worth more to the author.

Short novel
A 60k novel is approx 400 pages
KU earning for a full read = $2.00
Royalties based on a selling price of $4.99 = $3.49
Difference = $1.49
The borrow earnings are only 57% of the sale earnings. Again, a sale is worth more to the author with this example.
However, If the 60k novel is priced at only $3.99 then the difference is $0.79 and the borrow earnings are 72% of the sale earnings. A sale is still better, but the different is smaller.
If the novel is priced at $2.99 then royalties based on a sale compared to a borrow are almost the same.

Longer novel
A 90k novel is approx 600 pages
KU earning for a full read = $3.00
Royalties based on a selling price of $4.99 = $3.49
Difference in earnings = $0.49
The borrow earnings are 86% of the sale earnings. A sale is still better in this example.
However, if the 90k novel is priced lower at $3.99 the author earns *more* on KU ($3.00 for a borrow vs $2.79 for a sale).
If the 90k novel is priced higher at $5.99, the royalties are $4.19. The difference then is $1.13 and the borrow earnings are only 73% of the sale earnings

In conclusion

Whether an author earns more from a KU borrow/read vs a normal sale depends on the length, and the sale price of the book. But based on prices that are fairly standard among indie authors I would say that novellas and short novels lose out the most on KU. Shorts earn the same. Long novels lose out a little, and they lose out more if they’re priced high. So, if we’re simply looking at earnings in isolation, then the authors who benefit the most from KU borrows are those who write long books and normally price them low ($3.99 or less).

However, there are a myriad of other factors that determine whether KU is good or bad for an individual author. Obviously there are other advantages of being on KU—as well as some disadvantages—and I will probably address those in future blog posts.

If there are questions you’d like me to answer, please leave them in a comment. I’ll either answer them here, or will use them for a follow up post.

 

Advertisements

About Jay Northcote

Author of LGBT romance. Trans (he/him), Parent, cat herder, professional procrastinator.
This entry was posted in publishing, self publishing and tagged , , , , , . Bookmark the permalink.

11 Responses to Kindle Unlimited: Is a borrow better/worse than a sale?

  1. Heather C. Leigh says:

    Of course the fact that if you don’t give in to Amazon’s whip and chains, no one will ever see your higher priced book in order to purchase it as they bury it in ebook hell, behind every single one of their KU books.

    • Yes. KU books undeniably have a massive advantage in the charts. It would be fairer if Amazon separated the charts for KU/non KU. But that’s not likely to happen because Amazon want to encourage more authors/publishers to use it.

  2. Lennan Adams says:

    Great post, thank you. I am going to bookmark it for when I am shopping (who am I kidding, I am always shopping, I am sure I will have it memorized in a matter of days, haha). It makes much more sense to me now. The main reason I have KU is so that I can take a chance on books that don’t sound 100% like my “thing”, but as I told you on Twitter, I don’t actually use it that much – I feel guilty about not outright buying the book so I usually just buy it if it is cheap enough ($1.99 or less). I am so grateful to have a better idea of when buying vs. borrowing is the right decision. Thank you!

    One more KU question – if I borrow a KU book but don’t “read” it and instead use the Whispersync version and listen to it, does that count for you? If a KU book has an audio version, I always listen to it vs. read it (unless it is a narrator that I really don’t like). Free/cheap, good audiobooks are seriously heaven. I listen when I am driving (alone for your books, haha, but my kids and I listen to other stuff all the time, too. My 10 yr old son is dyslexic and can’t read at his comprehension level – audiobooks have been AMAZING for him and we all love them). I also listen when I am working out, doing artsy things or housework, basically whenever I can…

    I guess this leads into my next question which isn’t a KU question but is about $$$. If your book is being published by Dreamspinner Press (or other publishers, although I only buy from Dreamspinner Press or Amazon right now) – is it better for the author if I purchase the book from DSP or from Amazon? I guess it is usually a price issue for me and I don’t think that when a book is on sale at DSP, that it is also on sale at Amazon? I read 300 pages or so every day and so I buy a lot of books. I buy most of the .99 books that are advertised at Dreamspinner Press (I also subscribe to the BookBub newsletter which lets me know about cheap books every day, and follow Heather from myfictionnook.com, who, right now has Cold Feet at the top of her deals list <3<3<3). DSP isn't my favorite from which to buy just because I can't do the Goodreads stuff with them on my Kindle, have to have DSP e-mail them to my Kindle and don't get the Whispersync benefit. BUT in my uneducated mind, I feel like DSP must be better for the author, so I buy there when I can. Is that true?

    I am sure I have other questions, but that is all for now. :~D
    XOXO

    • Hi, thanks for reading 🙂 To answer your questions
      1. I’m not actually sure how it works for audio books, but presumably if they’re available via KU the the author would get paid something when someone listens, just as they do when someone borrows and reads an ebook. I’ll have to try and find out! I don’t think any of my audio are available on KU.
      2. An author will always earn more from a sale through their publisher than they will through a third party retailer, because the retailer keeps their cut. So for example with a DSP book bought through Amazon, DSP keep 60% of the royalties and the author gets 40%. But Amazon have already taken around 30% of the cover price for their cut (it’s exactly 30% for self publishers, not sure if they have different rates for bigger publishers). So the author only gets about 28% of the cover price (40% of 70%) once both Amazon and the publisher have taken their cut. Whereas if you buy from DSP the author will get 40% of the cover price.
      hope that helps!

  3. AnnAlaskan says:

    I always buy the books I read on KU or UK. I wish they would put a buy here at the end of the story in UK! I want keep the books I read if they’re good & most are. Thank you for using UK/KU … can read until pay day … hee hee

    • That’s very generous of you to pay the author twice 😉 Seriously though, I can see why if you’ve enjoyed a book via KU you’d want to keep a copy if it’s one you’ll reread eventually. When I was involved in a discussion thread about this on FB I was surprised how many readers said they do this at least some of the time. I’d kind of assumed that a borrow would replace a sale, but that’s not necessarily the case for all readers.

  4. Stephanie says:

    Hi Jay, I’m always interested to get an authors take of KU. As a non-kindle user I find the program very frustrating as I so often miss out on books that aren’t available on Kobo/ARE/Smashwords. It is especially sucky when an author switches over to KU mid series, I have several series that are unfinished (which is one of my most hated reading quirks) because they moved over to KU. I know that I can download the Kindle app but I have to read that on my phone and my eyes are a fan of doing that often ): My wish would be that an author releases to all the sites for say the first week before moving over to KU…I buy hundreds of books a year and hate missing out on favourites because I can’t get an ePub version…

    Just my .02, I totally respect that authors need to do what is best for them/sales but it also sucks for me as a reader! I don’t really get why they need to be exclusive on Amazon, honestly I won’t by a Kindle at this point just because of this policy…

    I’ve read from several authors that their sales on other sites weren’t very high but Amazon is still forcing you to exclude these readers, and if the sales are so low it really isn’t benefitting Amazon to do this. For me they’ve just managed to piss me off, not the authors, Amazon only.

    It is very, very rare for me to buy from Amazon (maybe like 5 books in 3 years) so I just pout at all the fabulous books being released that I can’t read ):

    I love they way that you have let people know that you will be moving books over and it will be the last chance to buy them…at least that way I can rush out and get them if I don’t already have them.

    Sorry that got long, but I just really hate the monopoly that Amazon has in the ebook market and how exclusionary this program is!

    • I totally agree with you about the exclusivity. If Amazon would allow us to enroll books in KU without making the exclusive I would do that in a heartbeat. Their marketing policy is pretty aggressive for sure. I understand why some readers prefer not to buy from them because of that. Sadly I don’t see Amazon changing that policy any time soon because obviously their goal is to push authors into excluding the other channels. Putting my last book in KU from day one was a tough decision for those reasons, but business decisions aren’t always easy. I will have to check out how easy it is it put it on other channels for a week and then pull to enrol in KU. That might be a good compromise in the future 🙂
      I did give out a few review copies of What Happens At Christmas to readers who can’t use Amazon (some countries don’t even have an Amazon store). If you’d be interested in reading and reviewing and would like a copy that you can read on your device, feel free to contact me direct via email or message me on social media if we’re connected there!

  5. Jan Hawke says:

    Well that needed a good de-mystifying! Thanks Jay! 🙂

    • You’re welcome! Although now that’s a little out of date because of the new way of calculating the page count… I might add a note. Thanks for reminding me 🙂

Comments are closed.