Amazon has come up with a new way to pay authors for the e-books they self-publish, and almost everyone agrees it’s a dumb idea.
Almost everyone is wrong.
The irony, however, is that a lot of the people complaining about Amazon’s new scheme seem not to have taken the time to read the full story.
First of all, it applies to a specific subset of authors: those who self-publish their books exclusively through Amazon’s “KDP Select” program. This program makes the authors’ books available not only in the Kindle Store, but also through Amazon’s subscription-based Kindle Unlimited program and the Kindle Owners’ Lending Library, which is open to Amazon Prime members. Subscribers to those programs can download the books without additional charge.
Since these downloads don’t come with a price, Amazon can’t simply give authors a cut of the revenue their own e-books generate. Instead, it pools the revenue from all such downloads and splits the royalties among KDP Select authors according to a formula. In the past, that formula was based on the number of downloads an author’s e-books received. Starting July 1, it will be based on the total number of pages read.
The change has no effect on how authors will be paid for books sold in the Kindle Store, or on Amazon.com, or anywhere else. Nor does it affect how authors will be paid for books published through more traditional channels.
Why would Amazon make a change to the royalty formula for this specific group of authors? Because the old one was broken, as I’ll explain.