Updated: 23 SEPT 2017 @ 05:00
- Amazon’s largest KU (Kindle Unlimited) payout in history resulted in the second lowest payout per page read for indie authors;
- Both, Harry Potter and the Sorcerer’s Stone & Fellowship of the Ring are in Kindle Unlimited;
- Also, both of these books are wide meaning they are also sold with other booksellers. For a regular indie author, this would break Amazon’s terms of service. See screenshots below.
Edit: Amazon finally responded to my query. I asked if HP (Harry Potter and the Sorcerer’s Stone) and FOTR (Fellowship of the Ring) were getting paid the KU normalized page read rate as the other indie authors from the same pool of funds available. Amazon’s response was that they could not comment on the terms and conditions of the contracts of author authors. They were nice about it, although the answer is still murky and somewhat convoluted. They also ignored my question of whether or not those books in KU were calculated at the same normalized page read as the indie published books under the Amazon TOS.
Being in the business as long as I have, I suspect that the largest pool of KU money in the history of the program would not have resulted in the second lowest payout per indie author otherwise. Yes, other authors are coming into the program, but it’s not enough to make up the difference.
Why it matters: often indie authors operate on a tight ROI. Advertising budgets, their ability to write to market, and their ability to survive in this business can often depend on being able to make informed decisions about their books. Part of that process is making the decision to go with Amazon exclusively for 90 days at a time in order to avail themselves of the monetary advantage of Kindle Unlimited (if the writer believes there is an advantage.) Therefore, Amazon must and should be as transparent as possible because they have a fiduciary responsibility not only to traditional Houses but to the indie authors KU was designed to represent. Over the course of the time this article has been posted, I have not talked to many writers who care whether or not HP and other ‘big names’ are in KU. But, all of them believe (as I do) that it makes a difference in the decision-making process of less established and less recognized independent self-publishers. Believe it or not, Amazon is not the only game in town and indie writers have options if they are given correct information.
I intend to keep plugging away at trying to find answers. I’ve also learned that more traditional publishers are getting into KU. For indie writers, this could be a game changer; especially LitRPG writers who tend to rely on KU money. I’ve always believed that KU has a shelf life. But, it seems, if my theory is correct, those changes may be moving faster than I anticipated.
Indie writers, if you only read one story today let this be it. A Quartz article published, 20 Sept 2017, points out that Amazon is riddled with fraud and abuse when it comes to ranking and Kindle Unlimited normalized page reads.
The Quartz article points out the many ways scammers can abuse Amazon’s Kindle Unlimited (KU) system and how Amazon either can’t or won’t stop it.
Amazon claims that the advent of Kindle Unlimited 3.0* was an effort to curb clickfarms and other scammer activities. A few days ago, KDP published that they had dumped the largest payout in Kindle Unlimited history with over $19M. But, in reality, Amazon is paying out the second lowest payout per normalized page read since the beginning of the program: 0.00419/per normalized page read.
Why? More and more writers are jumping onto the Kindle Unlimited wagon hoping to cash in. Although Amazon is proprietary and often times secretive regarding their business practices, internal Amazon documentation points out that as many as a thousand new pen names are added to KDP during some months. But, the few memos that I have seen do not differentiate between new authors coming onto the scene and established authors who are creating new pen names in an effort to recycle their back catalog. Amazon’s terms of service indicate that an author or publisher must change at least 15% of a published book in order to publish it as new content. However, as one former engineer told me “Amazon has no real mechanism in place to authenticate the process.”
The number of new authors coming onto the scene is not necessarily the problem, although it does reflect the amount an individual writer can earn. The problem lies in suspect authors and publishers manipulating the system by inflating the number of page reads in published e-books within the Kindle Unlimited system. For an indicating of how popular indie authoring has become read the Bowker report.
Amazon has taken at least one public step to combat the issue. On 06, September 2017, Amazon filed suit against one individual who the company alleges has advertised his services to authors in an effort to artificially game the system. See Amazon vs. Rubio. In a nutshell, Page 2, para 6 and Page 3 para 11 defines the argument(s) of the complaint;
 The more pages KU and KOLL customers read of the individual author’s books, the larger the authors share of the royalty fund becomes; and, accordingly, other authors will receive less from the fund. The KDP royalty system thus depends on the integrity of the fair allocation of page reads—i.e., that authors are not artificially inflating their page reads to the detriment of other authors.
 Respondent… Rubio has tried to manipulate and abuse the KDP service for financial gain and to the detriment of other KDP authors and Amazon’s reputation. Rubio has proposed to authors that he can artificially inflate their page reads in return for a share of their additional profits—as a kick-back…
Here’s the problem with this complaint
I contacted HARO and found an attorney who practices international law. Per our conversation, on its face, it seems reasonable to arbitrate this matter. But, should Amazon prove its case, it is unclear to what extent the company would be able to recoup damages (if any) from a sole proprietor in the Philippines.
Secondly, although I am not an attorney (and I don’t play one on TV) while I was a news producer, I took and completed a substantial paralegal curriculum in an effort to improve my acumen. Dealing with politicians and news production in general, I found it necessary and worthwhile to know and benefit from the understanding of law and legal research.
When indie authors hear of clickfarms and the manipulation of page reads, perhaps the first thing to come to mind is a scenario of a garden-variety dishonest villain based in a Third World country such as what happened with a Thailand clickfarm. Or, perhaps a dark warehouse in some obscure, remote part of the world, with wall-to-wall e-readers on automatic. However, this scenario is not necessarily accurate, or factual, as many of the scammers seem to be coming out of the United Kingdom, the United States, and Canada according to some authors I’ve spoken with on background.
If we can consider Amazon v. Rubio a test case, I wonder why Amazon did not go after an individual in a country where the weight of law could be more readily and perhaps evenly applied. Especially, considering for Rubio to successfully argue his position, he will have to spend considerable resources flying to Washington State.
Page 4, para 18 of Amazon v. Rubio: Amazon requests this arbitration be conducted in person in King County, Washington, where the parties’ contractual relationship is centered…
Furthermore, and probably the most important inference in Amazon’s complaint, is that the company feels the need to protect authors/publishers against Mr. Rubio et.al who would engage in such manipulative and unethical activities against unsuspecting authors. (Amazon v. Rubio, p3 (12).
A few months ago, the indie author world went ballistic when Kayl Karadjian’s book Dragonsoul reached Amazon’s bestseller rank presumably out of nowhere. Authors taunted their self-righteous indignation, lit their torches, and sharpened their pitchforks against him. But, much of the story they peddled was inaccurate.
To make a long story short, I reached out to Karadjian to get his side of the story. A two-hour telephone conversation, which led to many conversations afterward, made me realize that the 25-year-old writer was not only a victim of a very sophisticated worldwide clickfarm scam, but he was also brutally accosted on social media by a few blog writers and Twitter individuals too lackadaisical to do one iota of independent research. (I have an article coming out in November about Kayl Karadjian.)
I have no doubt in my mind that some unethical authors do reach out to individuals and companies running clickfarms with the intention of ‘gaming’ the system for financial profit. But, Karadjian was not one of them. Karadjian certainly wanted to sell more books and he wants to be a best-selling author. But, he was led to believe the company he was dealing with played the game within Amazon’s terms of service. I suspect Amazon shares my opinion, at least in part, as after all of the negative publicity swirling around him and his book, Amazon did not terminate his author account. And, even if they had terminated his account, that doesn’t in and of itself mean he did anything wrong. As far as termination, Amazon did actually terminate NYT and USAToday bestselling author Rebecca Hamilton’s account (albeit for a different reason) and then only after the frenzy of her social media reached Karadjian level. You can check out Hamilton’s issue on Kboards. Keep in mind; it seems almost everyone there has an opinion and some suddenly (as if overnight) acquired law degrees (sarcasm intended).
Quite a few authors have been duped by unethical individuals. You never hear about them because those situations never reach the Karadjian like social media magnitude. It doesn’t make it any less painful for these writers. Many have lost a lot of money and reputation. Some have even had their publishing accounts terminated unjustly and those writers have had to go to extraordinary links to have their accounts reinstated.
It seems obvious that Amazon has known about unethical clickfarms for almost two years. And, a reasonable person could conclude that the Zon only acts when it’s forced to do so: like when the media attention is too much to bear and gives their PR department headaches.
Despite all the different ways to game the system: promotions, gifting, fake reads, publishing the same book(s) multiple times, and fake reviews (ARCs), Amazon is caught between a rock and a hard place.
Why? Because, traditional publishers have been doing this for years—even before Amazon became a book distribution powerhouse. Nikki Matthews, an indie author, writes a compelling blog and often discusses the milieu between traditional and indie. Roughly explained—it amounts to scale.
Amazon pushes the concept of what they call “a positive customer experience.” But, think about it from a different angle: think about it from the viewpoint of a publisher. Who are Amazon’s customers? Amazon doesn’t write the books; they sell them. If you are an indie author, you are Amazon’s customer. Start thinking like a publisher because writing is only 20% of book production. The other part (roughly 80%) comes in the form of marketing, PR, book signings, conventions, conferences, author gatherings, and the like. As an indie, it also comes in the form of getting your name out to the readers in venues like blogs, podcasts, press releases, newsletters, and social media (Facebook, Instagram, and Twitter). Most indie authors are a one-man shop; it is overwhelming. The daunting tasks of marketing are why most independent authors simply give up within the first year. They can’t afford a personal assistant to do all the little mundane tasks it takes to keep books in front of readers.
If you’re lucky enough to be picked up by an agent and successfully shopped to one of the ‘Big 5’ that 80% isn’t going away. In fact, it’s expected. Your life will actually get harder. A friend of mine is a retired Knight Rider correspondent. He has written several nonfiction projects. His first success came several years ago when one of his books was made into a movie. Another nonfiction book that he wrote recently has also been made into a movie and will be coming out in early 2018. He has the same problems every indie author has—just on a different scale. The task of publicizing gets harder as you go along. It also gets more complicated.
So, it should come as no surprise when authors feel the need to outsource. And, it should also come as no surprise to learn that independent authors take up the same marketing strategies as traditional publishers.
The advantage of traditional publishing is that Amazon enters into completely different contractual agreements than it does with self-published writers.
For example, both Harry Potter and The Fellowship of the Ring can be read in Kindle Unlimited. But, you can also find both of those books on Apple and Barnes & Noble. For a small independent author, that would be against Amazon’s terms of service. Independent authors can’t go wide if they are in KU.
How fair is that? One could argue that fairness has absolutely nothing to do with it—and that may be true. But, considering Amazon only puts a certain amount of money in the Kindle Unlimited kitty, would that mean that independent authors are also competing with the normalized page reads of Harry Potter and The Fellowship of the Ring? Now, all of a sudden, the issue of fairness takes on a whole different meaning.
Perhaps, the same writers who were so quick to chastise Kayl Karadjian without knowing all the facts would be interested in getting to the bottom of this KU question. (Note: I have emailed Amazon about this, but they have not responded.)
Speaking of emails
There are two things really hard to do on Amazon: 1) cancel your Kindle Unlimited membership; 2) as an independent writer, talk to Amazon when you have a problem or question.
Considering Amazon is all about the ‘customer experience,’ you would think they would do a better job at communication. This is not a rant; it is a simple assessment of how hard it sometimes is, as an independent writer, to get conclusive information from Amazon.
So, what’s the solution?
Go wide. Seriously. I think this way for many reasons. I have a few books in Kindle Unlimited simply to test out a particular market or strategy. Otherwise, I use Pronoun or Draft 2 Digital depending on the genre to publish my books.
Kindle Unlimited cannot go on forever. And even if it does, Amazon will not be able to eliminate scammers and unethical practices. Couple that with having to compete against A-list authors for a finite share of income based on an ever decreasing normalized page read. I’ll take my chances elsewhere. And I have. To be perfectly honest, I do well enough on other distribution networks. And, I sleep better at night knowing my eggs are not totally in one basket.
Depending on the genre, I can certainly understand why some authors would choose the exclusivity with Kindle Unlimited. I’m certainly not saying they’re wrong for doing so. It also helps me by not having the competition elsewhere. If indie authors would stop beating each other up and learn to work together, support each other, and collaborate in a meaningful way—life for our tribe would be much more productive and lucrative. Sadly, I don’t see it happening. Just like I don’t see Amazon being able to fix rank and KU manipulation.
Because this article has met with some response from mainstream publications, I think it’s important and somewhat noteworthy to drop a few lines about myself.
For over 25 years, I worked in and around mainstream media. I started out with a local cable access station and moved up to regional. I worked my way up to news production. As a contractor, I covered several political campaigns, natural disasters, and other significant events; especially the somewhat local events in my general area.
From 2004-2012, my forte was satellite interviews. Which is how I got interested in writers and publishing. Back in those days, there was a big push in publishing (by production companies) outsourced to promote authors this way. It was big business. Often, a 24-minute spot would run $50,000 or more. (Not for the station, but that was the cost of production from the publishing end of things.)
Fast forward: I was contracted to cover CES in 2010 for CNBC, NBC (an affiliate) and BBC4 (when it was internet only). That year, e-readers hit the scene. Primarily, the buzz was centered around how those devices would save the newspaper business. It did not. But, there was a backstory. Although Amazon and Apple were not presenters, they did have techs walking around gathering intel on the technology. Keep in mind, that Amazon and Apple both came out soon after CES with their own devices.
A chance encounter at a bar at the Red Rock in Vegas gave me the opportunity to get to know an Amazon engineer (who is no longer with the company) as we drank Johnnie Walker Blue (I wasn’t paying for it) and ogled the high-end escorts dressed in black designer outfits I couldn’t possibly pronounce. The smartest thing I ever did (thanks to the suggestion of the owner and station manager who accompanied me) was keep those contacts and nurture the relationships with the tech guys.
I’ve always rooted for the underdog. And, during those years, indie publishing was definitely the underdog in the high-stakes world of publishing.
After CES, I began writing my own books while keeping my day job. I made every mistake in the book. I had no idea what I was doing. I didn’t even have a plan to publish my projects. I knew nothing of finding a competent editor, proofreading, formatting an ebook. But, I learned. And, yes, I was swingled a few times in the process.
Even though I am no longer a news producer and semi-retired for health reasons, I still write and publish. But, I’ve never lost the ability to ‘smell a story’ and ask the important questions that lead to important answers. Which is why I think there is a story here with Amazon and Kindle Unlimited. And, not only is it about transparency, it’s about my love for indie writers who want to tell a story. We need those stories. And, we need indie writers to succeed. Which is why it saddens me when I see indie writers viciously going after one another without deeply considering where that vitriol will lead. I’m not naive, I understand sometimes it might be warranted. But, many times, it’s not and the communication process could be handled differently.