Kindle Unlimited expands again but royalties contract

On February 12th, Amazon announced the expansion of Kindle Unlimited to Canada and Mexico. Four days later, Amazon announced that the KDP Select Fund, which pays out for the Kindle Owners Lending Library (KOLL) and Kindle Unlimited (KU), had been bumped up to $8.5 million for January. That the announcements were made four days apart was no accident, since Amazon would prefer that authors not make the link between the expansion of the fund and the need for it to accommodate the expansion of the program to another two countries. The addition of Canada and Mexico brings the total number of Amazon sites now divvying up the Fund to ten: UK, U.S., Canada, France, Germany, Italy, Spain, Brazil, Mexico, and Japan.

As was reported in my November 2014 post regarding the expansion of KDP Unlimited into Brazil, the amount per KOLL or KU download has been steadily decreasing,

from a high of $2.04 when the program first launched in 2012, down to $1.51 last September, and now $1.37 for January 2015. At this rate of decrease, one can expect the royalty to drop to a dollar before the end of 2015.

Both KOLL and KU benefit authors of short-form works over authors of long-form works since the royalty paid is the same regardless of the length of the work.

The program also now favors authors whose paid equivalent is priced below $2.99 and who elected the 70% royalty. For example, an author whose book is priced at $2.99 will earn a royalty somewhere in the $2.05 range (depending on the delivery fee) for a regular sale, but only $1.37 for a KOLL or KU download. Compare this to an author whose work is priced at $1.99: a regular sale grosses $.70 while a KOLL/KU download of the same work grosses the aforementioned $1.37.

What authors should be taking away from this is that, for works priced in the 70% royalty bracket, enrollment in KDP Select may be to your financial disadvantage, while shorter works enrolled in KDP Select can work to your advantage.

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