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Thread: How much is the KU payment this time?


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Permlink Replies: 25 - Pages: 2 [ Previous | 1 2 ] - Last Post: Mar 17, 2015 9:14 AM Last Post By: scribblr
David Kersten

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Registered: 01/03/15
Re: How much is the KU payment this time?
Posted: Mar 16, 2015 7:37 PM   in response to: extradimensions in response to: extradimensions
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extradimensions wrote:
A little math:
+ $8,500,000 divided by $1.3765 = 6,175,082 for January.
+ $8,000,000 divided by $1.4066 = 5,687,473 for February.
This ratio is down 8%. The difference is less than 500,000. (Note that I haven't offered interpretation of these numbers. It's just a little fun with math.)
Sure, borrows are down a little, and that is not an abnormal trend. However, they put $500,000 less into the pool, so either I was right that the program is losing profits and the extra they are putting in is just enough to keep it afloat, or they are making more money but trying to stabilize the royalty at $1.40 because that is where they want it.

That's the thing here, if they can go from putting 3.25 million one month to 5.5 million the next, it tells me pretty definitively that they are trying to keep royalties at a certain number. The letter they emailed said the subscriptions were still strong, so either they are being deceptive and using a vague term like "strong" that has no relative value and subscriptions are actually (WAY) down, or subscriptions are once again up and they are trying to make it more profitable for Amazon. Either way, it is going the direction I feared it would.

Your numbers from previous years don't mean anything unless you can say how much they put into the kitty above and beyond the initial pool. THAT is really what tells the story..

It's all speculation, but the reason these numbers make me skittish is because Amazon has been shooting REALLY low for at least the last few months by saying they are starting with 3 million, then throwing in nearly 200% of that to keep the numbers from going much lower than $1.40. By now they know where the next month will end up, at least within a few percent, so why lowball it by well over 60%?? It's because then they guarantee that they can set their costs wherever they want and never show us why. They come out looking like heroes for adding five million to the pot when in fact the program should be BASELINING at 8 million to start, and going up from there.
David Kersten

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Registered: 01/03/15
Re: How much is the KU payment this time?
Posted: Mar 16, 2015 7:38 PM   in response to: David Kersten in response to: David Kersten
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Hmm, moderated again.. happening a LOT lately. That and my threads getting killed by users, lol.
Notjohn

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Re: How much is the KU payment this time?
Posted: Mar 17, 2015 2:35 AM   in response to: David Kersten in response to: David Kersten
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Amazon is in business to make money. It can't make money by bringing in subscribers for $9.99 who then borrow ten books a month at $2.00 each. You're lucky to get $1.40; if that's not enough of a return (it wasn't for me), then pull out of Select.

Good luck! -- NJ

The book: Notjohn's Guide to Kindle Publishing: Ten Steps to Formatting Your E-book for Sale on Amazon (Or Anywhere Else)

The blog: Notjohn's KDP Guide
extradimensions

Posts: 4,140
Registered: 05/19/09
Re: How much is the KU payment this time?
Posted: Mar 17, 2015 5:52 AM   in response to: David Kersten in response to: David Kersten
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David Kersten wrote:
Your numbers from previous years don't mean anything unless you can say how much they put into the kitty above and beyond the initial pool. THAT is really what tells the story..
The fund was much smaller back in the days when it had only been Amazon Prime, and the results had been much closer to the projections. The KDP Select Global Fund didn't change much from one month to the next. Back then, each Prime member could only borrow one book, so they didn't need such conservative projections.
+ January, 2012: $500,000 vs. February, 2012: $600,000.
+ January, 2013: $1,700,000 (originally $1,400,000) vs. February, 2013: $1,300,000. (By the way, it went down to $1,000,000 in April, 2013. There had been a special bonus around the holidays, Dec. 2012 thru Feb. 2013, where Prime borrows peaked. The mega, at the time, bonus of $1.7 million on top of the usual fund, distributed over 3 months, was heavily marketed and attracted much interest. This is the one year where February didn't pay much greater than January, i.e. KOLL, prior to Kindle Unlimited.)
+ January and February, 2014: It returned to approx. $1,100,000.
Cassandra Black

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Registered: 12/18/12
Re: How much is the KU payment this time?
Posted: Mar 17, 2015 6:25 AM   in response to: kelake2000 in response to: kelake2000
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How much is the payout this time??????
extradimensions

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Re: How much is the KU payment this time?
Posted: Mar 17, 2015 6:32 AM   in response to: Cassandra Black in response to: Cassandra Black
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Do you mean the payout for February, 2015? That was answered: $1.41. (The global fund was raised to $8,000,000.)
So maybe you mean March? If so, nobody will know until mid-April. (The global fund begins at $3,000,000, but will probably be raised significantly.)
extradimensions

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Re: How much is the KU payment this time?
Posted: Mar 17, 2015 6:49 AM   in response to: David Kersten in response to: David Kersten
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David Kersten wrote:
A lot of people think Amazon is the only game in town, and if they aren't really good with numbers they will just trust that Select is serving their better interests.
Not everyone who excels at math though will opt out of Select. I've done extensive research into Kindle Unlimited, both the overall numbers and my own books included, and the math clearly shows me that I need to stay enrolled in it. I'm not in it out of loyalty or emotional reasons, but because the statistics expresses the confidence levels in favor of it. Every book is different, but for my overall numbers, both sales and borrows have steadily improved from July thru March (but had the opposite trend prior to KU). (Those are not the only numbers I've looked at to base my decision on.)
On the other hand, I see some authors opting out of Select for emotional reasons or speculation. When it comes to non-mathematical reasons, it goes both ways.
---
I have seen authors both stay in Select and opt out of Select based on numbers. These are good reasons to do either (especially if they are looking at the right numbers). There are many authors looking at available data.
David Kersten

Posts: 1,153
Registered: 01/03/15
Re: How much is the KU payment this time?
Posted: Mar 17, 2015 7:23 AM   in response to: Notjohn in response to: Notjohn
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Notjohn wrote:
Amazon is in business to make money. It can't make money by bringing in subscribers for $9.99 who then borrow ten books a month at $2.00 each. You're lucky to get $1.40; if that's not enough of a return (it wasn't for me), then pull out of Select.
Which is exactly my argument in past threads regarding Select. If they would pay less royalty for shorts and more for longer books, they would discourage shorts from being in KU/KOLL and encourage novels, and the number of borrows per month would drop substantially. The average "avid" reader can't read 10 full length novels in a month. However, 1-2 hour short reads are something even a normal reader could do 8-10 times per month. Even at $1.40 that makes it unprofitable. Yet Amazon seems to want to encourage shorts and discourage novels, so they seem to be setting themselves up for failure.
angelakulig

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Re: How much is the KU payment this time?
Posted: Mar 17, 2015 7:37 AM   in response to: scribblr in response to: scribblr
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Just throwing this out there. Historically, for me and the other authors in my publishing co-op, February is the worst month of the year for sales. So it could be people just aren't buying or borrowing, and it actually has nothing to do with Kindle Unlimited failing.
David Kersten

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Registered: 01/03/15
Re: How much is the KU payment this time?
Posted: Mar 17, 2015 7:39 AM   in response to: extradimensions in response to: extradimensions
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Extra, I want to make sure I am clear in saying that Select is not a bad program and there are certainly a lot of reasons to be in it as an author. However, some people simply don't do the math and just assume that if Zon is pushing it, they should be in it. I can speculate with my math regarding my place in Select, but when it comes down to it, the only way to know for sure would be to drop out. At this point my speculation puts it at a wash, and because of the countdown deal that was incredibly successful for me, I will stay in Select for a while. My goal is to get enough reviews to get in to BB and run a promo, and frankly making twice the royalty sounds a heck of a lot better than not making twice the royalty. My ENT promo netted nearly 400 sales, and in Select my break even on that and other ads that weekend was 100 books, out of Select it would have been around 180 books and I wouldn't have picked up the ~50 borrows I got that weekend too. All things considered, even if all my borrows to date had been sales at full price, that promo alone paid the difference, and I don't believe I would convert 100% borrows to sales, it would be more like 50%.

Thanks for posting the numbers for the past few years. It looks like Amazon had been trying to predict the sales volume and set a hard number in the pool. Now they underestimate it by 60%+ so they can come in after the fact and adjust the numbers to where they want. While it remains speculation, I would say it leans heavily toward Zon wanting to keep the royalty at $1.40.
scribblr

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Re: How much is the KU payment this time?
Posted: Mar 17, 2015 9:13 AM   in response to: David Kersten in response to: David Kersten
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Now they underestimate it by 60%+ so they can come in after the fact and adjust the numbers to where they want.

There's another possibility as well. By leaving the baseline at $3.0 million, that's the total amount they're liable for should they decide the KU isn't performing up to expectations or hopes. Should they make a decision to change the system once again, the final three months could be capped at the $3.0 million number. They'd save $15.0 million while they adjust the system because it would take KU members three months to opt out unless Amazon gives them an exit option.

Before anyone starts screaming that they'd never do that, I'm just speculating on what's possible. I have no inside knowledge of Amazon's plans.
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