Earlier this week, I got my royalty statement for Little Red Hen Romance for September 2015 from Amazon and went into a full-blown fidget. In spite of the fact that we had outsold our previous best-selling month, June 2015, by more than two to one, moving more than twice as many books to paying customers (excluding promotional freebies from both months’ sales figure, of course), we made less than one-quarter as much money. How the fuck does THAT happen? I shrieked, racing figuratively around the internet squawking for most of the afternoon.
The villain who had stolen from me, I soon determined, was that damned Jeff Bezos with his double-damned Kindle Unlimited – specifically, the new rules for Kindle Unlimited that went into effect July 1, 2015 (you know, the day after our big month). Under the new system, publishers and self-pubbed writers get paid by the page read instead of by the copy downloaded. In June, the Hens were paid $1.25 per KU download, quite a trick since our books average about 25 standard pages and only cost 99 cents each. We were, to be perfectly bald-faced frank about the thing, one of the short works publishers who were unintentionally scamming the KU payment system, collecting as much payment on our short stories as novelists at comparable sales rank were getting for full-length books. Even in mid-squawk, I had to admit that wasn’t fair and that some sort of correction had been required. But I still felt screwed by the steepness of the sudden drop.
After a little arithmetic, I figured out that for KU downloads, we were now being paid about 12 cents a book or $0.005 per page. Since the royalty on those books when sold outright is about 35 cents, Kindle Unlimited still seemed like a really bad idea for us, money-wise, and I met with my fellow Hen, Alexandra Christian, to discuss how much we wanted to continue to help Amazon sell free shipping and baby diapers with our books. We’re still working on that, and to that end, I sat down this morning with my calculator and contracts (including the stone tablets on which my traditional publishing contracts were carved back in the 2000s) to do a little comparing. I also took into account good points made by friends on both sides of the issue about what something like KU takes away from authors and publishers versus what it offers in exposure and promotion. My findings surprised me, and since I know a lot of other people are trying to make the same kinds of decisions at the moment, I thought it might be helpful if I shared them here.
I have published just about every way there is except Xeroxing my fan fiction and selling it out of the back of a van in the parking lot at Comic Con. For my purposes here, I’ll compare traditional publishing (contracts under Pocket Books/Simon and Schuster for full-length romances under the old template, about 400 pages/100,000 words), independent small press publishing (contracts under Purple Sword Publications, a fairly typical, better-than-average small press for full-length romances under the new template, about 250 pages/60,000 words), Little Red Hen Romance (a sort of self-pubbing co-op my sister and I started for short story romances, about 25 pages/7500 words), and Kindle Unlimited downloads of those same shorts. (None of the other stuff is available from Kindle Unlimited; the people making those decisions have already voted no.) All of these figures are for e-books; the Pocket contracts were primarily negotiated for print sales, but they do establish an e-book royalty that I’m still collecting on e-book editions of those books today.
Traditional Publishing: My cheapest e-books from Pocket retail for $8.99 (yeah, I know, no kidding), and I get paid a 15 percent royalty or $1.34. The books are about 400 pages long, so that works out to be about $0.003 per page. My two most successful books with them retail in e-book for $15.99 for 400 pages, with the same 15 percent royalty. So if anybody is desperate enough for medieval vampire romance in e-book to pay that, I make $2.39 or 0.005 per page (which, incidentally, is the same rate KU downloads pay–probably a coincidence, but I don’t know). The obvious advantage for Pocket in print is scope and reach–those books in print sold in the tens of thousands, not the tens, because Pocket was able to ship and place multiple copies all over the world at once and did; you could buy my books in any mall in the US and most of the world. But them days are over, for chain bookstores and for me, and these e-books are competing on the same digital playing field as stuff that’s much, much cheaper. I suppose there are probably readers who are more likely to buy a book from a traditional publisher (assuming they happen upon it in their keyword search), but at those prices? And by this royalty scale, if the sales figures aren’t hugely better, I’m not making any more money; my share comes out to be about the same in spite of the inflated price tag.
Small Press: Most of my e-books from Purple Sword cost $6.99, run about 250 pages, and pay me a more-than-fair royalty of 50 percent. This works out to be about $3.49 or $0.01 per page paid to me, which for me is as good as it gets. (Writers who self-publish AND self-distribute are working in a different office.) Problem is, I don’t sell any books through Purple Sword. It’s not their fault; other PS writers are doing much better through them than I am. I’m pretty sure the problem here is me and my books–not enough active promotion on my part of those titles and books that don’t really fit the brand of the press as a whole.
Little Red Hen: My sister and I started Little Red Hen as a way to try to give the people what they want – good, cheap romances short enough we could afford to sell them for only 99 cents each. (Because it takes us a couple of weeks to write each one versus the six months to a year we’d put into a full-length novel.) Currently, we distribute them only through Amazon, and our royalty for each one sold is 35 cents. This works out to be $0.01 per page, the same as the small press books, except that I’m actually selling quite a few. So while I’m still not pricing summer homes in Tuscany, I am able to call the experiment a success; the co-op is self-sustaining. But obviously I’d prefer to do more.
Little Red Hen – Kindle Unlimited: And here’s where we get to the problem of today. Little Red Hen shorts downloaded through KU pay us $0.005 per page or about 12 cents per full book, less than half what non-KU sales pay. We also tend to have 3 KU downloads for every 1 outright sale. (This is not an exact statistic – some books do better in KU; some books do better in regular sales. But it’s a fair generalization for the press as a whole.) Amazon is obviously committed to promoting KU; consequently books listed through KU are treated more kindly by their sales ranking algorithms. We’ve also been doing a free book promotion for every new release, something that’s only available through Amazon for KU books. Like a writer friend who is listing his on-going serial with KU pointed out, we are almost certainly reaching readers through KU that we would never reach without it, and that can’t be easily dismissed. But are we losing royalties to Amazon on readers who would want the book enough to buy it if they had to but are downloading it through KU instead? The many KU haters would say of course; Amazon would say certainly not. Me, I just don’t know.
I’m still mad at Amazon for the snake oil salesman approach they’ve taken with writers about KU. I get emails from KDP every month congratulating me on my brilliance for signing up and promising the moon when in fact, best case scenario, it’s paying me at exactly the same page rate as the fat cat traditional publishing model Amazon keeps saying it means to vanquish forever. (As I wrote more than a year ago in an open letter to Jeff Bezos, stop pissing on my shoes and telling me it’s raining.) But KU’s sins aren’t nearly as black as I wanted to paint them when compared to the alternative. My guess is Lexie and I will end up compromising, listing some books through KU for the sake of the promotional push and withholding others; in any case, we will have to take a hard look at every step in our current protocol. And I would advise any other author who isn’t James Patterson to do the same.
Lucy Blue Writes 
This is very eye-opening stuff! Thank you for doing the math and explaining in an apples to apples comparison!