{"id":10518,"date":"2016-04-28T08:00:26","date_gmt":"2016-04-28T14:00:26","guid":{"rendered":"http:\/\/www.onelowerlight.com\/writing\/?p=10518"},"modified":"2016-04-28T13:09:45","modified_gmt":"2016-04-28T19:09:45","slug":"why-kindle-unlimited-is-a-broken-system","status":"publish","type":"post","link":"https:\/\/www.onelowerlight.com\/writing\/why-kindle-unlimited-is-a-broken-system\/","title":{"rendered":"Why Kindle Unlimited is a broken system"},"content":{"rendered":"

\"ku\"I recently became embroiled in an unexpectedly hostile discussion on Mad Genius Club<\/a> over the brokenness of Kindle Unlimited. In retrospect, though, there was\u00a0nothing surprising\u00a0about it.<\/p>\n

The OP had asserted that Amazon is “still the only real game in town,”\u00a0which I attempted to refute.\u00a0It ended with\u00a0the fine folks at Mad Genius Club\u00a0putting words in my mouth, threatening to ban me for my “tone,” and calling me a “pompous blowhard” and a “prancing, self-aggrandizing, self-congratulating spunkmuffin.” Which would have been amusing except that\u2026 okay, it was pretty amusing. But it was also a bit infuriating\u00a0to watch so many people deliberately take offense simply because\u00a0I disagreed with them.<\/p>\n

(The irony was especially thick as they\u00a0viciously attacked me, then turned around and emphatically denied that KU pits authors against authors, all while demanding me to prove to them\u00a0that it does\u2014often\u00a0in the same breath.<\/p>\n

And\u00a0for the record, I do not think that there’s anything “dickish”\u00a0about asking\u00a0the other side to back up their argument with\u00a0sources. This is especially true for things\u00a0that “everybody just knows,” and doubly so when\u00a0forming a negative argument, such as “no one bothers with outside Amazon.”)<\/p>\n

In all fairness, however, there were a few arguments I made that I could have done a better job supporting. And since this is my blog, where no one holds the ban-hammer but me, it seems appropriate\u00a0to make them here.<\/p>\n

First, though, I want to make it clear to any KU readers that I’m not trying make you feel guilty for subscribing to KU. If you are a KU subscriber and you enjoy the program, great! I have nothing at all against that. Whether or not the system is broken, we’ll still\u00a0find ways\u00a0to get paid. Have fun, and as always, thanks for reading.<\/p>\n

Also, I want to point out that even though I believe KU is broken, I would still love to enroll my books. The problem, as I’ve pointed out before<\/a>, is that Amazon demands exclusivity for the privilege. Not only\u00a0am I wary of putting all of my eggs in a basket (especially a broken one), I also think that that’s a bad deal for my readers on iBooks, Kobo, Nook, etc, or who live outside of the territories where Amazon operates. Their numbers are not insignificant.<\/p>\n

So why is Kindle Unlimited a broken system? In a word,\u00a0incentives.<\/p>\n

In a healthy system, writers\u00a0write the books that readers want to read, readers support the writers by voting with their dollar, and the middlemen (publishers, distributors, booksellers, etc) provide value to both readers and writers commensurate with the cut that they take.<\/p>\n

A healthy system is not closed. If readers collectively decide to read twice as many books, writers collectively earn twice as much. If another writer’s books do twice as well, it does not take away from the money I earn from my books.<\/p>\n

Contrast that with the closed system that is KDP Select. We have only a ballpark estimate for the size of the KU subscriber base. Amazon keeps that (and most other KU-related data) close to the chest. We have no idea if the pay is commensurate with the subscriber base.<\/p>\n

Instead, writers are paid out of a fixed pot, the KDP Select Global Fund. If readers collectively\u00a0read twice as many KU books,\u00a0it doesn’t increase the size of the pot. The pot only increases if Amazon decides to increase it, which again may or may not be commensurate with the increase in books read, or subscribers enrolled. We have no way of knowing.<\/p>\n

Worse,\u00a0because pay is based on a share<\/em> of the pot, if someone else’s books receive twice as many borrows, everyone else’s earnings\u00a0go down\u2014even if their readership remains unchanged.<\/em><\/p>\n

This is why so many writers are up in arms about the latest KU scandal, covered in depth by Phoenix Sullivan<\/a>\u00a0and\u00a0Ann Christy<\/a>. To summarize, the current iteration of Kindle Unlimited (KU 2.0)\u00a0pays authors based on number of pages read, and scammers are gaming the system with text synthesizers and click farms. It’s not impossible to make $500,000 a month with this scam, all of which is taken out of the share of legitimate writers.<\/p>\n

Is Amazon working to fix the problem? Until last week, it wasn’t clear that they were\u2014and it’s still an open question\u00a0if\u00a0they can. It’s a perpetual game of whack-a-mole\u00a0where the\u00a0moles keep getting smarter, increasing the odds that legitimate writers\u00a0will get whacked.<\/p>\n

When you look at the way the incentives are structured, however, there’s nothing\u00a0surprising about this unmitigated mess. Amazon has divorced the readers from the writers in such a way that pricing signals no longer work.\u00a0Worse, the fixed pot\u00a0pits authors against authors in a zero-sum race to the bottom. You do not earn\u00a0more\u00a0by simply getting more readers\u2014you earn\u00a0it by getting more reads than other authors<\/em>. <\/em>In the meantime, Amazon keeps lowering the KENPC payment rate, and authors keep bending over.<\/p>\n

Is there still value in an ebook subscription service? Readers certainly seem to think so. If there’s value for readers,\u00a0it shouldn’t be too difficult to also find value for writers.<\/p>\n

But when you look back on the history of KU, you realize that it’s not really about providing value for readers or writers, but undercutting Amazon’s competition. KU launched right around the same time as two other subscription ebook services: Oyster and Scribd. These subscription services did provide value to writers, as they paid full price for every completed read.<\/p>\n

Amazon responded by launching KU 1.0, which paid writers significantly less. However, since Amazon had most of the ebook market share (at least in the US), and since non-KU books receive much less visibility on the Kindle Store than KU-enrolled books, authors were aggressively pressured to sign up.\u00a0Amazon’s exclusivity requirements kept its competitors from receiving content, and as a result, they\u00a0have since either folded (Oyster) or failed to gain much traction (Scribd).<\/p>\n

It ultimately comes down to the contrast between makers and takers<\/a>. KDP Select is a closed system, where the size of the pie is fixed and the best you can expect is to get a larger slice than the person next to you. This turns everyone into a taker: someone who feels threatened by other people’s success and\u00a0jealously guards their own.<\/p>\n

Is it any wonder then that KU authors, when presented with someone critical of the KDP Select program, resort to rhetorical tactics like gaslighting, lampost-moving, name-calling, and conflating disagreement for personal attacks? Sadly, no. These are all classic\u00a0hallmarks of a taker, which the system has forced them to become. In this way, Kinde Unlimited pits authors against authors.<\/p>\n

It’s a broken system,\u00a0but of course, different people experience the brokenness in different ways. When I was living in Georgia, I met several older people who believed that things were better under Communism. Without a doubt,\u00a0the Soviet system was broken, but these people did better under it than they did after it fell. In the same way, there are a lot of authors doing very well under KU 2.0 who would love to keep things exactly the way it is.<\/p>\n

Several\u00a0of them employ text synthesizers and click-farms.<\/p>\n

And when KU 3.0 comes out, as it inevitably will,\u00a0it will sort out a new batch of winners and losers just like KU 2.0 did before. Because of Amazon’s exclusivity requirements, many writers\u00a0will lose just about everything, having developed no other income streams.<\/p>\n

But not the scammers. They’ll just find a new way to game the system, based on the way KU 3.0 misplaces\u00a0the incentives. Amazon will continue to aggressively insert itself between readers and writers, breaking the incentives structure\u00a0in new and interesting ways.<\/p>\n

And the cycle will begin again.<\/p>\n","protected":false},"excerpt":{"rendered":"

I recently became embroiled in an unexpectedly hostile discussion on Mad Genius Club over the brokenness of Kindle Unlimited. In retrospect, though, there was\u00a0nothing surprising\u00a0about it. The OP had asserted that Amazon is “still the only real game in town,”\u00a0which I attempted to refute.\u00a0It ended with\u00a0the fine folks at Mad Genius Club\u00a0putting words in my… Continue reading Why Kindle Unlimited is a broken system<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[664,668,529,1008,1049],"class_list":["post-10518","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-amazon","tag-exclusivity","tag-indie-publishing","tag-kindle-unlimited","tag-scams","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p7iXK-2JE","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.onelowerlight.com\/writing\/wp-json\/wp\/v2\/posts\/10518","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.onelowerlight.com\/writing\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.onelowerlight.com\/writing\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.onelowerlight.com\/writing\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.onelowerlight.com\/writing\/wp-json\/wp\/v2\/comments?post=10518"}],"version-history":[{"count":9,"href":"https:\/\/www.onelowerlight.com\/writing\/wp-json\/wp\/v2\/posts\/10518\/revisions"}],"predecessor-version":[{"id":10528,"href":"https:\/\/www.onelowerlight.com\/writing\/wp-json\/wp\/v2\/posts\/10518\/revisions\/10528"}],"wp:attachment":[{"href":"https:\/\/www.onelowerlight.com\/writing\/wp-json\/wp\/v2\/media?parent=10518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.onelowerlight.com\/writing\/wp-json\/wp\/v2\/categories?post=10518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.onelowerlight.com\/writing\/wp-json\/wp\/v2\/tags?post=10518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}