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“Some books are to be read only in parts”, and paid for accordingly, says Amazon

by User Not Found | Jun 24, 2015

When he wrote “Of Studies”, Francis Bacon most likely didn’t expect that, five centuries later, the “Earth's Biggest Bookstore” would take his words literally.

Amazon announced that it will change the way pay-out is made to self-publishing authors on its platform, Kindle Direct Publishing Select (KDP Select). From July 1, instead of paying the author as long as his book is made a “qualified borrow”, i.e. been “checked out” and read more than 10% by a Kindle Unlimited or Amazon Prime user, under the new policy, an author will be paid based on the number of pages his book generates out of the total pages read out of all books by the universe. The way a page is calculated has also been updated using new standards set forth by Amazon labelled Kindle Edition Normalized Page Count (KENPC). KENPC evaluates a page based on different aspects of the text used, including everything from font to line height to line spacing and many more features. All illustrations (i.e. graphics and charts) are also included in page counts.

As we highlighted in the report - More Handy Access to Content And New Business Models Boosting Ebook Market - from November 2014, self-publishing is one of the new business models and the key drivers for future growth of the ebook market. As an example, self-publishing ebooks are taking up more spots in the overall Kindle Best Sellers list. A comparison between pre- and post-Kindle Unlimited launch was made by the website Publishers Lunch, showing the number of KDP Select titles among the top 100 paid titles jumped from 3 to 13.

We think the change of pay-out policy by Amazon is positive to the market. In particular it addresses the flaw in the earlier model. Under the current system, authors are incentivized to write short books, making it as easy and quick as possible for readers to go beyond the 10% threshold. This has resulted in a large number of books published on KDP Select coming under 60 pages and priced under $1.99. Short books may not necessarily be bad books, but the incentive system does discourage writers to invest large amount of time to long form writing, as under the current system an author is paid equally whether his book gets read 11% or 100%. The new policy will give less incentive to the (compact) size of the book than to gripping, engaging development of the book. In turn, Amazon expects better content to encourage more reading which will come back to influence better writing.

Another positive implication to the market is competition reaction. Despite Amazon’s dominant position, there are also competing subscription services, e.g. Oyster, Scribd, etc. It will be interesting to see if other services are going to follow suit to modify their paying mechanisms.

One subtlety in the new policy is, as Amazon put it, “you'll be paid for each page individual customers read of your book, the first time they read it.” In other words, the number of pages read is only counted once. Francis Bacon may have gone on to write “some few (books) to be chewed and digested”, repeated reading, despite increasing the reader’s “delight, ornament and ability”, does not increase the author’s income, even under the new pay-out policy.
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