By Jeff Posey
Is Kindle Unlimited (KU) a game-changer for small publishers? It certainly could be. But it’s also certainly not yet.
Bottom line: Until the KU subscriber base is large enough to move the market (and this could be a small base of avid readers who give lots of recommendations to their friends and families), the value will remain very low at best. In other words, enter at your own risk.
At first glance, a Netflix-like subscription service for books makes sense. Others are trying (Scribd and Oyster most notably). For readers who spend more than ten bucks a month on ebooks, it sounds great. But what about as an author and small publisher, as one who markets books?
There it begins to get knotty.
Here are some logical pros and cons from a business perspective. We’ll begin with the good side because that’s a more difficult case to argue.
The good side of Kindle Unlimited
As book marketers, change makes for opportunities. Here are eight ideas for how Kindle Unlimited might make good book marketing sense:
1. Book Launch
It’s possible KU could be a good book launch tool for new books or republished backlist titles. Maybe with a strategy something like this:
Sign up for ninety days of exclusivity on Amazon (a requirement for KU), and announce the title as “Exclusively on Amazon until XX date.” KU and Prime subscribers will be able to read the title for free. Other Amazon users pay full price.
Meanwhile, for also being in the KDP Select program (another requirement to be in KU), you get one of two promotion tools during your ninety-day exclusive period: 1. Kindle Countdown Deals or 2. Free Book Promotion (for up to five days, not necessarily contiguous).
Either one provide some marketing juice. “Now free on XX dates to Amazon customers only,” or a Countdown Deal however you choose to announce it to your fans and followers.
You could even plant the seeds for things to go viral. Choose one free day and devote it to your favorite social media followers. Notify only them that the book is free for one day only as a gift to your Facebook followers. Some will be tempted to “leak” the information outside FB, which is good—that’s the potential viral part.
Pick another free day and do the same on another social network or two.
Keep three free days together toward the end of your ninety days by which time, hopefully, you will have a collection of good reviews, and try a BookBub “free” promotion on Amazon Kindle only.
Your fans on Amazon will be happy.
Your fans on Amazon who subscribe to KU or Prime will be really happy.
Your fans who do not use Amazon will be unhappy. (But they’ll still be able to buy your paperback book if you do one—exclusivity relates only to ebooks.) And if you promise to launch to all those other platforms after your ninety-day exclusivity stint, maybe at a reduced price for a short time—then those fans may eventually be happy, too.
2. Price comparison
Price is one of the most important marketing tools available. Imagine looking at an Amazon page and seeing these prices:
$0 for KU and Prime members
That’s pretty powerful pricing psychology. Buyers of the ebook get it for half off, and KU and Prime members get a $13.99 value for free (or, technically, at no additional charge to them).
Never discount the value of pricing stacks like this. The last price seen by a buyer greatly influences what they think a product is worth. That paperback heading the list is a great price anchor for ebooks, even if you never sell a paperback.
Price comparison marketing value declines if no higher-priced paperback is offered and if the base price of the ebook is low. An ebook priced at $2.99 doesn’t seem as good a deal for KU and Prime members as does one priced at $9.99. And a $9.99 book on sale for five days for $0 to all Amazon users (as part of KDP Select) looks significantly better than a $2.99 book offered for free.
Marketing is all about the appearance of value. Higher anchor prices give higher perceived value to temporary sales prices. (KU is, in essence, a ninety-day “sale” price feature.)
3. A new ranking list
It’s also another list to join: KU books in any given genre. KU subscribers and people considering whether to subscribe will likely peruse these lists. The chance to rise and gain visibility here is a potential boost to your Amazon fan base.
If you have audio versions of your books in Kindle Unlimited with Narration, this may be a great deal for you. The number of customers who listen to audio books is growing much faster than those who read books.
5. Early adoption
Early adopters will get the most attention from early KU subscribers. Though, in this case, it’s the pool of those titles already in KDP Select, so that’s pretty large. KU announced more than 600,000 titles are already available. It’s hard to judge the value of being an early adopter on this one.
6. Build fan base (or greater visibility)
The more people to whom your book is exposed as free of additional cost to them, the more people are likely to try it. A small percentage will become fans.
This makes most sense for authors who have little or no existing fan base outside of Amazon to disappoint.
7. Make more money
Amazon sets aside a pool of money prior to each month, and all books loaned or accessed through KU split that revenue. The average payment to publishers per book through KU is in the $2 zone right now.
If you sell 100 books a month on Amazon right now at a regular price of $6.99, you’re earning about $480 from those sales.
If those same buyers joined KU and read the book, you’re earning about $200.
To make the same money as before, you would have to “sell” 240 copies a month at the KU price. (Note: KU “free” price is only for those who have subscribed to KU, not to all Amazon customers.)
If KU offers your title to more eyes at a price they can’t refuse (free to them), and you sell more than you otherwise have without KU, then this will make you more money.
Only those who experiment with this will truly know.
8. It’s only ninety days
If a title is not selling at all through any other channel, then why not try it for ninety days? There’s little to lose. And at the end of ninety days, you can put it back out on all channels.
For publishers with many books, it’s an opportunity to experiment with a commitment of only ninety days. That’s not much. The risk of hurting your sales by giving it a try is very low.
The not-so-good side of Kindle Unlimited
Here are four reasons Kindle Unlimited makes poor book marketing sense:
This, to me and many, many others, is what kills the KU deal for book marketers.
A requirement of KU is the same exclusivity as for KDP Select, meaning an ebook title must not be published on any platform or channel other than Amazon. This applies only to ebooks. Paperbacks are immune.
This flies in the face of conventional marketing wisdom, which dictates getting the product into as many outlets as possible so that as many customers as possible have access to it.
If you manufacture and sell scissors, you’ll likely do very poorly if you allowed them to be sold only through Ace Hardware. You’ll do much better if they’ve available at every possible store where people might shop for scissors.
To sign an exclusive deal—in any part of the business world—there must be a significant value proposition to outweigh the loss of other sales channels. The value to book marketers KU offers is low and vague at best.
This is perhaps the death knell to KU for left-brain small publishers. If Amazon wants exclusive rights to sell our intellectual assets, then they had better offer some significant added value. Otherwise, it’s not even tempting.
2. Low, variable payment
KU payment is the same as KDP Select Prime payment: Amazon declares the size of a pool of money prior to the start of the month; all KU/Prime “free” downloads read beyond 10 percent receive an equal share of that pool of money.
Right now, that means about $2, roughly the same a title sold at $2.99 on Amazon earns.
That’s hard to stomach if you regularly price at $4.99 and above. Fortunately, KU is so new, the subscriber base is small, so if you do accidentally sign up for KU, then you probably will not lose too much money.
But until Amazon acts like other businesses that pay for services (meaning they agree to a reasonable price up front for the duration of the contract), this is very bad business.
They are, in essence, asking for exclusivity and cutting the price of your title at the same time. That is not a fair and equitable business arrangement.
3. Over-reliance on Amazon
Stock market investment analysts have preached diversity since the beginning of investment analysts. There’s a reason for that.
When it’s good, when you’ve picked the winner, then you are a big winner.
But when it tanks, you lose.
Investment analysts call this spreading your risk. Grandma calls it putting all your eggs into one basket.
Small publishers that sell only through Amazon have no backup plan, no second option, no place to go if Amazon does anything intentionally or unintentionally that hurts their business.
This is essentially the “exclusivity” argument turned a slightly different way.
4. Macroeconomic point of view: Can you say “monopoly”?
In aggregate, Amazon is doing what makes microeconomic sense: Get as much market share as possible. At their current roughly 65 percent of the ebook market, they are already approaching what, from a macroeconomic point of view, is beginning to look like a monopoly.
Anything Amazon does to increase that monopoly puts them at risk of getting unwanted attention from the Feds. It also puts their economic incentives at odds with their customers and suppliers (because they’ll be able to raise prices and squeeze expenses merely because of their size).
Our government has been lax about monopolistic behavior for about thirty years. But times could easily flip, especially as concerns over income inequality and wealth distribution begin to loosen the reins on federal regulators.
Small publishers that are tied to Amazon through KU and KDP Select could be in a tangled world of hurt if and when the Feds crack down.
Is this imminent? Absolutely not. But it’s a long-range worry. Sooner or later, Amazon will overreach. All big businesses do that sooner or later. Some get away with it. Others don’t.
The exclusivity clause kills the KU deal for left-brain-dominated small publishers. If there’s any value to KU, it’s in launching new titles, and removing them from the KU system after a single term of ninety days. And that’s iffy and yet to be proven.
Other than that, there’s very little, if any, logically apparent business value to book marketers to join KU.
But maybe I’m wrong. If so, leave a comment below.
Do you think KU is a good way to market and sell more books? Why? Do you think it makes sense to launch a new book through KU? Leave your thoughts in a comment below.
About the Author
Jeff Posey is a Managing Editor for Lucky Bat Books. He has an MBA in corporate financial management, and spent a good chunk of his professional career in and around marketing. He tries to spend most of his time writing and publishing historical and contemporary novels inspired by his research and interest in cultures that collapse, particularly the Anasazi of southwestern North America a thousand years ago. See more about him here:
Google Plus (his most active social media platform, where he posts regularly about income inequality and other indicators of cultural collapse)http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons