The Exclusive Option

Alright, you’ll see this discussion a lot in author groups discussing going exclusive (or KDP Select, more commonly called Kindle Unlimited due to that being the front-end term) or going wide – meaning, using as many other distributors. The reason this discussion appears as often as it does is due to the restrictive policies Amazon has. The two major exclusivity options at this time are:

– Kindle Unlimited for ebooks

– ACX distribution for audiobooks

KDP Select (Kindle Unlimited)

Under the KDP Select exclusivity program, authors sign their books up for a period of 90 days. During that time, the books are enrolled in Kindle Unlimited which is an ‘all you can read’ subscription program. Readers are charged a fixed amount and have access to all books enrolled in the KDP program.

Once a month, Amazon announces the KDP Select Fund (a specific amount of money that is the ‘pot’) from which authors are paid. Payments are calculated based off what is known as Kindle Edition Normalised Page Counts (KENP) which are a calculated number of pages for each book (generally somewhere in the 250-350 words per page depending on formatting). As such, each book has a ‘fixed’ KENP. Each page that is read by a Kindle Unlimited (KU) subscriber of your book is logged. You are then paid based off each page read with the amount paid per page varying and calculated based off how much the KDP Select Fund is that month.

As such, you never have a known amount you’d earn per page as it’ll vary each month.

Now, things to note:

– the per page rate is calculated for each marketplace that KU is available. As such, while the total global fund is given, that is further broken into per market fund amounts. A page read in Germany is worth less than a page read in the USA.

– the rate varies between $0.004 to $0.0048 per KENP.

– you are only ever paid for the first readthrough. Subsequent readthroughs do not pay you.

– books can be downloaded from the KU program and kept on devices and can pay months after you remove them (readers can have up to 10 books downloaded from the program).

– KDP Select pays multiple bonuses for the top 100 most page reads for a single book in the US & UK and their ‘All Star’ for most page reads by an author. The requirements are roughly 2+ million page reads (in a month) for a single book or 8+ million total page reads for an account.

KU exclusivity is quite popular among certain whale reading genres. As I understand it, Science Fiction, romance and harem / reverse harem does really well, others are better off wide.

A good way to ascertain how prevalent Kindle Unlimited is in your genre is reviewing the top 100 books in your genre for sales. Go to the category pages, and review how many of those books are in Kindle Unlimited and how many are not. Of those, how many KU books are in the top 10. If you keep an eye on this number for a month or two, you’ll have an understanding of how prevalent KU is to your specific niche.

Pros & Cons

In general, KU provides a significant boost in terms of number of books read and reduces the barriers to purchase as each KU book is basically ‘free’ for the reader. This allows readers (especially whale readers) to pick up and try multiple books a month.

However, KU generally depresses the price of books unless you are an epic fantasy writer or the like (where books are 300k words long). This is because while sale prices are lower, KU pays per page read, and with really long books, can earn a writer more.

This then offers the distribution & pricing strategy of low sale pricing (to help rank the book well and expose it on Amazon searches and also boughts further) while being in KU. The goal then is to make money back on the KU reads.

This is somewhat reliant on the way Amazon designs their product pages where the Kindle Unlimited ‘borrow’ function is featured prominently rather than the ‘buy’ option. As such, even if you price at $0.99 (and promote it as such); for KU readers, it’s easier to ‘borrow’ the book.

The major disadvantage (beyond potential devaluation) is the restriction in distribution locations. As an indie publisher, you become entirely reliant on Amazon for your ebook income. You CANNOT have your book on any other retailer.

ACX Exclusivity

Firstly, to clarify – ACX is a distribution platform for audiobooks. ACX (owned by Amazon) currently distributes to Audible (which is again, owned by Amazon) and iTunes. They do not distribute anywhere else.

ACX offers an exclusivity option which are differentiated by differing royalty rates.

– exclusive audiobooks receive 40% royalties

– non-exclusive audiobooks receive 25% royalties

In either case, when you sign up with ACX, you sign up for a minimum 7 year distribution agreement. If you pay for your audiobooks direct (and thus own the copyright fully instead of doing a royalty share option); you can go non-exclusive after 1 year. If not, you have to be exclusive with Audible for the full 7 years.

Pros & Cons

Now, it’s worth noting that while Audible itself has anything from 27-40% or so of the audiobook market, much of that market domination is in the US & UK. As such, while the 15% loss can potentially be made by by going wide, Audible is a significant market and can be a very high % of the market for certain genres.

Secondly, ACX as you might have noted do NOT distribute to libraries. With the multiple distribution methods to libraries, these markets can make a significant % of the income you gain when you go wide. Furthermore, touching and working with libraries can offer additional revenue streams and publicity (author talks, etc.).

Lastly, it’s worth noting that in terms of promotional opportunities, the audiobook market is very limited at this time.  As such, much of the growth is often on an organic basis rather than via paid promotions.

Like the business blog post? Want to support me writing more of them? Want to read ahead (2 weeks) of others? Become a Patron and choose the $2-tier to be able to read the business posts only and ask questions about the business side of writing.