Confession time: we don’t entirely understand the hate electronic books get. It doesn’t all feel rational; many of the arguments boil down to emotion-based appeals to nostalgia, to the smell and feel of paper. There are some studies that suggest that some information is retained better when reading a physical book—but if you do a little digging, it seems the only clear and measurable advantage to reading from a physical paper book is a better memory of the exact sequence of events in the book. For instance, the researcher in this article EXPECTED, based on an earlier study, that ebook readers would perform worse on tasks related to empathy, transportation, immersion, and narrative coherence, but they actually found that “performance was largely similar.” And ebooks certainly have their advantages, particularly in ease of purchase and portability.

We don’t want to get bogged down in these arguments, though; it should be up to the customer how to read. If someone enjoys reading paper books more than electronic ones, or vice versa, that’s their business. Our business is to give them a way to buy our books in whatever format they prefer, and some do prefer ebooks.

There’s a lot to like about selling electronically. This is the channel with the greatest pricing flexibility—if you take a 70% royalty from Amazon, you can price your titles between $.99 and $9.99, and change the pricing any time you feel like it; you can also take a 35% royalty and price the book even higher. (We’ve kept our ebooks exclusive to Amazon because they’ve it worthwhile; unlike other ebook retailers and channels, they’re always building out the marketplace. In the dozen years since the Kindle’s introduction, they’ve continuously improved their e-readers. They’ve also introduced the Kindle Unlimited platform—basically Netflix for books—and continuously improved that as well. When it comes to ebooks, they’re clearly in it to win it, and we have no particular need or desire to sell elsewhere.) This is an area where we feel like we have a solid competitive advantage over traditional publishers, many of whom are pricing their ebooks rather expensively—often only a buck or so less than the physical version. Because Amazon is right about this—traditional publishers are often ripping off their customers with their ebook pricing. After all, if ebooks and physical books aren’t the same, why price them so similarly? Why not cut customers a break on something where you don’t have to physically manufacture or distribute each unit sold?

One other advantage to this channel: Amazon allows you to do countdown deals and limited-time giveaways. If you want to try and juice the sales for a particular title without permanently discounting it, you can drop pricing for a couple days, promote it a little on social media, and pick up a few sales you might not have made otherwise. (We’ve had some successes this way; for our top two titles by number of units sold, over 80% of the sales—not giveaways, but sales—were on Kindle, and many of those came during discounts.) You can also make it completely free for a limited time, although experience suggests that this doesn’t necessarily lead to greater sales once the giveaway ends. (The last giveaway we did, in late December, was for Public Loneliness, part of a disconnected series of space books; we gave away 71 ebooks over the space of three days, but sales for that and other titles in the series only increased very slightly in the month or so since.)

This platform also lets you make your titles available on Kindle Unlimited. KU titles are downloaded but not purchased; Amazon initially tried to compensate authors and publishers a set amount per download, but some authors started gaming the system by dividing up titles into shorter works and trying to earn more money that way. So Amazon started basing their Kindle Unlimited comps on KENP—Kindle Edition Normalized Pagecount, a number that assumes “pages” of approximately 200 words. Amazon divides up a global fund and allocates it to each KDP book based on the number of pages that have been read. Is it a perfect system? No—as with all things Amazon, there are cottage industries that have sprung up around gaming the system. (Almost as soon as Amazon switched to the KENP model, reports started surfacing of click farms and page-turning bots geared towards increasing your KENP, tricking Amazon’s algorithms, and raising your ranking; in the shady corners of the internet, you can find shady people who will take money to do just about anything. Not something we’d try, of course, but it is, allegedly, an option.) It’s difficult to gauge intent online, to sort out the wheat from the chaff—just as social media networks attracted their share of bots and bad actors, Amazon has summoned some disreputable characters from the digital void. But Amazon’s always tweaking their algorithms to try and take these things into account, to figure out what page turns are from “legitimate” readers engrossed in a book, and which ones are from automated operators making money by gaming the system; one gets the sense that, in this endeavor, Amazon’s as fair as it’s possible to be.

Still, when it comes down to dollars and cents, is it worth it to participate in Kindle Unlimited? Without getting into the total numbers (which we’ll do in the last blog post), looking only at the sums for individual titles, it is still a bit of a loss if someone reads our books on KU rather than purchasing them on Kindle. BUT that loss is a little less if it’s a longer title. (We tend to price our ebooks on the high middle of the KDP range—usually $5.99 or $6.99 for full-length novels and story collections. That way, we can be decently cheaper than the Big Five while still giving ourselves some good margins. For a publisher whose ebooks are normally cheaper, KU may actually be better than a KDP purchase.) And a full KU read may result in more royalties than a sale elsewhere, although this does depend on the book’s page count and list price.

A couple examples: For Island of Clouds, a full read of the book gives a KENP of 574. Our royalties for September show a KENP of 575. (Hopefully representing at least one KU reader totally engrossed in the book and reading it to completion, rather than 575 people picking it up, reading a single page, and setting it down in disgust.) For that full “read,” we earned $2.81, whereas for a purchase, we earn $4.82. BUT when we compare that with, say, the royalty for a single paperback sale on Ingram, we earn more on KU—each Ingram paperback sale only yields $2.25 in royalties. (As with many of our paperbacks, we felt the need to keep Island of Clouds under $20. But it’s a relatively long book, with higher per-unit costs than many other titles, so that squeezes our margins a bit.) So Amazon’s subscription-model compensation for this book actually pays more than a purchase elsewhere.

North and Central, however, has a KENP of only 262. Our September royalties show a total KENP of 262, which is presumably a full read of the book, because Bob Hartley is an awesome author and it is an amazing read. We earned $1.28 for that read, versus $4.82 for each sale. And every Ingram sale yields $3.10 in royalties. (North and Central is a little under half the length of Island of Clouds—47,132 words versus 104,207—but more than half the cost, so print charges are lower.) For this title, a full KU read probably results in lower royalties than a full read in any other channel.

Still, there’s a decent chance that a Kindle Unlimited user wouldn’t have purchased the book in a physical bookstore, and there’s a fair chance an indie bookstore shopper isn’t going to look and see if something’s available on Kindle Unlimited. Would we prefer to earn more per copy? Obviously. BUT a certain portion of the buying public is happier with the all-you-can-eat subscription model than with the buy-one-of-each-thing model, and as long as we’re making money from those people, we’re happy to get our ebooks in their hands.

One hopes Amazon will continue to improve KDP and KU; one particularly hopes they start to look intently at which KDP books are usually read in full, versus which ones earn only a few page views. Assuming they have good ways for filtering out page turns by bots and bad actors, they could do something that’s never been possible in the history of publishing—they could get hard data for which books in a given category are most often read to completion, and put out rankings that will help those books bubble up to the top of the turbulent and infinitely vast digital marketplace. (There is something odd and slightly off-putting about watching people read—which, in a sense, is what Amazon’s doing here. Sometimes when I think of KENP, I think of that scene in Funny Farm where Chevy Chase gives his wife a manuscript as an anniversary present and then tries to watch her read and react to it. BUT there is also something intriguing about bringing that sort of feedback loop into the publishing industry; the optimist in me says it’s giving authors and publishers something that, say, musicians have always had when they perform live—the ability to read the room, to know when people are paying attention or walking out.) The traditional industry sometimes seems like their best idea is to monetize nostalgia; they’d rather plaster stores with posters for books that have been out for fifty years than push something new. And this attitude trickles over into their attitude towards ebooks; one gets the sense it’s something they’re doing reluctantly and halfheartedly, something they’ve been forced to do, not something they are eager to do. Whereas Amazon is innovating, working to expand and constantly refine the ebook marketplace. Instead of trying to sell you Slaughterhouse-Five every time you walk into a store, they’re busy building something new. It’s a marketplace we’d like to win in, too.

Tortoise Books