Amazon rolled out the Kindle Unlimited program a little over two years ago. While they continue to tweak it and it does have its flaws, I think it will prove to be the most revolutionary step in publishing since the e-book itself, and perhaps since the first paperback was published in 1939 by Pocket Books. They priced them at $0.25 each, at a time when a reader’s choices were $2.50 – $5.00 hardbacks for the wealthy, library books for the literate but less wealthy, the Book of the Month Club, and Reader’s Digest, which surprisingly is still doing fine today. Pocket Books priced the first paperbacks at $0.25 with the expressed intention of bringing affordable books within reach of the masses. Naturally, all of the major publishing houses laughed at them, as they have at nearly every other innovation since the Gutenberg printing press. Their reaction to paperbacks was a precursor to their reaction to e-books. That lack of innovation has always been at the heart of the publishing house’s problems. Within five years, however Pocket Books had sold over 100 million copies, and no one was laughing anymore.
The economics of book prices are interesting. The first Pocket Book paperbacks came out at the end of the Great Depression. A postage stamp cost $0.03, gas cost $0.10 a gallon, and bread was $0.5 a loaf. At $0.25, it was roughly the same as a gallon of milk, or a pound of butter, chicken, or coffee. More importantly, they were priced at about 10% of the cost of a hardback book. That was a lot of money back then, which is why hardback books were mostly found in libraries. According to government statistics, inflation has totaled 1589% since then, which means that 1939 Pocket Book would cost $4.22 in 2016 dollars and that hardback around $42.20.
Think about that for a moment. First, that 10 to 1 spread between hardbacks and paperbacks hasn’t held up over time. The average paperback today is more like twice that and new paperback releases are normally in the $10-14 range. Meanwhile, the average new hardback still manages to stay under $30, so that 10 to 1 spread now is more like 2 or 3 to 1. While a new, big name e-book in the Kindle store comes out at $10 to $14, the price doesn’t stay there for long. After about 6-8 months, they are normally discounted to the $6 to $9 range, still, in a 4 or 5 to 1 spread to the hardbacks, and the average e-book on Kindle costs less than, roughly equivalent to that $0.25 Pocket Book in 1939 dollars. In fact, many readers only buy the Free or $0.99 e-books on the Sale pages, making Kindle the equivalent of the old public library for the frugal among us. One conclusion you can reach from these numbers is that e-books have had a larger effect on hardback book prices than they have had on paperbacks.
The growth of e-book readership has been phenomenal. Technically, they were first “invented” in the 1930s, but they only reached any level of popular use in the past 20 years, following the introduction of the Sony Reader in 2006, and the first Kindle in 2007. Today, over half of all adults own some type of reader or tablet. More significantly for authors, Amazon now sells 65% of all e-books and 85% of all self-published e-books. In 20 years, the e-book and Kindle have grown to become the twin, 800-pound gorillas in the publishing industry, but their biggest impact may be yet to come.
That comment brings us to the Kindle Unlimited subscription service, which Amazon launched in July, 2014, initially to compete with Scribd and Oyster from HarperCollins and Simon & Schuster. At that time, the three services had similar sized libraries to choose from; but like everything else, Kindle just seems to do it better. Kindle Unlimited’s offerings have now grown to over 1 million books. Scribd and Oyster have grown as well, but none of the three offer their first rank bestsellers as part of their subscription services. If you are a reader however, and go through three books or more a month, at $9.99 per month the Kindle Unlimited subscription service is a no-brainer.
True, the Kindle Unlimited library only includes books that are part of the Kindle Select program and “exclusive” to Kindle, which unfortunately is less than half of of their total library, primarily the better, self-published books. Unfortunately, it does not offer many new releases, books that were brought out by the major publishers, or books from front line authors, except their old ones. Still, for $10/ month, there are a lot of good books available for an avid reader, and Kindle is now experimenting with ways to expand their book availability options to Kindle Prime.
For authors, the question has been whether to go exclusively with Kindle Select and get your books eligible for the Kindle Unlimited program, or stay out and try to market them through the other independent e-book publishers such as Smashwords and others. My writing friends have gone either way depending on how much they dislike or don’t trust Amazon. I understand those feelings, but my writing income has doubled as a result of the Kindle Unlimited “Nominal Pages Read,” and it now provides 60% of my books sale income, so don’t let your suspicions or emotions pick your own pocket. More about that in my next blog piece.
William F. Brown, is the author of 8 action, adventure, suspense novels on Kindle, Kindle Select, and Kindle Unlimited. To read about them or subscribe to the blog, go to my web site, http://box5462.temp.domains/~billbro4