What the New Kindle Unlimited Payment System Means for the Future of Humanity

I came across this the other day and found it so fascinating I just had to write about it.

First, a quick recap for those who aren’t familiar with the Kindle Unlimited situation:

Kindle Unlimited is a subscription-based program that allows you instant access to an ocean of digital books. All you need to do is borrow books in order to read them. You don’t have to buy books that are enrolled in Kindle Unlimited, just click “Borrow.” A virtual virtual library at your fingertips!

You, as a reader, only need to pay a measly $9.99 per month to subscribe to this plethora of digital pages, and you can cozy up by the fireplace with your digital romance novels for the rest of your life without ever having to purchase a single one…

DeathtoStock_Medium4To incentivize Kindle-published authors into enrolling in this program, Amazon has set up a multimillion-dollar fund to pay authors for every book that was digitally borrowed.

After July 1st, though, Amazon is making an interesting change…

Instead of being paid per borrow, authors will be paid based on the number of pages people actually read. According to Amazon, they will divide the KDP Select Global Fund by the total number of pages read, rather than by the total number of qualified borrows.

So if one of those borrow-crazy readers only reads one page of your book, you’ll be paid for that page alone. But if an avid fan reads your entire trilogy all the way through, you’ll get paid for all those pages.

Here’s the main reason why this could be a good thing:

Authors will be compensated on the quality of their work, rather than the quality of their book cover or the impulses of borrow-crazy Kindle owners.

Amazon claims this is the reason for the change. Well, not so much the book cover part…but the fact that authors wanted to “align the payout with the length of books.” Before this change, payouts took place when users read 10% of any Kindle title, and the payouts for 2,000-word short stories would be the same as for 200,000-word mega-novels.

On the surface, it may seem that this change will reward novelists and hurt short story writers. But as one Kindle author pointed out, there are plenty of very good, very prolific short story writers out there. Obviously, there are plenty of complex factors at play, such as the size of your genre, how many titles you’ve released, how big your following is, how good your writing is, and so on and so forth.

But I think that Amazon and Google are trying to accomplish the same thing with their algorithms: reward quality because quality is what the people want.

However, there’s one very fascinating takeaway from all this:

money-256319Kindle Unlimited is the prototype of a micropayment economy.

“What the heck’s that?” you might be asking.

Well, let’s look at the so-called information economy…

The web is full of free information. This article is free. Google is free. Facebook is free. You’re giving your personal information away to those companies for free.

In fact, it’s for reasons such as these that Jaron Lanier says the idea of “free information” is actually naive. And that in order to save the middle class, we’ll need to restructure that “free information” delusion and the economy and create a system wherein micropayments were exchanged for the information that is now being bottled up by the corporate juggernaut.

It’s been a while since I read Who Owns the Future?, so I may be wrong about some of the details.

Here are some examples of what micropayment systems might look like:

  • What if WordPress was a subscription-based service that users paid .05 per hour to use? What if I were given 2.5 cents for every minute someone spent on my site? Sure, it doesn’t sound like a lot, but if I have a total of 100 hours spent on my site per day by various visitors, that’s $2.50 a day and $75 a month. All because I’m blogging. Like I’m doing now. Which I’m not getting paid for. Unless you click this link and buy something.
  • What if fans were allowed to donate money to their favorite artists based on how much art was produced? Like Patreon.
  • What if Facebook actually paid people for content? Yeah right.
  • What if there was an online information and content marketplace that allowed people to package and sell information products to others in exchange for currency? Like Amazon.
  • What if you paid a flat monthly subscription fee for unlimited access to that information and the information producers were paid based on how much of that content you consumed? Like Kindle Unlimited.

I think that this micropayment system has such great potential, because it’s performance-based. The cream rises to the top of the crop. Those who produce better quality products will be rewarded for their effort.

Normally I’d go on some cynical tangent about the potentials for abuse by the evil corporate machine, but not today. Let’s bask in the warm glow of Kindle Unlimited’s all-just and all-encompassing warmth and love…while it lasts.

Of course, if there are any Kindle nerds out there who can see an obvious downside that I’m missing, shoot me an email.

I’m sure I’ll come up with something sooner or later.