Is Kindle Lending Library a Cash Cow for Conventionally Published Authors?

Posted on Monday 29th October 2012 2:23

Recently we explored how the expansion of the Kindle Lending Library into the UK could end up being a revenue bonanza for publishers, as Amazon pays wholesale book price for e-book loans. But what does this mean for authors?

The benefits of Kindle Lending Library for self-published authors are clearly visible. Amazon agrees to pay royalties to authors published via Kindle Direct Publishing (KSP) whose works are loaned via the scheme from a monthly fund. In its current incarnation, which is confined to the US, this fund makes $600,000 available per month to self-published authors. Royalty payments are then calculated according to the share that an individual book has of all the KDP works participating in the Kindle Lending Library scheme.

Kindle Lending Library certainly has its detractors. Many self-published authors object to its terms which state that it will only pay out on works that have been exclusively available by Kindle for at least 90 days. What it does do, however, is tell authors explicitly what they can expect to be paid for their work and when. And this is something which is not available to conventionally published authors.

As we’ve discussed before, many publishers still do not have the capability to calculate royalties on e-books accurately and pay them out to writers. Their accounting systems are simply not sophisticated enough to cope with reconciling the proceeds from e-book sales with the sales data, which typically arrives at different times. The consequence is that the royalty cheques of many authors experiencing healthy e-book sales still do not reflect the switch to digital reading.

Conventionally published authors are also arguably being short-changed on e-book loans too. Some public libraries in the UK do already lend e-books, but the British government does not fund author payments for e-book loans in the same way that it already does for print loans via the PLR programme. The situation is the subject of a government review at the moment, but presently it’s possible to argue that payments to authors are being state-funded, albeit by a complicated process.

Most of the e-books that UK public libraries provide to their patrons are made available via e-book aggregators, who libraries pay for access to their collections. Aggregators secure books for their collections by buying e-book licenses from publishers on commercial terms. This means technically libraries are paying the aggregators, who are paying the publishers who should be paying the authors. However, as we have already established, publishers’ ability to do this in a timely and accurate manner is limited.

So what do authors get for lending at the moment? In the UK they rely on the PLR scheme, which is directly state funded and pays out a maximum of £6,600 per year to individual authors whose works have been frequently borrowed from public libraries. Last year the scheme paid out between £5,000 and the £6,600 maximum to a mere 313 authors. Compare this to Kindle Lending Library, which has the potential to pay out a similar sum per month for self-published authors whose books are popular enough to be borrowed a couple of thousand times per month.

What’s really surprising about the conversations surrounding Kindle Lending Library is that they’re dominated by self-published authors discussing if giving Amazon exclusivity on their works will impact their income. I’m astonished that more conventionally published writers and agents haven’t recognised this as the cash cow and – just as importantly – the regular, clear and accurately calculated source of income it represents.