Scammers and Fixed Pots

Lots of news in the last couple of weeks about Amazon Kindle Unlimited scammers, who are creating 3,000-page books filled with mostly garbage because that’s what lets them take advantage of the way Amazon pays authors participating in the KU scheme: Amazon tracks the last page synced and pays out by how far into the book someone’s gone (as opposed to read).

This is bad news for actual authors with actual books, because a) actual books are generally much smaller than three thousand pages, and b) Amazon doesn’t pay a set rate per page — it defines a KU “pot” of money for each month and then pays out to authors by the number of pages they register readers as having gotten through, as a proportion of total pages read on the service that month. So if (purely as an example) Amazon defines the payout pot for KU as $1 million for a month, then all the authors participating have to split that $1 million — and the scam artist with the fake 3,000-page book is going to get a larger chunk of that $1 million than the actual author with a 300-page book.

Bear in mind that no matter what compensatory scheme Amazon does for its KU system, someone is going to find a way to maximize it. Before the current “pages read” scheme, Amazon paid out when a certain percentage of a book was gone through, which drove authors to create very short books that would hit their payout percentage with just a couple of page flips. It was this gaming, presumably, that caused Amazon to change how it did its payout. If and when Amazon changes its payout scheme (again), people will find out how to game the system under the new rules. It’s what happens.

(Nor is adjusting one’s work to take advantage of the market a problem; publishers have always done this. Is the money is cheap paperbacks? They will make cheap paperbacks. Is the money in hardcovers? They’ll make hardcovers. What, novellas are the next big thing? They’ll all make novellas! Likewise, if Amazon is saying to self-pubbed authors (and, by extension, scammers) “[X] is the way we decide to pay you,” then it’s rational to do [X].)

The problem with the Kindle Unlimited scammers isn’t really the compensatory triggers of KU or the fact that everyone, legit author or otherwise, is looking for the way to squeeze as much money as possible from it. The problem is: who bears the immediate economic brunt of the scammers taking advantage of whatever scheme Amazon decides upon? Well, it’s not Amazon, that’s for sure, since its financial exposure is only what it wants to pay out on a monthly basis; scammers in the system or no, Amazon only pays what Amazon wants to pay. The readers also get off lightly; their economic exposure is only they flat fee they pay to access KU.

So that leaves the actual authors, whose share of a fixed amount of money is being diluted by bad actors who see how the system can be gamed and are cheerfully gaming it as fast as they can. It is the authors’ problem because Amazon doesn’t pay out like it has to pay out for printed books, where each unit sold has a contractually-defined royalty that is independent of any other book or author and how well they are selling. Again, Amazon pays from a pot it defines and controls and which is limited; in effect pitting authors against each other, and all of them against the scammers. In this case the scammers are winning because it takes almost no time to create a scam book, assign fake accounts to “read” it, and profit; meanwhile writing real books actual people would invest their time in is still the same time-intensive effort it always was.

Is this fair? Well, life’s not fair, and in business (which this is) you get what you contractually agree to. Kindle Unlimited authors presumably know that they are only going to get what Amazon is willing to give them for their participation; they also presumably know that their marketplace is “fair,” with regard to scammers, to the extent that Amazon wants to make it so; they also presumably know that their ability to force Amazon to do anything to deal with scammers is exceptionally limited because the KU agreement privileges Amazon over individual KU participants to an extraordinary degree. KU participants, by participating, have agreed to let Amazon shift the financial risk over to them.

(Well, some of them. It’s my understanding that there is a tranche of authors — generally hugely best-selling, generally not self-published — whose participation in KU is through other deals where their compensation is not tied into an Amazon-defined pot. Good for them! And another reminder of the issue of “fair” in publishing — nothing’s fair, everything is what you agree to in contracts.)

That being said, if Amazon doesn’t eventually deal with the scammers, then it will become their problem: Authors, quite reasonably, won’t want to participate if scammers are taking money that should be going to them, and readers won’t see the value of the KU subscription if authors stay off the service. Humans are bad-experience avoidant, and it doesn’t take many bad experiences to keep people away. It’s in Amazon’s best interest to fix this. Eventually. I’m pretty sure it will.

But only to a point. Amazon is very very very unlikely to ever make Kindle Unlimited a scheme that doesn’t rely on a fixed payout, defined by Amazon itself. And that is why, at the end of it, KU (and, to be clear, other subscription services with a service-defined payout pot) will always disadvantage authors in terms of how much they can make, and why these authors will always suffer first and foremost from scammers — because there’s only so much money for authors in the scheme, and that’s the money scammers are taking. There will always be scammers and people who will game the system; so as long as the KU scheme pays out from a fixed pot, authors participating in it will always be the most vulnerable to their actions.

Amazon should deal with its KU scammers. It should also compensate KU authors for their work independent of how other authors are doing, or what they are doing, or what scammers are doing. The first of these is rather more likely than the others. If you’re an author participating in Kindle Unlimited, know what you’re getting into, and the fact that it’s you whose money is on the line when the scammers game the system.