A remarkably pertinent discussion on Digital Book World points out that in the world of Kindle Unlimited nothing is equal.
As Michael Sullivan muses, the system turns some ... but not all ... Indie authors into second-class citizens.
I must admit I did a double-take when I read that Algonquin/Workman have signed up for the KUnlimited Launch. Island of the Lost, which Algonquin published in 2007, continues to do very well, both in digital and print format, but particularly so in the first. Does this mean that my income will be drastically reduced, Island of the Lost being borrowed instead of sold? Will I get just my fraction of the share of the KDP fund that Algonquin will earn each time the book is checked out?
Publishers that have signed up for KU will get exactly the same amount that they would have received if the book had been bought, when borrowed. This means that my royalties for Island of the Lost are unaffected.
Not so, if I had signed up for KDP Select with any of my Indie Old Salt Press books. As Sullivan summarizes, "Amazon has a pool of funds which is established at the start of each month. This is the same fund that has been used for “borrows” for people who are enrolled in Prime (they get 1 borrow a month). The fund does not take into account the size of the book or it’s price. Instead it takes the total amount of the pool divided by the number of borrows to calculate a unit price. This unit price is then multiplied by the number of times an author’s books are borrowed. Historically, the per unit price has been about $2 (sometimes a bit more, other times a bit less). The “downloads” from KU will be treated like a “borrow” once the reader gets past the first 10% of the book."
This is a long way from the 70% royalty for each Indie book sold (when the cover price is between $2.99 and $9.99).
To sum up: Self-published authors are paid from a pool set by Amazon each month. They have no idea how much they will be paid per book.
Traditionally published books get paid exactly as they would if a sale were made. They know exactly what the unit price will be for each book.
Fair? I don't think so.