Downward trend in the Kindle Owners’ Lending Library

Downward trend in the Kindle Owners’ Lending Library

Well, this was fascinating!

I was intrigued when the pool pay per borrow was $2.18 for March.

That’s the amount that publishers using Amazon’s Kindle Direct Publishing who have elected to put their books in the Kindle Owners’ Lending Library (KOLL) got for each time an eligible Prime member borrowed one of their books.

That’s up from February from $2.01. That $2.18 is significant: it means that books which are priced at $2.99 and which are getting the highest 70% royalty rate were worth more to the publisher when borrowed than when purchased (which is about $2.08, depending on the size of the book…there is a delivery charge based on file size).

That’s interesting both philosophically and strategically. People do get less when they borrow a book (they don’t get to keep it), but the publisher is paid more for it.

That’s because the consumer isn’t paying the publisher…Amazon is. Having the KOLL is a great selling point for physical Kindles (you can’t borrow from it with just a reading app). More importantly, I think, is that it increases the value of Prime, which I think is a key part of Amazon’s retailing strategy.

However…

The pool was the same in February and March: $600,000.

If publishers got more per borrow, that means there were fewer borrows.

Yep: people borrowed fewer books from the KOLL in March…and there were two more days in March.

That intrigued me, so I wanted to run some numbers. I knew the number of available books had been going up, so I included that:

Month Pool Pool Pay Borrows Per Day Count BPT
Dec-11  $  500,000  $     1.70    294,118    12,788
Jan-12  $  700,000  $     1.60    437,500    14,113      69,850 6.26
Feb-12  $  600,000  $     2.01    298,507    10,293      95,020 3.14
Mar-12  $  600,000  $     2.18    275,229      8,878    117,652 2.34

As you can see, the number of borrows went down in March over February.

Let me explain those columns:

The month is the month. :)

The pool is the amount that was divided among the participating publishers.

The pool pay is how much those publishers got for each “borrow”.

The borrows are the number of times that books were borrowed from the KOLL. Note that those aren’t all different titles. It’s possible that The Hunger Games was borrowed a lot more often than Love Your Kindle Fire…in fact, I’d bet on it. :)

Per day is the number of borrows per day. I did adjust for the program not starting until December 8th.

The count is the number of books I recorded for the KOLL on the first of that month. I considered counting, say, March 1st as being the February number, but I decided not to do that.

BPT is the number of Borrows Per Title. I divided the number of borrows by the   count.

The number of titles is growing…the number of borrows is not growing as quickly, and has even gone down.

This suggests to me that Amazon is succeeding in getting independent publishers to go into the KOLL, giving Amazon more exclusives…but the number of borrows are being concentrated in fewer books. Fewer people making more money…

I thought perhaps the most popular books in the

KOLL

were going to be traditionally published books (I expected Suzanne Collins), but right now at any rate, that’s not the case.

The top five are:

Those are all independently published, I believe.

If borrows continue to decline, would Amazon drop the KOLL?

I don’t think so. I don’t think the number of borrows impacts them all that much, if it looks good. :) More exclusive titles looks good. More “no additional cost” titles looks good.  The pay per borrow going up looks good.

That last one is like a lot of businesses: a few people may make a lot of money, and that attracts people who think that it can happen for them. I believe it used to be true that most union actors were under the poverty level…but some made a lot of money. Most professional baseball players (going down to the feeder leagues) don’t make much money…but some make tons.

The same has been true of authors…and maybe, it’s true of authors in the KOLL.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

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13 Responses to “Downward trend in the Kindle Owners’ Lending Library”

  1. Lady Galaxy Says:

    Are the publishers cutting back on which books in your own library you can lend to friends who have a Kindle? I was looking through my Kindle library, which contains over 400 books, and I could only find one that had lending enabled, and it was originally a freebie.

    • Bufo Calvin Says:

      Thanks for writing, Lady!

      Well, that’s an interesting question.

      I haven’t run the numbers on it.

      Since you can participate in KDP Select without meeting the 70% royalty requirements (which include enabling lending and not blocking text-to-speech access), that hypothetically makes the 70% less attractive…which in turn gives Amazon less leverage in encouraging participation in Kindle store programs like lending.

      If a publisher can make $2.18 a borrow while pricing the book at ninety-nine cents and not allowing lending, as opposed to $2.08 a sale by pricing the book at $2.99 and being forced to enable lending to get that amount, it might be an unintended consequence of the KDP Select program.

      That said, I think it’s unlikely. :) Like all entertainment businesses, I think publishers want to copy success. It would be hard to argue with the success of The Hunger Games trilogy, and they allow lending. Of course, that might be seen as part of a segmented market: lending on young adult novels might be different than on, say, scholarly art treatises.

      You got me thinking this morning…thanks!

  2. Zebras Says:

    I am one of your statistics. We’ve been so inundated with free books between the 300-400 a day that are made available, and library lending, that I haven’t bothered looking for ones to borrow under KOLL.

    • Bufo Calvin Says:

      Thanks for writing, Zebras!

      I’ve been borrowing a book each month steadily…but I am a bit obsessive like that. :) I pay for it (with my annual Prime fee), I’m going to take advantage of it.

      Similarly, I don’t walk out of a movie…or not finish a book.

      I’ve told this story on the forum, but I went to a double-feature at the movies with a friend. The second feature was a Japanese documentary about the arctic fox (I think it was narrated by Grandfather Tree).

      Well, the movie finished quite late, and my friend had fallen asleep. The two of us were the only ones left in the theatre.

      I saw the movie flapping in the reel on the screen: the projector was apparently unattended.

      As we walked out, there was a somewhat angry projectionist standing there. I was told in no uncertain terms, “You know, that’s the first time I’ve had to run that movie all the way through!”

      Apparently, I kept the projectionist from going home early…
      :)

      • Zebras Says:

        Reminds me of the time mom and i were in Prince Edward Island which still has a drive-in theater, and the 2nd movie of the double feature was Titanic, and Mom hadn’t seen it yet. I have no problem sitting in a car for the 18 plus hours it took to get to PEI, but 6 hours sitting in a motionless car seeing two movies you’ve already seen? Ack!

  3. wildsubnet Says:

    March was unseasonably warm this year. More people spending time outside means less time reading. At least until beach reading starts.

    • Bufo Calvin Says:

      Thanks for writing, wildsubnet!

      Interesting hypothesis!

      I did find some stats on monthly book sales. While they did drop last year in March over February, that doesn’t seem to be a consistent trend:

      http://www.fonerbooks.com/booksale.htm

      I don’t know about how typical the Marches shown here were, though…it would be interesting to see a correlative study between “unreasonably warm” and book sales.

  4. 1smartcanerican™ Says:

    Maybe it should be that one can only have one book out on loan at any given time, but as soon as it is returned, a new book can be borrowed. I don’t like getting a book on April 1st, finishing it April 2nd (or 1st), and then no longer eligible until May 1st for another book.

    I can “borrow” (stream) Prime movies with no limit, or at least none that I’ve seen.

    Just a thought….

  5. Pam Says:

    I agree with Zebras – too many other inexpensive options and not enough time (even in retirement)! And then there’s the Prime Instant videos! :)

  6. Karen in NJ Says:

    You know, Buffo, I have gone to check into some of those titles that show up on the owners’ lending list on the Kindle to find they are also free when I get to the books’ product page. Not always, but often enough to just click ‘buy’ instead of borrow. Then I go read that free book, and immediately forget to go back through the prime list again. When I do remember, we are into the next month. So far I have only managed to borrow two or three titles since the whole feature began.

    Of course, I was glad to get those because I try to concentrate my selections in the higher priced offerings. I hope the program does survive. I have way too many free books in my TBR collection, but they can wait if I get a good loaner to finish first.

    • Bufo Calvin Says:

      Thanks for writing, Karen!

      One of the things about being in the KDP Select program is that publishers can offer the books free for five days during the period (I’ve done it). That might explain why you would see one both in the KOLL and avaialable for free.

      The one I have borrowed right now is not also free…but it might make sense for me to list it at

      http://www.ereaderiq.com

      to be notified if the price drops…that way, I could get it if it does go free.

      Thanks for making me think of that! :)

  7. One bad Apple don’t spoil…on second thought ;) Says:

    [...] Downward trend in the Kindle Owners’ Lending Library (Are you in KDP Select? Interesting numbers…) [...]

  8. Round up #85: Judge on the class action suit, KOLL-apse continues « I Love My Kindle Says:

    [...] month, I wrote about a downward trend in the Kindle Owners’ Lending Library. Well, the figures are out, and that trend is continuing.  Well, the April figures are out, and [...]

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