Warning: This is not scientific. This is A GUESS. This is based on Assumptions and it’s literally called a Guesstimate i.e. Guess + Estimate. Except for Amazon, no one knows exactly how many Kindle Unlimited subscribers there are
First, let’s look at various guesses over the years
- Fortune in 2015 thought Kindle Unlimited had 2 million subscribers
- The Passive Voice in 2017 thought Kindle Unlimited had 3 million subscribers
Next, let’s look at what we’re going to do
Guesstimating to figure out how many Subscribers Kindle Unlimited has
We’re going to look at how much Amazon paid out to Kindle Unlimited Authors in 2019. Then we are going to look at different scenarios (whether Amazon is making a profit, or taking a loss). Then we are going to figure out the number of subscribers
The one concrete thing we do know is that Kindle Unlimited paid out roughly $300 million to Authors in 2019. That is the one solid piece of data we have. We are rounding it to exactly $300 million (it’s very close) to make all the calculations easier
Does this give us a way to figure out how many Kindle Unlimited subscribers there are?
Perhaps it does allow us to make some very rough guesstimates
Assuming Kindle Unlimited is making a large profit
Warning: This is an EXTREME assumption and is not to be taken seriously. It is meant to be an extreme example
Probability: Slim to None. Why? Because Amazon likes to reinvest into growing its businesses. Therefore, it is unlikely that it has some crazy high number of Kindle Unlimited Subscribers, and is making a large profit
Here is what our Assumptions are about number of subscribers and amount of earnings from subscribers
- $9.99 per Kindle Unlimited Subscriber
- 15 million Kindle Unlimited Subscribers and all at the $9.99 rate
- Monthly earnings of $150 million
- Annual earnings of $1.8 billion
Obviously, this is a very ambitious estimate
Let’s consider the costs
- Paid to Authors: $300 million
- Amazon R&D Costs and Team Costs: $100 million
- This might seem an extreme estimate. However, keep in mind that Alexa has 20,000 employees. Amazon in total has 600,000 employees. It is not inconceivable that Kindle Unlimited R&D and team costs are a large figure like $100 million
- Amazon Data Costs for delivery of ebooks to Kindles (remember, for wireless delivery Amazon has to pay AT&T): $10 million
- Various Costs such as Kindle Unlimited All Star Bonuses: $10 million
- Costs for special agreements (such as with J K Rowling for Harry Potter): $30 million
- Total Costs: $450 million
Net Profits: $1.35 billion
This estimate is obviously wrong as the net profits of the entire division in which Kindle Unlimited is included are far less than that
So, we can safely rule out this ‘highly profitable’ scenario
Assuming Kindle Unlimited is making a slight profit
Probability: Quite High
Here are our assumptions about this scenario
- 5 million Kindle Unlimited Subscribers at $9.99 per month
- 5 million Kindle Unlimited Subscribers at $1.80 per month (the rate in India)
- Monthly earnings of $59 million a month
- Annual earnings of $708 million
We will assume the same costs as the costs are similar in all scenarios – $450 million a year
Net Profits: $258 million a year
This estimate is actually quite possible. It is not inconceivable that after making money from Amazon Web Services and from 3rd Party Sellers, and seeing how high its stock price has jumped, Amazon is building Kindle Unlimited as a slightly profitable business
Assuming Kindle Unlimited is almost break even
Probability: Extremely High
Here are our assumptions about this scenario
- 4 million Kindle Unlimited subscribers at $9.99 per month
- 4 million Kindle Unlimited subscribers at $1.80 per month (the rate in India)
- Monthly earnings of $47.2 million a month
- Annual earnings of $566.4 million
We will assume the same costs as the costs are similar in all scenarios – $450 million a year
Net Profits: $116.4 million a year
This estimate is the most likely one. That Kindle Unlimited is almost break even and everything that is being generated is being ploughed back into Kindle Unlimited, or into other Kindle divisions
Assuming Kindle Unlimited is taking a slight loss
Probability: Quite High
Here are our assumptions about this scenario (these are the same as the ‘almost break even’ scenario)
- 4 million Kindle Unlimited subscribers at $9.99 per month
- 4 million Kindle Unlimited subscribers at $1.80 per month (the rate in India)
- Monthly earnings of $47.2 million a month
- Annual earnings of $566.4 million
Where we differ is that we assume that costs are actually higher than $450 million a year. That there are certain hidden expenses such as special contracts, cost of ‘trial memberships’, secret R&D costs, etc. which add another $200 million a year
That brings total costs to $650 million a year
Net Losses: $83.6 million
The India Wild Card
In all of this discussion, we have to consider that India is a big wild card
- The Kindle Unlimited cost in India is only $1.80 a month
- The number of readers is massive. English is one of the most popular languages in the country with people from different parts of India having different languages and English being the common link
- As opposed to countries such as US and UK, India subscription revenues per subscriber are very small
- India can contribute a lot of ‘subscriber numbers’, without actually adding much to total revenue
- A good way to think of it is that 5.5 million subscribers in India are worth roughly the same as 1 million subscribers in the US
- India is at a very nascent stage. It is not inconceivable that India can supply 20 to 30 million Kindle Unlimited subscribers
What about Kindle Unlimited All Star Bonuses?
They are a drop in the ocean. They add up to just $10 to $25 million a year. Much much less than the $300 million a year paid out for pages read to all authors
They are not even worth considering (unless you are getting one, in which case, congrats)
So, what are the most likely figures for Kindle Unlimited Subscribers?
Our most likely guesstimates are
- Between 4 million and 5 million Kindle Unlimited subscribers in US, UK, etc (countries paying $10 per month)
- Between 4 million and 6 million Kindle Unlimited subscribers in India, etc (places paying $1.80 per month)
- Profits of somewhere between $0 and $258 million a year
- Total Revenues of somewhere between $566 million to $900 million a year
Kindle Unlimited is close to becoming a billion a year subscription service. Makes sense if you consider that Scribd is $100 million a year, and that other companies like Storytel also have exceeded 1 million paying subscribers