Sunday, February 24, 2013

The Free Kindle Book Ride May Be Over

Many authors have been taking advantage of the Amazon KDP Free Book promo option ever since KDP Select was rolled out, and many a bookish website and blog has sprung up specifically around promotion of free Kindle books.

All of that may be about to change, thanks to an Amazon Associates agreement revision that's set to take effect March 1 of this year:

March 1, 2013 version
The following is added at the end of the sub-section:

“In addition, notwithstanding the advertising fee rates described on this page or anything to the contrary contained in this Operating Agreement, if we determine you are primarily promoting free Kindle eBooks (i.e., eBooks for which the customer purchase price is $0.00), YOU WILL NOT BE ELIGIBLE TO EARN ANY ADVERTISING FEES DURING ANY MONTH IN WHICH YOU MEET THE FOLLOWING CONDITIONS:
(a) 20,000 or more free Kindle eBooks are ordered and downloaded during Sessions attributed to your Special Links; and
(b) At least 80% of all Kindle eBooks ordered and downloaded during Sessions attributed to your Special Links are free Kindle eBooks.”

A Little Background On Amazon's Associates Program

Amazon Associates program participants can provide a link to virtually any page or product on Amazon (including links to free Kindle books) with their Associate ID attached to it, and that ID piggybacks on most purchases the customer makes on the Amazon site during the same shopping session. So Associates have historically had an incentive to share ANY Amazon link, including links to free Kindle books.

If anything, links to free Kindle books have been very desirable for Associates program participants to use because shoppers' resistance to clicking through on such links is low: the product in question is free, after all. But very often, once on the Amazon site, the customer will start browsing or will think of some other item they've been meaning to buy, and commissions for those purchases are paid to the Associate whose ID first brought the customer to Amazon.

Possible Chilling Effects of the Associates Policy Change

There are two factors to consider when trying to forecast possible outcomes of this change:

1. This new policy puts ALL of a given Associate account holder's commissions at risk in any month where "sales" of free Kindle books from that Associate's links are high.

2. With this new policy, authors and Associate link / promo providers who used to have the common goal of maximizing click-throughs on free Kindle books are set in opposition to one another. The author still wants to maximize downloads during the free promo period, but the more free downloads are generated, the greater the risk that the Associate link provider will lose all of his commissions for the month.

In my opinion, this will be a pretty effective discouragement for many Associates to promote free Kindle books. Even if the bar for commission loss is set pretty high (both of the above-quoted conditions must be met for a given month's commissions to be forfeited), the mere possibility of commission loss may steer many Associates away from continuing to promote free Kindle books.

What's Amazon Up To?

This policy revision speaks to some business changes on Amazon's end.

Amazon is surely aware that the free Kindle promo option has been a major driver in getting authors to sign up for their KDP Select program, but recent changes to Amazon's book sales rank algorithm have drastically reduced the formerly positive effects of large numbers of free downloads. While a given book's sales rank isn't exactly penalized for free downloads, free downloads are no longer driving the kinds of sales rank leaps and bounds that drew authors to take advantage of free book promo periods in the first place.

Now add the disincentive for Associates to promote free books, and it definitely starts looking like Amazon is moving to discourage publishers and authors from offering their Kindle books for free.

Has Amazon Finally Turned On Indies, As So Many Predicted Would Happen?

Since the great majority of authors and publishers who have been willing to offer their Kindle books for free are indies, some may conclude this is some kind of long-planned attack from Amazon on indies in general, but I doubt it.

Sales rank algorithm changes levelled the sales rank playing field again to a great extent, but maybe sales rank integrity wasn't all that was troubling Amazon. Maybe Amazon never anticipated how popular and widespread free book promotions would become, and how large a percentage of their monthly Kindle book "sales" in any given month would eventually come to consist of free downloads. Every free Kindle download represents a loss to Amazon, since Amazon is absorbing overhead costs to host and sell the book but isn't earning any profit on it.

Given that Amazon only earns money on downloads of Kindle books people are actually paying for, I think the most obvious and simple answer is the correct one:

Amazon is tired of losing money on free book downloads.

But once the genie was out of the bottle and indies everywhere had made free downloads an entrenched part of best practices for any new Kindle book launch or promotion, nobody outside of Amazon or mainstream publishing was motivated to stop the runaway freight train of free Kindle books.

Even indie authors and publishers who don't want to offer free promo periods have felt pressured to do so, since others who did offer their books for free have sometimes seen such great results.

You May Have To Start Making Money On Every Kindle Book Download, Whether You Like It Or Not

I can only speculate about the long-term impacts of this most recent policy change, but after thinking it over I've concluded that in the end, it's probably a good thing. The change gives indies a good, solid business reason to move away from offering their Kindle books for free; what's that old expression, about how a rising tide lifts all boats?

When the majority of us are selling our books at a price instead of giving them away, the majority of us will be making money on every download.

When free Kindle books become the exception instead of the rule, book buyers will stop 'waiting till it's free' or even having an expectation that a given book should be free. I was never one of those who backed the 'devaluation of books and literature' argument, I've always thought that within reason, ethics and the law, any promotional tack that gets an indie author more exposure and sales is worth trying. Even so, I think the prevalence of free Kindle books has shaped---some might say distorted, or even dominated---the ebook market in ways that few predicted, and it has ultimately hurt indies overall more than it has helped most of us.

The former, nearly guaranteed sales rank boost one could expect from a free promo period is all but gone, thanks to algorithm changes. Yet many have continued to cling to the free promo gambit like a drowning man to a piece of driftwood, because it has worked for so many authors in the past.

In the face of the very daunting book launch and promo task, a free book promo was at least something an indie could do pretty easily to get his or her book in front of as many eyeballs as possible, and an easy "in" to book blogs and sites. Like I said before, a free product is an easy "sell". And if most customers who were taking advantage of those free promo downloads were actually just book hoarders, collecting but never actually reading hundreds of free titles, well, most of us preferred not to think about it.

Amazon may be trying to force authors, publishers and book bloggers alike to stop offering and promoting free Kindle books, but in so doing they're forcing us in the direction of more profit for everyone. It's hard for me to see that as anything but a positive development.


Sarah Wynde said...

I agree that it's a positive development, but I'm not sure Amazon wants to stop people from using free days. I think possibly they want to make free days more equal opportunity (and reduce the incentive to cheat.)

At the moment, your best chance of having a strong free day is if your book is mentioned on one of a few major sites, ie Pixel of Ink. I haven't looked at them in months, but I believe those sites limit what they list and require books to have lots of reviews with a fairly high rating average. I wondered if Amazon wants to reduce the power of the big sites so that free days are more useful for everyone, and authors lose the motivation to get 20+ positive reviews, no matter what.

One reason I think that is that they still haven't cracked down on price-matching. If they were really worried about the money they were losing, I would think that they'd be booting all the perpetually free books off the site immediately. Those book violate their terms of service, so they'd be within their rights to do so, and if you consider each download a loss for Amazon -- say a loss of .06, which is what they charge me for my book download -- then the people at the top of the charts who have been giving their books away for months have effectively stolen thousands of dollars from Amazon. The fact that Amazon hasn't moved to ban those authors and is still allowing price-matching makes me think that the cost of downloads isn't the motivation for the changes they're making.

Either way, though, I think you're right that it'll be a positive in the long run for everyone except the sites who will be losing the affiliate dollars.

Unknown said...

What may happen is that blog owners will have to decide what side their bread is buttered on and act accordingly.

I'm an indie author and I don't operate one of the promo sites, but I have noticed a big shift in recent months on the majority of them. It used to be that most would advertise your upcoming promotion for free. But I suspect this turned into way more work than anyone anticipated and many of them started charging token payments to get on their lists. "Just" $5 and you're guaranteed listed, or make no payment and "maybe" you'll get on the list, but it's safe to assume there's very little motivation for the blog owner to list yet another free book when they're not going to get anything for their time/trouble. Add to that the possibility it may actually HARM their Associate earnings and they will surely drop promoting for free.

Personally, as an author, I'd like to see some paring down and merging of these lists. I'd also like to see more specialization. I write fantasy and science fiction. While I don't mind the idea of paying something for advertising, it does me no good whatsoever to pay to have my free book listed on a site where 95% of the readers are Romance fans. Where are the sites dedicated to the other genres? Yes, they're out there, but since Pixel of Ink and Digital Book Today dominate the free ebook market and seem to have all genres, we all tend to go with what looks popular.

Most bloggers don't share how many subscribers they have. And the ones who do don't always admit that 90% of them won't even LOOK at a non-romance book. I'd be very willing to PAY for the service of advertising a free promotion if I knew the blogger could reach the kind of readers who would be interested in my book and that we were talking about a significant number of them. That's what I'm paying for: exposure.

In return, yes, some of these bloggers will have to decide that they cannot count on Associate income and shift to reliance on the authors. Is that so terrible? List 100 books a day at $1 a pop and that is $100 a DAY. Really, bloggers, is that not enough for you? Are you making more than that as an Affiliate? If so, dump the free promos and stick with Affiliate Marketing and let someone else pick up your slack. I'd really love to only have to notify five blogs instead of my current 25.