Primarily Free Kindle Books promotions on websites are now heavily discouraged by Amazon
There's been indication for awhile that Amazon has been shifting emphasis from their various free-Kindle book promos to get more attention for Kindle books that bring them revenue (considering news that their margins are thin, partially due to reinvestment in expansion and jobs), although the free-Kindle book carrot will continue to be offered.
They just no longer want them promoted... at least not as a focus on websites belonging to Amazon affiliates.
This week brings news of a stronger effort on Amazon's part to strongly discourage affiliate website promotion of those free Kindle books, an action which will have an effect on authors who have relied on the free-book promotions but will now see little activity on those books if people have a difficult time ever finding the promotions.
Since the free-book promotions had been a bonus for authors, from what I understand (someone correct me if I'm mistaken there), for authors who did not place their e-books elsewhere, that will probably cause larger distribution of those e-books (which for e-book audiences is a good thing) and a possible decrease in growth of the Kindle Owners Lending Library unless Amazon develops more ways to entice authors toward Amazon exclusivity.
This affects authors and the Kindle audience (and I personally believe that 600+ free books briefly available daily HAS caused some people to feel they have little to reason to buy books anymore and was a mistake on Amazon's part). But their new action seems harsh on bloggers whose sites were emphasizing the availability of free books.
The Associates program fee FAQ that Nate Hoffelder points to is a public page in the informational area in which they let website owners know about the Associates program. And the new clause is now definitely news.
Friday, many passed along the new Amazon affiliate clause as explained by the Amazon fee FAQ discussed by Nate, though I read it a bit differently, because Amazon wrote it as a set of 3 conditions, rather than 2 conditions that then lead to the initial point.
Here's the FAQ explanation of the clause, linked by Nate, and by the Goodereader site.
I'm bold-facing the 3rd condition, which is presented by Amazon first and is connected to the other conditions with the word "and" (rather than saying 'determined by the 2 add'l conditions:
'1. What is changing for Associates who refer free Kindle eBook sales?
Starting March 1, 2013, Associates who we determine are promoting primarily free Kindle eBooks and meet both conditions below for a given month will not be eligible for any advertising fees for that month within the Amazon Associates Program. This change will not affect advertising fees earned prior to March 1, 2013.
- At least 80% of all Kindle eBooks ordered and downloaded during Sessions attributed to your Special Links are free Kindle eBooks
- 20,000 or more free Kindle eBooks are ordered and downloaded during Sessions attributed to your Special Links '
AS written, the first condition is that a site or Amazon associate is "promoting primarily free Kindle eBooks.
THEN, it adds "AND" meets both conditions below that first statement.
Clearly, attorneys know that the word ‘AND’ above should be changed to “WHEN they” if the first statement is not to be taken as part of the set of circumstances defining what could cause income to be eliminated for a month.
That could be carelessness from the legal dept but I doubt it. The page states, furthermore, that "This change will affect far less than 0.1% of Associates.
Update2 - And here's the Operating Agreement Clause eff. March 1, 2013: [Emphases mine]
' Associates Program Advertising Fee Schedule – Limitations on Advertising Fee Rates for Certain Products
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.” '
So my read is that they are targeting sites that were built primarily to feature the many free Kindle books Amazon releases each day. And they now explain their new policy by pointing out that "the program is designed to compensate advertising partners for referring paid business to Amazon."
One could assume that sites that were built to, and continue to, provide other information in a solid way to their audiences are not targeted here for total elimination of fees but they will make it very difficult for those site owners to support their sites now.
"Partners" is a strong word for this situation. When a radio or TV announcer tells you about a special product and pricing and gives you a website and phone number to get more info or to take advantage of that offer, they receive payment for the advertisement but aren't called partners, though contracts are always signed in those cases.
Few people are aware that Amazon has "over two million affiliates" (Associates).
Amazon means business here, as they will still show affiliates what an Associate/Affiliate WOULD have earned for a given month if they had not been even indirectly responsible for so many downloads of free books.
RECENT Indications of Amazon's shift in focus
I always save many articles I've read but decided not to post (yet) for various reasons, but there is one that's germane to this recent turn of events and was of interest to me, so this is a good blog entry for it.
The article, by Edward W. Robertson, is titled, "Did Amazon Change Algorithms to Protect Their Readers?: The Ten Thousand Gatekeepers of KDP Select" and was posted February 12, 2013.
' ... last May, Amazon drastically changed their popularity lists (available on the left sidebar of the main Kindle store) to change the way free downloads were factored into the ranks ... I was asked whether this change was done in order to present readers with better books.
The short answer: yes.
The longer answer: not necessarily better books, but certainly more profitable ones... '
The article has details on how free-books came to outrank paid books, pushing them off the top.
"The result is that a lot of books with lower commercial appeal wound up displacing books with higher commercial appeal. On Amazon's popularity lists, 1000 free downloads beat 100 paid sales, and new Select books were picking up thousands of free downloads every single day.
The gatekeepers weren't strong enough to keep out the low-appeal books, meaning readers were less likely to buy the books in front of them or to be satisfied with the titles they did purchase."
He noted a new algorithm in May. List placements no longer were based on giving free downloads equal weight with paid sales but was "something near a 10:1 scale" and "instead of weighting the last 1-7 days of sales + downloads, it looked at the last 30."
Read his article for all the details on how the number of downloads needed were affected and the impact on authors, though with a somewhat better experience for the Kindle owner looking for an appealing book.
From what I've gathered, this is a harsh turn of events for some websites that have put a lot of effort into promoting the very books that Amazon itself has been promoting as 'loss leaders' with the idea that other sales would result that would more than compensate for whatever losses, but now the other sales won't be credited to website owners whose sites are seen as "primarily promoting free e-books" (which I think is the key phrase).
Nate Hoffelder talks about website owners not being able to control what consumers will do when arriving at Amazon for more info. They may look at a paid book but see many Amazon ads about free books and then get some and these, by Affiliate program rules, will be attributed to the website owner and count against the site. Again, though, very important (as written) is the clause about determining Associates who are "promoting primarily" free Kindle eBooks AND who meet the two other conditions as well.
It SEEMS that some sites that do focus heavily on free e-books but also are focusing quite heavily on on paid books are not going to be penalized in this way, so the issue seems to be to change drastically the initial pages of those websites to point to paid books but the problem remains that the ratio of free books 'ordered' to any that are paid are acknowledged to be on the order of 15:1 at the least and I really think it's more like 25:1 from what I've seen on the free-book discussion groups.
The avid readers active on Amazon Kindle book-forums are gobbling up 50 a day, often, and some on the Amazon Kindle forums have complained that Amazon servers are "too slow" on the Kindle Management page to find one of their 16,000 to 20,000+ Kindle books that they've picked up, most of them for free. While these are extremes, they indicate a bit of a problem in connection with the attraction of free vs paid, but I'm just stating the obvious here, and that's why this is such a problem for Amazon and its authors and now probably quite a few websites that were just supporting Amazon's own focus on free Kindle books.
But, once more, if authors decide, as a result of this change, to make their e-books available on other sites as well as Amazon's I think that's a good thing. Amazon (and any other bookstores) shouldn't need exclusives, when it comes to books, to sell well.
One further thought (Updated at 2:23pm - original post 6:08am)
Besides what was discussed above as reasons for Amazon's decision, I had to wonder what could be a problem for Amazon besides the 'cost' of losing sales on non-free books (which I think is actually fairly substantial not because heavy free-book downloaders would start buying more books -- I don't think they would) but because there is now a general idea with many of Amazon's "avid readers" that there is little reason to pay for a book when so many are free for a brief period if you spend time each day hunting them all down (who has time to read after that?).
Len Edgerly's 18-minute interview with Jeff Bezos July included Bezos' observation, when discussing 3G models of various Kindles, that "people who buy that Kindle are the people who read the most."
The only models with 3G currently are e-Ink models -- and the Kindle 1 and 2, still used by many who just want to read and not web, do not have WiFi capability so these will always entail 3G costs for book downloads for Amazon.
It used to be felt that even the slow web access possible with the first 3 models would deter heavy usage, and that's very likely true, but with the advent of free Kindle books to be downloaded, that would be ALL on 3G, payable by Amazon with the still very-much used older Kindles (I have family and friends who still use Kindle 1 and 2 because these still meet their needs).
On Kindle forum posts, people mention downloading tons of books daily. WiFi was not necessary for Kindle homes until the tablets came, and as a result, e-Ink Kindle owners are often using 3G even when the newer models have WiFi capabilities. This is almost certainly one real cost and not just a theoretical one.
In a period of lower net profits and very low margins, with a focus on long term goals via expansion of warehouses (not to even mention Amazon Web Svcs) and job opportunities opened up in the U.S. plus global expansion of Kindle devices to other countries (for which there is a lot of demand), any unnecessary costs would have to be cut. They have stockholder pressures.
Publisher pressure after the DOJ and State lawsuit fallout which was not kind to the large publishers, as well as market pressures in connection with the slowing rate of growth of e-book sales generally, and the competition for market share of paid books are very likely heavy factors as well.
Will the changes affect most Kindle owners? Readers of this blog? Or will the reduced website promotions available not make that big a difference for most Kindle owners? For authors, there IS a fairly large effect. Will a change to very low-cost promos make a difference? Let me know in the Comments section here or, if preferred, in the easier talk areas of the Facebook page.
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