Sunday, February 24, 2013

Kindle news: Amazon now -heavily- discouraging focused website promotion of free Kindle books. Possible reasons? Update2

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.
  1. At least 80% of all Kindle eBooks ordered and downloaded during Sessions attributed to your Special Links are free Kindle eBooks
  2. 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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  1. It's kind of implemented strangely, if you break the rules you lose ALL commissions for the month!!! At worse, they should just not count all the free items towards the calculations.

    Just to make sure I understand: Does you selling a "free" books (someone clicks your link then gets a copy at Amazon) could as one of your sold items as a affiliate? To elaborate the question if you sell a hundred free books and sell one other item as an affiliate, do you get the higher percentage rate (as if you'd sold 101 items)?

    If that is the case, I can see why Amazon might be concerned, not just from the free items, but from people gaming the system. Someone buys a $300 piece of electronics through one of my links, I just get several friends to buy six "free" books and my percentage rate jumps from 4% to 6% (or on a larger scale, hundreds of books). I can see them worrying about people gaming the system.

    1. Gary, For affiliates, a click on a link to a specific free book never results in a fee for any order or download of the book or of any other free books.

      Amazon prefers that people read the operating agreement and fee schedules in their 'Associate' info area to get best info rather than rely on explanations from a non-Amazon staffer.

      But, if a free-book link is clicked by 100 people and ordered by each of them, there is no 'selling' of that book and no credit to the website.

      However, if within certain conditions (which are plentiful and complex) the person buys something else at Amazon, there -can- be a resulting affiliate fee from -that- sale by Amazon unless certain things occur that make this not doable.

      Free orders are also not countable as either ordered or 'sold' books -- only Amazon sells, the link is a 'referral' mechanism. But while there are referral credits to paid books, there is none for free books.

      Again, re the last question, there's no credit to affiliates for free books orders or downloads. They count 'for nothing.'

      You can read how it works, per Amazon, at

      I agree with you that any of this is confusing as there are many conditions to be met or avoided...

    2. Thank you!

      I use affiliate links when I talk about books or movies (or whatever) on my blog. Sometimes I sell unrelated things because they click through, so that makes sense.

      If Amazon doesn't want people coming for the free books then they shouldn't let authors "sell" free books and use their WhisperNet for distribution (Amazon is paying for that over 3G, right?). Make there be a 10 cent requirement or something (and make there be a 10 cent MINIMUM commission requirement or something). Or a limited number of free copies per book per year or something.

      Honestly, I have a lot of junk on my Kindle because it was free and it was easy to buy it for free. A good chunk of the free stuff I would never have bought if it had been 25 cents (maybe even if it was 10 cents). I'd certainly have paid more attention before clicking...

    3. Gary, I need to make one thing clearer on what I was saying.
      I said affiliates don't get credits for free-book orders and they count 'for nothing,' but by that I meant there is no *revenue*-credit.

      Starting in March, a free-book order and download (much more high-volume than any paid books, even cheaper ones) will be counted -- for checking the 20,000 max per month and to make sure it's no more than 79% of all Kindle books ordered that month from that site.

      There is also the first condition re Amazon determining that a site primarily promotes free Kindle books.

      Clearly that's not a determination to be made of Squidoo, someone else pointed out, because while their free-book volume will be huge in downloads and percentages of Kindle books, the site itself is not one which primarily promotes free Kindle books...

      The older Kindles have ONLY 3G and it wouldn't be good for Amazon's issue to not allow the older-Kindle owners to download free books on 3G.

      Again, there really is no commission reimbursement at all for free-book orders and downloads so 10 cents would raise Amazon's cost...

      It's a very confusing situation though, for sure.

  2. According to this post the 2 conditions determine whether an affiliate is primarily promoting free ebooks. Evidently, confirmed by Amazon.

    1. Thanks for the pointer to the discussion, 'clearly misunderstood' :-)
      Karen needs to cite the person who wrote the email, the name and the person's position at Amazon, especially if citing it as the word.

      The legalese in the contract clearly stipulates the first clause a condition and uses "AND" for the remaining two conditions instead of saying "determined by" -- in other words, their attorneys will have to rewrite it to say what she was told by an unidentified representative.

      While I know one person who was told this in email, the Amazon rep was going to get confirmation from another member of the team.

      Amazon would need to have their attorneys rewrite that section, as it does not say what perhaps they would like it to say.

      What's your take? Mine is everyone needs to be very careful but especially Amazon needs to be.

  3. I was a big advocate of free books last year (as an author and reader) but I stopped doing free books this year when I saw 50,000 free titles every day. I did feel it was undermining my long-term ability to make a living as a writer. While the dynamic volatility of the Amazon market was fun, it also (as Edward Robertson pointed out) led to muddy waters for readers, when books were getting on the charts solely for having good covers or a mention by one or two huge freebie promote sites. In fact, those few sites were briefly the most powerful literary forces in the world! And NONE of it was based on having read the book--it was all "see and click."

    I am sad that affiliates lose out who worked hard to build their businesses--but that's the risk when you build a nest in someone else's tree. It is hard to conceive of any economy built on "free" that could sustain itself for a year or two, much less decades.

    1. I agree with you, Scott, on the long-term effects - the expectations that people should just wait until an author's work is offered for free.

      The 'see' and 'click' recommendations of larger promotional sites that you mention definitely can help good authors but at what cost, long-range... Still, exposure to a big audience for a book that is very worth the read is still a plus.

      I just, myself, got tired of looking at the lists with so much on them that didn't appeal, especially not in so many of the descriptions as written, which often came off as writing that didn't promise much! It takes serious time to go through any daily list now.

      As a writer with a good base, you must find it hard to find a book of yours in the middle of all that somewhat undifferentiated flow and you probably become annoyed when people ask when the free promos are coming :-)

      Amazon's all-or-nothing cut-off comes off as unjustifiably harsh when much of it can happen with only indirect purchases from sessions when no free books were even recommended but when Amazon members find them while looking at a discount-alert promotion (because Amazon will continue to 'feature' the free books when people are on their site). That's an area they need to review.

    2. Love your turn of phrase Scott "that's the risk when you build a nest in someone else's tree" Beautifully put and a good word of warning for not only Amazon endeavours.

    3. Rosemary and Scott, agree! I love the analogy.

  4. I wouldn't mind in the least if all the free 'loss leaders' books were changed to cost $.99 or $.49 or some other nominal fee, instead of this odd new ruling. That would cover Amazon's costs, probably, and I'm sure that would cut down on the mass downloading of free books just because they are free. And if I'm interested enough to try an author, I think I'd still do it at 99 cents :)

    1. Anonymous, I'm sure you're right and I like that idea myself. But competition and market forces being what they are, it would all be upset by other online stores saying, OK, we'll have free books for a day now on a regular basis.

      And if they all agreed not to do free books to help expectations that, long run, can hurt even the idea of paid books, as has happened with many, it would be collusion to fix prices at any minimum :-)

      How one breaks out now without heavy free-book-promotion sites is a question. The Amazon Kindle forums don't want authors in the general help places where the audience tends to be but it seems they could generate interest in the Meet the Author forums -- and yet that would lead to have downloads for $0 of tons of books, much of it through 3G that Amazon pays.

      I've wondered if some of the big sites could do this on their own if they offer enough. One of the very new, smaller ones even has email registrations of daily readers, and if half of those agreed to pay $1/mo. to continue getting the curated lists, that would be a possible average $6,000 mo. But people will do that for only 1 to 2 sites, and it's an outlay, if one choose two sites, of $24/year, asked of people who are looking for books for which no payment is needed.

      Another very large and successful siteowner says on his blog today that he has 125,000 unique readers daily - so he has quite a lucrative possibility there if he decides to go with an alternative.


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