If free sells books, then why is Amazon changing its tune?
Recently, Amazon told its affiliate partners that, starting this month, it is placing a limit on the number of free Kindle ebooks that an affiliates’ traffic to Amazon can download. If an affiliate’s traffic generates too many free Kindle ebook downloads in a month, the affiliate will receive no affiliate income for that month.
To be specific, Amazon affiliates will be penalized in any month that one, their affiliate ID shows up on more than 20,000 free Kindle ebook purchases, and two, 80% or more of the ebooks downloaded from their link are free. If an Amazon affiliate can’t comply with the rule, they will lose their income for the month.
Studies have shown that the number of free ebooks that digital readers download is much higher than the number of books they purchase. Some studies say that over 50% of ebooks that digital readers download are free ebooks. Smashwords reported in 2012 that their site saw 100 free downloads for every paid ebook.
Many authors offer their books for free in the Kindle store for a short period of time as a marketing tool to gain exposure. Some of these authors then see a spike in full price sales upon returning their ebook to paid, all without the need to do additional marketing and advertising beyond the promoting they originally did to drive readers to download the free version.
Amazon has always been out to make a profit. They did not grow to own almost half the ebook market by chance, but rather through shrewd business practices. Their latest move is another cunning businesses practice. I believe that Amazon analysts tracking the free ebook downloads versus the paid downloads realized that they needed to do make a move to discourage free downloads and encourage more paid downloads, making more profit for Amazon. This is their move.
After all, Amazon continues to reduce the price of the Kindle to lure consumers to purchase them, locking the consumer into buying ebooks from the Amazon store. However, it appears that Amazon may be concerned that their Kindle move is not as successful in generating as much income as they had hoped due to a larger share of free ebook downloads by Kindle owners. Choosing to take a different tactic then Barnes & Noble—they lost ground in the ebook market by stopping their affiliate fees for ebooks—Amazon is keeping their affiliates for ebook sales but, instead, placing limits on them.
The good news is that authors will still be able to offer free ebooks on Amazon. The bad news is that all the websites that promote free Kindle ebooks may not as readily list every free ebook special on Amazon anymore, reducing the reach of your marketing efforts in offering a free ebook.