Home » Amazon, Ebooks, Pricing » Amazon puts FREE ebook promotion sites out of business?

Amazon puts FREE ebook promotion sites out of business?

22 February 2013

From The Nightlife:

Drinking my coffee, going through a ton of email & social media crap, I happened upon an email from Amazon.  The Associates Operating Agreement has changed.

. . . .

I noticed a section about FREE ebook promotions:

. . . .

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.”

. . . .

These freebie sites don’t make money from free books.  They sells ads. But they do make a fair amount of Amazon Associates commissions from people entering Amazon to catch a free ebook, who then go and shop for something else. If all these free kindle sites can no longer collect Associates commissions because they are disqualified by virtue of promoting free kindles, can they afford to stay in business based on their ad sales alone?

Link to the rest at The Nightlife

Amazon, Ebooks, Pricing

22 Comments to “Amazon puts FREE ebook promotion sites out of business?”

  1. So Amazon is trying to control the seepage of cash though the freebie promos. From a business viewpoint, I do understand what they’re aiming for. (Don’t think it’s smart IMHO, but that’s another story.)

    What they’re really creating is the next term of abuse by trolls. Say if I want to shut down our host’s Amazon revenue, I get a bunch of my troll buddies to access his link and start downloading free books. Now, we’re right back to TAG and LIKE button abuse.

    • I don’t think so, Suzan. The “if we determine you are primarily promoting free Kindle eBooks” line gives Amazon quite a bit of leverage in my opinion.

      • Will they use it, though? If a human looks at the site and goes, “Um, there’s nothing in the past week promoting any books whatsoever, let alone free ones,” then yeah, not a problem. But what if they just have the automated thing flip the switch and when you try to get it fixed, and are emailing someone with a name suggesting India origins…

        Well, I have not actually heard good things from any author, thus far, about getting Amazon to reverse a decision without a mass outcry and/or lawyers.

        I’m on the side of “this looks like low-hanging fruit for griefers.”

        • True. I’m definitely not saying it would be easy, but at least that’s there and it’s not a flat out, no loopholes kind of rule.

  2. I would think the sites will just have to drop out of the amazon affiliate program. I’m pretty sure they make more money through paid ads from people wanting to promote their books than they make as amazon affiliates.

    • Exactly. You don’t make a referral fee on a free book. Sure, you make some on those other purchases people sometimes make, but it’s perfectly reasonable for Amazon to say “no more” on that.

      This is not putting anybody out of business.

  3. The sites wouldn’t have to drop out of the affiliate program, they could just not tag all (or any) of the free links with their affiliate code. Obviously this cuts into their income to some degree, depending on how much of it was driven by purchases that happened via affiliate links to freebies.

    The troll abuse could happen, I suppose, but getting 20k books downloaded (or at least however many more are needed to push them over that limit) could be tough.

    • Actually, not tagging the free books with affiliate tags is an excellent way to keep a foot in both business models. The free books would still drive a lot of traffic, and if you featured cheap books, or prominent “sign up for Prime” links, you could still do well.

    • This is exactly what I was thinking. Just don’t tag the links to Free books. (Although, in a way, that might be a little deceptive and if a buyer clicks through on a “for purchase” link and DLs a freebie the Associate will still get that freebie added to their tally.)

      As a side note, yesterday I ran a freebie on Amazon – made it to #4 in the free store. I noticed that Amazon had changed the display format for the top 100 Free books. Instead of having them side by side with the top 100 best-sellers as they have had for the past several months, they had them on a separate page. Even to the extent that if I clicked “see the top 100 free books” the link took me to the top 100 PAID books and I had to click a 2nd time to see the free ones. Each time I changed categories, the list almost always reverted to the paid side of that category, requiring an extra click to see the freebies. (Every once in awhile a category change click did take me to another free list.) (Today I notice that the lists are back to “normal” so I presume Amazon was conducting some tests.)

      Anyhow, I was talking this new format over with a friend and here is part of what I said… “All I can think is they are suddenly giving away a TON of books and are trying to divert people more toward the paid lists than the free ones – maybe it will be beneficial for us on the upswing after going off a free run?? I’ve had almost 18,700 DLs today and still only at #6 – that shows how many free copies are being given away in the #1 and 2 slots… if it costs them even .03 cents per DL for my book alone that’s $561.00. Multiply that figure by the hundreds of books they are giving away for free each DAY and I bet it adds up really quickly. (And .03 might be on the low end – I know I get charged .11-.14 per DL when they deduct it from my royalties.)”

      IMO, Distributing Free books has become a monster and Amazon is trying to catch it by the tail.

      • Not so much a monster as a plant in the garden grown wild and all out of the boundaries of usefulness. Monsters get shot and killed, while plants get aggressively pruned back to where they should be.

        From the author end, the attractiveness of KDP lies in the ability to do promotional free days, and in the borrow pool, yes? So if one of the two attractors is losing its effectiveness, and therefore KDP is losing its attractiveness, what would you do in the business’s shoes?

        • I assume you mean KDP SELECT, not KDP. :P Very big difference. One is a publishing portal, the other is Amazon’s exclusivity program. (Sorry, but not adding “Select” at the end is the reason I keep getting newbie Indies not wanting to publish with Amazon because they have to be exclusive… o.O Yeah, it gets old explaining the difference.)

  4. I think that’s not going to work. The cookie lasts for 24 hours so if a reader downloads a paid book via your link today (which has an affiliate code), and then downloads a free book via your link later on (which has no affiliate code), then that will still count towards your total.

    Amazon has confirmed that even if you don’t link to *any* free books whatsoever, and only link to paid books, if those readers then go on to download free books after browsing the store, those free downloads will count towards your total.

    There’s not much wiggle room here for the free-only sites, and it looks like the big sites will have some very careful management of freebies to do, or they risk losing a month’s affiliate income (which dwarves the income from any other source for most sites).

    Make no mistake. This is a huge change.

    • David hit the nail on the head. This is huge. And it changes the fundamental basis behind the Amazon Associate link business in relation to ebooks.

      I tweet about free ebooks once in a while, and I have a free ebook of my own that I offer as intro to my series.

      I have seen anywhere from $50-$100 of Associate commissions from these tweets of mine that autopost to my facebook page. Is that big money? No.

      But those commissions are from all kinds of stuff people bought, sometime after they checked out my free ebook link. If this is an automated thing, like so many other aspects of Amazon reporting and payouts systems, it will and can bite people hard.

      It will take a definite chunk out of the free ebook promotional sites. It’s changing the game of free ebooks.

      And I noticed the same thing Lynette Bonner noticed, they created a definite separation between the free lists and paid lists of each genre.

      Why is Amazon doing this? Who knows. Who will it impact the most is what I am looking at. It will, indirectly, impact Indies, and our ability to use free promos to compete with the Big 6 pubbed novels.

      My opinion, for what its worth.

      Travis

  5. We know that Amazon applied pressure to at least one of the big free sites, Ereader News Today, some months ago, resulting in a big change to the site’s menu of book offerings. The Kindle Daily Deal began to be featured, free offerings were reduced, and “bargain book” offerings greatly increased. Here’s Greg at ENT’s Kindle Boards post explaining the changes: http://www.kindleboards.com/index.php/topic,131573.msg1941742.html#msg1941742 . At the time, I was indignant that Amazon was pressuring sites like ENT into changing their practices, but now I’m just glad Amazon gave these sites a heads-up months early, allowing them to adjust their business model before the policy change was officially enacted.

  6. Could simply be that Amazon accomplished its goal–use free ebooks as a Prime draw and to crush the competition. Since it appears now that there is no more real competition, Amazon doesn’t have much incentive to give away 50,000 free titles every single day.

    I used to love freebies– I gave away over a million last year. But then I saw the floodgates open in earnest and I saw the impending devaluing of ALL books. And these promo sites not only had ridiculous standards (based on dubious star averages), most of them didn’t promote any paid books at all. It was an economy built entirely on free–and who could expect that to last?

    I see this as a great thing. Time for people to learn how to run a business, where they own the turf. Amazon had already shifted to favoring higher prices on the popularity list. This is just another move toward protecting overall value of the ebook market, whether people want it or not.

    • Scott, you just said everything I wanted to say and better. I do feel sorry for the businesses that have built their models on free, but as an author I feel this is ultimately a good thing. I have had trouble at times finding ways to promote paid books because so many sites have built themselves on free.

    • I agree wholeheartedly with your comment, Scott. I completely understand the value of free for drawing people to Amazon, but I also don’t think it’s smart to give away too much free stuff when you’re a business built on paying customers. Do you see Wal-mart giving away freebies in these kinds of quantities? Bookstores? The grocery store? Department stores? These are businesses and too much free stuff creates a sense of entitlement in the customers. Amazon should definitely err on the side of caution when it comes to becoming a destination where there’s too much free stuff. Authors saw that free worked and went nuts. Amazon has had to put some brakes on that car! I think this is just the start of the changes Amazon will be making when it comes to free. I think they’ve invested too much into building up ebooks to allow them to continue to be devalued.

  7. What if someone just uses standard Amazon links for free books (with no Affiliate code) and the Affiliate code only for paid books?

    Of course, that would mean no commission on paid sales users made of the standard link, but it might keep the free numbers down.

    Or is my complete lack of web technology showing?

    • Apparently that’s not a sure-fire solution, Iola, because when you click on an affiliate link, the cookie stays on your computer for 24 hours and everything you download gets credited to that affiliate. So if you buy a bargain book promoted on ENT, and then, early the next day, download three freebies (advertised on ENT or anywhere else) with no affiliate links, ENT’s affiliate account gets “credit” for those free downloads.

      That’s how I understand it, anyway.

      It seems like a risky situation for sites that rely on affiliate income because whatever you do on your site, there’s just no controlling what shoppers do in the next 24 hours while your affiliate cookie is active on their computer. If buy a book you’re promoting, then go directly to Amazon and troll through the Top 100 free list and download 50 books, all of those will be counted against your account. It all seems to make affiliate income very unreliable.

  8. I think this will eventually come back to bite – not the free sites, but the popular authors. When someone with a large audience decides to put something up free for a day (or their publisher/fellow author does, and they point it out), they’ll be very unhappy at the unexpected change in income and accompanying explanation. (The assumption of “it doesn’t apply to me [right now], so I can ignore it,” is dangerous, but all too human.)

    The free aggregate sites make their money on being a business, and like all [surviving] businesses, they keep an eye on the weather and change with it in order to survive. The people who ignore change, on the other hand – look for this to be another source of an Amazon-bashing article in a month or two.

  9. Smashwords.com has a GREAT affiliate program, paying higher rates and less hassles. Mark Coker would gladly take all of that traffic…

    Amazon is threatening to put these free ebook sites out of business…counting freebies they download even if the site did not refer them to the freebies is outrageous.

    C’mon free ebook sites, you know what to do…

    • I see this as an effort to pressure authors to stop putting Amazon into the position of having to make so many books on Amazon free with the price match, and using the freebie sites to apply that pressure. I don’t mind. I think the free book marketing promotions have gotten completely out of control. Amazon is a store and they SELL things. :)

      For all we know, this could be a precursor to having to start deactivating accounts (and losing lots of KDP works) for breaking the contract. The minimum and maximum price list linked in the terms says price can’t be lower at any other store and if Amazon has to price match down to $0 because the author chose to make the price $0 somewhere else… that’s a broken contract. (The terms do seem to allow for the fact that other retailers might offer free promotions that Amazon will then price match, but the wording is such that it seems clear this can’t be permanent free as so many authors have made it.) I find it hard to believe people are so willing to risk their KDP accounts just to offer a book for free outside of KDP Select, where it’s allowed, for limited times.

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