Amazon is About to Throttle Free Books

Very early this morning, Amazon posted the following changes to their Affiliate program, effective March 1st:

“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.”


Here’s my reading of this: if you’re a bargain ebook site that gets at least 20,000 free book downloads a month, and at least 20% of your total orders aren’t paid books, then you don’t earn any affiliate money that month. If you think I’m misinterpreting, please chime in.

So. Major sites like Pixel of Ink earn scads and scads of money off their affiliate sales, which include any Amazon purchases made by a customer who was driven to the site by clicking on one of POI’s free book listings. I don’t know how many freebie orders POI generates, but I’m pretty positive they’re good for well more than 20K a day.

In other words, they’re going to be way, way past the cap.

Here’s the question: what percentage of their current orders are of paid books vs. free books? If they’re past the 80% mark, how much are they going to have to change their listings–by decreasing free mentions, increasing paid mentions, or both–to not forfeit their affiliate earnings?

Turns out I can drop some very rough math on this. I think that, generally speaking, a free book listing will get about 15 times as many orders as a paid book listing. In other words, that’s a 15:1 ratio. To come in under the new requirements, sites need to hit a 4:1 ratio. That means the bargain book sites will have to post approximately four times as many paid books as free ones.

Right now, nobody’s all that close to those numbers.

POI’s closest; they already run around a 2:1 ratio of paid:free. ENT runs about 1:1. So does BookBub. FKBT runs several times more free books than paid. My figures are extremely back-of-the-envelope here, but you can see that major change is on the way. Either the major sites are going to have to offer a lot more paid books (although I doubt that tripling their paid listings would triple their paid orders), or offer a lot fewer free books. It could shake out that they list 50-80% fewer free books every day than they do now.

Now, it’s possible things aren’t as grim as that. These sites are so big that Amazon may have reached special arrangements with them to allow them to run more freebies–POI and ENT were already contacted about this general issue a few months back. Or my 15:1 ratio could be off. It’s extrapolated from ad results, but it’s not like I have direct access to these sites’ affiliate numbers. But it could be closer to status quo than I think.

That said, it’s pretty clear that things will change. The question is how much. And there are two obvious outcomes of these changes.

First, if you’re an author, it’s going to be tougher to get your free book mentioned on the major sites. Probably the medium-sized sites, too.

Second, the bargain sites may open to more for advertising of discounted titles, giving authors more venues to promote $0.99 sales and such. If demand from authors for freebie mentions is high enough, and supply is limited enough, the sites might start charging to list free books. And if the results are there, we’ll totally pay them for that, too.

This will be another blow to Select, making the program more winner-takes-all than ever. Why would they harm the program? Because they care infinitely more about the overall ebook market than they do about Select. EDIT: And it might not even be about the ebook market. This could be nothing more than an attempt to correct a problem with the affiliate program, which may feel it’s overpaying for the results its ebook affiliates are providing Amazon.

Whatever the case, it may be extremely chaotic over the next few weeks and months. As the bargain sites attempt to adjust to the new guidelines, you can guarantee they’re going to err on the side of caution, meaning very few free books will be listed each day. They might loosen up as they learn to work with the new system, but who knows how long it could take.

This is why I remain ambivalent about Select in general. Success depends heavily on these bargain book sites. If they change their rules, or Amazon changes the rules for them, it can leave authors caught on the carpet.

As they say, though, from crisis comes opportunity. If there are fewer site-launched freebies dominating the charts each day, that may leave more room for more “organic” free runs for books to claw their way up the ranks on their own (or aided by a bevy of small sites instead). Especially in the transition period, the books that do very well on free runs could do even better than ever, because there’s less competition vying for clicks.

That’s about as far as I can squint into the future. I fear that shit is about to get real. If you’ve got any questions, thoughts, or predictions, fire away.

EDIT, 2/28: Some numbers have started to emerge from affiliates who links to ebooks. The performance of free books vs. paid books varies heavily depending on how the site owner built their readership, but the order numbers have looked.. challenging. The best ratio I’ve seen was 91% free books, 9% paid. Others have been as high as 98.5% free. Michael Gallagher, owner of FKBT, estimates his links to free books get 148 times as many clicks as his links to paid books.

It sounds like virtually all of the freebie sites are going to have to make some changes: some minor, some drastic. March should be interesting.