The anti-memory device?

Why is Amazon Trying to Squash Availability of Free Ebooks?

In Discussion by Edward Nawotka

Amazon’s recent change to how it pays commission to affiliates linking to free ebooks likely signals a broader shift in strategy.

By Edward Nawotka, Editor-in-Chief

In today’s feature story “Did Amazon Just Kill a Golden Goose?,” George Burke, CEO of eBookDaily, argues that Amazon’s move to curtail affiliate commissions linked to free ebook downloads is big mistake. It is, essentially, penalizing the big traffic producers who generate brand loyalty and paid-for purchases. So why did they do it?

Well, for one, Amazon is likely paying out significant commissions to affiliates for non-book purchases. As Burke notes, there are tens of thousands of people who rely on such commissions to some degree as a source of income.

These people’s sites function as a form of free advertising, marketing and points-of-sale for Amazon — and drive tons of traffic. They are those who, at least in part, helped “make Amazon king.”

But another reason Burke proposes is that Amazon may be “actively trying to squash the availability to readers for free books.” Several recent changes signal as much. He posits that the main reason may be to curtail cannibalization of print books (which remain at the core of their business) and/or drive more readers to paid-for ebooks.

Ironically, as Burke notes, studies have demonstrated that the availability of free ebooks in fact drives more paid-for purchases.

Is there something more strategic behind Amazon’s move than saving money on commission fees? The structure of the arrangement would suggest so. Does this signal a shift in Amazon’s ebook marketing strategy and work with KDP authors, particularly now that the company has taken such a significant chunk in the marketplace? And what does this bode for the future?

Let us know what you think in the comments.

About the Author

Edward Nawotka

Edward Nawotka is the Editor-in-Chief of Publishing Perspectives. A former foreign correspondent, he has covered the book business exclusively since 2000, serving as daily news editor for Publishers Weekly and columnist for Bloomberg News.