Thursday, January 16, 2014

Why buy the cow when the milk is free?

Amazon's Kindle Desktop Publishing program, informally known as KDP, has been around for nearly four years now. I noticed an advertisement for it somewhere, possibly from an email, close to three years ago as I worked on Betrovia, book one of what was to become The Land of Betrovia trilogy. As the day to unleash Betrovia on a completely unsuspecting audience approached, I learned more and more about KDP. In August of 2011 I took a leap of faith (so much irony in that idiom) and signed Betrovia up for the program. To make a long story short, the following December I also enrolled Betrovia in Amazon's Select/Prime program, an off-shoot of KDP. As nearly every self-pub, indie writer should now know, Amazon Select/Prime allows writers to promote their ebooks by offering them as "free" for a short time during a 90-day period.

In April of 2012, Betrovia, along with a few other authors' fantasy/sci-fi novels, was part of a nifty promotion. Since I discussed that promotion within this blogpost, I don't want to belabor the point further.

And so here we are at the crux of this blogpost.

It's been a bit over three years since Amazon shoved Select/Prime out the door.

Let's see after all this time what the kind folk who frequent The Writers' Cafe think of it now!

"Making written works available free, is IMO harmful to both the Indie author and the industry. Many people believe you get what you pay for. The worker is worthy of his/her hire. Not much is free in this world, why should your work be free? If you just want to get your work out there, keep in mind that a freebie is a potentially lost sale to a serious reader, and your book if looked at will serve to evaluate you as a writer. Therefore your freebie should be very carefully edited, and be your best work. I have seen freebies referred to as sales. A free giveaway is not a sale. There is a world of difference. To my mind, if a person doesn't think enough of their reading to spend a few dollars on it, they need not read my work. On the other hand, I gift ebooks to people I want to read them. And, I will gift an ebook on request. People, please keep in mind we are in the USA, where the minimum wage is now $7.25 per hour, and so an ebook price of $2.99 is less than half an hour's work. Do you really feel your work is not even worth so little? To read my work you must repeat must pay a (very) minimal fee. Or, request the book. Get it generally free- forget it! No way Jose!"

"Because a lot of people like steak with their milk, and they have to pay for that."

"Do people still say that? My mom did, when I was living with my boyfriend. Also (and even more confusingly), 'He won't buy the loaf if he can get all the slices.' We've been married for 23 years. Does that mean I am now perma-free?"

"It's called a loss leader. It's a very common method of sales. It works, if done right."

"Calculated timing of loss leaders is what has made me a bestselling author and a ton of money. I don't consider it devaluing my work. I consider it showing people that my work is worth purchasing."

"Gamers out there likely know this, but often time console makers will sell their new machines at cost or sometimes even at a loss. They know they will make it back in future costs of games. While not exactly the same the same argument can be made for free books, especially those with series. You have 5-6 whatever books in a series. A person may see it, but not willing to spend money on it. They get a free taste and suddenly they are hooked....wait I think this applies to drug dealers to. We are literary crack dealers! If the cops come get me, I will testify against Hugh (Howey) for a lesser sentence! (or even for a grammatically correct sentence!)"

"Let's not forget how many MMORPG's have moved to Free-To-Play and Freemium formats. And let's not get into indie games where people like ToadyOne of Dwarf Fortress are making a living exclusively off donations garnered by fans of the game he's giving away for free, or Jick of Kingdom of Loathing, who is running a company off of his Item of the Month system and Merch. Outside of games, this is literally how it has always been done with webcomics (Scott McCloud aside). Penny Arcade has a media empire based on a comic they still give away every single day, Rich Burlew of Order of the Stick had a million dollar Kickstarter to do a book of side stories for his free comic, plus merch. Content-as-loss-leader and Content-as-promotion is probably the most powerful emergent force in the digital age. The money, for these endeavors, isn't in the work, it's in the fandom who click your ads, pay for extras, buy your merch and donate to keep you comfortable enough to give them more."

"I received a free razor in the mail about a year ago. 
I'm still buying replacement blades for that razor."

"What do people think Amazon have been doing with the Kindle itself? Exact data is hard to find but most commentators reckon they are sold at near to or below cost price. Ask ANYBODY who works in selling ANYTHING & they will tell you the same story- loss leaders can work & in our case, it can achieve severals things we all crave- visibility, Reviews and possibly even (gasp) sales. The cow/milk analogy also doesn't work. We are the cow producing the milk. If anything, we're more like drug dealers giving away free samples to get consumers 'hooked' (although morally that metaphor doesn't make us look great)."

"Here's the numbers of copies sold for Amulet 2:
Jan 2011 - 1
Feb 2011 - 8
Mar 2011 - 5
Apr 2011 - 5
May 2011 - 3
Jun 2011 - 3 
Jul 2011 - 495
Aug 2011 - 276
Sep 2011 - 221
Oct 2011 - 202
Nov 2011 - 207
Dec 2011 - 190
Jan 2012 - 308
Feb 2012 - 251
Mar 2012 - 249
Apr 2012 - 211
May 2012 - 216
And so on...
Can anyone guess when Amulet 1 went free?"

"I went from earning 150 dollars to 1500 the first time one of my books went permafree.
Now I'm at 5000/6000 a month.
Does that answer your question?"

"As a relatively new (since june 2011) author with 8 novels self published, I have my very first novel set free at another popular publishing platform.  I can't set it free at Amazon because I'm a UK author and we're not allowed to have perma freebies for some unfathomable reason.  It is the first in a four part series, and I have it set free because several authors said this is a good idea.  Readers will take the freebie and if they like it, they're more likely to buy the others.  I've found that those who've read it, have loved it and several times it has led to sales of further volumes in the series.  I'm not in the position of making  huge numbers of sales as I have zero money to pay for aggressive marketing/promo, so anything that doesn't cost me much in money or time is worth it as far as I'm concerned.  I certainly do value my work, but I am willing to take a chance on a formula that some say has worked for them."

"Once a month, most museums nationwide offer a free night or a weekend day. Completely free admission. Doesn't devalue other museums, or museums in general. Goldstar is a discount ticket aggregator for live plays, musicals, and performances. They often have free tickets -- the price set by the production company or venue. Doesn't devalue other performances. Libraries offer free books for those with a card. Doesn't devalue other books. Those who are against permafree/free eBooks tend to be those who 1) haven't tried it or 2) tried it and it didn't work."

"Free samples are as old as dirt. They are a proven way to get new customers."

"That said, I do think that only some of an author's books should ever be offered for free. I think it's a big mistake to have all your books in Select and rotate them all into being free. You just train your readers that eventually they can get any of your books for free. The first book in a series permafree has worked for so many authors here at KBoards that I consider it the norm."

"You need to view it as a product. There is a place for giving away free books. If they are part of a series, or part of larger whole, having the first book free (or at a reduced price) is a good tactic.  In my day job, we get samples all the time chemicals to try out and use. The point isn't that it is free, but that it is a sample.  You are trying to convince a customer to try out a product they have never used before, or have very little experience with. Now, don't put your whole catalog for free, unless making money is not your goal (and for some it is not). But putting a free book (or maybe two if you have multiple sets) is a way to get people interested. Many of the books that I read now started because I downloaded a free or reduced price book to try them out. I won't do that for a $10 book, but for a $3 or so I will take a risk. As with all things marketing, it is a tool, but not the only one."

"Amazon's free book supply draws in customers who then go on to buy the books we have for sale. If Amazon thought they could make more money by getting rid of free books, they would do it.  But it's a business strategy to make them more money.  And the way they make more money is by us authors selling more books. Consider the extreme situation of Amazon selling only one author's books - yours.  At first glance, that may seem like a good thing, but it isn't.  Because there would be nothing (no offense) to draw more readers in.  No one would show up if Amazon only offered one author's books.  But add in more authors, and more people show up. So what seems like more competition, is actually beneficial to all authors involved. It's the same with free books.  They even help authors who don't give out free books, by attracting more readers to the website.  So you're actually benefiting from my free books without having to donate any of your work to the cause."

"As far as I can tell, there are two main answers to that question:
1: Put a link to your other book/s in the back of your free book.
2. Put a sign up form to your 'Be notified of new releases' email in the back of your free book.
Do you have those in your book?"

"In terms of the (theoretical) size of the market, I think authors are competing at least as much against all sorts of entertainment. It's not just books. Games, movies, TV, dinner out with the S.O., everything you can do for fun other than reading is what we're competing with. And as a reader and consumer, I'm good with that. I have zillions of options every day that never existed before. But what I want most is for reading to take up as much of that entertainment budget (time and money) as it can. Because I think reading is a positive good."

"Free gets me in the door. Easy shopping keeps me coming back. BTW just so you know amazon has always offered free e-books. Even if they got rid of the indie and select freebies one could still get the public domain books free. So yes, Amazon on the whole would make less money. Heck the freebies save them on advertising. Oh are you all aware that Amazon also has free apps and free mp3s everyday?"

"Free books draw people to the website. Once you're in the store, you're apt to buy something you didn't plan to.  To sell stuff (and I'm broadening this to more than books), you have to get people into the store. Free books do that. I've bought books by authors I sampled by reading their freebies. I'm pretty sure member Michael Wallace is one of them, for some of the others I'd have to go check (because by the time I actually get to a book, I have no idea what I paid for it without checking.) I pick up all of MW's books as soon as they come out, and wouldn't have tried them without the freebie. Freebies work for Amazon because they bring people into the store.  Freebies may or may not work for individual authors--because the freebie has to be good enough to make the reader want more of that author. There's always going to be a place for a loss leader in sales, whether it be free or just really, really cheap. It's a time tested method of attracting interest.  As are tentacles."

"I've done the math on this over and over again and I've proven that free books cost Amazon virtually nothing. You know that 'delivery fee' they charge for each of your paid books? Yeah, each nickel of that can pay the bandwidth bill for thousands of free books. Even with the absolute worst hosting deal (which they don't have because they are the host), the entire free book market costs them less than a few thousand dollars a month. So the cost to them is negligible. Not only that, but even if all the naysayers are completely correct and free books are terrible advertising, they only need to sell a couple of thousand books to turn a profit on them. But the naysayers are in no way correct because that's literally not how commerce works. As long as the free thing doesn't cost more to produce than the business it brings in, it's working as designed. Here's the big question though: how much money are you spending on promos without the loss-leader to get the same amount of effect as having one? I'm not burning down the chars, but I've spent all of $50 this year and am doing better profit-wise than some folks that have spent twenty times that. And that $50? I had to spend that to keep afloat before my permafree kicked in."

"Russell Blake already did 'test the waters' — he used freebies to expand his reader base, then stopped using freebies when they were no longer cost-effective for him. So if you're 'a true disciple', you'd use free copies as a tool to expand your reader base until you had a solid enough position high enough in various algorithms that you no longer need that freebie as a promo."

"Blake benefited from free for a very long time, and it helped him get where he is. The larger fanbase you already have, the less relatively useful free will be. It's a building strategy, mostly. Indeed, Blake's overall example on this is a good one to follow. He used free when he thought it helped him, and he monitored things and decided it was in his interests to make a change. I'm sure if he feels something would benefit him by being free, he'd do that. That's how you run a business or an independent career. You learn, apply what you learn, and understand that you will almost certainly need to change from time to time. FYI, I have never done free, but I would if I thought I needed it or could gain a net benefit from it. This is a business strategy, plain and simple, to be analyzed, tested, and applied if you feel it will benefit you. It is not a religion; it is not a philosophy. Uncounted businesses have given away product to build a client base. Lots of examples were given here. When I was in high school, a new radio station had a commercial free summer. They were trying to build a listener base. There are dozens of comparisons. For those trying to erect a golden idol to the "no free books shall pass" religion, ask yourself this: if writer A gives away a bunch of books and sells 5,000 in a month and writer B refuses to go free with anything and sells 50, who is 'giving away' their work?  You don't rate your success one book at a time, nor do you pay your bills that way.  It costs a writer nothing whatsoever to give away a free ebook: there is no incremental cost. If you sell more books overall (to a point), you are getting paid more for the work you did, not less. I do think some people go too far with free.  Some genres are smaller than others, and if you give away an enormous number of books, I don't see how that doesn't cut into the potential paid market. Perhaps you don't care if it is book one of a 6 book series (and, in that case, perhaps you shouldn't care), but it is something to consider in developing an overall strategy."

"In general, for FREE promos to work, the books have to be worth downloading in the first place, and for follow-through the rest of the books also have to be worth paying for. I wouldn't "buy" a free book just because it was free, it HAS to have honest effort put into it. DON'T just type up something, slap together a cover in Paint, and throw it up for sale, it won't go anywhere at any price. I'm not saying you have to pay thousands of dollars for the best editor out there, but good lord, at least get someone who can spell and has a decent grasp of the language the book is written in check it over.  Get a cover made if you don't have the skills yourself.  Barter for it if you don't have a spare cent. (BTW, pre-made covers that look good are advertized here all the time, and they aren't that expensive.) And none of this is even pointing out, Do NOT overprice your crap stories, and then WHINE about them never selling. I have recently seen a slew of "new authors" who are putting out "books" that are under 50 pages, and charging $3.99 or more. Let's see, short, un-proofread or edited, crappy story with a horrendous cover, and it's at $5? yeah riiight. It's Free? who gives a rip? I wouldn't sully my Kindle with that."

"There are two groups of freebie users
1. Those that will never pay for a book because they have grown accustomed to getting freebies (these are the people that writers opposed to freebies are understandably most scared of)
2. Those that use free to try new writers and then go on to buy more books by that writer (these people are the reason why free works as a marketing tool)
I know a lot of people who fit into category 1. for music.  When they mention an album they like, if you ask them where they bought it, the colour drains from their face and they tell you they download all their music from torrent sites.  Hopefully this culture never becomes ingrained in book buying (some opposed to free may argue it already has). However, my experience is that most people are 2. - as evidenced by mine (and most others') experience that free promotions lead to measurable gains in paid sales."

"If free books hurt Amazon's overall strategy they would have dumped it. When it no longer works they will dump it."

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