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Amazon to split free ebooks into separate list on Kindle Store

05.16.10 | 2 Comments

Last week, Amazon announced that it will soon pull all the $0 Kindle ebooks from its regular bestselling list, and group them all together in a separate free ebooks list. A big publisher said this was a great move that would benefit consumers. Maybe, but not in the way the big publisher wants you to believe.

Why big publishers love old-fashioned bestseller lists

When Publishers Weekly broke the story last week, an executive from HarperCollins told the magazine that this was a wonderful idea because it will make the list more consumer friendly. Her reasoning, however, sounds mainly like justification for her company’s marketing departments:

…she thinks Amazon is certainly doing the right thing by splitting the list, noting that consumers “want to know what books everyone is reading, and buying,” and that a list which combines free downloads and books for sale doesn’t deliver this information.

Aww, that’s sweet, but of course it’s a little misleading. Traditionally, the bestseller list has been a tool for publishers more than consumers; if you can manipulate the market enough (with pre-orders, ad campaigns, bulk purchases, media appearances, etc.) to get a title on a bestseller list, you’ll gain free publicity at the retailer level, in newspapers, and in the general consciousness of the population. People tend to be interested in, or at least curious about, what’s popular, so being a bestselling title becomes self-sustaining to a point.

That marketing system breaks down when more than half of the top 100 best “sellers” on the Kindle Store are fast-moving freebies. For one thing, “free” is a premium than any publisher can offer, even the smallest independent publisher with no marketing budget, which means the competition to get on the list is greater. That leads to a second complication, which is that to compete on the Kindle Store bestseller list a big publisher has to drop the price of books to zero, which eats into profits. HarperCollins has already spent tens of thousands of dollars on traditional marketing, and doesn’t want to have to give away books on top of that just to compete with the indies.

Why readers should be optimistic about having two lists

So the Kindle Store bestseller list is going to become more traditional this summer which will make big publishers happy, but that’s not a bad thing entirely. As long as Amazon doesn’t institute an arbitrary minimum price requirement on titles included in its bestseller list, what this will really do is enlarge the competitive space for publishers–and that should benefit consumers in the end.

With the free titles removed from the list, the best way to send a little-known or undermarketed title to the top of the bestseller list will be to mark it down as steeply as possible, to get it as close to free as you can in order to entice more customers to give it a shot.

This should lead indies and aggressive big publishers to continue to offer titles at huge discounts, and force other publishers to start looking at deep discounting as a necessary strategy to make it on the Kindle Store list.

But since the free list isn’t going anywhere, it will also remain a viable marketing option for publishers, especially smaller ones who don’t have big marketing budgets. Big publishers’ titles may not show up on the free list much in the future, but that might be a good thing in that it will create a second “discovery pool” of new titles that would otherwise remain invisible to casual shoppers.

Amazon could sabotage the free list by keeping it hidden from casual view, but those free titles offer such compelling value to Kindle owners that I doubt that will happen. And if it does, well, there’s now a well-developed network of blogs and websites that can promote those hidden gems for Kindle owners. Unfortunately for big publishers but fortunately for us, those free Kindle ebooks aren’t going anywhere.

(Photo: hyperscholar)

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