Does Amazon Kindle Need a Free vs Paid BestSeller Chart?

As Amazon's (NASDAQ: AMZN) Kindle book reader continues to drop in price (now only $259) and move into the mainstream, more and more book publishers appear to be using this digital distribution method to deliver free books to the service, which is obviously unheard of in the traditional book business, but which is quite familiar to the digital music, video and game sectors.

As of October 13, 7 of the top 10 "Kindle Store Best Sellers" are books offered for free, as are 23 of the top 50.  Having followed this trend for a while now, one can see the publishers adjusting their tactics as they learn more about the Kindle service, no different than how Apple (NASDAQ: AAPL) iPhone publishers learn to give away free or earlier versions of games in order to drive them up the charts, and then increase the price or release the paid sequel, all "drafting" off related top sellers.

Remember that Kindle is currently a closed system, not easily allowing users to acquire books outside of Amazon's system, although some piracy is showing up through sites like MegaUpload, as one would unfortunately expect.   So the only initial free Kindle books were public domain works offered by Amazon itself, which means they were so old they no longer had copyright protection, such as The Adventures of Sherlock Holmes or The Art of War.

Out of copyright books still make up a chunk of the free ones, but the last 3 months have seen a surge of free books from mainstream publishers, most of which end up in the most popular 100 books, at least for a period of time.   The reasons for free mainstream books tend to vary:

• Re-ignite interest in an older series by making the first one free (Full Moon Rising - the first Riley Jensen Guardian book)
• Introduce a new author in a crowded category, whereby the publisher will presumably later increase the price (The Keeper by Sarah Langan)
• Deliver a prequel to a series in order to give users a taste of the author's universe - one of the more creative ideas (My Soul to Lose by Rachel Vincent)
• Re-introduce an author just as he/she delivers a new book by featuring for free an older, but similar type of book from the same author (The Templar Legacy by Steve Barry)

Assuming this trend continues, my guess is we'll start to see free books overwhelm the Best Seller list by early next year.   It will take time to convince somewhat stodgy publishers and authors to understand how they can drive incremental revenue by giving away some of their content, but once one looks at trends in other digital media sectors, you can see various ways to manipulate the system (or just hire me to point it out for you:).  

At that point does Amazon have to separate the Free from Paid books in order to maintain the integrity of the Best Seller list, or is that exact list not the primer driver of discovery of new books as it is for other digital media sites like Rhapsody or iTunes?  

As a side note, Apple has been forced to set up a Highest Grossing application list to promote more sophisticated paid applications at higher price points to try to separate the $.99 best sellers from the $4.99 ones.  Amazon now has the first book priced at $.01 that I have seen (On The Heels of Evil by DE Daum), but it currently doesn't separate it from the pack the way a free book would, so the only way I can imagine it makes sense to charge $.01 is if Amazon separates Free from Paid on the list in the future - then having a really low priced book would make a difference in the Paid section.

Comments

[www.facebook.com/profile.php?id=705346413]

Cool article, Sean.

Downward pressure on digital pricing continues unabated.

I just started 'Free' and will follow that up with the Gladwell rebuttal.

See you soon.

[Kirsten Mellor]

I think a free v. paid list is inevitable and probably welcome to both consumers and authors/publishers. As a huge Kindler, I don't want to wade through piles of trashy supermarket novels to get to new or quality releases. That being said, there is no reason not to utilize the same methods as other book marketing rankings to differentiate offering. Kindle is just medium; it's a platform after all, it affects content not one iota.

But you underestimate what the "stodgy publishers/authors" do and do not understand about their own business. Speaking as one of them ;-) there are lots of other reasons that publishers chose to utilize the free model or not with Kindle, most of which you don't mention and I think the ones you do are actually the least compelling business reasons why it is done in the premium houses, and apply really only to somewhat niche publisher and/or low end imprints at the big houses. All the titles you mention are either mass market paperbacks or Harlequin-type series. (What ARE you reading these days dude?!) But actually not sure who you are calling a "mainstream publisher" either, are you talking about the money or are you talking about volume - two very different things in book publishing? (Probably unfortuately actually...)
Anyway, happy to connect you with our digital publishing VP and see if there is interest in a pitch for consulting! ;-) Best, K

[Kirsten Mellor]

http://www.npr.org/templates/story/story.php?storyId=113836134
Tina Brown and others talks about ebooks and publishing models going forward - some interesting, some - not so much...