Bad news from Kindle for indie publishers

Here’s my thumbnail summary of the news that’s been coming out this month about Amazon’s changes in its algorithms for calculating sales rank, which powerfully affect e-book visibility & sales.

First:  Just before Xmas 2011, along with 3 new Kindles, Amazon introduced KDP Select (KDPS) for authors.  If you commit your e-book to an exclusive 3-month contract with KDPS, it can still be purchased the same as ever, but now it also can be borrowed (for each loan, you get a cut of Amazon’s $600M promo pot), and you can promote it by making it FREE for up to 5 days during your 3-month contract.

FREE turned out to be a huge booster of visibility, & therefore sales.  First:  Amazon counted freebies as sales in calculating sales rank. The higher your book’s sales rank, the sooner readers see it when browsing.  Second: Any time someone downloads your book plus someone else’s, your book appears on the other book’s website, in the “People who bought this also bought…” section.

The result?  Indie/self-published books got to compete as equals with traditionally published books!  From Dec. to March, a well-written, well-presented indie e-book could “break through” into huge success & profits.

What happened next?  Here’s a summary from Ed Robertson (http://www.edwardwrobertson.com/2012/05/amazons-ever-changing-algorithms-kindle.html)

Around March 19, Amazon changed the way they sell books. In a Kindleboards thread devoted to the subject, authors tracking the performance of books during and after a free promotion began reporting strange results. Prior to then, books that gave away several thousand copies during a promo would shoot to the top of the popularity lists some 36-48 hours later. It was like clockwork. Clockwork that paid you several hundred dollars.

Because the popularity lists are a big deal. These are the default book listings you’ll see when you’re browsing around by genre…. If you could ride a free promotion to the top of those lists, your book would be extremely visible to shoppers. Depending on genre and your book’s presentation, topping the pop lists could snag you dozens or hundreds of sales before other books overtook you. Sometimes that visibility was enough to launch a book into the stratosphere, where the stratosphere is also made of money….

Then, things changed…. Authors began reporting lower sales than expected as well as strange-looking lists. Chaos reigned!

Robertson did extensive tracking research, & found these changes in the new sales-rank lists:

• Ranks are determined by the last 30 days of sales, with no extra weight given to the most recent sales

• Free book downloads are discounted heavily–maybe as little as 10% the value of paid sales

• Borrows don’t count as sales

…What does this mean, then? Well, for starters, it’s probably the end of the 3-day bump. This was the term coined on Kindleboards for sales on Select titles that had recently been free. In the past, … if you went free and gave away 5000 books, … your book would be credited with 5000 sales, vaulting it to the top of the “most popular” lists. With your book in front of so many customers, you’d see a lot of [paid] sales, spiking late on Day 2 and carrying through Day 5 or so as your rank decayed and your book was pushed down the lists by new titles rolling off free.

I don’t think that’s going to happen anymore.

So, many indie authors are looking for a new approach.  Smashwords?  iTunes?  Others are ignoring the change & figuring a little boost is better than none at all.

What’s your response?