I've read a couple of posts in the "Bargains" forum today about this, and thought maybe a discussion should be started outside of that forum.
Quotes from MR member Jalandar (in Aradata's Affiliate Thread):
Amazon's new affiliate program policy changes are probably going to affect you.
If you have more than 20k free kindle ebooks purchased (directly or indirectly) from your links, and if free ebooks are more than 80% of the total kindle ebooks sold through your links, you lose ALL your affiliate program income, even non-kindle related.
Just wanted to give you a heads up.... Policy goes into effect starting with March.
Sadly the tools on the amazon affiliate program to track free kindle book transactions wont be up until march 1, so we can't even really know for sure if we're effected or not because right now they dont track them at all.
And from MR member (and noted blog host) Koland, from the "horror" thread, in a discussion of FreeReadFeads:
I expect several of these sites to disappear starting March 1. Amazon just made a huge change to their affiliate program and if too many free books are purchased using referral links, the affiliate loses all income for the month.... :
This seems really scary to me, and smacks of some bizarre logic on Amazon's part (certainly wouldn't be the first time....)
A lot of us depend on blogs & independent websites to help us select books, because they're more diligent and better educated that I am about separating the "wheat from the chaff" in both free and reduced price books. I've certainly purchased books (with real money) from affiliate links through these sites.
I use EReaderIQ and FreeReadFeeds when I have time, and made buying (with real money) decisions frequently after reading (especially) EReaderIQ. I also get a fair number of free books pointed out through all.
I'm worried that it sounds like this policy may wreck havoc in the systems that are so useful to us!
The logic for Amazon is kind of twisted:
They don't make money giving away free books, so why should they reward those who help give them away? I don't know, but Amazon has already decided it's beneficial to them in the long run to give away free books. (Of course, my limited understanding of the Affiliate program is that they don't exactly reward those who help them give away free stuff, but they do reward those who help them sell stuff because they're giving away free stuff....)
Amazon has certainly been helped in it's mission by the sites mentioned above, and gets lots of additional market penetration as a result.
I'd love to hear more from more knowledgeable folks about the possible impact of this policy, and whether we can do anything to mitigate the possible damage? (or if we should....)