Did you know that Amazon started as a bookstore? In 1994, Bezos, started to take advantage of the growth of the internet by shipping books. There are always books that don’t sell and publishers wanted to get rid of them, so it was how Bezos found his niche market (Packer, 2014).
Mintel (2014) claims 24% of people read books on an eReader compared with the 68% that still read physical books therefore showing that even though the eBook market is popular consumers are still reading physical books. Amazon wants to encourage readers to buy the kindle and therefore by offering free books it acts as a compelling reason to purchase one because who does not want books for free?
Harlequin, Random House and Scholastic are offering some of their titles to companies like amazon for $0 because they are hoping that consumers will indulge in the free books then buy other/similar titles by the same author. This is way to boost sales and reduce the uncertainty of unknown authors and making people buy more books (Rich, 2010). There lies the question of whether or not it is profitable?
Amazon offers free books by one author in the hope that it boosts the sales for the authors other titles. It also is another reason to pull people from other competitors sites like Apple, for example the free books available on Amazon are only formatted for the kindle therefore you have to have a Kindle or the Kindle app in order to get the free books, as well as a Amazon account.
Amazon can offer free books because they are working with publishers to boost e-book sales. The relationship between publishers and Amazon is complicated but they share one interest which is books. Garside (2014) suggests that Amazon wants to keep the price of eBooks low because the book market it competing with games, TV and so on. Offering free books also acts as an incentive to buy books because it isn't costing the reader anything but in the long run it costs the publishers and the authors because they make no income.
Another reason for publishers to offer Amazon free-books is to gain attention and word-of-mouth buzz for a new book (Rich, 2010). This acts as a from of marketing for the book, Rich (2010) suggests if they offer it for free for a two week period and it climbs the Kindle best-seller list, which leads to more people will be willing to buy/download it.
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Garside, J (2014). ‘Ebook sales: Amazon tells Hachette to give authors more, charge readers less.’ Available at: http://www.theguardian.com/books/2014/jul/30/amazon-hachette-ebook-sales-too-expensive (accessed: 25th, November 2014)
Heater, B (2013). Amazon Kindle Fire HDX review (8.9-inch): a high-end tablet at a mid-range price. Available at : http://www.engadget.com/2013/11/07/amazon-kindle-hdx-8-9-review/ (Accessed: 6th October, 2014)
Mims, C (2011). How amazon can afford to give away books for free?. Available at: http://www.technologyreview.com/view/426015/how-amazon-can-afford-to-give-away-books-free/ (Accessed: 6th October, 2014)
Packer, G (2014) Cheap Words. The New Yorker. Available at: http://www.newyorker.com/magazine/2014/02/17/cheap-words (accessed: 12th October, 2014)
Rich, M (2010). With the Kindle, the best sellers Don’t Need to sell. Available at: http://www.nytimes.com/2010/01/23/books/23kindle.html?pagewanted=all&_r=0 (Accessed: 6th October, 2014)