Free e-books: Good or bad for sales? And can even pirated editions help at times?

image Do publishers and writers come out ahead when free e-books go out on the Net---deliberately or as pirated editions?

Will the freebies encourage readers to buy paper editions, or the remainder of a series? Can even unauthorized P2P distribution help publishers?

Such tricky issues were discussed at the recent Tools of Change Conference.

Now, following up on that, publishers and others can sign up to learn when O'Reilly Media releases "A Rough Cut edition of 'Impact of P2P and Free Distribution on Book Sales,'" expected in the next several weeks. Alas, the report itself isn't free because of the considerable research required, and I don't know what the cost will be, but we hope at least to provide a summary in the TeleBlog. Price info isn't available right now.

Some related facts here:

  • O'Reilly Media and Random House contributed data for the report. Involved were Brian O'Leary of Magellan Media and Mac Slocum of O'Reilly and Chelsea Vaughn of Random House.
  • As reported in a PPT presentation at TOC, the publishers found that the "P2P 'threat' may be overstated," at least as of now, based on the current technical level of typical readers.
  • Random House experimented with "8 titles, 12 formats...in the first half of 2008." Sales of the printed books rose "19.1 percent during promotional period." They were up 6.5 percent "during the promotional and post-promotional period" (combined stat). And the individual titles varied from 155 percent up to 74 percent down.
  • O'Reilly monitored P2P activity and sales stats for the front list in the fourth quarter of 2008, via eight DRMless titles pirated from O'Reilly's front list. "Average post-seed sales were 6.5 percent higher in the four weeks after. Ranged from 18.2 percent up to 33.1 percent down. Low seed and leech volume. Average first seeds appeared 20 weeks after publication date."
  • More work needs to be done before reaching definite conclusions. Also bear in mind that "correlation isn't causality."

"We were careful to describe the results as correlated (where correlations existed), but the samples are small enough to avoid drawing conclusions," Brian e-mailed me. "That said, we did not find evidence that free or pirated content hurt print book sales, and what evidence we do have suggests that free or pirated content may contribute to greater awareness and print or digital sales."

Brian is the author of the  report, with other participants acknowledged. It’s now 11,000 words and expected to grow somewhat. "Much of the final version will be an expanded data set to support to drive conclusions," Brian tells me. He "won’t write lots more words if the data can say it plainly."

Update, 11:15 a.m., February 27: Brian further tells us: "The promotion period was typically one week, although in three instances it was a total of three weeks each. The combined promotion and post-promotion period was a minimum of five and a maximum of seven weeks."

Detail:  O’Reilly won’t use your e-mail address from the sign-up for any other purposes.

Image credit: CC-licensed photo from redjar.

5 Comments on Free e-books: Good or bad for sales? And can even pirated editions help at times?

  1. Even if pirating books helps sales of paper books, I hardly think we can be sanguine about the practice. After all, some of us are in the eBook business not the paper book business (while BooksForABuck.com offers both, more than 90% of our business is electronic rather than paper). As we reach the inflection point discussed in an earlier post, more publishers will find they’re in a similar position. Then think about it–would making free versions that are identical to the paid versions encourage sales of the paid? I don’t think so.

    Rob Preece
    Publisher, http://www.BooksForABuck.com

  2. Rob Preece seems to not be aware of the experience of publishers such as Baen. People do indeed buy stuff that is available for free and that means electrons not printed versions of the same content. At my work blog I suggested (somewhat tongue in cheek) that piracy should be called “unauthorized viral marketing” – http://tech.blog.extendance.com/2009/02/06/unauthorized-viral-marketing/ because the evidence suggests that that is exactly what it is.

    This leads directly back to Eric Flint’s “spillage” concept. It is well known that “free trials” are an effective sales pitch. In the non digital world the cost of a free trial can be significant (how much does it cost to provide scent samples for example?) but in the internet age the free trial costs almost nothing, Thus the question should not about whether there are free-loaders but whether there are sufficient paying punters to provide a decent return. If there is enough revenue then it doesn’t matter whether there are a bunch of freeloaders as well.

    I also note that the opaqueness of the publishing trade hurts them. Most people understand that if they want more of Author X’s works then they have to buy Author X’s books. What people don’t always grasp is how much money ends up in Author X’s bank account and thus how many books need to be sold in order for Author X to remain a writer and not take up a job at MacDonalds. I think it wouldn’t hurt if epublishers had clear definitions such as
    first N books -publisher 100% (author received an advance meet costs of editing etc.)
    next M books – publisher 50% author 50%
    thereafter – publisher 20% author 80%
    and a hint as to where the sales have got to (as in are we still in the N zone? the N-M zone?)

  3. Mass bootlegging of music started in the 80ies but the first instances goes back to the start of the recording industry, and until the 1930ies noone paid any royalties when showing someone else’s movies and again bootlegging never stopped being a factor.

    Book piracy and plagerism were a issue in shakespeare time, but it never really took on(apart from the used book and library scene) the way music and movie bootlegging happened in the 80ies.

    Or put in another way the content industries have never really been seriusly hurt by freeloading. Yes there might be some lost revenue but nothing of a catastrophic scale.

  4. Ultimately, I am against piracy. It is too easy for us to rationalize that we are helping the company by reading their book… and indeed we might be. The problem is that we are not the owners of the property we are taking and spreading.

    That being said, I think that there is plenty of evidence to suggest that overall making some works freely available does help sales. Lets face it, the Music industry made money for decades by letting radio stations broadcast their product at very low costs. Baen has also proven the concept in the publishing industry — Both David Weber and Eric Flint (Two of Baen’s best selling authors) have effectively made all of their baen books freely available through either the Baen Free Library and the CD’s that grant permission to copy and redistribute the work. While noticing a simple coralation might be a case of post hoc ergo propter hoc, after a while, if you get enough coralation, it is reasonable to deduce there is some connection.

    Ultimately, I think we need to revisit the role of intellectual property law in our society. The ultimate reason for intellectual property is for the works to enter the public domain. Borrowing characters, plot lines, and even segments of text from others can be integral to the creation of new works. Our current system prevents not only sharing works, but the creation of new works based on old works. Imagine if we will for a moment, a world where Shakespeare’s works were still under the control of Shakespeare’s family… I wonder if we would have had some of the wonderful productions that have kept Shakespeare alive… I wonder if we would even know who Shakespeare was?


    Bill

  5. You can go into an IRC chat room, such as #ebooks on irc.irchighway.net and find people serving thousands of copyrighted books. Publishers releasing free editions of material to generate interest is one thing. However, new books showing up in a matter of days after their release date is a bit over the top.

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