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Challenging notions of “free” February 11, 2009
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Challenging notions of “free”
February 11, 2009
Overview
• Why revisit “free”?• Approach• What we found• What next?
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“Free” is not “new” …
• A long and successful history• Galleys, ARCs, blads, sample chapters• Digital sampling on the rise• … but only a small set of experiments using
fully “free” content
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Why look at this now?
• Growing sophistication of ebook readers• Proliferation of digital content• Ongoing debate about the true impact of free• Perceptions of a piracy threat
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Why O’Reilly and Random House?O’Reilly Media Pioneered discussion of the distribution of free content
Active in promoting widespread access to its content
Perceived as vulnerable to a piracy threat
Random House Largest U.S. publisher
A wide range of book types reaching a variety of audiences
Engaged in a number of experiments with “free”
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Book marketing: growing content discovery and access
High Discovery
High Access
Low Discovery
Low Access
Appearance on Oprah
Coop Marketing
Corporate Web Site
Museum Stores
Amazon Promotion
Catalog & BEA
Over time, in
crease both discovery and access
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Options to focus marketing
Build or extend an individual
brand
Market cost-effectively across a content niche
Cultivate relationships to drive sales
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Our approach
• Document and assess prior work• Address data quality• Analyze and share results• Assess implications• Develop and propose next steps
The research is data-driven, open (without compromising publisher data) and structured to share knowledge.
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Overall findings
• Not binary• Measures must evolve• Does not appear to parallel other media• P2P “threat” may be overstated– Low incidence– Significant lag– Technical skills are not commonly held
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Proposing a more nuanced model
“White” market
“Gray” market
“Back channel”
• Print sales
• DRM-protected digital sales
• “Trialware”
• Unprotected digital sales
• Galleys, ARCs
• “Free” promotions
• Unauthorized duplication
• Pirated content
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Overall findings
• Not binary• Measures must evolve• Does not appear to parallel other media• P2P “threat” may be overstated– Low incidence– Significant lag– Technical skills are not commonly held
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There is value in structured testing
• Track a robust set of variables• Provide appropriate segmentation• Capture content characteristics• Test hypotheses (validated or refined)
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The sample matrix (illustrated)
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An initial look at sales impactTesting free (Random House)
8 titles, 12 formats tested in the first half of 2008
Sales up 19.1% during promotional period
Sales up 6.5% during promotional and post-promotional periods
Ranged from 155% up to 74% down
Monitoring P2P (O’Reilly)
8 titles that were posted O’Reilly front list in 4Q 2008
Average post-seed sales were 6.5% higher in the four weeks after
Ranged from 18.2% up to 33.1% down
Low seed and leech volume
Average first seeds appeared 20 weeks after publication date
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We tested the results in a few ways
• Did pre-sale volume matter (i.e., would sales lift be greater for a previously popular book)?
• Is there a relation between immediate (during promotion) and post-promotion lift?
• To create comparability, we used “average sales” for each period (pre-, during and post-)
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Promotion and post-promotion sales not correlated with prior sales volume
Correlation coefficient = 0.03
Promotional sales also not strongly correlated to prior sales volume
Correlation coefficient = 0.1217
What does this tell us about “free”?
• Average results in a small sample were “up”• A range of possible outcomes exist• No correlation with prior sales, even when
isolating print sales as a channel• Important to collect more results and grow
the sample size
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We took a similar approach to testing the data collected on pirated O’Reilly titles…
It’s not clear if prior sales volume changes the impact of pirated content
Correlation coefficient = 0.67 (-0.30 if outlier is excluded)19
The number of seeds is correlated with growth in print sales
Correlation coefficient = 0.35 (0.74 if outlier is excluded)20
The number of seeds peaks quickly
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The number of leeches peaks immediately and quickly declines
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Lag time before seeding varies
Average = 20 weeks
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Some research surprises…
• Number and range of “under the radar” free experiments available for analysis
• Strong interest among trade publishers• Some strongly positive correlations• Low volume of P2P incidence• Lag time on P2P seeding
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The work will continue …
• Matrix offers 20 possible options (and even more permutations)
• 16 covered in this first pass, but several with only a limited set of data points
• More promising opportunities to test– Young adult– Backlist, especially for series– Trade nonfiction
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Three useful cautions
• Correlation isn’t causality• Larger samples may uncover an existing skew• What works today may not work as well at
some future date
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Next steps
• Additional Random House tests queued• Continued P2P monitoring• More publishers can help fill in the test matrix• Gathering feedback• Refining the analysis
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For more information
• “Rough Cut” research paper coming soon– Includes research covered here– Also provides background on free and P2P
• [email protected]• [email protected]
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