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The impact of piracy (and P2P) on book sales An update on the piracy project Tools of Change – Frankfurt October 13, 2009
This morning … ,[object Object],[object Object],[object Object],[object Object],[object Object]
And… a call to action ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Born (Wakefield, Massachusetts) Catholic school education College, business school Finally left Massachusetts Time Inc. weekly magazines Married, kid
More kids Hammond Started to consult “ Faster, better, cheaper” Got a logo
MIP 2008: Andrew Savikas and Mac Slocum wonder, “Can we measure the impact of piracy on book sales?” Brian: “How about using a co-op marketing model to assess whether it helps or hinders paid sales?” O’Reilly’s editors: “All of our content is pirated as soon as we publish it!” Random House joins the research, contributing several experiments with “free” content distribution Intrepid NYU grad student starts tracking O’Reilly’s 2008 front list to find pirated content Brian secretly worries that any analysis will not have a “quiet period” against which to measure baseline sales
TOC 2009: Research paper and preliminary results are announced Piracy research on O’Reilly titles Search for more participants BEA 2009: Piracy and “free” results are updated Still consulting … Add Thomas Nelson titles to the piracy research
Why tell you all of this? ,[object Object],[object Object],[object Object],And I’d like you to take action …
My point of view ,[object Object],[object Object],[object Object],[object Object]
“ Perhaps on the rare occasion that pursuing the right course demands an act of piracy, piracy itself can be the right course?” Governor Swann, in “Pirates of the Caribbean” (itself heavily pirated)
“ Free” is not “new” … ,[object Object],[object Object],[object Object],[object Object]
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, increase both discovery and access
Why look at this topic now?
Our research approach The research is data-driven, open (without compromising publisher data) and structured to share knowledge. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
A value in structured testing … ,[object Object],[object Object],[object Object],[object Object],[object Object]
A hands-on research project ,[object Object],[object Object],[object Object],[object Object],[object Object],New York University, candidate for M.S. in Publishing, Dec 2009
The sample set Since the initial working group, Thomas Nelson has joined (August 2009), and we are expanding the number and type of titles we are tracking. 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”
What we have tested … Monitoring P2P (O’Reilly) Sample set for peer-to-peer piracy Monitored three BitTorrent sites; only one (PirateBay) had more than a handful of O’Reilly titles posted Tracked activity of seeds (uploads) and leeches (downloads) for any 2008 O’Reilly front list titles found on these sites Testing free (Random House) Free PDF downloads (three for 1 day, one for 3 days, one for three weeks) Free PDF excerpt (3 weeks) Free ebook download (1 day) Free PDF, MP3 and ebook downloads (3 weeks)
What we found initially … 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 Testing 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
What we took away from that data ,[object Object],[object Object],[object Object],[object Object]
The number of seeds peaks quickly
The number of leeches peaks immediately and quickly declines
Lag time before seeding varies Average = 19 weeks
Proposing a more nuanced model “ White” market “ Gray” market “ Back channel” ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Our current question: what impact does “free” have on sales?
Some research surprises… ,[object Object],[object Object],[object Object],[object Object]
The piracy research continues … ,[object Object],[object Object],[object Object],[object Object]
Comparing the data… The spread in results made us wonder if we had missed something in the bigger sample set. Measure First sample P2P to date Titles 8 21 Post-seed change in sales +6.5% -4.2% Biggest gain +18.1% +15.1% Largest loss -33.1% -48.7% Lag before piracy 20 weeks 19 weeks
Where piracy may benefit … ,[object Object],[object Object],[object Object],[object Object],Because of different pub dates, the average time on sale for pirated content in this sample is shorter (35 weeks) than that for un-pirated content (47) weeks.  Comparisons at the end of the on-sale period are not reliable.
Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets
Four-week rolling averages Average week at which seeded content first seen Unreliably small sample sets
Data in what is not yet pirated… “ Head First books break from the linear tradition, instead using a trajectory filled with successes, failures and lessons… The non-linear format makes them tough to reproduce in a digital form -- they're full of illustrations, thought bubbles, photos, quizzes, etc.”  Series Examples Head First HF Servlets and JSP HF C Sharp HF PHP and MySQL HF Ajax Other Photoshop Elements 7 Programming .Net 3.5 Real World Haskell Windows Server 2008 Learning Python
Three useful cautions ,[object Object],[object Object],[object Object]
Next steps ,[object Object],[object Object],[object Object],[object Object]
A call to action (a reminder) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
For more information ,[object Object],[object Object],[object Object],[object Object],[object Object]

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Impact Of Piracy And Free ( T O C F F)

  • 1. The impact of piracy (and P2P) on book sales An update on the piracy project Tools of Change – Frankfurt October 13, 2009
  • 2.
  • 3.
  • 4. Born (Wakefield, Massachusetts) Catholic school education College, business school Finally left Massachusetts Time Inc. weekly magazines Married, kid
  • 5. More kids Hammond Started to consult “ Faster, better, cheaper” Got a logo
  • 6. MIP 2008: Andrew Savikas and Mac Slocum wonder, “Can we measure the impact of piracy on book sales?” Brian: “How about using a co-op marketing model to assess whether it helps or hinders paid sales?” O’Reilly’s editors: “All of our content is pirated as soon as we publish it!” Random House joins the research, contributing several experiments with “free” content distribution Intrepid NYU grad student starts tracking O’Reilly’s 2008 front list to find pirated content Brian secretly worries that any analysis will not have a “quiet period” against which to measure baseline sales
  • 7. TOC 2009: Research paper and preliminary results are announced Piracy research on O’Reilly titles Search for more participants BEA 2009: Piracy and “free” results are updated Still consulting … Add Thomas Nelson titles to the piracy research
  • 8.
  • 9.
  • 10. “ Perhaps on the rare occasion that pursuing the right course demands an act of piracy, piracy itself can be the right course?” Governor Swann, in “Pirates of the Caribbean” (itself heavily pirated)
  • 11.
  • 12. 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, increase both discovery and access
  • 13. Why look at this topic now?
  • 14.
  • 15.
  • 16.
  • 17. The sample set Since the initial working group, Thomas Nelson has joined (August 2009), and we are expanding the number and type of titles we are tracking. 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”
  • 18. What we have tested … Monitoring P2P (O’Reilly) Sample set for peer-to-peer piracy Monitored three BitTorrent sites; only one (PirateBay) had more than a handful of O’Reilly titles posted Tracked activity of seeds (uploads) and leeches (downloads) for any 2008 O’Reilly front list titles found on these sites Testing free (Random House) Free PDF downloads (three for 1 day, one for 3 days, one for three weeks) Free PDF excerpt (3 weeks) Free ebook download (1 day) Free PDF, MP3 and ebook downloads (3 weeks)
  • 19. What we found initially … 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 Testing 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
  • 20.
  • 21. The number of seeds peaks quickly
  • 22. The number of leeches peaks immediately and quickly declines
  • 23. Lag time before seeding varies Average = 19 weeks
  • 24.
  • 25.
  • 26.
  • 27. Comparing the data… The spread in results made us wonder if we had missed something in the bigger sample set. Measure First sample P2P to date Titles 8 21 Post-seed change in sales +6.5% -4.2% Biggest gain +18.1% +15.1% Largest loss -33.1% -48.7% Lag before piracy 20 weeks 19 weeks
  • 28.
  • 29. Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets
  • 30. Four-week rolling averages Average week at which seeded content first seen Unreliably small sample sets
  • 31. Data in what is not yet pirated… “ Head First books break from the linear tradition, instead using a trajectory filled with successes, failures and lessons… The non-linear format makes them tough to reproduce in a digital form -- they're full of illustrations, thought bubbles, photos, quizzes, etc.” Series Examples Head First HF Servlets and JSP HF C Sharp HF PHP and MySQL HF Ajax Other Photoshop Elements 7 Programming .Net 3.5 Real World Haskell Windows Server 2008 Learning Python
  • 32.
  • 33.
  • 34.
  • 35.