The Scholarly Kitchen

A common bit of speculation, bolstered by Chris Anderson’s book, “Free: The Future of a Radical Price,” is that providing free copies of books drives awareness and redounds in a commercially beneficial way (Anderson didn’t pursue this approach himself, it’s worth noting). (Update: I was wrong. He did offer it for free. I just didn’t hear about it.)

Various publishers, some in the scholarly space, have had success with this approach — but arguably always as part of a carefully constructed business model in which “free” has a clear purpose. Even open access can be characterized as free output to spur paid input.

Aside from Anderson, one of the biggest mainstream proponents of “free” as a marketing tool is Cory Doctorow. He shamelessly recommends “free” as an unqualified benefit to authors, and feels he has benefited for years from the approach of giving away electronic copies of his science fiction books under a Creative Commons license. Doctorow is that rare author who has created for himself the vaunted “platform” currently in vogue in trade publishing circles — a personality, speaking engagements, writing in big venues (Boing Boing), and publishing books. Some revenue comes from each aspect, and the four aspects drive each other in a virtuous cycle.

(Doctorow should also consider that maybe his success is based on his skill as a writer. Surrendering success to a “free” strategy negates the role of skill as a writer, after all.)

Given this potential “fundamental error of attribution,” I wasn’t surprised to see Doctorow cheerleading a recent study about the effects the free e-books have on print sales:

A new study from two academics at BYU tracking the sales of printed books following free ebook releases found that generally, a free ebook release is correlated with increased sales. Interestingly, the exception is for a group of ebooks that were released for a week and then withdrawn — part of Tor.com’s launch strategy, and a success in getting large number of people signed up to the site. Very nice to see some crunchy data in the mix.

It would be nice to see some “crunchy data” in the mix, but the data in this study were largely uncrunched. In fact, they were just raw tables, barely masticated by the two Brigham Young University researchers.

There are many problems with the study published in the Journal of Electronic Publishing:

• Sales for only 70% of retail outlets were used as a basis of evaluating increased print sales, and these probably don’t even account for a majority of sales (Wal-Mart was left out, for instance).
• No data about e-book downloads were included to compare with print sales.
• “Correlation” is claimed, but there are no statistical tests of correlation in the study.
• No other factors are adjusted out — e.g., increased marketing, author name recognition, awards, etc.
• Only science fiction, tech non-fiction, and fantasy genres were included in the study.
• There isn’t a meaningful $ to be found in the study. Sales figures are provided, but the researchers didn’t push to find out if pricing changed on the print versions during the “free e-book” weeks studied, or if Tor in particular generated more revenues indirectly by creating leads using free content.

Why should the financial aspect been analyzed? One of the publishers covered by the study, Tor Books, took a risk making its e-books free, even for a week at a time. Doctorow and the authors of the JEP paper both speculate that Tor’s practice of only release e-books free for a week is what limited their upside of the “free” approach. But with only a week of free availability rolling through the 41 titles studied, Tor’s sales declined by 5,268 units. That’s $42,091 in lost gross revenues basing it on an average sales price of $7.99 per title (which seems to be Tor’s average paperback price — the actual revenue loss is probably greater). So, in the eight weeks studied, Tor potentially gave up more than $40,000 of revenues to offer e-books for free. Users had to register to get the free e-books, so Tor increased its email list. But at a cost of $40,000+, that had better be one well-monetized email list.

Had the authors thought this through even as superficially as I just did, they would have seen the size of the hill “free” can create for a publisher to surmount, and could have speculated on the likelihood of Tor’s email strategy overcoming that challenge.

One interesting element of the raw data counts presented by the researchers is that Random House and Tor titles sold much better overall than the other books. Is this because their marketing arms are that much better? Is it because the authors are more popular in general? Do these publishers just have better lists? Are the books generally more current or newer? (Many of the tech titles were older titles.) Again, the researchers didn’t measure these factors or adjust for them.

One author of Tor titles notes his own increased sales during the free e-book period, commenting on a confounding variable:

Were there other factors possibly relating to that increase? Sure; for example, in March of 2008 I was nominated for two Hugos, including Best Novel for The Last Colony. That might have had some influence, but I suspect if so it was tangential, since it wasn’t Old Man’s War up for the award.

While he may think the effect of being nominated for two Hugos is “tangential,” that’s a pretty powerful shot in the arm — to have two nominations for a genre’s crowning prize. Yes, I think that would drive strong sales across an author’s catalog.

Some books had significant sales declines with the offer of free e-books, if you accept e-book availability as the only driver. As an author or a book marketer, there is risk to be found in this study, and that’s enough to give one pause.

But, of course, one author of the study published in JEP gives himself away as a shameless advocate of free content:

I think there’s a huge benefit to society by making something available for free. Recently I’ve been involved with another study with my dissertation, and this studied just eight books, and over a few week time these books were downloaded over 100,000 times, and sales increased moderately. But the point wasn’t whether sales increased or decreased; here are 100,000 people who accessed works who otherwise wouldn’t have. So my hope would be that this study would relieve people’s fears that if they put books online for free their sales would tank, and they’d say, ‘let’s think about a more global benefit to having your works online for free.’

It’s nice to have this intellectual bias revealed in an interview after the study was published. It might have been better if he had stated in the paper itself his hope about which direction the results would point. Not that he didn’t leave intellectual clues aplenty — you can feel the authors working throughout the paper to make the “free content” argument appealing. This clear bias in their writing is what sent me to look for evidence that they held an intellectual bias.

Free access to content makes sense in some cases. But, it seems to make the most sense in the context of a business model that can make it work. Publishing studies like this — complete with lightweight data, flimsy analysis, and intellectual bias — doesn’t help.