The App Store and the Long Tail Part 2: The Real "DRM" At Stake

Andrew Savikas
August 10, 2009 | Permalink | Comments (5) | Listen

Note there's a lot of images in this post, so if you're reading it via RSS, you may want to click through to the original post if you can't see the images.

A few weeks ago I wrote about how the small number of sales from many different countries were adding up to more than the large number of sales from the US in the App Store for our books. That trend has continued (and accelerated), and right now about 60% of our App sales are coming from outside the US:

When I've talked with other publishers about our success with iPhone Apps, they typically discounted what I said because I was talking about iPhone: The Missing Manual, a title particularly suited to the device. And to a degree, that's a fair argument, and I don't expect very many other books-as-apps to sell as well as that one. But the results for the next batch of 17 titles is instructive. For the two-week period of July 20 to August 2 (the first two calendar weeks the apps were on sale), five of the 17 titles sold more units as iPhone apps than via print (as measured in Bookscan). Here's a comparison across all 17 titles:

That got me wondering why there's not stronger interest from other publishers, especially trade publishers, in iPhone apps (besides concerns about pricing and the approval process). Then as I was looking at rankings for some of the top paid book apps, I spotted a possible answer.

In the App Store, each country has its own top 100 lists (overall and for each category, and for free as well as paid). Something that's #1 here in the US may not even register on the top 100 in another country. Here's the current (as of this writing) worldwide rankings for the "Classics" App, the #1 paid book app right now:

Classics is one of the most popular paid book apps in nearly every country with iPhone service (the list actually goes further down than shown above).

Now here's the current (as of this writing) worldwide rankings for "Twilight" which has been holding steady in the top 25 paid apps here in the US:

Yup, that's it. Just the US. Presumably this is a rights issue -- Hachette either doesn't have the rights to sell this book as an App anywhere else, or they're choosing not to. But taken in light of our own sales of nearly 2/3 outside the US and the data from Classics, that means a publisher who can't (or won't) sell their app outside the States is missing a lot of the market. Here's the current rankings for the "A Twilight Trivia" app, which is ranked above Twilight in the US (and is not affiliated with Hachette or Stephenie Brown):

So there's clear interest in the Twilight content on the iPhone outside the US -- enough interest to keep this app well into the top 100 paid book apps in dozens of countries.

Perhaps the most important "digital rights management" at stake right now is that of the rights to sell digital content globally.

If you're planning to attend the Frankfurt Book Fair, producing and selling digital and mobile content from a global perspective will be a big part of the program at TOC Frankfurt on Oct. 13.

Does Digital Cannibalize Print? Not Yet.

Andrew Savikas
August 7, 2009 | Permalink | Comments (10) | Listen

One of the big risk factors publishers think about when it comes to digital books is that they will cannibalize print sales. Factor in the lower prices we're seeing for ebooks, and it's a quite reasonable concern.

Looking at data on sales from our website, at first glance that would appear to be exactly what's happening:

Over the past 18 months, we've gone from print outselling digital by more than 2:1 to just the opposite.

But that's not the full story. If there really was cannibalization happening, you'd expect to see our print sales underperforming the overall computer book market, but that's not what's happening. Here's a comparison of how our sales (as measured by Bookscan) stack up against the broader computer book market. The data here is normalized (the first period in the graph is set to 100, and subsequent results are calculate relative to that period):

Roger Magoulas, who heads up our Research Team (which is doing some way cool stuff with App Store data) put it this way in a recent backchannel email covering this as part of a larger analysis:

By looking at the data and these charts we infer that while O'Reilly physical book sales are down compared to last year, this seems more the result of the drop in demand for computer books since the financial meltdown than the impact of ebook sales. Since O'Reilly is a relatively prolific publisher of econtent we would expect that ebooks would affect O'Reilly's physical book sales more than other publishers and we don't see that evidence in these results. Even if ebooks are taking a bite out of O'Reilly physical book sales, we see no negative effect on O'Reilly's slightly increasing share in the physical book market nor on how O'Reilly's sales correlate with the overall market for physical computer books.

So, for now, if what we infer is correct, you can put away your exorcism crosses, ebooks seem more a legitimate expanded market opportunity than a projectile vomiting Linda Blair wannabe.