How E-Books Make (A Lot) Of Cents

 

Andrew Savikas, 03.23.09, 06:00 AM EDT

O'Reilly talks about the lessons learned by its foray into e-book publishing.

 

Many people, both inside and outside of the publishing and media industry, are skeptical about the potential of paid content on mobile phones, especially given the troubled history of e-books. I beg to differ. In December 2008, O'Reilly's "iPhone: The Missing Manual" was published as an iPhone app. Since its release, the app has outsold the printed book, which is a best seller in its own right. We're learning a lot from the experience. Here our some of the questions that we're starting to answer.

Was the iPhone app for the "Missing Manual" an anomaly? After all, iPhone owners are the most likely audience for the "Manual."

O'Reilly: Conventional wisdom suggests that when choosing pilot projects, you pick ones with a high likelihood of success. This was a best-selling author on a red-hot topic. We're gearing up to release about 20 more books as iPhone apps, but realistically we don't expect any of those to sell as well as this first one.

Is the iPhone the most convenient place to get content about problems you're trying to solve on a computer?

For many of our readers, a first or second pass through one of our programming books is mainly about orienting to the landscape and getting a sense of the platform and what's possible, not about solving a particular problem at hand. The iPhone is a perfectly suitable environment for that kind of reading.

Won't you make less money selling iPhone apps than books? The computer book market is the computer book market, period. It has a certain size, and that's it. If you convert that market into iPhone app buyers instead of book buyers, say good-bye to your publishing business.

It would be economically bad news to sell a $5 product to someone who would otherwise pay $50. But it's good to sell a $5 product to someone who would not otherwise be a customer (provided, of course, that the marginal revenue exceeds marginal cost). For Safari Books Online, for direct sales of our e-books and now for this (single) iPhone app, the data suggests that they have created growth without sacrificing print market share. For example, our market share for printed computer books sold at retail was 14% in 2004, and is now 16%. According to Nielsen Bookscan data, the print version of iPhone: The Missing Manual has sold nearly as many copies as the next two competing titles combined in the time period since the app version went on sale in December.

 

This data only goes back to mid-January, but the 90-, 30- and seven-day averages on Amazon sales rank for the printed book have been steadily improving, suggesting that sales of the iPhone app version are not cannibalizing print sales--and may even be helping them.