On the face of it this is just a piece about the gaming industry, though a fascinating one. In fact this article raises issues for all content industries from games, to books, to newspapers, magazines and music.
It covers the gamut, the explosion of content, the role of market makers (in this case Apple – though to a lesser mentioned extent, Google), the use of price as a lever and the challenges of making money in markets that have become so large, diverse and saturated.
I’m reminded of two realities most forcefully when reading it, firstly that while digital unleashes greater freedom to create and make content of all kinds available, thus empowering the creator relative to the middlemen and women of the previous era, it also (in its current guise by power of platform) shackles them to the power of another middle-person (for books, mostly Amazon) AND makes a sustainable career even less likely because of the huge increase of content such freedom unleashes. Secondly, I am reminded of just how little information is publicly available to those looking at the book trade. Consider the information in this article about the nature of games sales in the iOS store and ponder how different our conversations might be about ebooks if these facts were more openly shared (some notable exceptions on that front would be Smashwords who share quite a lot of data).
Getting people to play your game in a market of 150,000 alternatives requires a different kind of marketing. For example, if the user can choose to pay $0.99 for your app, or pay zero for another app that’s probably just as fun, they’ll pick the free one. The result follows: 90% of apps are free in 2013 when weighted by monthly average users. And when you look only at those apps that use an experiment/test/data-driven approach for their pricing, you see a strong upward trend in more free apps. So the pricing experiments that these developers are running (you know, actual flipping research, not just speculating baselessly in an HN comment) are telling them it’s better to go free.
via How in-app purchase is not really destroying the games industry | Sealed Abstract.
Very good piece looking at the competing fortunes of Quercus and Waterstones. I’d add a small amount of caution here. Firstly, the Waterstones figures are for the year up to April 2013 whereas the Quercus figures are more up to date. Even so you can follow the logic through from April 2013 until today, in many ways that makes sense because the impact of the kind of policies highlighted here would be more dramatic on publishers in the key Christmas Trading period than at any other time:
Now, cash management is closely related to stock management, so it should come as no surprise that Waterstones’ stock has come down as their cash has grown. I have no knowledge of the state of Quercus’ stock management, but it’s a pretty safe bet that they’ve got too much stock, probably of extremely good titles, sitting in a warehouse, intended for those big orders that never came from the retailers with those challenging conditions.
For independent publishers to remain independent, and sadly it looks as though Quercus will not, we need a relentless focus on cash management and cash generation. Our businesses and the titles and content that make them need to be profitable, and we need to use the digital print and e-book technologies that enable us to hold the lowest stock possible. Easy to say, and probably pretty obvious, but if we don’t hold it as a top priority we can easily be caught out.
via Waterstones up, Quercus down—what’s the story? | Independent Publishing Guild in the UK | IPG.
You really don’t need to look hard for even traditionally published authors driving change:
The two authors, who will continue to write for S&S, are also skilled in other areas. Murray has an MBA from New York University and Billingsley is a former TV and radio news reporter who also has more than 25 years experience in marketing.
“We’ve been pretty successful and we’ve still got book contracts at S&S,” Murray said in a phone interview with PW. Murray told PW the notion to launch a publishing company began a year ago when her agent, Lisa Dawson, self-published some of Murray’s fiction as an e-book novel and the book sold about 15,000 copies with almost no promotion. “Just a little note on my facebook page,” Murray said.
via Authors Launch Brown Girls Publishing.
A curious take on Waterstones results:
The new Waterstones-branded Café W coffee shops, which have been introduced in 17 stores, are another driver of the company’s growth. “Book sales are far stronger in the Waterstones shops that have a coffee concession,” said Mr Daunt.
But the company’s partnership with Amazon to sell its Kindle e-reader tablets and e-books, introduced in May 2012, does not a make a “significant” contribution to Waterstones’ revenues, according to Mr Daunt. “Both sides are happy with the partnership, but it doesn’t materially change the business,” he said.
via Waterstones turns a corner under Russian ownership – Telegraph.
This won’t hurt Apple much financially, even if successful, but the legacy of the Agency Pricing move is still damaging Apple and publishers. As I’ve said it was a stupid move that put publishers on the wrong side of consumers which while attractive in the short term was incredibly damaging in the medium to long term:
Apple has received a new damages claim of over $840 million dollars for conspiring with publishing companies to raise the price of ebooks across the entire industry. The claim, filed Friday in New York by an attorney leading a class action lawsuit on behalf of ebooks customers in 33 states, stems from the US Justice Department\’s successful antitrust lawsuit against Apple that took place in the summer of 2013. Using evidence presented during the course of that trial last year, attorney Steve Berman begins by arguing that Apple owes American ebooks customers a bare minimum of $231 million in damages, and probably far more money than that.
via Apple hit with $840 million damages claim for ebooks price fixing | The Verge.