'Giving It Away': When Free E-books Work and When They Don't

More U.S. adults had read an e-book (15 percent) than had actually paid for an e-book this year, according to Michael Norris, senior analyst at Simba Information, based on the results of a recent Simba study called, "Trade E-book Publishing 2009."

Norris moderated a session at BookExpo called, "Giving It Away: Balancing a Sustainable Publishing Model While Discovering the Rewards of Free."

Peter Balis, director of digital content sales for John Wiley & Sons, and Brent Lewis, vice president, digital and Internet at Harlequin Enterprises, shared their experiences with free e-book efforts and their insights into the place for free e-books in a publisher's business model.

Balis, whose responsibilities span both nonfiction and trade publishing, said that this year, for the time, "thanks to mobile devices," trade titles sold more in e-book form than scientific, technical, medical and scholarly (STMS) titles—sales through "a consumer-facing retailer superseded Wiley's largest library wholesaler," he said. "That's very significant because it shows, for us, a migration from research-based [usage] to consumer [usage]. It follow our traditional best-seller list now."

Overall, Balis said, "When we explore free offerings at Wiley, we have to do so in light of our profit," he said. The company has found that "free does not cannibalize paid; free does not dilute brand; and free has some purpose," whether for marketing, public relations, or to upsell or generate traffic and/or sales/revenue on Web sites. (Wiley's online business model is a bit different than most publishers, however, as revenue from Wiley's Web sites is based on advertising, not book sales, said Balis.)

Balis discussed a few examples of the company's free e-book efforts—for Frommers.com and CliffsNotes.com. "Both are standalone, successful businesses," he said. "Any content on the site is there for these businesses' profitability."

The company, therefore, has been careful to ensure that free will not cannibalize print sales, he said. On Frommers.com, free content is "sectioned off," or served by segment, theme or destination, not by chapter or in a complete digital facsimile of print content. For example, said Balis, a search for content on accommodations or restaurants in Paris would produce a relevant chapter from a book, "but you can't read [the book] in its full form," he said.