In-book Purchases

We're all familiar with the in-app purchase model. It's a way to convert a free app into a revenue stream. In the gaming world it's an opportunity to sell more levels even if the base product wasn't free. Each of the popular ereader apps allow you to purchase books within them, of course, but why does it end there? What if you could make additional purchases within that ebook?

Here's an example: I'm almost finished reading Walter Isaacson's terrific biography of Steve Jobs. I paid $14.99 for the Nook version and as I've read it I've been tempted to go out to YouTube and relive some of the interviews and product launches Jobs did over the years. I didn't do that though, mostly because it would have required me to close the ebook and search for the relevant video.

I would have paid an extra $5 for an enhanced version of the book with all the YouTube videos embedded (or linked to). Sell me the base edition for $15 and let me decide to upgrade to the richer version for an additional price. Even though everyone won't necessarily upgrade why not make the option available to those who might?

My example is pretty simplistic but the lesson here is to think about how a single product can be re-deployed as multiple products. Think basic, enhanced and premium editions, each at different price points and upgradable to the next level. The most successful approach here is likely one where the basic edition is as inexpensive as possible and readers are given a compelling reason to upgrade to the enhanced and premium editions.

What do you think? Is this a viable model and can it be implemented in today's walled gardens or will it have to wait till more ebooks are being sold direct to consumers by the publisher?

Comments

[Tony Hursh]

Not until we get a real multimedia ebook standard. Amazon and Apple have proprietary solutions, and epub3 is just all-around nasty. It's one of the worst examples of design-by-committee I've ever seen.

I wish some forward-thinking publisher (cough... O'Reilly) would develop a real, usable standard for this and open source it.

Ideally it would be something that works in a regular web browser. That would let a thousand flowers bloom. Want to add in-book upgrades? No problem. Just add a hyperlink to the purchase portal, and have the premium content located in special divs that get populated via Ajax after the purchase has been completed. No purchase -> the div gets populated with a banner suggesting the upgrade.

You'd want to make really, really sure that the reader understood that they weren't getting the whole thing with the initial purchase, though. It might be better to make it an add-on volume/appendix rather than sellling a book with big holes in it.

[Joe Wikert]

Thanks for your thoughts on this, Tony. I'm wondering if an HTML5-based solution would be best. That turns it into a platform for any customer with a decent browser. We'd still have to build all the surrounding upgrade capabilities, but a browser-based solution makes sense to me.

[Tony Hursh]

Yes, definitely. HTML5, CSS3, Javascript, and maybe any advanced features that are found in the intersection of WebKit (Chrome, Safari) and Gecko (Firefox), for a bit of future-proofing.

That would get you a package that can be run on every desktop and notebook and every common smart phone and tablet. If someone wants to build a dedicated reader, the underlying software would be there for free.

That would cover the client side. The server side would need some careful planning. In addition to the multimedia stuff, I'd like to see gradeable (and updatable) quizzes and built-in discussion forums. Ideally the whole thing would be a turnkey package that you could deploy to Amazon EC3, Google App Engine, Heroku, or the like.

[Rechtsteiner]

There are really two issues at play here, both of which are critically important.

The first issue is the presence of and support for multimedia / interactivity in an ebook / app. The battle between HTML5, CSS3, Javascript, ePub3 and a host of proprietary formats and how they will support multimedia is a significant issue that is deserving of its own thread. It's simply too big to address in a comment.

The second issue is the one I gravitated towards which focuses on an author's ability to serialize their works at a pace (and price level) commensurate with their work. The opportunity for an author to enable in-book (in-app) purchases for additional material(s) is going to become paramount to their success. The fundamental problem here, however, is that the retailer will take a significant cut of this in-work revenue which may further inhibit the author's ability to make a sustainable living from their works.

There is no question that authors and publishers should be looking at how in-book or in-app purchases can be used to increase their ARPU (average revenue per user). They should be pushing the bounds in the ways their works are created, marketed, sold and consumed on a daily basis. It is only with this pushing that the edges will be clearly identified and the business models can begin to evolve to support standard of living requirements (or not, as the case may be). If the authors don't push these bounds, someone else will push them for them (publishers? retailers?) and they will lose out in the ARPU opportunity.

For the record, I totally agree with Joe. I, too, would have loved to have been able to quickly reference some of the interviews, commercials, etc. and would have gladly paid "more" for the version of the ebook containing them (not just containing links to them).

[Joe Wikert]

Chris, I'd like to think that ultimately HTML5 will prevail and we won't be stuck with multiple formats (and variations of HTML5!) for too much longer. That's wishful thinking on my part right now though, of course.

Your point about author pace and the rev share is a very important one. I think this model works better when it's either implemented direct from publisher to consumer or author to consumer. IOW, having to deal with a cut in the middle makes it less attractive for the author, so will enough authors be willing to test it out? That's a big question we'll have to answer before this proves successful.