More hard data on the impact of free/pirated downloads on book-sales

Brian F. O'Leary has posted slides updating his quantitative research on the effect of "piracy" and/or free giveaways on book-sales, done independently using data from O'Reilly and Random House (the largest tech publisher and general publisher in the world, respectively). The new slides, from the recent Book Expo America, expand the work with a larger data-set, and confirm the earlier findings that free downloads are broadly correlated with higher overall sales (though correlation is not causality!).
With a larger data set, we tried plotting the average paid sales of pirated and un-pirated content using a common starting point (that is, we plotted sales data week-by-week after publication). The results of the week-by-week and four-week rolling averages are shown on slides 28 and 29 of the BEA presentation. Both pirated and un-pirated titles showed similar growth in sales in the first few weeks after a title is published, followed by a decline after peak. Average sales for unpirated content start higher and peak later, although this may reflect the specific nature of titles in a small sample.

The primary difference between sales of pirated and unpirated content appeared in weeks 19 through 25, when sales for pirated content peaked a second time at a level higher than that seen in the first, sell-in period. This second peak followed the time (19 weeks) at which the average pirated O'Reilly front-list title was first seeded on a P2P site.

We stress that this is correlation, not causality, but the difference in the sales profile is notable and persists even when using rolling averages.

The impact of piracy

Impact of Piracy and Free on Book Sales (BEA 2009, Powerpoint) 2.0 MB