I want to share a case study with you.
This is about making a profit selling ebooks. That's right.
Somebody is out there, breaking all the rules, and making a profit
His name is Jim Baen, and he publishes science fiction and fantasy.
I've been watching the great Baen Webscriptions experiment for two
years now, and I can report that it is working, and according to
Jim, it is making money.
Here is how it happened.
Like every other publisher, Baen set up a website. But several of
his authors and fan friends convinced him to put a chat client on
his site. Since he was interested, and since several of those
authors (like Jerry Pournelle, former columnist for Byte Magazine,
for instance) were very Internet savvy, he did. The chat client
grew into an incredibly vibrant community called Baen's Bar. There,
that's that "community" word again.
Baen's Bar is quite different from the websites of other publishers:
Baen, his editors, and many of his authors actually frequent the
chatrooms daily, host their own forums, and are quite open and
friendly, and "just folks." Of course, if you are friends with an
author, you run out and buy his or her books in hardback right
away...and, oh my, Baen's hardback sales have increased
tremendously. Baen's Bar has several thousand active members, and
averages over 900 posts a day in all of its forums.
Baen got an interesting idea about two + years ago: He suggested to
his authors that they should post "snippets" of works in progress,
to get continuity checks, reality checks, historical and logical
consistency checks, and, oh yeah, to whet appetites for the books
when they finally came out.
Baen's community convinced him to start offering the books as
ebooks by subscription. Hence, "Webscriptions." Starting the
second month before publication, you can download the books in
sections, and finally, 30 days before they hit the stores, you can
download the entire month's releases in several different, totally
unencrypted, ebook versions, for a total of $15.
That's right...Baen uses no encryption at all.
You get an average of 5 brand new books in RTF, palm, PocketPC and
HTML versions, for $15.
It used to be $10. Two months ago, Baen's community convinced him
that he wasn't charging enough for the books and asked him to raise
the price $5 a month!!! They also convinced him to start allowing
them to purchase individual books instead of the whole lot at $5
Baen also decided to produce a Free Library, where you can download
many very fine books by authors such as David Weber, Mercedes
Lackey, and Eric Flint, absolutely for free, with no encryption.
One of the first things that happened when Baen posted the first
David Weber book in the Free Library, was that sales of the "dead
tree backup" went up by 100%. People who had never read the book
read it or parts of it online and then went out and bought it, and
its successor volumes in the 10 volume series it is the first of.
Baen broke even on Webscriptions in the first year, and has made a
small, but steady profit off the project ever since. He can show
increased sales of all his books, that are directly related to
In addition, since there are several thousand people who have
already read the book when it hits the stores, he has an army of
viral marketers who post reviews on Amazon, and hit the chain
bookstores special ordering the hardbacks on the first day of
availability. This has started to boost the number of Baen
One of the most interesting of Baen's uses of community is his
counter to the fact that midlist authors are hard to push. Baen
encourages his midlist authors to participate actively in the Bar
community, and sales of Baen's midlist books have steadily
increased, because people get to know them, see snippets of their
work, and they buy books they probably never would have ot herwise.
Finally, the incidence of piracy of Baen ebooks is so small it is
insignificant. A recent exchange on the usenet newsgroup
Rec.Arts.SF.Written is illustrative. A poster asked for a pirate
ebook copy of one of Baen's books. Immediately a half-dozen people
posted back saying, "Go buy it at Webscriptions, you cheapskate!"
The lessons to be learned from Baen's example are several. First,
there is no underestimating the power of community. Second, you
have to spend the time, personally, to grow and brand your
community. Third, openness about your business goals and your inner
workings with your community leads to synergy. Fourth, give, and
you shall get.
As an observer (and, admittedly, as a Baen's Barfly) I can only say
that Jim hasn't made any obviously major mistakes with his online
presence and his community and his ebook publishing business.
Walt Boyes is a Marketing Practice Consultant. He does Strategic marketing, sales and electronic business consulting for the small and medium-sized enterprise: http://www.waltboyes.com