Down, down, down: Books, e-books and apps all trending to zero

“We expect DVD Subscribers to decline every quarter.. forever.”
— Reed Hastings, CEO, Netflix

Does your business model rely on selling paid content?  Welcome to Mr. Hastings’s world.

Books

Many publishers continue to operate under the assumption that printed book sales are declining gradually or perhaps even plateauing.  Unfortunately the data tells a different story: the decline appears to be accelerating.  Here’s Nielsen Bookscan for the travel market:

Printed guidebook sales, millions/year

That’s from the “Guidebook Category Report, Rolling, Period 13” for 2006 to 2012.  The trendline is a simple polynomial (n=2) best fit, and if it’s accurate, the market will halve by 2015.  And while that sounds drastic, it’s by no means unprecedented, as the sales of CDs did pretty much the same thing in 2006-2009.

Of course, the market’s not quite homogenous: Lonely Planet’s been beating the trend, mostly by continuing to invest in print and absorbing customers from the rapidly-disappearing Frommers. But that just makes LP an even-bigger fish in an ever-shrinking pond.

So can the white knights of digital paid content, e-books and mobile apps, save the publishing industry?

E-Books

Finding good data for e-books is a pain, so I ended up rolling my own: I grabbed Amazon’s Kindle Store Top 100 bestsellers lists since 2007, using snapshots from the Internet Archive that record the actual prices at the time, and computed average prices and the proportion of under-$5 titles, the vast majority of which are self-published.  (Source code in Ruby here.)

Average price of e-books in Kindle Store Top 100

Despite that December 2012 spike, the trend is clear, and while the decline looks gentle, my personal suspicion is that the trend line is too optimistic and that there’s a collapse looming.  For one thing, the data above is only for best sellers, meaning new books by well-known authors who command a distinct price premium; the average price of an average e-book is both lower and falling faster.  Yet even in the Top 100, the share of “cheap” books, the vast majority of which are self-published, is growing exponentially:

Books Under $5 in the Kindle Store Top 100

While I didn’t use their data directly, I owe tips of the hat to Piotr Kowalczyk, who wrote a very detailed report on the growth of self-published books on Kindle, and Digital Book World, which has been keeping tabs for the past half year (albeit looking only at the top 25).  DBW also has a credible explanation for the spike, which boils down to publishers yanking up prices in the period before they had to start allowing discounting, and further reinforces that shrinking prices are the new normal.

Apps

The collapse of prices in the mobile app world has been even more drastic, to the point that outside an  elite circle of bestsellers and the odd very specific niche, making money by selling the app itself is a pipe dream.  (All data courtesy of 148Apps.biz and the Internet Archive.)

Average price of paid applications in the Apple Store

By the end of the year, the average app will cost under 99 cents, and even that’s pulled up by every $999 BarMax and wannabe in the store.  The median price is already zero:

Share of free applications in Apple Store

In other words, over half of all apps are already free.  On current trends (and look how beautifully that line fits the data!), that will be over 80% within two years.  This is for the “premium” Apple Store widely opined to have less stingy customers; the equivalent figures for Android will be even more brutal.

What to do then?  The only answer is to figure out a way to make money that doesn’t involve readers paying for content.  Here are some ideas:

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Free travel guide Wikivoyage comes out of beta and is already kicking ass

Tomorrow, January 15th, marks the official launch date of Wikivoyage, the new free travel guide from the Wikimedia Foundation.  Born from a split with Wikitravel, here are six reasons it’s already better than its ancestor.

  1. Wikivoyage has a great mobile version.  This uses the same systems as the massively popular mobile version of Wikipedia, and is thus fast, compatible with virtually every device, and close to bug-free.
  2. Wikivoyage supports scrollable, zoomable web maps, courtesy of OpenStreetMaps.  These are so new there aren’t many around yet, but here’s an example from the Italian page for Funchal; expect to see plenty more soon.
  3. Wikivoyage lets you collect articles into books, which can be turned into a PDF or EPUB for offline reading, or shipped to you as a printed book.  (And thus Wikivoyage Press came to life at the flick of a switch.  D’oh!)
  4. No more screen scraping: full data dumps of Wikivoyage are already available.  Thanks to the Creative Commons license, you can freely use this data for travel mashups and more.
  5. Thanks to its active community, Wikivoyage already gets more content updates, and has spam firmly under control thanks to the Foundation’s years of experience in combating it.
  6. Last but not least, Wikivoyage does not suck: there are no punch-the-monkey ads, in-your-face flight booking dialogs, database backends that flake out randomly when you’re trying to edit, or company-appointed admins who censor and ban at will.

So what does this mean in practice?

Short term impact

As part of the launch, every Wikipedia page that once pointed to Wikitravel will now start pointing to Wikivoyage instead.  In addition, every Wikipedia page will temporarily be festooned with a notice pointing to the site, which means a cool 6.5 billion ad impressions a day. The traffic boost from these will be massive, so you can expect to see a lot more Wikivoyage in your search results quite soon.

South Beach, Perhentian Besar, MalaysiaThis is not to say it’s all peaches and cream, as the site remains a work in progress.  For example, while merging Wikivoyage’s image backend with Wikimedia’s Commons allowed access to a wealth of new pictures and illustrations, it also means that several thousand pages now have broken image links.  These are being fixed one by one, and the backlog has already been cut in half since mid-December, but plenty of work remains.

Long-time readers may also recall that there was a complicated tangle of lawsuits between Wikitravel’s owner Internet Brands (IB), some of its erstwhile users, and the Wikimedia Foundation.  The first lawsuit, by Internet Brands against two Wikitravel users, was dismissed on November 28, 2012, and although they could technically try again in state court, IB appears to have given up (unsurprising, as they had no case).  The second and arguably more meaningful lawsuit between the Wikimedia Foundation and Internet Brands is still rumbling on though, with both sides stomping around the sumo stadium, slapping thighs and grunting menacingly, but no court date set.  Keep an eye on the Wikimedia blog for updates; nonetheless, the Foundation has stated that this will have no impact on Wikivoyage itself.

Long term impact

While I have no doubt that Wikivoyage will surpass and supplant Wikitravel, its impact on the wider travel industry remains an open question.  For Wikivoyage to become as globally ubiquitous as Wikipedia, at least some of these hard problems will have to be cracked:

  • Oysters in Adelaide, AustraliaClearer separation between objective and subjective travel information.  Wikis are great for “the train takes 15 minutes and costs $2.50”, but not so much for “the pizzas are great and the music rocks”.  Allowing multiple comments, reviews or ratings of some kind for listings is needed.
  • Building a database backend.  Wikivoyage articles are long, flat pages of text, with a little markup for points of interest and geographical hierarchy.  Turning them into anything other than pages of text, or even getting the various language versions to share information, would require reworking the site to use a database of some kind, not a trivial exercise, although it would definitely be an intriguing application for the budding Wikidata.
  • Lack of vision and desire.  To a first approximation, the Wikimedia Foundation allocates its meager resources based on site popularity, which is why Wikipedia gets almost all of the love and the Foundation will have precisely zero Wikivoyage people on staff.  This means that not only is the Foundation unlikely to be able to make the large investments needed to bring the site to the next level, but there won’t even be anybody who could direct those investments if the money and will suddenly came up.
  • Lack of funding.  That money is unlikely to come up, though, since Wikimedia is funded entirely by donations and the vast majority of them go to pay for Wikipedia.  While adding eg. hotel bookings to Wikivoyage would be a near-guaranteed money spinner and, if done right, a genuine enhancement to the site, it would be an uphill battle to get the occasionally rabidly anti-capitalist wider Wikimedia community to accept this taint of Mammon.

I should probably underline that I’m not trying to rag on the Foundation with those latter two points, they’re operating quite sensibly with the constraints they have as a non-profit organization.

This also explains why, as a travel industry insider myself, I don’t think Wikivoyage poses an existential threat to TripAdvisor, Google or, for that matter, Lonely Planet: it’s simply not playing the same game.  Quite the contrary, it promises to be a great resource of information for everybody.  In the same way that Google pulls in data for Wikipedia for its search results and Lonely Planet’s website uses images sourced from Wikimedia Commons, other travel guides will be able to complement their own content with additional data from Wikivoyage.

 

Wikitravel editors abandon Internet Brands, join up with Wikipedia

On July 11, 2012, the Wikimedia Foundation of Wikipedia fame made a decision that has been a long time coming: they decided to support hosting a new wiki devoted to travel, populated with Wikitravel content and, most importantly, the community that built Wikitravel.  It’s not a done deal yet, as the decision has to be confirmed by public discussion, but as it’s looking pretty good so far; and if it comes true, this second shot at success is almost certain to result in the new gold standard for user-written travel guides, in the same way that Wikipedia redefined encyclopedias.

Let me start by making it clear that this is a personal blog post that does not claim to represent the view of all 72,000+ Wikitravellers out there, much less the Wikimedia Foundation.  I’ve played little role in and claim no credit for making this fork (legal cloning) happen, and my present employer Lonely Planet has nothing to do with any of this.  However, as a Wikitravel user and administrator since 2004, who has done business with Wikitravel’s current owner Internet Brands and seen first hand how they operate, I’ll take a shot at answering three questions I expect to be asked: why the fork is necessary, whether the fork will succeed, and how Internet Brands will react.

First, a quick history recap.  Founded in 2003 by Evan Prodromou and Michele Ann Jenkins as a project to create a free, complete, up-to-date and reliable world-wide travel guide, Wikitravel grew at an explosive pace in its initial years and seemed on track to do to printed travel guides what Wikipedia had done to encyclopedias.  But in 2006, with ever-increasing hosting and support demands and no money coming in, the Prodromous made the decision to sell the site to website conglomerate Internet Brands (IB), best known at the time for selling used cars at CarsDirect.com.

IB made many promises at the time to respect the community, keep developing the site and tread carefully while commercializing it.  The German and Italian wings of Wikitravel didn’t believe a word it, so they rose up in revolt and started up Wikivoyage, the first fork of Wikitravel, which did successfully supplant the original for those two languages.  But the rest of us, including myself, opted to give IB a chance and see how things turned out.

Now to give Internet Brands credit where credit is due, it could have been considerably worse.  They’ve kept the lights on for the past 5 years, although overloaded or outright crashed database servers often made editing near-impossible.  They have respected the letter of the Creative Commons license, if not the spirit, as from day one they have refused to supply data dumps.   And they grudgingly abandoned some of their daftest ideas, like splitting each page into tiny chunks for search-engine optimization, after community outcry.  On a personal level, I also dealt with IB while running Wikitravel Press, and while they could be a tough negotiating partner, whatever they agreed on, they also delivered.

What they did not do, though, was develop the site in any way that did not translate directly into additional ad revenue.  The original promise to restrain themselves to “unobtrusive, targeted, well-identified ads” soon mutated into people eating spiders and monkey-punching Flash monstrosities, with plans to cram in a mid-page booking engine despite vociferous community opposition.   Once Evan & Michele were kicked off the payroll, bug reports stayed unattended for years, and neither did a single new feature come through, with the solitary exception of a CAPTCHA filter in a feeble attempt to plug the ever-increasing amount of spam.  Even the MediaWiki software running the site was, until very recently, stuck on version 1.11, five years and a full eight point releases behind Wikipedia.  Unsurprisingly, the once active community started to fade away, with all of Wikitravel’s statistics (Alexa rank, page views, new articles, edits) slowly flatlining.

By 2012, with various feeble ultimatums ignored by IB and no other way out in sight, the 40-odd admins of the site got together and decided to fork. After a short debate and a few feelers sent out in various directions, unanimous agreement was reached that jumping ship to the Wikimedia Foundation (WMF) was the way to go, with Wikivoyage also happy to join in.  Reaction on the Wikimedia side was almost as positive, and as I type this the birth of a new, truly free travel wiki appears to be only weeks away.  (Sign up here to be notified when it is!)

The natural question is thus, which of the two forks will win?  Internet Brands has triggered many a community revolt before, but the track record of those revolts is distinctly mixed.  QuattroWorld has found a stable user base but is still below AudiWorld in traffic rank; Cubits.org did not put a dent in Dave’s Garden; and the jury is still out on FlyerTalk vs MilePoint, but FlyerTalk retains a commanding lead.

Nevertheless, in Wikitravel’s case, I feel confident in predicting the answer: the new fork will win, by a mile.  Many of the reasons are clear — Wikitravel’s license allows copying all the content, nearly all editors and admins will jump ship, and the Foundation’s technical skills in running MediaWiki are second to none — but one takes some explaining.

The primary reason Wikitravel shows up so well in Google results is that it is linked from nearly every article about a place in Wikipedia.  Now, ordinary garden-variety links from Wikipedia to other sites are ignored completely by Google, because they have the magic anti-spam rel=nofollow attribute set.  However, Wikitravel is one of a very few sites that are linked through an obscure feature called “interwiki links“, which do not have that attribute set, and are thus counted in full by Google when it computes the importance of pages.  Thus, the moment those links are changed to point to the new fork — and all it will take is one edit of this page — the new site will be propelled to Google fame and Wikitravel.org will begin its inexorable descent to Internet obscurity.

The final question thus presents itself: How will Internet Brands react?  We have some clues already: as soon as they twigged on, they simultaneously pleaded that everybody return to their grandmotherly embrace, tried to spin the fork as a “self-destructive” rogue admin coup against a Nixonesque “silent supermajority”, and attempted to censor discussion on Wikitravel itself.  When these attempts unsurprisingly fell flat, the phone lines started ringing, with head honcho Bob “Passion to Mission” Brisco calling up the WMF with promises of “innovative collaboration” if only they can keep their sticky fingers in the pie.

From Wikitravel’s point of view, it would obviously be best if Internet Brands cheerfully admitted defeat and handed over the domain and trademark to the WMF, which would avoid the necessity for a messy renaming. However, having followed the (private) discussion from the sidelines for a few days now, Internet Brands insists on keeping full control of the site and minting advertising money, and all they want from the WMF is a seal of approval, paid for with a slice of the loot.  The non-profit Foundation, on the other hand, aims simply to freely share knowledge and has a long-standing aversion to advertising, so all they are able to offer is an easy way out from what will otherwise be a PR disaster.  I’d still like to hope a deal can be done, but quite frankly, the gap between these two positions does not look bridgeable at the moment.

The other extreme is that Internet Brands tries to prevent or sabotage the fork via legal action, as they did in the vBulletin vs XenForo case that’s apparently still rumbling through the courts.  I think this is even more unlikely though: all they own is the Wikitravel trademark and domain, so as long as the new (and presently undecided) name is sufficiently dissimilar, they will not have a legal leg to stand on.  Unlike the XenForo case, there are no employees jumping ship, the software is open source, and the content itself is Creative Commons licensed and can be copied at will.

The most likely option is thus status quo: IB will keep doing the only thing it can, squeezing every last drop of revenue from visitors venturing in, and probably turning up the infomercial volume to 11.  But with the community soon to turn into a ghost town, and increasing numbers of spammers and vandals dropping in to trash the place with nobody left to clean up after them, they will probably have to disable editing sooner or later, and Wikitravel.org the site will die a slow, ignominious death.

It remains to be seen if the new travel guide can succeed among a broader public: travel information online and collaborative writing have both moved on since 2003, and there are still unresolved problems with asking users to write and agree on fundamentally subjective content.  But the new Wikitravel will remain the world’s largest open travel information site for the foreseeable future, and will certainly give the closed competition a run for their money.  Wikitravel is dead, long live Wikitravel!

To register your support or opposition to the fork proposal, please head to the Request for Comment on the Wikimedia Meta site.  Translations of the RFC into other languages are particularly welcome.  

The RFC is expected to run until the end of August, with a formal decision and the launch of the new site to follow soon thereafter.  To be notified if and when the new site it goes live, please sign up at this form.  You will receive a single mail, and your e-mail address will then be thrown away.

Update: On September 5, the Wikimedia Foundation officially announced that they will proceed with the fork, and contrary to my optimistic prediction, Internet Brands is suing everyone left, right, and center.  See follow-up post.

Update 2: The new site, called Wikivoyage, was launched on January 15, 2013 and is already better than Wikitravel ever was.