The company’s newest product is Tapas, a mobile app and marketplace that takes the company’s model of providing content in small amounts and applies it to literary content. The app uses the “freemium” business model—offering some content to consumers for free as an incentive to pay to get more—that has proven successful in the mobile gaming market and brings it to the mobile reading market. Readers are able start books and other stories for free, and then pay to unlock subsequent episodes, or pay for the entire book or story, with prices based on the books’ current market value. Essentially, it’s Candy Crush for books.
Tapas, available on iOS and Android, provides a range of media (all literary at the moment), from books to comics, created by professional writers, all in the form of what Tapas refers to as “bite-sized micro chapters,” or episodes, of 2,000 to 4,000 words. In addition to the freemium model, it enlists a user-engagement model, with features such as rewards for peer-to-peer sharing.
In-app purchases are a big deal in the games/apps market, and that segment accounts for a larger share of revenue that app/game sales.
This has inspired some to think the same model could work for ebooks. Chang Kim, CEO of Tapas Media, told PW that: “We’re trying to apply the proven business model and user-engagement model from the mobile gaming world to reading. If there’s one industry that’s figured out how to monetize content and engage users on mobile, it’s really the gaming industry.”
The problem with that argument is that it overlooks fundamental differences between the ebook market and the app/game market. It also sidesteps the question of whether authors and publishers should want the new model.
One key difference between the ebook and game markets is that it's easy to download a sample of an ebook and see if it's any good, but it's not so easy to sample a game before you buy it. As a result consumers are less willing to buy a game because they don't know whether it will suck or not.
Also, ad-supported games have inculcated the expectation that games should be free, and free-to-play games with in-app purchases are arguably just an extension of that trend. (The ebook market has free ebooks, though, which might be pushing that market in the same direction.)
Another difference is that both of the two major app stores (Apple and Google) support in-app purchases. The largest ebook retailer, Amazon, has in-app purchases for games and a digital currency (Amazon Coins), but the coins can't be used to buy ebooks - not yet, anyway.
With Amazon dominating ebook sales, Tapas' plan to gamify ebook sales will only succeed if Amazon adopts it (Apple and Google will follow suit). Until then, it will remain a niche market, at best.And even if the plan does succeed, Tapas will only play a tiny part, with most of the revenue passing through Amazon, Apple, and Google.
And it's not clear that the model will succeed, or that authors and publishers should push for it. Right now there's hardly any content in the Tapas app, but that should change as it leaves beta.
But the more important question is whether authors and publishers should want this model to take hold in the ebook market. Yes, it works in apps/games, but how well?
Given that half of the in-app purchase revenue comes from a fifth of one percent of users, the model arguably doesn't work very well:
As the 2015 annual Swrve Monetization Report reveals, 64% of all revenues from IAPs in F2P games comes from a mere 0.2% of all players. This number reveals an increase from last year's report where only 50% of all revenues came from the top 10% of paying players. Further to the point, 60% of all payers (players who make at least one purchase) contribute just a tad over 8% of a game's total revenue, also known as not enough for developers to care about or cater to.
Do you want that model to become the standard in ebooks?
image by tao_zhyn