Showing posts with label business models. Show all posts
Showing posts with label business models. Show all posts

Sunday, June 28, 2009

Business models: a question of honour?

There's a story in Purple Cow that caught my eye about two restaurants. The first, Brock's Restaurant in Stamford, Connecticut, has a sign up above their salad bar: "Sorry - No Sharing". There is an explanation that this rule is necessary so that the restaurant can continue to provide good value. In other words "please help us protect our profit margins".

Compare this to the wine policy at a restaurant called Frontiere. The owner puts an open bottle of wine on every table. At the end of the meal you tell the waiter how many glasses you have drunk. An honour system.

The brilliance of this idea is that two glasses of wine pay for the whole bottle at wholesale price.

Isn't the salad bar just like the media business? In this case the sign might read "Don't share music" or "Don't photocopy books". The underlying message is the same: "please help us protect our profit margins".

What if we were more like Frontiere? What if there was an honour system?

In journal publishing that is exactly what does happen. Journal articles have no DRM. Fair use allows for copying and sharing of articles. Publishers trust librarians to honour fair use. Librarian respect that trust. Articles are shared widely and everyone benefits.

Freeware has a similar business model. Download for free but make a contribution if you use it and like it. You might find it surprising but many people do.

So what might an honour system for books look like?

Suppose we make books available online by chapter. The student pays for one chapter but has access to all. If they download more we ask them to tell us and pay.

Just as in the wine example, pricing will be key. I'm certain that the low price for a single chapter will attract a larger number of customers. I doubt it would be enough to protect the margins. The success of the model will likely depend on how many customers pay for a second or third chapter. The other thing to remember is that the printed book will of course still sell although likely in smaller numbers. And they would be other derivative versions, such as the complete eBook, or the eBook as part of a collection or library, and for a textbook an online course.

I'm sure this sounds like a crazy idea to you. Maybe it wouldn't work. But maybe it just might. In any event, I would love to see someone experiment with new business models like this for books. I think everyone would benefit.

Friday, November 30, 2007

Windows to the future

Adobe and Yahoo have just announced the ability to embed advertising into PDF files.

All Publishers have to do is to upload the PDF files to an Adobe/Yahoo portal where it is "ad-enabled" allowing dynamically generated contextual ads to be displayed whenever the PDF is viewed. The service is currently in beta and it's free! It is limited now to text, pay-per-click ads, but I am sure it will be expanded to include graphics and rich media.

This is a huge breakthrough for publishers. The advertising opportunities are clear and important. We are all searching for viable alternatives to the subscription model.

It could be so much more than that. I think of this more as a window to the future. Whenever a PDF is opened in the future any content can be piped in at that moment. Content that is relevant to that moment in time and space when the document is being read. It could be an advert, but it could also be a note to say that the article has been updated or it could contain an erratum. It could alert the reader to recent publications that are relevant. The possibilities are endless.

The other huge benefit is the possibility to track usage. Today we measure PDF downloads and correlate this to the act of reading an article. In future we can track every time a file is opened, at least in theory. It will be truly fascinating to see what the lifetime of a downloaded article is.

Of course, there will be those that see the DRM demon all over this. The truth is that the technology to embed DRM into a PDF and have it "call home" has been around for a while. It has remained largely unused by scientific publshers. I suspect the reason is the delicate balance between revenue and visibility. It would seem to make sense to protect copyright with DRM, yet the huge barrier to use that this causes is detrimental to visibility. And all Publishers know that zero visibility leads to zero revenues. The other reason is that Librarians are dedicated and effective protectors of misuse; they respect licenses and respond quickly to abuse. There is no need for DRM when there is a trusted relationship between Publisher and Librarian.

So what would you use your window to the future for?

Wednesday, June 13, 2007

Making it easy to pay

I heard about Voice Pay a while back on NPR's All Things Considered. It took a recent note by David Worlock of Outsell to remind me that these things are highly relevant to Publishers like us.

There are ever more inventive ways to make it easy for us to part with our money. My experience is that making things easy leads to more usage. It seems reasonable to expect that making it easy for customers to pay might lead to higher revenues.

Here are some other examples.

I have an EZPass so I can whizz ticketless through the turnpike toll booths. It automatically debits my credit card in $35 increments when my balance falls below a threshold. I have a Starbucks card that does same thing for my coffee. It's so automatic I forget what each transaction costs. I just get used to the occasional debit from my account.

My use of txt messaging has increased over time (Twittter!) and as it has I have changed my cell phone bill plan from a purely transactional plan (pay per txt) to buying a block of txts (drawdown) to unlimited txting (a subscription). A seamless transition from my point of view, low cost/high return for the cell phone operator since it was all done online with no human2human interaction and I’m using and spending more.

The bottom line: make it easy for me to part with my money and there's a good chance I will.