At TOC, you’re as likely to run into media professionals, entrepreneurs and innovators as you are publishers, booksellers and others working in traditional publishing. This, in turn, makes the underlying themes as varying and diverse as the attendees. This is the third in a series, taking a look at five themes that permeated interviews, sessions and/or keynotes at this year’s show. The complete series will be posted here.
As traditional publishing is more and more disrupted in the digital era and deeper and deeper discounts in digital publishing become the norm, big questions about revenues — and where they’ll come from — arise. Monetization was a major theme at this year’s Tools of Change for Publishing conference. Discussions covered a variety of business models suited to monetize content, including subscription/access, freemium, and ad-based models, and models for moving the focus away from the books themselves to monetizing services, experiences and relationships with customers and readers.
“There are two reasons why subscriptions matter now for books more than they did 10 years ago when Safari first got started: First, we all know readers are much more comfortable with digital reading and other digital media. The percent of adults who own an ereader or a tablet doubled this Christmas — nearly 48% of adults in the U.S. own a tablet, an ereader, or both.
The second reason subscriptions matter more today has to with something Kevin Kelly talked about last year — the shift toward streams of information … Streaming models are an important alternative and complement to purchase models, and consumers are growing more comfortable with them … There’s a growing product and service economy around access and membership models that reduce the up-front costs associated with things like buying a car; hiring an assistant; or buying enough music, movies or books to build a great library. In addition to reducing the up-front costs, subscription access models also offer on-demand convenience.”
Savikas talked about what ebook subscription models look like and with what kinds of books such models work best. He said the model will work with more kinds of books than it’s currently used and outlined three reasons publishers should consider the subscription/access model:
He broke down the payment model and explained how — and why — it can be profitable. He said, “When a book is sold at retail, the publisher and the author get the same amount whether the book is read once, twice or 100 times. In a usage-based model, the publisher is paid only for what people actually read — but, they’re paid every single time that page or book is read.” Savikas said that at Safari, it’s rare for readers to read books cover to cover, but pointed out that it’s the aggregate behavior that matters and that brings in the revenue.
Savikas’ presentation slides can be found here, and his entire keynote can be viewed in the following video:
Justo Hidalgo, co-founder of 24symbols, addressed the issue of monetization from a freemium model standpoint in the session “New Ways to Sell — Aggregated Content, Paywalls, Subscriptions, and More.” He argued that just having free content or paid content alone is not enough — people aren’t going to pay for content, he said, unless you have “extremely high-quality, differentiated content,” as the Financial Times has, or you have “impressive brand recognition,” as the New York Times has.
With a freemium content model, the reader gets something for free with the opportunity to get more content, services or a better experience for a price. Hidalgo shared an example from his company’s model:
The panel session “The Future of the Cookbook” addressed monetization specifically from a cookbook-genre standpoint, but the overall points could easily apply to other areas of publishing. Some monetization ideas that came out of the session included allowing advertising inside ebooks and finding sponsors or co-branding books, and also included subscription-based possibilities, as Andrew Savikas discussed in his keynote. Here are some of the major points the session addressed in the area of monetization:
The ideas of chunking — in this case, selling individual recipes — and bundling could be monetized in many genres of publishing. And as Savikas noted in his keynote, the subscription/access model can be applied broadly across publishing sectors.
The slides from “The Future of the Cookbook” session can be found here, and session panelist Adam Salomone, associate publisher at The Harvard Common Press, has further discussions on monetization, ad revenues and the importance of staying flexible in this TOC Podcast interview and in a post at Publisher’s Weekly.
Literary entrepreneur Praveen Madan turned the monetization discussion away from content and books and toward partnerships, relationships and experiences in his session “Kepler’s 2020: Building the Community Bookstore of the 21st Century.” Madan, who is currently working with The Kepler’s 2020 Project, said selling memberships isn’t anything new but is a very important source of revenue today and an important way to engage a community around a local bookstore. He talked about diversifying the traditional revenue model, moving away from a focus on selling print books and toward a model based on selling memberships, services and experiences, such as charging small ticket prices for author events and educational classes. His monetization discussion revolved around four core principles:
Madan elaborated on the first principle and talked about separating the bookstore business into two business — one for-profit and one non-profit:
“More and more, what we find is all the excellent public education programming that bookstores do is really a non-profit activity, and it belongs in a non-profit organization. The community partnerships program — these 120 community partnerships Kepler’s has, schools that they’re raising money from — that’s a money-losing activity. There are about six people on Kepler’s staff who do that work all the time. I looked at that and thought, this is really a non-profit organization, but it’s stuck inside a for-profit organization, and it’s losing money. So, let’s just take it out, call it a non-profit and run it separately and fund it separately.”