ECPA Publishing University: Chicago, 11/4-11/6
Borders.com Beta

Revenue Model Alternatives for Book Publishing

MoneyThe current financial model for books is pretty simple.  Publishers sell to retailers and retailers sell to consumers. It doesn't get more straightforward than that.  I don't see that model going away, at least not in my lifetime, but how could it evolve?

Wiley colleague John H. was kind enough to send me this link, which is a post by Booksellers Association blogger Martyn Daniels.  In his post, Daniels has this to say:

Shanghai-based Bookgg is exploring a new advertisement-powered free book business model. The consumer selects the book and then selects the sponsors with their placement in the book until the price of the book drops to zero. The book is then printed and posted.

The flexibility this implies is quite interesting.  Regardless of whether you're open to ads or not the model can be tailored to suit your needs: Pay less for the book with advertising or pay full price with no advertising.  It's also easy to see where this could be applied to either e-books or print-on-demand (POD). 

A separate e-mail thread with another Wiley colleague, Abe G, caused me to realize that you could easily take it a step further and automate the whole process.  Rather than having to select which ads/advertisers you're willing to tolerate, just turn a virtual dial to calibrate the finished product to whatever price-to-ad ratio you prefer; the system would then use an AdSense-like engine to figure out which ads should be included.  Do you suppose Google is thinking much about this or are they too focused on the lower-hanging advertising fruit tied to television, newspapers, etc.?

Again, I don't see the current model disappearing, but something like this would be a nice alternative, especially for e-books/POD.

Comments

Steve Grossman

Fascinating idea I can see applied to all media. I wonder though, what effect it will have. I already ignore ads, so I'd be glad to fill a free book with stuff I'll ignore. How long will it take for the marketers to realize everyone's doing that? On the other hand, perhaps the marketers will actually communicate or offer something useful to us. Hmmm...

Brad V.

This is a very interesting idea. I'm always on the prowl for new and alternative publishing models - as the traditional one that is employed right now is losing money fast.

I think for advertisements to work, they'd have to be as unobtrusive as possible. Also, this raises many more questions: would the ads be subject-specific? If so, how would that work for fiction? Would the advertising-based model mean an end to author royalties (if the books are given to consumers for free)?

This model is an interesting one, and very exciting, especially as an avid consumer of books. But as a writer, I have my reservations, particularly about the issues I stated above.

Great post!

Abraham Greenhouse

Interestingly, as this post was going live, Google was busy launching AdSense for mobile devices - which seems to me like a pretty clear step in the right direction. Given the limited screen real estate of mobile displays, making the ads truly unobtrusive might require a different approach than the "sidebar" style that Google employs for regular web search. I'm looking forward to seeing how they tackle this, as any positive innovation in this area will likewise bode well for eBooks.

That said, I want to point out another advantage of the ad-supported eBook model: it doesn't require a proprietary file format, and can potentially work with any file containing text for it to analyze. This means that publishers would be able to draw the same advertising revenue from their content even if the user had acquired the content illegitimately. The device could pull the ISBN from any eBook file (including a five-year-old pirated PDF with cracked DRM), use the wireless connection to check it against a database, and direct the ad revenue to the appropriate publisher.

Anne Wayman

Makes sense... particularly for ebooks I think. I too ignore most ads... don't most of us? Sometimes they inform, and those are the best... and I sure love collecting ad revenue ;)

I'll bet google is planning this... all we need is a decent ebook reader.

Nate Caldwell

Not sure if I would like an otherwise great book marred by an ad for a Big Mac, but there are tons of books I would love to buy but am unwilling to pay full price. With those types of books (the dime a dozen variety), I would definitely be willing to have ads displaying within it. Plus, books are getting more and more expensive. The ability to obtain them for less with ads would be great for those who don't have the income to buy a lot of books (such as poor law school students...).

ajit Sharma

Dear Joe,
Good to know that we are not alone in this world with this idea. Recently we were planning to do a mega launch of a title from our publishing program and one of my very experiencd collegues Yogesh came up with the idea which i also liked a lot and we were convinced that this model will work. Alas, but the editorial thought otherwise and we had to shelve the idea because of very stiff editorial resitance. I beleive this idea is worth trying and eventually some one is going to try this out. I would look forward to your views and ideas. Incidentally we have had done complete research on this concept. I will be happy to help some one who really wants to try this idea out.
Also i have posted a very itresting post on my blog. Would you care to spare a minute and let me know ur ideas on that. I promise you will like the post. Its called The science of writing? Imagination or insights from a higher power?
With best regards
AKS
With best regards

Michael A. Banks

It's a fascinating idea (another one that "sounds like science fiction.") I suppose a lot of shoppers would go for an ad-laden product, though I don't know whether they'd be in a majority.

I wonder if the return would justify the advertising, long-term. I think advertisers would be smart to target products that appeal to book readers. I say that because there are so many venues for general consumer advertising any more that overexposure must be eroding the return. In fact, I look for an advertising "bust" of sorts in the next couple of years, as advertisers cull out the poor performers.
--Mike
http://mikebanks.blogsplot.com

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