It’s why you use Google at work and at home, why you use Craigslist, not the newspaper, to find furniture and apartments, and why you watch your favorite shows on hulu.com: it’s free. And the ‘free’ we have grown to accept as the norm on the web has already made an impact on the publishing industry.
Take for example the growing use of digital textbooks. According to an article in Publishers Weekly, Flat World Knowledge, an open source textbook company, has announced that “40,000 college students at over 400 colleges will use its open source digital textbooks this fall.” It’s not surprising that states with shriveling budgets like California are looking into cheaper alternatives in providing their students with material—it’s a money saver for both state and student.

But how is this model viable from a business standpoint?  The methods used by Flat World Knowledge relate very closely to the models highlighted in Chris Anderson’s new book, Free: The Future of a Radical Price.

Anderson’s concept of the “Freemium”—the content that publishers would provide for free—follows the ‘1 percent rule’ that many web media already take advantage of. The concept states that while the majority of users will enjoy services for free—think Craigslist—the world-wide availability of the quality free material will create an audience large enough so that if 1 percent of that audience pays for the ‘premium’ services—be it custom hard copy formats or extra material like study guides, in the case of textbooks—the revenue from that 1 percent will support the free services, even drive a profit. As ‘distributing’ materials digitally costs practically nothing at all, expanding the range of distribution—the number of people accessing your site—becomes more important than ensuring a cheap product is paid for, as was the case when everything had to be shipped physically. Flat World Knowledge says on its website: “Sure, we’ll make less money per student than the big guys. But that’s okay. We’ll be selling to a lot more of them, and we’ll be doing it for a lot less money (thanks to technology like web-hosted services, XML, print-on-demand, and more).”

It has been argued that textbooks and reference books will be the first books whose digital format will become more popular than their print formats. This is common sense—they’re weighty, expensive, and a simple find tool like those found in Word or Acrobat would do wonders for studying and research. But I look forward to seeing how digital distribution can help regular trade publishing, and how ‘free’ may work for publishers and authors (they’re already blogging for free as a marketing tool!) in the near future.

Photo Courtesy of lomokev via Flickr Creative Commons license.

Tags:   Chris · Free · open source · publishing · publishing industry · textbookNo Comments