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Publisher of Free Textbooks Says It Will Now Charge For Them, Instead
An anonymous reader writes "In a surprising blow to the movement to create free textbooks online, an upstart company called Flat World Knowledge is dumping its freemium model. The upstart publisher had made its textbooks free online and charged for print versions or related study guides, but company officials now say that isn't bringing in enough money to work long-term."
Once you get kicked out of your moms house, you need a real business model. Free doesn't always work.
In a perfect world, everything is free and we have an endless supply of lollipops. I bet it's not even a real hard realization that you need to make money to continue operating. What gets people pissed is when companies take obscene profits -- the catch is that we all can't agree on what obscene means. For me, that means I don't buy Apple or soda at the movie theater. And I look for my textbooks second hand ( I like the margin notes, anyway )
For over 15 years I've been paying $24/year for a free-for-life email address.
How or when did they expect FREE (with "optional" charges) to start bringing in enough money to work long-term?
Yes we have. Open (anything) source has a history of being difficult to make a living off of.
In the case of software, it has proven difficult, but not impossible. But this is no Red Hat Linux -- it's not someone taking the voluntary effort of millions and wrapping it up in a managed test-and-support environment. Red Hat profits because Red Hat take free and add value. Flat World have taken value (their books) and added free. That's completely back-to-front.
The problem here is not "open", it's "freemium". It's the freemium that never seems to work. The original philosophy of freemium was the idea that on the internet, unit cost was so low that a minority of "serious" customers would pay enough to keep the servers running. A lot of the "freemium" camp has found that freeloaders are actually more demanding in terms of support than they expected, and you can't ignore the guys on the free plan as long as you're hoping that they might one day become paying customers...
If they're still talking about partnering with EdX, though, they may still end up producing free material anyway, but as it will be customised to the EdX courses, it may well become something of an advertising asset, rather than a money sink.
Perhaps this is the way forward for the freemium business model -- limit the "free" version to a part of a wider "free" system. So the free version is "closed", but the paid version is "open". That means turning a few of our assumptions about the word "open" on their head...
Got them moderator blues I blieve I walk out the do', With these mod-points I been gettin', I 'most never post no mo'
Not really, I looked at the book list... unless you're a burning urn of churning funk for algebra... or just gotta have a book on social science... walk away from this pointless waste of electrons. I can't imagine with this book list they'll do any better with a for profit model.
Textbooks that are old are worth lots. The newest ones are often worthless .... except that I am speaking from a homeschooler's or tutor's point of view. To a professor with 100 students, it's more important to have everyone use the same book, than for the book to be correct.
He can instruct the students on what to ignore, and why. He can check the answers to problems, and come up with an errata sheet. He can't even hope to read 20-odd different texts, though.
Correct Horse Battery Staple: 72 bits of entropy. Enter "Correct H" into google. When it generates the phrase, that's
Whoosh, meet Chrisq.
Chrisq, meet Whoosh.
In fact, if the textbook is old, it is worthless
Ahh that's the problem. I took a university class on pre-civil war american history. That could be updated every month as the historical academic journals publish new papers, but almost nothing would be changed each month and approx zero value would be added, although the price for all that churn would be extremely high. Or you could update the text every generation or so, maybe as what boils down to a PHD's dissertation project. Not sure if that would be an Ed PHD or a history PHD project or a collaboration more likely or .... That's probably good enough, and basically free.
On the other hand, I was forced to take some idiotic IT helpdesk support training type class on Excel '97, which was only one generation obsolete at that time. That textbook obviously has to be completely rewritten every time MS wants to re-cash-in on all the previous Excel sales.
Generally speaking if its a training textbook then an old one is worthless, and if its an education textbook then an old one is perfectly fine.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
If Baen had done something like this it would have been a blow.
Yeah, a financial blow for Baen. I've spent fat stacks of cash on books that they'd lured me in with free versions. It helps for series sales to release the first novel, but it REALLY helps to release at least one novel per author, so you get a free preview of what they're like, and then the collecting drive kicks in and the amazon boxes start arriving ...
It seems there's a substantial psychological hill to climb with non-free publishers "I hate you Fing pirates downloading our books" "Well F you guys I'll buy something from Baen instead if it makes you feel any better" vs "Here's something free you might like. If you like it, there's lots more that's cheap, but not free." "Cool, (VLM whips out credit card)"
This is not theoretical, Baen is making more money off me than they "should" merely via their marketing gimmick.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
Free doesn't always work.
Non-free doesn't always work either. I have been involved in many businesses as founder, owner, consultant, adviser, etc. Some based on open source/content, some not. One company I was involved in gave the software away and sold t-shirts. That actually worked fairly well. The trick is to find a revenue model that works before you move out of Mom's basement. Remember that Mom isn't just giving you free rent, you are also getting free meals, electricity, laundry service, etc. Those all add up.
If you assume 100% markup, then the bookstore pays $50 for a new book, and sells it for $100. Profit = $50.
You are roughly correct for the gross margins but the net profit is nowhere near $50 in your example. (Rent, utilities, staff salaries, etc) Net profit will be quite a lot lower, probably in single digits to low teens usually if the company is profitable.
Probably with a way to return purchased books to the publisher.
Virtually all new books are sold on consignment. There are a handful of very large distributors in the book industry. They sell to bookstores including Barnes & Noble as well as your school book store. Some bigger sellers like Amazon can go direct but not many others can. New books are sold on consignment with 90 day terms meaning if they don't sell within 90 days they are returned to the publisher. Realistically 90 day terms really means 120 day terms because the distributors have 90 days from the book store and then 30 more days for themselves so the publisher gets paid at best 120 days after shipping a book that there is a good chance will be returned to them unsold. Publishing books is a terrible business to be in from a cash flow standpoint.
Based on your numbers, they'll buy the used book for $30, and sell it for $75-$80 with no way to recoup cost if they aren't purchased (although they probably sell to a wholesaler or something) Profit = $45-$50
There are secondary market options for used books that cannot be sold locally. Not hugely lucrative but they are significantly better than zero. The buyers of used books have some databases which tell them they should pay $30 for Book A and $5 for Book B and shouldn't buy Book C based on what they can sell it for elsewhere. They don't just buy books blindly for a flat fee. (or if they do they are stupid)
Red Hat does not sell software, they sell support. Software needs support because it is complex and buggy. Books, not so much. Because Red Hat makes enough money selling support (and much of the software is created by others anyway), they can afford to give away unsupported software. That does not prove 'free' is a viable business model.
Radiohead made a ton of money selling albums the traditional way. The fact that they can afford to give one away for free is no more proof that 'free' is a viable business model than anyone else donating their time to something is proof that free is a viable business model.
Fixed that for you.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.