I attended this one day pre-conference session on February 3, 2010.
I got here after the first group of speakers, unfortunately, due in part to #snOMG and part to parking confusion.
Barbara Kline Pope on Free at the National Academies Press
Mission is to disseminate books from National Academies while being completely self sustaining. Their content is created by volunteers who are subject matter experts asked to examine a particular issue of interest. Everything from global climate change to the care and treatment of lab animals. Very much the long tail, biggest seller had 13k sales, but over 2900 titles had 10 or fewer sales, 940 only had 1 sale. They offer a lot of choices: hardcover, paper, pdf download, pdf chapters. Can read full text online (yes - this is much appreciated!). They've been posting images of book pages since 1994. Really helped printed book business but they were fax quality, so there were complaints.
Concern in 2001 that introduction of pdf would interfere with their requirement to be self-sustaining because the pdf could be a substitute for print. They did a study (eventual publication in Karman & Pope (2009) Pricing Digital Content Product Lines. Marketing Science 28, 620-636, winner of an INFORMS prize in 2007). How could they give stuff away. A-B groups. Give option at checkout - and then survey to see if pdf cannibalizes print or expands market. Print still strong - 58% offered free pdf took print. They modeled across everything - ended up charging for pdf. Some groups get pdfs for free (congress, their members, etc). Authors can subsidize free pdf by title (33% of potential sales - that % was developed by looking also at offline customers who might come online). They give free pdfs to developing countries.
Free pdf uptake is increasing dramatically (now at about 500k, 22k pdfs sold per year). Print is dropping, too, but that is partly due to the way their institution has changed business. They've been investing in more sophisticated online tools (some of which are really cool). They're working on more mobile formats (hopeful that newer options will be better at tables and graphs than current).
They are seeing increasing comfort with reading online.
audience q: if you're looking at giving away all pdfs, then what is your process or what have you determined about these other mobile formats?
q: how are you making up losses? a: we're cutting cost, we're not increasing revenue.
Jeff Shelstad (CEO Flatworld Knowledge)
They do higher ed - textbooks. They market to faculty - who have to, like in pharma, prescribe a particular book - and also students. First books published in March 2009 (they basically have 1 semester of results to look at). Open textbooks (attractive to faculty), student customers as king (unique), building a community around titles (social learning). He has to sign authors for new textbooks - can't bring a textbook over from another pub, they're all locked up.
Open - creative commons license (attribution - share alike - non-commercial). Open platform. Professor adopts a book, they create a unique URL for that class, and make the full book available by it. They sell students alternate formats - print is their biggest seller, it's all on demand, no warehouses, $29.95 black and white, $59.95 color (96% choose black and white). Sell print it yourself (chapter, $1.99, watermarked, not DRMd). Study aids.
(random question: I had to buy at the bookstore so NROTC contract would cover - can students who have books covered by some scholarship or other use these things? Never occurred to me before. - he did answer, they can put things in bookstores but the bookstores don't know what to do with them - need to go there for students on financial aid)
They hope they'll have sticky customers because their content will be there as they modify books to meet course needs. They do compete with free - speed of adoption, enables global spread, seems inevitable... 20 big enrollment textbooks now. 480 faculty adoptions in fall 2009. 175 new for spring 2010.
Have heard from community colleges in particular that students try to take courses without buying the books because they just can't afford them - so at least with these they have the content via online version.