Ads, Ads, Ads: How Free Books can Make a Profit

The future of the publishing industry has been up for debate ever since the introduction of e-readers and the availability of books in the digital format. Although the print publishing industry is still finding success using it’s traditional model (Shatzkin, 2015), the advent of creative commons licensing as well as technological advancements have opened the door to a variety of new potential business models for both authors and publishing houses. In this essay I will be exploring the possibilities of a business model similar to that of Facebook and complimentary mobile apps, where the content is provided free of charge in a digital format, using advertisements as a form of revenue generation (Thomas, 2012; Lunn, 2012). I will give a brief description of this model, followed by an analysis of the implications for authors, creativity of production, publishers, and readers.

The basis of the advertising model is that businesses will pay an agreed-upon amount per impression (how many times their ad is seen on your website) as well as per click-through (how many times their ad is clicked on and a viewer is directed to their website) (Starak, n.d.). Authors providing their content free of charge in the attempt to profit off of this business model can move forward in two ways. First of all, authors have the ability to create their own personal websites, through which they can make their content available and be the sole recipients of all of the revenue generated through advertisement clicks. In order to ensure that the advertisements are relevant to the audience, it would be prudent for the author to understand who their readers are and contact businesses who are wishing to target that demographic, offering them an opportunity to advertise on their site (Starak, n.d.). Secondly, if we suppose that publishing houses also subscribe to this business model, authors can attempt to have a publisher post their content on their website and have the profits be divided between the house and the author. As an additional form of revenue, authors can continue to produce print copies of their works (either self-published or through a publishing house) to be sold as a ‘special edition’ should there be a demand for it.

In theory, this business model will work on some levels for all authors. It is a business model of limitless resources, meaning that the number of authors who are able to use it simultaneously is infinite. However, it is important to note that not all authors may be interested in pursuing this model. There is still a wide digital divide among citizens, both generationally as well as geographically. It must be considered that not all authors may be capable nor comfortable with publishing their content digitally and/or free of charge, and not all readers may be interested in, or have access to, digital formats. Secondly, it is doubtless that some authors will benefit more than others, as the more popular one’s content becomes, the more clicks and therefore revenue they will generate. Nevertheless, I do not see this as a failing of this business model, as even with the traditional publishing model there is a hierarchy of benefits with a small portion of authors achieving much greater financial success than the majority. I feel that this type of imbalance in benefits is inescapable no matter what business model is used. Finally, I feel that this business model is a viable option for authors as it can work much in a similar manner as royalties; once an author is no longer producing content, as long as it is still available online with relevant advertisements that are generating click-throughs, the author will continue to benefit.

In addition to the potential financial benefits for authors, a business model based on free content and advertising can have positive effects on creativity and content production. Much in the same way as traditional self-publication can, this form of publishing can encourage creativity in that it allows authors who may not be picked up by a publishing house to make their content available and reach an audience. Whereas a publishing house may be primarily concerned with finding what they assume to be a guaranteed hit, this model allows for a diversification of content as it allows authors who have a different writing style or who are focused on a niche genre to publish their content independently.

This business model would change the publishing industry drastically. I believe that were the publishing industry to adopt several strategies used by similar businesses, it could find success in this primarily digital form of content-sharing. To begin, it would be imperative for publishing houses to embrace digital content production as a main form of revenue generation and allow print editions to become a secondary priority. Secondly, it would be necessary for their websites to require users to sign up if they are interested in accessing the free online content. In this way, they can gather important information about each reader in order to successfully profit from targeted ads in the same way as companies such as Facebook (Lunn, 2012). This type of user data collection will increase the value for advertisers and, subsequently, increase the revenue generated for the publishers. In a similar vein, they would be driven to adopt Big Data algorithms in a manner similar to Netflix, in order to obtain more information than ever before about what readers are interested in and how they are consuming the content in order to make informed decisions in the future (Leonard, 2013). This type of Big Data collection can also allow them to provide their users with recommendations based on their preferences and reading habits (Leonard, 2013). Finally, publishing houses can continue to produce ‘special edition’ print copies for books that are exceptionally popular and for which readers would pay to own in physical form.

Finally, I will examine how this type of business model would impact and affect readers. I believe that the most significant development will be a dramatic increase in the prevalence of digital content consumption. While reading print books is currently the most common form of consumption (Carr, 2013), were content to be made available in the digital form free of charge, this would shift the primary method of reading for a great deal of consumers. Many of today’s consumers are not interested in paying to own content – rather, they are satisfied with having complimentary digital access to it (Wohlsen, 2014). As a result of this, I believe that were this business model to be adopted e-reading would become the norm. Print books would become a specialty item, being reserved for books that are extremely popular and sold almost as a form of merchandise to dedicated fans. That being said, it is important to note that many consumers are tired of being bombarded with a non-stop stream of advertisements, and find them to be both a distraction and a nuisance. In this case, this business model could negatively impact readers as the quality of their reading experience is lowered due to the irritation of constant targeted advertisements. However, this can potentially be used to the advantage of authors and publishing houses who have the option of developing a subscription-based, ad-free paid service (Popper, 2015) – in this situation, while the ‘content’ is technically complimentary, a profit is still being made without the use of advertisements.

While a change such as the adoption of this business model for authors and publishers seems very drastic, it is a model that has potential and could seem more and more viable as technological advancements continue. This is a model that is commonly used and very popular, and this is for a reason – if it is applied properly, it can create remarkable revenue while promoting free content and creativity. While it may be more effective for authors who are more popular and have a fan following, it is difficult to argue that this would not be true of any publishing model. It would undoubtedly be a huge shift for the business of publishing houses, and would require a great deal of adaptation if they wish to find success. Finally, it would presumably change the manner in which readers commonly consume content, shifting from primarily print to primarily digital.

Works Cited

Carr, N. (2013). The flattening of e-book sales. Retrieved from: Rough Type http://www.roughtype.com/?p=3590

Leonard, A. (2013). How Netflix is turning viewers into puppets. Retrieved from: Salon http://www.salon.com/2013/02/01/how_netflix_is_turning_viewers_into_puppets/

Lunn, E. (2012). How does Facebook make money? Retrieved from: Yahoo Finance https://uk.finance.yahoo.com/news/how-does-facebook-make-money.html

Popper, B. (2015). Red dawn: An inside look at Youtube’s new ad-free subscription service. Retrieved from: The Verge http://www.theverge.com/2015/10/21/9566973/youtube-red-ad-free-offline-paid-subscription-service

Shatzkin, M. (2015). The publishing industry as we have known it is not going away anytime soon. Retrieved from: The Idea Logical Company http://www.idealog.com/blog/the-publishing-business-as-we-have-known-it-is-not-going-away-anytime-soon/

Starak, Y. (n.d.). Making money from your website using advertising.  Retrieved from: Entrepreneurs Journey http://www.entrepreneurs-journey.com/105/making-money-from-your-website-using-advertising/

Thomas, C. (2012). How do free apps make money? Retrieved from: Bluecloud Solutions http://www.bluecloudsolutions.com/blog/5-ways-free-apps-money/

Wohlsen, M. (2014). Apple and Amazon have a problem: People don’t want to buy stuff anymore. Retrieved from: Wired http://www.wired.com/2014/10/apple-amazon-problem-people-dont-want-buy-stuff-anymore/

1 Comment

  1. You’ve taken a very common model (ads) and applied it to the publishing industry, having touched on several of the key dimensions that needed to be considered. In principle, you fulfilled all of the requirements in the essay prompt. However, although you had a couple of nice insights and observations, the essay does not delve carefully into any of those key dimensions. Exploring each further would have helped to give the essay some depth.

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