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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/

The Evolution of Entertainment: Effects of Technology on the Publishing and Video Rental Industries

This essay will compare two industries that have undergone extensive changes through technological evolution. I will examine the manners in which the publishing industry and the video rental industry have been drastically altered by technological advancements in recent years. While both industries have undergone substantial changes, the video rental industry has been changed less comprehensively and on less levels but with more dramatic results.

Technology has affected both the publishing industry and the video rental industry by altering the form the product takes, its’ distribution, and the way the product is consumed. As a result of all of this, the perceived value of the product has gone down for both industries. To begin, I will compare the effect of technology on the form of both products. Videos have taken many forms throughout the years, beginning with VHS videocassettes, then progressing to DVDs and Blu-Ray, before becoming digital files (Tech Time Machine). The publishing industry is following a similar path with the introduction of digital eBooks. Books can now be purchased in either physical, digital, or audio form, providing readers with increasingly more options for consuming content.

Technology has also affected the distribution of the product for both industries. For the publishing industry, the introduction of Amazon and online purchasing has greatly altered the manner in which customers get books. Whereas at one point in time their only options were a brick-and-mortar bookstore or a library, they can now purchase print books through an online distributor or forego them altogether and purchase digital files. The options for obtaining videos have also changed drastically with technological advancements. Beginning in the late ‘80s it was popular to rent physical copies of VHS videocassettes or DVDs from companies such as Blockbuster; the way customers get videos today is quite different. Rather than rental agencies being the dominant distributor, online streaming and subscription services have exploded in popularity (Halal).

Finally, the way books and videos are consumed has been transformed by technology for both the publishing industry and the video rental industry. The changes that the two products have undergone are extremely similar and can be directly related to the increase in the availability of digital files. Videos are now frequently watched on laptops, tablets, or smartphones in addition to traditional television sets, and books are now read not only in print but also by using the above-mentioned devices, as well as eReaders (Zickuhr & Rainie, 2014).

While these similarities are important to note, I feel that it is most critical to highlight the effect that these changes have had on both industries and their parallels. The ultimate result of the increase of digital files has reduced the value of the product in the eyes of the consumer. With online streaming and piracy so convenient and accessible, consumers are no longer satisfied with paying the price they would have several years ago to rent video content (Liedtke, 2014; Halal). We can see a similar result in the perceived worth of books; if eBooks are being sold through online distributors at a fraction of the cost of print books, it can cause the ultimate value of the book to drop drastically in the eyes of the consumer.

The most distinct difference between the publishing industry and the video rental industry is the degree to which they were affected by these changes. I would argue that the publishing industry has been affected on more levels than the video rental industry – for example, it is clear that the way books are written and produced has evolved drastically with the evolution of technology. For instance, there is a growing relationship between author and reader, as the writing of books becomes more interactive. Some authors are choosing to allow readers to give comments and feedback as the book is written, and are putting these suggestions towards their work (Lloyd, 2008). This type of producer-consumer relationship is not as present in the video industry. The consumers remain consumers and those that do produce video do so on a separate channel – for instance YouTube or personal websites. The way in which videos are produced and content is created has not undergone as many cultural changes due to technology as those of the book.

Despite having been affected on less levels, the resulting changes seen in the video rental industry are more drastic than those seen in the publishing industry. This is evidenced clearly in the effects of changes to methods of distribution and how the products are consumed. As mentioned above, the methods consumers use to get ahold of the respective products have changed. For the video rental industry the change was astronomical, which is not the case for the publishing industry. This is clear in the decline and bankruptcy of rental agencies, along with the simultaneous rise of subscription services such as Netflix. These services have removed the need and desire for rental agencies by providing convenient accessibility to videos at a reasonable price. In the publishing industry, we have not seen this eradication of traditional distribution methods. While there are other options, many consumers will still choose to purchase print books in a bookstore (Association of American Publishers, 2015). Though subscription services are offered as a method of distribution for eBooks, they have not exploded in popularity as in the video industry. This is due in large part to the fact that they are not seen to provide the same level of value to the customer, and many are lacking in popular titles and authors (Wood, 2015).

The difference in the effects of technology on the publishing industry compared to the video rental industry is most clear when we examine the manner in which the respective products are consumed. While the publishing industry has introduced new, digital methods to consume content, these have not replaced the form that preceded them. eBooks and eReaders are a supplemental option for consumers, an alternative to a print book but not necessarily a replacement (Shatzkin, 2015). This is very distinct from the video rental industry where every new technological advancement fully replaced that which came before it. The introduction of DVDs rendered VHS cassettes obsolete and, following that development, the rise of subscription services and online streaming are now replacing DVDs. The video rental industry barely exists in any form other than subscription services (Khanna, 2013), which is certainly not the case for the publishing industry.

The publishing and video rental industries are very comparable as both underwent changes in methods of distribution, the way content is consumed, and the physical form of their products. For both industries, these changes have led to a decrease in the perceived value of their product. Where they begin to differ is when we begin to examine other effects of technological changes. The changes in methods of distribution and consumption of content appear to have affected the video rental agency in a much more absolute way than they have the publishing industry. Although the publishing industry has been altered in every aspect imaginable, the effects of these changes are not as dramatic as the changes to the video rental industry.

Works Cited

Association of American Publishers. (2015). “Monthly statshot: March 2015”. http://media.publishersmarketplace.com/wp-content/uploads/2015/07/2015_03_AAP_StatShot.pdf

Halal. “How Netflix beat Blockbuster: An exemplar of emerging technologies”. http://billhalal.com/?p=295

Khanna. (2013). “How the content industry almost killed blockbuster and netflix”.
http://techcrunch.com/2013/12/27/how-the-content-industry-almost-killed-blockbuster-and-netflix/

Liedtke. (2014). “Redbox is raising prices because people don’t rent movies anymore”. http://www.reviewjournal.com/entertainment/redbox-raising-prices-because-people-don-t-rent-movies-anymore

Lloyd. (2008). “A book publisher’s manifesto for the 21st century”. http://thedigitalist.net/blog/2008/05/manifesto-download

Shatzkin. (2015). “The publishing business as we have known it is not going away anytime soon”. http://www.idealog.com/blog/the-publishing-business-as-we-have-known-it-is-not-going-away-anytime-soon/

Tech Time Machine. “The evolution of video”. http://mashable.com/2015/01/09/ces-tech-video/#gvrqfa4Eskq4

Wood. (2014). “Aiming to be the Netflix of books”. http://www.nytimes.com/2014/08/07/technology/personaltech/aiming-to-be-the-netflix-of-books.html

Zickuhr & Raine. (2014). “E-Reading rises as device ownership jumps”.
http://www.pewinternet.org/2014/01/16/e-reading-rises-as-device-ownership-jumps/

 

 

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