Business Model Innovation Hub
... where visionaries, game changers, and challengers discuss business models
Give the Book Away ? Open letter to the authors
I firmly believe that you should give away a free PDF version of your book. It would be a possibility letting the book spread virally, while adopting new sources of revenue and following the great examples within the publishing industry.
Once before, I have mentioned this in a thread here on the forum. The other day I was reading your blog and thought about this again. Soon after, I found myself writing an open letter to you and people in your situation.
Please forgive me for trying to tell you what you should do. This open letter is meant as an invitation for a discussion on this forum.
Here is why you should give away a free PDF version of the book.
Go Viral
The idea behind giving a free PDF away is that it will help you spread the ideas. True viral comes when people can not only tell their friends about a great product, but when these friends also have a chance to try it out and then again tell their friends. Products like Gmail and Skype are a great examples of how great products can spread virally, without any advertising. The reason such products spread so rapidly, is that people can actually try them out as and when they hear about it.
Adopting Freemium Principles
The basis of the freemium model is that you give a product away for free, in order to sell complementary products to a certain number of the free users. Flickr uses this principle to sell pro accounts to 5-10 % of their free members. The Brazilian tecno brave scene uses this principle, by giving the music away for free and selling tickets to parties.
This principle is ideal for a writer/consultant because the books can be used to promote an idea. Once this idea spreads, the writer/consultant can profit from this in a number of ways.
Or as Chris Anderson puts it
“I don’t write books to sell books, I write books to increase my personal “fame” and then capitalise on this in other ways.”
While Chris Anderson's book is very popular and sells well, this does not compare to the revenue generated by the high-price-tag talks he is giving around the world.
Great Examples of Success
Within the publishing industry, there are various examples of success achieved by releasing a free PDF version of a book. One such great example is that of Paolo Coelho.
In 1999 he posted a free Russian version of “The Alchemist” on his website. With no additional promotion the sales climbed from 1.000 to 10.000 within a year. The next year the sales reached 100.000 and by 2002 he was selling a million copies of several titles.
Personally he is convinced that the free download made the difference.
It Will Most Probably Not Hurt Your Physical Sales
Some smart guys are looking into the effect of ‘free’ on publishing.
Their initial results include an observation that “average results in small sample were up”.
Or in other words: Based on their initial findings, it seems that a free digital book helps the sale of the printed book.
Personally I looked into around 30 examples of authors providing a free version f their book for download. What I have found is that most of these were happy with the result obtained after providing the free copy.
There was only one author who expressed bad experiences. This was from raising a book solely online and depending on donations for all of his revenue. I conclude that even this single negative experience could have been positive, if the author had also sold a physical copy.
Recently Nine Inch Nails experienced something similar in the music industry. Even though their latest album was freely available with a Creative Commons License the album made it to the top of Amazons sales charts (besides generating a lot of revenue from their other products).
Walk the Talk
I have been following your blog for a while now and like the examples of business model innovation that you provide. One thing that I see that all great examples have in common is that they are all radical innovations that are modeled towards the specific circumstances of their target group. By providing a free PDF version you would be treading this path that has proved successful to many.
Radical innovation
Most of the examples you use are radical innovations, things that make these companies change the face of their industry by changing the business model.
A great way to illustrate this would be to adopt a business model that seems radical. In the writer/consultant industry, free is only now starting to catch on. By giving away a free version of the book, your own business model would seem radical.
Modeled Towards the Target Group
Giving away a free PDF gives you a unique opportunity to shape the business model towards the target group.
Within the segment of established businesses, you have a great possibility to sell workshops and talks at a high premium. Along with this, revenue could be generated from licensing, referrals or similar.
Amongst students, NGOs and similar segments, a free giveaway would give them access to your ideas and concepts. A free book could greatly increase your spread in these segments, which will palpably have a great spillover effect into the more mainstream and profitable segments.
This Letter is also posted in my freemium blog.
Once before, I have mentioned this in a thread here on the forum. The other day I was reading your blog and thought about this again. Soon after, I found myself writing an open letter to you and people in your situation.
Please forgive me for trying to tell you what you should do. This open letter is meant as an invitation for a discussion on this forum.
Here is why you should give away a free PDF version of the book.
Go Viral
The idea behind giving a free PDF away is that it will help you spread the ideas. True viral comes when people can not only tell their friends about a great product, but when these friends also have a chance to try it out and then again tell their friends. Products like Gmail and Skype are a great examples of how great products can spread virally, without any advertising. The reason such products spread so rapidly, is that people can actually try them out as and when they hear about it.
Adopting Freemium Principles
The basis of the freemium model is that you give a product away for free, in order to sell complementary products to a certain number of the free users. Flickr uses this principle to sell pro accounts to 5-10 % of their free members. The Brazilian tecno brave scene uses this principle, by giving the music away for free and selling tickets to parties.
This principle is ideal for a writer/consultant because the books can be used to promote an idea. Once this idea spreads, the writer/consultant can profit from this in a number of ways.
Or as Chris Anderson puts it
“I don’t write books to sell books, I write books to increase my personal “fame” and then capitalise on this in other ways.”
While Chris Anderson's book is very popular and sells well, this does not compare to the revenue generated by the high-price-tag talks he is giving around the world.
Great Examples of Success
Within the publishing industry, there are various examples of success achieved by releasing a free PDF version of a book. One such great example is that of Paolo Coelho.
In 1999 he posted a free Russian version of “The Alchemist” on his website. With no additional promotion the sales climbed from 1.000 to 10.000 within a year. The next year the sales reached 100.000 and by 2002 he was selling a million copies of several titles.
Personally he is convinced that the free download made the difference.
It Will Most Probably Not Hurt Your Physical Sales
Some smart guys are looking into the effect of ‘free’ on publishing.
Their initial results include an observation that “average results in small sample were up”.
Or in other words: Based on their initial findings, it seems that a free digital book helps the sale of the printed book.
Personally I looked into around 30 examples of authors providing a free version f their book for download. What I have found is that most of these were happy with the result obtained after providing the free copy.
There was only one author who expressed bad experiences. This was from raising a book solely online and depending on donations for all of his revenue. I conclude that even this single negative experience could have been positive, if the author had also sold a physical copy.
Recently Nine Inch Nails experienced something similar in the music industry. Even though their latest album was freely available with a Creative Commons License the album made it to the top of Amazons sales charts (besides generating a lot of revenue from their other products).
Walk the Talk
I have been following your blog for a while now and like the examples of business model innovation that you provide. One thing that I see that all great examples have in common is that they are all radical innovations that are modeled towards the specific circumstances of their target group. By providing a free PDF version you would be treading this path that has proved successful to many.
Radical innovation
Most of the examples you use are radical innovations, things that make these companies change the face of their industry by changing the business model.
A great way to illustrate this would be to adopt a business model that seems radical. In the writer/consultant industry, free is only now starting to catch on. By giving away a free version of the book, your own business model would seem radical.
Modeled Towards the Target Group
Giving away a free PDF gives you a unique opportunity to shape the business model towards the target group.
Within the segment of established businesses, you have a great possibility to sell workshops and talks at a high premium. Along with this, revenue could be generated from licensing, referrals or similar.
Amongst students, NGOs and similar segments, a free giveaway would give them access to your ideas and concepts. A free book could greatly increase your spread in these segments, which will palpably have a great spillover effect into the more mainstream and profitable segments.
This Letter is also posted in my freemium blog.
Replies to This Discussion
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Permalink Reply by Alan Smith on -
Peter,
As a freemium "consultant", maybe you can take a pay-per performance bet on this to convince Alex to do it? Each sold book above target of N, you make a %. Each sold book below target of N, you PAY a % to the author.
Partially kidding here, but I'm actually partially interested in if there is a model for you to start giving "free" freemium consulting best practices to ensure success on products and services where you see the opportunity - offset with a "freemium bet" of some sort.
Best,
-Alan
(comment also posted at the freemium.eu blog)
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Permalink Reply by Kevin Donaldson on -
What about an increasing price model based on demand. Similar to some offerings in the music industry. First X are free, then moves to $1 and once another threshold passes, moves up again... encourages early adoption.
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Permalink Reply by Peter Froberg on -
@Alan
I like your input and the idea of the bet, i has definitely given some thoughts for me. At the moment I am actually contemplating something similar for a current client. That i run the freemium part of their business. They do the consultancy work that they have always been doing and i run the freemium related parts of their business “create and distribute the free products, adjust and run additional complimentary products”
The success of a freemium model depends on the ability to distribute the free product and adjust the complimentary products. Even just releasing a free PDF can give freemium advantages. Yet in order to reach the maximum benefit, you need act on several levels around a product. This creates a situation where a direct “offset bet” would be hard to control.
In line with you comment,one option could be to offer “no cure no pay” consultant services. Where I only get paid when there are results. Would that be in line with you chain of thought ?
@Kevin
That could be another model to examine, yet i believe that free would be a lot more powerful. One of the reasons is that a $1 book would not generate a lot of revenue, yet it makes a big phycological difference.
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Permalink Reply by Anders Sundelin on -
I believe the business case for giving the book away for free is very strong for the following 3 reasons:
1. The book will be beautiful, graphical and though provoking, people will want to own the book and use it for inspiration. Pdf and printed versions will not cannibalize on this.
2. A free ebook gets spread like a virus and with some links in it to buy the physical book I even believe you will sell more books than not providing a free pdf. Better and cheaper marketing than colleagues sending this ebook to each other is difficult to get.
3. I believe the main target audience for this book will buy the book even when they have the pdf version because they like books and have money to buy books. Also I believe that the buyer doesn't want to have it in the suitcase everyday but be able to pick it up anytime anywhere and a free searchable pdf version will do the trick.
Alex, perhaps you should have a business model where you after X copies start sharing the revenues with the co-creators in the hub? That will create a strong sales force… (I only take 2% commission if you use the model)
//Anders
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Permalink Reply by Alex Osterwalder on -
Strong arguments for a free pdf. Let us see what others on the Hub think!
@Anders: we are working on putting together a commission model for book sales already. Wonder if that would really motivate people, since the amounts to gain are tiny...
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Permalink Reply by Rob Manson on -
I think having a free PDF version is a great idea...yet I'm not sure what your planned supporting revenue streams are.
I also think you could get the same benefit by just distributing a free "cut down" version of the book with say the first 2 chapters and a well designed overview of the rest that includes a link to buy the full version or order a paper book.
It all depends upon what your business model is?
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Permalink Reply by Anders Sundelin on
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I believe the future of these kinds of hubs are really interesting from a business model perspective. I guess you already see the hub as one of your key resources and start wondering why contributing members should pay you to be a member and help you make money and not the other way around.
Perhaps a future model will be "Pay to become a member. Depending on your level of contribution to the hub you get the money back. If you get the ranking of TOP Contributor by the members of the hub, you get a free book, a small percentage from every book sold and free invitations to all hub club events."
We have only seen the beginning of online collaboration and the development will be interesting to follow.
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Permalink Reply by Ellen Di Resta on -
I think the idea has merit as a promotional vehicle. I think the issue is to figure out how get the value and timing right to institute some sort of pricing model. One thing that has been bugging me is that some free, and freemium, models have gone too far, and have set up unrealistic expectations that have devalued quality content. Augghhh....I better stop there.
So, maybe you could give away an overview chapter like Mike Raynor did with his Strategy Paradox book. Maybe the overview chapter has a time-lapse discount percentage that decreases the longer the person waits to buy the whole book.
There are no shortage of ways to do this, but I think it's important to clearly articulate the ultimate value of the free portion, whatever it is. At the end of the day, if the content is good, there is value in accessing it. Let's make sure it's captured.
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Permalink Reply by Abdullah Nadeem on -
The idea of a free book is a double edged sword. I firmly believe in the viral effect. But at the same time, being free could give a negative impression. People may ask how valuable the book really is. Personally, I receive or find on the web free ebooks almost on a daily basis. I download them all because they’re free. But I give the book I that picked myself and paid for a priority over these free books. I end up not reading most of them. Maybe the idea of a free book used to be exciting when it first came out. But now there are too many out there. Some of them are barely “books” given that their content is too general or less valuable.
I’d imagine a freemium model for a book if you plan to write another one that would be represented as a must-read follow-on book. For example, if this book by itself won’t be enough for people to implement the ideas, so they would need either you in person to help them or would need to read another book to implement, then a freemium business model would make sense. But even a priced book could generate business for you.
But maybe to facilitate WOM, you could give an e copy of the book for book buyers. These are the people who will actually do the real WOM for you. This way won’t dilute the image of the book because you won’t post on the web as a free ebook, but will still facilitate viral WOM.
my 2 cents :)
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Permalink Reply by Peter Froberg on
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I am glad to see that there is a debate on the subject. having spent some time looking into freemium best practice and theory, I will take the liberty of countering some of the concerns. Hopefully this will help further a debate.
@Abdullah
Devaluing the product is definitely a concern. And I would agree that there are a lot of free ebooks out there and that a lot of them doesn't get read a lot. Yet I think is important to look at the quality of the content. Drawing a parallel to the music industry makes this easier.
If i make a demo and release it on the internet, it would be crap and rightfully people would not value it. There are tons of this kind of music on the internet.
At the same time there are quality musicians like Corey Smith and Nine inch Nails. When they release their music for free, people see the quality and value it.
In the same way, there are a lot of ebooks. But very few are of the quality of this particular book.
One thing that could further underline the value of the BMI book, even if it is free online, is to make a physical copy that is expensive and exclusive. Besides NIN, Free Souls is a great example of this
The freemium model is thus. Giving the content away for free and selling the ease of reading a book, further understanding through consultancy or ease of access to the ideas by buying a lecture.
@Releasing the first few chapters for free.
There is definitely value in releasing a few chapters for free. Yet it is not nearly as much as with the full product.
It seems that there is a few people that agree with the viral potential of a free copy. Viral potential is best reached when the product is allowed to spread virally. Skype and Gmail of product that everybody had within a very sort time.
They had the advantage that once I heard about it from a friend, I could try it for free. If I liked it I could tell all my friends.
If people have to pay for something or only can se a limited part.
Fewer people will see it, fewer people will love it, fewer people will tell their friends.
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Permalink Reply by Philippe Rousselot on -
Seth Godin did it ... with great success !
I indeed think it is a good tactic that has been used successfully by our marketing guru, Seth Godin. He wrote a post in his blog called "You should write an ebook" (http://sethgodin.typepad.com/seths_blog/2007/03/you_should_writ.html) where he describes how successful it was.
Thanks to this word of mouth campaign, he could rank #5 on amazon without any promotion investment at all !
"Free information is a great way to get people talking about" from Andy Sernovitz, Word of Mouth Marketing
Free information is a great way to get your public talk about and start a viral campaign. Andy has put some short articles on his website as free downloads which have been dowloaded more than 10,000 times. Market researchs, reports, white papers, webcasts, newsletters, anything that is portable, easy to share and cheap to produce.
Give the first 100 books to your best talkers
Instead of giving away the ebook, you may also consider offering your first 100 books to your best talkers, your fans, customers, readers, influencers who will be proud to talk about your book and consulting experience.
Give a light pdf version of you book
As I mentioned in an earlier post, I would so much love to have a synthesis version of each book I read with all the big ideas, templates and visuals which I find so compelling (like the manageris synopses see http://www.manageris.com/english/what_s_a_synopsis.htm). Maybe giving away an electronic version of this extra document could be another option. This will not prevent the sale of the book anyway, believe me.
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Permalink Reply by Cesar Picos on -
Hello,
I suggest to use two options at same time, if someone is registering and declares the download is for academics (education institute) oand give it away, plus selling it for rest of people increasing the price based on demand but starting at a reasonable price.
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