1. Scott Gray

2. O’Reilly is at the Forefront of publishing
Walking the walk on digital publishing.
Experiments in every facet
Trying many different business models
Measure everything

3. History of Digital Content at O’Reilly
1993 – First commercial website.
GNN – Global Network Navigator (first commercial web browser).
Safari Books Online – partnership with Pearson (2003)

4. More history
2005 – Purchased “Useractive, inc.” elearning company.
2005 – Started selling PDFs of books.
2005 – Rough cuts. Preprints in PDFs.
2006 – Short Cuts PDFs.

5. Even more:
Ebooks, Mobi, epub, kindell, iphone apps – 2009/2010
Ebooks finally take off in 2010

6. In the mean time Print business has been declining

7. Questions remain:
Is the rate of increase of ebooks enough to offset decline in print?
Is this a new format bump? i.e. is this increase due to re-cataloging by customers?
Will new distribution channels be enough to take up the slack when old reliable channels fade?
Will long tail sales be enough to keep authors happy? New model here?

8. Music business is a warning

9. Analogy: B to C Online market = Serengeti plain
Different body types evolved to take advantage of different opportunities

10. Review of Publishing Business

11. Sales curves for individual books
Not such a bad thing: Shows Market saturation

12. Google is a herd of Wildebeast

13. Arguments for digital content
It’s what users want.
Users consume smaller chunks.
Higher profit margin (no printing and shipping)
Faster to market.
Remix and mash up inventory.
Compete with Google

14. Big numbers online!

15. O’Reilly has been out exploring the Serengeti with different species (different kinds of business Models)

16. O’REILLY statistics via SiteCatalyst
ROI, conversion ratios, revenue, and traffic analysis.

17. Online Business Models (ways to collect revenue)
Advertising
E-Commerce (pay per view)
Subscriptions (all you can eat)

18. Advertising (lifted from Tim)
Building a $10 million dollar division.
At the $5 CPM level achieved by demographically targeted sites, you need 166 million page views/month. (2 billion/yr.)
At the $1 CPM level achieved by most general sites, you need 4 billion page views/month.
At the $20 CPM level achieved by highly targeted sites, you still need 40 million page views/month. (480,000,000 pg views/yr)

19. Video Ads (lifted from Nat’s Radar post)
15 cents per video
15 cent cost
67,000,000 downloads per year to get $10M

20. See Tim’s “Free is more complicated than you think” talk…
“Follow the Money”

21. Revenue = P*C*N P = Price C = Conversion Rate N = Number of Visitors
E-Commerce
Revenue = P*C*N
P = Price
C = Conversion Rate
N = Number of Visitors
C = is virtually the same, and relatively independent of P across types.
N = is less for High P

22. Higher
Returns
Revenue = P*C*N
Lower
Returns

23. The short head
Vs. the long tail
for digital content.
These graphs
Don’t intersect!

24. Let’s do some Math ( Goal $10M) Suppose you’re conversion rate on your own site is 1% (ours is currently .7% which is a new online record for us)
1% needs 250 million visits/yr
1% needs 100,000,000 visits/yr
1% needs 34,000,000 visits/yr

25. $400 @ .5% needs 5 million visits/yr
Let’s do some math (Goal $10M) suppose it’s half (.5%) for higher priced products
.5% needs 5 million visits/yr
.5% needs 2.7 million visits/yr
.5% needs 1.6 visits/yr (our conferences do about 1% actually)
.1% needs only needs 1,000,000
Visitors to make $100,000,000 (online accredited schools)

26. Subscription Model (raises P)
Periodical (Make magazine)
Physical units
lifestyle support
All you can eat (Safari)
Digital
Bigger the better
Community

27. Can we go from free to subscription?
Sports sites for example

28. Other Advantages of premium online
Increases customer acquisition power
Marketing Power
Adwords (some $60 per click!)
Advertizing in general
Affiliate programs
Higher ROI

29. Most of the nutrient rich food for B to C publishers is up high in the trees.

30. Ways to increase P (premium business)
Charge More (IDC, O’Reilly Reports)
Add a combination of other products and services (Conferences, OST)
Subscriptions (Safari, Make)
P*C*N

32. Online School offering courses and certificate programs in Information
Technology and Systems.
In partnership with

33. How we add value to a digital product

34. Some examples of how different the business models in elearning can be: Skillsoft – 6,000,000 $40/user (hr managers choose) Capella – 16,000 $16,000/user. (end users choose) Same size of businesses.

35. Go online, but don’t forget about the giraffes

36. Be Patient, it takes a while to grow premium business

37. Beyond ebooks = Maker Cubes
Show us cool stuff, Scott!