TOCCON2013 Panel: The Elusive Netflix for Books. 24symbols

Panel: The Elusive Netflix for Books Justo Hidalgo jhidalgo@24symbols.com @justohidalgo

■ Co-founder, 24symbols■ Past: B2B stuff (data integration, metadata, web search and automation, …) • VP Sales Engineering, Product Management • VP Technology■ Mentor for startups (Tetuan Valley, UEIA, …)■ Ph.D., M.Sc. in Computer Science • Training in Product Strategy/Mgmt, Innovation&Creativity at Stanford, UC Berkeley■ Love data. Love books.

“the publishing industry is in a most exciting, but also vulnerable way” Evan Schnittmann, 201

More than a Business Model

When talking about “Netflix for Books”, “Spotifyfor Books” or “Subscription Services foreBooks”, we should not circunscribe ourselvesto the revenue model. The business model willonly work as long as other key elements takethe most of what technology, reading devicesand specific approaches to how people find andread books provide to us.

1. Books on theCloud

Multidevice synchronizationHTML5 Web iPad app

Real- TimeLearning and Control

Mutable artifact Credits: Craig Mod, June 2011

First key element is “books on the cloud”For readers: no worries about where books are,simplicity in how books are found, accessed andkeptFor publishers: DRM becomes a non-issue; real-time analytics dashboard becomes a real assetEvolution of books: in some cases, books needto evolve continuously.

2. Social Reading

Before you say “oh, no, social reading again”, let me redefine it…

… just call it ENGAGEMENT

2. Engagement

Why should we worry about engagement in the publishing industry?

Because we compete for people’s time, and other options are winning

Readers will mainly want to read books. Ofcourse.But potential readers have many otherentertainment opportunitiesThere are many other ways to increaseengagement• Social Reading is one• Recommendations is anotherBut there are many more:• Mining the content of books• Linking the content of books

Of course, the obvious: share with your friends.But much more: communication amongreaders, first step towards a betterrecommendation system based on friends andtastes, beyond “purchases”And it must happen inside and outside of theserviceThis is the “engagement” side of the equation.Critical.

Breaking the wallbetween the book and the readers…

… among the readers themselves…

… and with the authors?

RecommendationsRecommendationsEngine based onprior readingsSocialrecommendations(your friends!)

… not just for fun…■ Edition, Author and Publisher Pages■ Sharable in Facebook, Twitter, Google+ (virality)■ Organic positioning in search engines

… and more to come

3. ContentAggregation

This is what many publishers would like to have

But that’s a huge challenge for MOST publishers… and for readers Big PublisherI just wanted to read a book… Great Publisher Cool Publisher

D2C is a clear opportunity for publishersBut it is also a huge challenge: most publisherslack a brand• People look for authors, books, categories, but not for publishers• Many publishers are generalistsThat’s where getting the most of a publishinghub makes sense

“Book as a Service” provides a real HUB for readers, publishers and authors

And it can be done in new, attractive ways

4. Business Models

Content is not enoughFREE CONTENT PAID CONTENT many 1

But it is still key…

… and core of your business

OK, so we need to offer a great service beyond content… but…

HOW TO MAKE PEOPLE PAY FOR A SERVICE?????

Subscription models look for ways to increaserevenues, but in a different way:• Offer a great service• Offer great content• Pay once, FORGET ABOUT IT• Have new stuff everytime readers come back• In summary: create value, constantlyHow do you avoid the initial chasm?• Our approach: FREEMIUM!!!

FreemiumREADERS FREE ACCESS WANT MORE? TO CONTENT c

Freemium =Free: read ebooks, free and with non-intrusive adsPremium: ad-free, even withoutInternet connection. Price bysubscriptionAffiliation: we redirect traffic to yoursite or wherever you sell your printedbooks

Income model 24symbols income is based on advertising and subscriptions. 70 % of this revenue is shared equally among the total number of pages read. 70% Income PublishersPublisher’s = xIncome Pages Read Total Pages Read

Fear offreemium?

1. Freemium increases engagement FreeUsers Conversion Rate Delayed subscription (test the service & engage) Premium Lower entry ratio Time Then, work on conversion

2. Price per page increases as subscriptions grow Price/page Profit threshold Growth Consolidation time/conversion rate• http://www.digitalbookworld.com/2012/how-the-economics-of-ebook-subscription- services-work/• http://www.24symbols.com/docs/FAQ24symbols_en.pdf

4. Platform

Are books “it”?Are books “the final product”?

A subscription service on the cloud is the bestfit for an ebook platformA place where readers can read, and othercompanies can create added-value services fortheir customers: recommendations, contentmining, book interlinking, … imagination is thelimitAnd potentially open for standards, research,etc.

So, elusive? Nah, I don’t think so 110000 100000 90000 80000 70000 60000 50000 40000@justohidalgo

Just a typical adoption lifecyclehttp://toc.oreilly.com/2013/02/the-four-stages-of-the-spotify-for-ebooks-adoption-model.html

Thanks for your time!Justo Hidalgojhidalgo@24symbols.com@justohidalgo

TOCCON2013 Panel: The Elusive Netflix for Books. 24symbols

by OReillyTOC on Feb 12, 2013

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