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Aaup nap free

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The National Academies Press has a duel mission to disseminate the findings of the National Academies as widely as possible but also break-even financially. The presentation serves as a case study of using freemium as a business model but also of maximizing dissemination.

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Aaup nap free

  1. 1. Free@ The National Academies Press Barbara Kline Pope, Executive Director for Communications and the National Academies Press
  2. 2. Agenda • Introduce you to the National Academies Press • History of Free • Research to Guide Business Model • Transitions • Free Now
  3. 3. The National Academies Press Mission To Disseminate the Books from the National Academies as Widely as Possible While Being Completely Self-sustaining
  4. 4. • About 200 reports each year • 4,000 “in print” • Print, PDF (full, chapter, bundle), Page- by-page formats
  5. 5. Original Web Model—1994 Leading the Way in Free Content Before Amazon. . .Before Google. . .Before PDF • Early Model – Free browsing of full text (2,500 books) – Fully searchable pages (550,000 pages) – Charge for printed copy
  6. 6. The Research Winner of the INFORMS Society for Marketing Science Practice Prize 2007 • How much could we give away for free and still break even? • What would be the impact of pricing policy options including free PDF on – Revenues – Dissemination
  7. 7. Group A Short Survey (B) For Free Consumers Totebag with Books in 2nd NO Shopping Cart (No PDF Go back Reduce PDF Price to One No Print) 1st Level Lower Intercept and Would you Present Details Like to Order NO Group B Of PDF book PDF Now? 2nd JUST PDF NO BOTH PDF JUST PRINT Consumers & PRINT Browsing Books Complete Complete PDF Complete with PDF Available PDF Order Print Order & Print Order Short Short Short Online Survey (A) Survey (A) Survey (B) For Add’l. For Free For Free Choice Discount Shipping and Shipping Add’l. Discount Experiment Continue Checkout Process
  8. 8. Online Choice Experiment • 500 titles for which PDF format available • Print format price fixed • PDF prices – Six levels relative to Print format – 110%, 100%, 75%, 50% 5%, 0% (Free) – Prices randomized across • Subject category • Price Levels of Print • Popularity of the title (number of visits)
  9. 9. Data for Developing Policy Options 110 58% of those offered free PDF 90 bought Print. Net Impact on Sales Revenue 70 Predicted Sales 50 Revenue as a Cannibalization Impact Percentage of on Sales Revenue of Sales Revenue 30 Market Expansion Impact Prior to PDF on Sales Revenue Introduction 10 42% of those -10 offered free PDF took it instead of 0 20 40 1 60 80 100 120 the printed book they planned to PDF Price as a Percentage of Print Price buy.
  10. 10. Implementation • April 2003--PDF format introduced – Charged for PDF – Starting point as we allowed time to pass in order to validated the research – Free PDF to NAS/NAE/IOM members, volunteers, Congress, journalists, sponsors for all 3,000 titles – Free full-text page by page still available – Authors could subsidize free PDF by title (33% of potential sales)
  11. 11. Implementation • June 2003—Free PDF to people in 144 developing countries • February 2004—Free PDF of “Compass” titles to the world – 1,500 of the total of 3,000 titles on line – 100 of the 200 new titles each year – Research Validated in 2005—33% lower sales of printed Compass books with free PDF
  12. 12. Upward Trend in Free PDF; Unit Sales of PDF Flat; Unit Sales of Print Decreasing Units Distributed Free PDF, PDF, Print 550,000 500,000 Number of files or books 450,000 400,000 Free PDF distributed 350,000 Unit Sales PDF 300,000 Units Sales Print 250,000 Developing 200,000 Countries All 150,000 Free Free 100,000 “Compass” 50,000 books to All 0 2003 2004 2005 2006 2007 2008 2009 Year
  13. 13. Page Views Major Redesign 120,000,000 100,000,000 Updated N um be r of P a ge s Pages in Discovery Engine 80,000,000 XHTML rather Podcasts ,Exact than page Target, Outreach 60,000,000 image 40,000,000 Research Tools---Skim, Reference Finder, Web 20,000,000 Search Builder - 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Year
  14. 14. Invested in Sophisticated Online Tools
  15. 15. More Free and Self-Sustainable through Cost Efficiencies 2010: Total Units Distributed (Books and Files) Outsource Warehouse 800,000 Outsourced Printing Stronger inventory Operations management—more Warehouse print on demand efficiencies 600,000 Number 400,000 200,000 0 Free PDF 01 02 05 06 08 03 04 07 09 Year 20 20 20 20 20 20 20 20 20 Total Net Unit Sales
  16. 16. Increased Dissemination Over Time Visitors/Page Views/Total Units (book/pdf) Distributed 120,000,000 800,000 Visitors/Views/Rate 700,000 100,000,000 600,000 80,000,000 500,000 60,000,000 400,000 300,000 40,000,000 200,000 20,000,000 100,000 - 0 Visitors 19 20 20 20 20 20 20 20 20 20 20 Page Views 99 00 01 02 03 04 05 06 07 08 09 Units Distributed More Free Access + Reduced Costs = Self Sustainability Next up? New comprehensive analyses to determine how to get to full free PDF and map out the transition
  17. 17. New Formats
  18. 18. Social Media Promotion and Research Blogs Widgets Rating Sites Bookmarking Sites • Compare customers acquired through social media with those obtained through other channels • Track widget use and determine which sites are most productive
  19. 19. Following the Mission • Increasing emphasis on free • Increasing comfort with reading our free content on line • Strategic direction for electronic content • New cost models • New analysis in progress for getting to full free PDF
  20. 20. Questions? Write to bkline@nas.edu Want to read the Marketing Science paper? http://www.nap.edu/staff/barbara_kline_pope/marketin gsciencepaper.pdf

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