Friday, April 13, 2012

Open Business Models

Discussing my participation in this course over dinner last week with an editor of educational publications for a large global publisher, I was confronted with the comment that all this openness was bad for society. It would mean a lot of people loosing their jobs, and not alone in (educational) publishing.

I responded with something sarcastic like how big business should probably not think that because something worked for hundreds of years, it would keep working for hundreds of years and should probably think about reinventing themselves from time to time. And combined that with something more constructive like the massive growth in demand for education in the near future.

But what type of business models are there that fit an openness model? This section of Intro to Openness in Education looks at some of the ways institutions, organisations and companies are trying to tackle this issue.

In 'A sustainable model for Open CourseWare development,' Johansen and Wiley are listing 3 questions surrounding Bringham Young University Independent Studies programme's participation in OCW:

  1. What does it cost to "open" an existing BYU IS course?
  2. How does opening up affect paid enrolment in the course?
  3. If impact on enrolment is positive, is this alone enough to sustain an ongoing open publishing project?
Their study shows that it is possible to sustainably offer open access to (existing) courses, given that a small percentage of participants will subsequently enrol for paid courses. The additionally generated income from these new funds the conversion costs. It is uncertain if the existence of OCW in itself had a negative effect of enrolment.

Giving away books
In answer to my friends concerns for the future of employment in publishing, let's look at what business models are out there for books.

In a study of the effect of making digital versions of books available for free on sales of books, Hilton and Wiley interviewed 10 authors and examined sales data for two books.

“All of the individuals we sur- veyed felt free digital downloads increased the distribution and impact of their book. None of the authors felt that print sales were negatively affected. Data from our book sale comparison suggest that in the case we studied, free digital distribution did not negatively affect sales. “ (Hilton & Wiley, 2010).
Reasons for making free electronic versions available:
  • Visibility of an author's work 
  • Morally the right thing to do
Note: The study presents very interesting user perspectives, and I would therefor nominate John Hilton and David Wiley for the OpenEd User Perspective Badge!

Text books
One business model is employed by Flatworld knowledge - a commercial college textbook publisher offering free online versions of the text books. Students can buy different versions of the textbook, such as printed chapters, audio versions of the book or chapter, or print a PDF. In a study of the sustainability of this model, Hilton and Wiley (2011) find that revenue from sales would mean a three year period until break even. 

It is obvious that open does not mean free. While there's are many good reasons to open up access to knowledge in many different ways, the read ins in this topic show that openness costs money and that money needs to come from somewhere. The magic formula has not necessarily been found. 

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