How do you monetize free? Can you make money by giving away your very best ideas and content? In this video, publisher Tim O'Reilly makes an argument for open publishing, and explains how can you earn money from giving away your stuff without selling it.
Photo credit: Opl
If you consider $15.000.000 a year a good deal, then Tim O'Reilly has a point to make here. That revenue has been created initially by publishing and distributing books for Open-Source software and then later by building upon the interest generated by the Web 2.0 free paper, downloaded a million times or more to this day. By organizing and hosting prestigious events, and creating new opportunities around a vision shared with everyone for free, O'Reilly has literally been making a fortune around some key free resources.
"One size fits all" is no longer a working approach in business.
"We are living in a wonderful world, in which there are many answers... This wonderful spectrum from free and ubiquitous, to scarce and valuable, gives us so many possibilities. Our job as inventors of businesses is to explore that range of possibilities and to create new music with it."
Full English Text Transcription
Be An Amplifier
Why should publishing be open? How many ways can I tell you this?
First off, because our mission is to inform, to educate, to transform the world by passing on good stuff. The more we do that, the better off we all are.
We are connectors, we are amplifiers. Our fundamental mission is about passing on what we have. Why the devil would we want to lock it up if we don't have to? That's reason number one.
Give Your Products Away
Reason number two: The pragmatic reason.
We have found through years of experiments, that we can actually make a pretty good living even when we give our product away.
We have published books on Linux where the authors have said: "I want this to be put under free documentation license" and we still ended up selling in some cases millions of dollars worth of copies of those books.
In many cases it was less than we would have made otherwise. But there are other books, where a topic was legitimized by the free content, and by getting millions of people to read it online, we were then able to commercialize them after the fact.
How to Monetize Open Publishing
I gave a keynote last year called: "Free is more complicated than you might think", and one of my most compelling examples is the paper I wrote called: "What is Web 2.0?" It's free, it's been probably downloaded about a million times. One of my most widely read pieces. It has helped give a name to the industry. How do you monetize it?
I put together a series of events in which a relatively small number people, a thousands at a time for the Web 2.0 summit, maybe ten or fifteen thousands for the Web 2.0 Expo, come and give me a fairly substantial amount of money.
I've generated from that free paper a business that's worth, I think, about 15.000.000 dollars a year, as part of my business.
There are models if you can use the amazing power of the Internet to spread ideas, you can then say: "How can I monetize this?"
Because there's something that is intrinsically limited. Only so many people can fit in a room, and for an executive-style event you can charge a lot because because you're limiting saying that only people above a certain kind of level of influence will let in. Or you can have a big event where many of the attendees are coming free like in an expo, and there you get money from sponsors who want to reach those people. So there are all kinds of different ways to monetize free.
"You Pick the Hat to Fill the Head"
I remember many years ago, when I was about 14 years old, I remember talking to this teacher of Sri Aurobindo yoga, in San Francisco. I was asking about reincarnation. I was saying: "How do you reconcile self-reincarnation with genetics?" And he said with this big beaming smile: "Oh, you pick the head to fit the head." That was a wonderful phrase, and I often remember that. I think about that in the context of business models.
"You pick the hat to fit the had". You don't go for "one size fits all."
So many people are looking for just one answer. But we are living in a wonderful world, in which there are many answers. How good is that?
This wonderful spectrum from free and ubiquitous, to scarce and valuable, gives us so many possibilities.
Our job as inventors of businesses is to explore that range of possibilities and to create new music with it.
Originally published by OPL on February 23, 2009 as "Tim O'Reilly answers the question "Why Open Publishing?"".
About the author
Tim O'Reilly is the founder of O'Reilly Media and a supporter of the free software and open source movements. He is widely credited with coining the term Web 2.0. After graduating from Harvard College in 1975 with a B.A. cum laude in Classics O'Reilly became involved in the field of computer manuals. He defines the job he does with his company: "changing the world by spreading the knowledge of innovators."
Tim O'Reilly -
Be An Amplifier - Stephen Coburn
Give Your Products Away - motorolka
How to Monetize Open Publishing - Nikolai Sorokin
"You Pick the Hat to Fill the Head" - lilyr