Women in Publishing event
I took part in a panel discussion on digital publishing for Women in Publishing last week, alongside the awesome Laura Summers and Rebecca Lefort. Below is a transcript of my presentation on the importance of the freemium model.
Sara O’Connor from Hot Key Books wrote in Futurebook last week why she is leaving publishing to go and work in tech. She still feels the ‘walls of resistance to digital’ within publishing, particularly coding
She called for a time when CEOs of publishing houses can code, when coding is no longer a taboo and publishers understand the power it can give them to create new and innovative products.
It’s an interesting parallel as I recently read an article that said Marissa Mayer, the new CEO of Yahoo was the first to ask for her PC to be set up to code, that she has been able to move the company forward at such a pace precisely because she can code and understand the process behind her products.
Like Sara I have spent my career in publishing – mainly in education or STM publishing on the marketing side. Recently I started working with Gojimo, an EdTech startup who have developed a GCSE and A Level revision App.
Although I don’t code, I can appreciate the point that Sara is making. There is a very different mindset, and language set, working in EdTech than there is in traditional publishing. Even though we are both essentially creating content to provide to students, there is a world of difference between working for even a company as progressive as Rising Stars and Gojimo. And one key difference comes in the form of the freemium model.
What is the freemium model?
This took me a while to get my head around. Conversations went something like this. So the app is free, and the content is free – so how do we make any money? And the truth is, we don’t. Well not yet anyway.
Gojimo, like many tech companies, is funded by venture capital, which means in the first instance there isn’t the pressure to immediately turn a profit. However that doesn’t mean that the product is created without any thought to profit, it just means the business model is different.
The freemium business model enables us to build a great user base and then to monetise the product at a later date, once those users are hooked and coming back to us regularly.
Freemium becomes the cornerstone of user acquisition (or new customer acquisition as we would say in publishing).
With Gojimo this works by offering over 150,000 free revision quiz questions across a huge range of qualifications and subjects so that we become the only revision app you would ever need to use.
We make it easy for users to find us, to download or access the app (iOS, Android, web) and they don’t even need to register to get started. We have removed all the barriers that traditionally prevent people from discovering what a great product we have – price, sign up, access, discoverability. Then we have set up trigger points that, once reached, trigger an email or in app push notification in order to guide the user towards a purchase of premium content, which in our case are ebook study guides that we have licencsed from publishers such as OUP and Pearson.
Over time, our user base will get bigger, the range of content on offer will be broader and the revenues will be greater. But we rely on giving away content for free in the first instance in order to generate revenues down the line.
Ok so how can freemium work if I’m not an app developer?
A few years back I worked on the launch of EssentialCPD an online training delivery platform from Rising Stars and Guardian Teacher Network. EssentialCPD offers short courses for teachers to take online to aid their personal development. Our launch strategy involved creating one courses specifically that we could give away for free – a variation on the try before you buy model. But in actual fact that is just another form of freemium. We allowed customers to use the site and have access to a course for free for ever, not for a limited time (free trial). In this case we did require a sign up partly because the software is adaptive and needs to remember a user when they return, and partly because this is a high cost institutional sale and not a low cost consumer product like Gojimo. But the thinking behind it was the same. We then worked very hard at driving new customers to the free course and then instigated automated marketing to following up on them once they had completed the course.
PanMacmillan have recently introduced an extracts website which does exactly what it says on the tin. 10 minute extracts from all their new titles and a selection of their popular backlist, that you can access for free online. Read it , like it, buy it. It’s so beautiful it makes you wonder why nobody’s done it before. Far more engaging than a look inside, you actually feel as though you are reading the book proper and therefore far more likely to purchase at the end – it encourages you to read rather than just flick/browse through.
Self-published authors often give away the first book in a series for free via Amazon. Once hooked they are then able to sell the remaining titles in the series to readers at a higher than entry-level price. They have used the free title to gain loyal fans.
So will freemium work for you?
Ask yourself what you can give away for free that is representative of the product as a whole. Can you chunk it so that some of the product sits behind the paywall (as newspapers do) and the rest is available for free. Or can you create a lite version as many apps do, that gives users access to some of the content or features of your product but then they have to pay to unlock the rest.
Work out what you are trying to achieve? Is it user numbers, like Gojimo? Is it lead generation like EssentialCPD so you can then sell a high value product or service to the customer as with subscription services or school textbooks. In fact the inspection copy system that textbook and academic publishers have been using for decades is a form of freemium, giving lecturers and teachers a free copy of the book in order to decide whether or not to adopt it as a set text. These days we no longer need to supply a costly physical book but can give away ebooks or online access to the content. In return for valuable data on student numbers, personal contact details and information on what resources are currently being used, budgets etc. The data alone can be worth the cost of a free book.
Or do you want to build a loyal fan base as the self-published authors do.
Whichever way you go you need to have clear KPIs, analytics and a monetisation plan in place, even if the revenues don’t come until further down the line. Otherwise you are literally giving away your content for nothing.