The Public Broadcasting model for ebooks, by Eric Hellman

Imagine if Radiolab (my favorite radio show) were a book. It would be a best-seller, probably the kind you might buy at Target. It would sound good on your coffee table, and you’d have a shelf full of your favorite episodes. You’d also be able to get it for free at the library. Now that radio is becoming digital, you might even be able to buy it instantly at Amazon.com, or download it to your iPad from the iBookStore.

It’s expensive to create fantastic programs like Radiolab. New York Public Radio, which produces Radiolab, produces other award winning programs and operates three of America top public radio stations, all on an annual budget of  just under 48 million dollars. That works out to $130,854 per day. If you spread that expense over the 19 million potential listeners in the New Yourk Metropolitan area, it works out to 0.69 pennies per day per person.

But it doesn’t even cost that much to listen to WNYC or WQXR. Most people pay even less, zero pennies, to be exact. What’s more, you can listen to the shows for free on the internet. On your iPad, even. And you don’t even have to go to the library.

A relatively small number of us send money to become “members” of the station. The $120 my family contributed turned into a deduction on the tax return I completed yesterday. Most people who listen don’t contribute, but they’re never referred to as “pirates” or “thieves”.

The reason this works anyway is that radio has large fixed costs and infinitesimal marginal costs. If the listenership doubles, the costs stay exactly the same. It’s not like book publishing, which spends a lot of money pumping paper through a complex supply chain.

A book can cost a lot to produce, too. An author might devote a whole year to the writing of a book. Let’s be generous and say the author deserves $200,000. There’s an editor, a graphic designer, maybe an illustrator who also work on the book. Add some management overhead, tax accountants, lawyers, and it’s easy to get over $300,000 in fixed costs, and we haven’t even started promoting, printing and shipping the book. Many books, of course are produced for much less money. Some authors don’t get paid a cent.

But EBOOKS ARE NOT BOOKS. They’re just bits, and typically not so many, compared to a radio show. The cost of making a copy is negligible. It needn’t cost anything to distribute the ebook. eBook distribution is even cheaper than radio, because you don’t have to pay for transmitter power, and you don’t have to own a frequency license. It’s the monetization machinery that costs money: the ecommerce systems and the DRM. If the producers of ebooks had some way of covering their fixed costs (with profit to make it worth their while), ebooks could work just like free radio. Three million people contributing a dime would do quite nicely. 30,000 contributing $10 would work, too.

A public “bookcasting” system would work somewhat differently from public radio. Audiences and patrons would be assembled around individual books and authors, which would be much more numerous than radio stations. People would be motivated to help make the books they love public by the virtuous cycle of receiving books supported by other public book patrons.

In case you haven’t been paying attention, this business model is what I’ve begun working on as Gluejar, Inc..  The Internet presents an incredible capability for assembling audiences around a common purpose. The business will bring together people to pay for the fixed costs of producing ebooks, reward the best producers with profits, and to make these ebooks public, free to read, free to copy, to everyone, everywhere in the world, using Creative Commons Licensing.

This can work. I can see it now. The pledge drive will take up pages 40-50.

Via Eric Hellman’s Go to Hellman blog