I’m at an education conference put on by CET in Tel Aviv. This is the second day of the conference. The opening session is on business models for supporting the webification of the educational system.

Eli Hurvitz (former deputy director of the Rothschild Foundation, the funder of CET) is the moderator. The speakers are Michael Jon Jensen (Dir of Strategic Web Communications, National Academies Press), Eric Frank (co-founder of Flat World Knowledge) and Sheizaf Rafaelli (Dir. of the Sagy Center for Internet Research at Haifa Univ.)

Michael Jensen says he began with computers in 1980, thinking that books would be online within 5 yrs. He spent three yearsat Project Muse (1995-8), but left because they were spending half their money on keeping people away from their content. He went to the National Academies Press (part of the National Academy of Science). The National Academies does about 200 reports a year, the result of studies by about 20 experts focused on some question. While there are many wonderful things about crowd-sourcing, he says, “I’m in favor of expertise. Facts and opinions on the Web are cheap…but expertise, expert perspective and sound analysis are costly.” E.g., that humans are responsible for climate change is not in doubt, should not be presented as if it were in doubt, and should not be crowd-sourced, he says.

The National Academy has 4,800 books online, all available to be read on line for free. (This includes an algorithmic skimmer that extacts the most important two-sentence chunk from every page.) [Now that should be crowd-sourced!] Since 2005, 65% are free for download in PDF. They get 1.4M visitors/month, each reading 7 page on average. But only 0.2% buy anything.

The National Academy Press’ goal is access and sustainability. In 2001, they did an experiment: When people were buying a book, they were offered a download of a PDF for 80% of the price, then 60%, then 40%, then for free. 42% took the free PDF. But it would have been too expensive to make all PDF’s free. The 65% that are now free PDFs are the “long tail” of books. “We are going to be in transition for the next 20 yrs.” Book sales have gone from 450,00/yr in 2002 to 175,000 in 2010. But, as they have given away more, they are disseminating about 850,000 units per year. “That means we’re fulfilling our publishing mission.” 260,000 people have opted in for getting notified of new books.

Michael goes through the available business options. NAP’s offerings are too broad for subscriptions. They will continue selling products. Authors fund some of the dissemination. And booksellers provide some revenue. There are different models for long-form content vs. articles vs. news vs. databases. Further, NAP has to provide multiple and new forms of content.

General lessons: Understand your mission. Make sure your strategy supports your mission. But digital strategies are a series of tactics. Design fot the future. and “The highest resolution is never enough…Never dumb down.” “The print-based mindset will work for the next few years, but is a long-term dead end.” “‘Free’ of some kind is required.” Understand your readers, and develop relationships with them. Go where the audiences are. “Continue experimenting.” There is no single best model. “We are living in content hyperabundance, and must compete with everything else in the world.”

Eric Frank of Flat World Knowledge (“the largest commercial publisher of” open source textbooks) says that old business models are holding us back from achieving what’s possible with the Net. He points to a “value gap” in the marketplace. Many college textbooks are $200. The pain is not evenly distributed. Half of college students are in 2 yr colleges, where the cost of textbooks can be close to their tuition costs. The Net is disrupting the text book market already, e.g.,through the online sale of used books, or text book rental models, or “piracy.” So, publishers are selling fewer units per year, and are raising pricves to protect their revenues. There’s a “vicious downward spiral,” making everyone more and more unhappy.

Flat World Knowledge has two business models. First, it puts textbooks through an editorial process, and publishes them under open licenses. They vet their authors, and peer review the books. They publish their books under a Creative Commons license (attribution, non-commercial, share-alike); they retain the copyright, but allow users to reuse, revise, remix, and redistribute them. They provide a customization platform that looks quite slick: re-order the table of content, add content, edit the content. It then generates multiple formats, including html, pdf, ePub, .mobi, digital Braille, .mp3. Students can choose the format that works best for them. The Web-based and versions for students with disabilities are free. They sell softwcover books ($35 fofr b&w, $70 for color) and the other formats. They also sell study guides, online quizzes, and flashcards. 44% read for free online. 66% purchase something: 33% print, 3% audiobooks, 17% print it yourself, 3% ebooks.

Second business model: They license all of their intellectual property to an institution that buys a site license at $20/student, who then get access to the material in every format. Paper publishers’ unit sales tend to zero out over just a few semesters as students turn to other ways of getting the book. Free World Knowledge’s unit sales tend to be steady. They pay authors 20% royalty (as opposed to a standard 13%), which results in higher cumulative revenues for the authors.

They currently have 112 authors (they launched in 2007 and published their first book in Spring 2009). 36 titles published; 42 in pipeline. Their costs are about a third of the industry and declining. Their time to market is about half of the traditionals (18 months vs. 40 months). 1,600 faculty have formally adopted their books, in 44 countries. Sales are growing at 320%. Their conversion rate of free to paid is currently at 61% and growing. They’ve raised $30M in venture capital. Bertelsmann has put in $15M. Random House today invested.

He ends by citing Kevin Kelly: The Net is a giant copy machine. When copies are super-abundant, and worthless. So, you need to seel stuff that can’t be copied. Kevin lists 8 things that can’t be copied: immediacy, personalization, interpretation (study aids), authenticity (what the prof wants you to read), accessibility, embodiment (print copy), patronage (people want to pay creators), findability. Future for FWK: p2p tutoring, user-generated marketplace, self-assessment embedded within the books, data sales. “Knowledge is the black gold of the 21st century.”

[Sheizaf Rafaelli’s talk was excellent — primarily about what happens when books lose bindings — but he spoke very quickly, and the talk itself did not lend itself to livebloggery, in part because I was hearing it in translation, which required more listening and less typing. Sorry. His slides are here. ]

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I just shared a cab with James Bridle, a UK publisher and digital activist (my designation, not his) who is the brilliance behind the printing out of the changes to the Wikipedia article on the Iraq War. It turns out that those changes — just the changed portions — fill up twelve volumes.

What does the project show? “The argument,” James says. Of course it also shows the power of the cognitive surplus: we just casually created twelve volumes of changes in our spare time. If only all users of Wikipedia all understood how it’s put together! (Rather than banning students from using Wikipedia, it’d be far better if teachers required students to click on the “Discussion” tab.)

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Dan Gillmor has posted his new book. Mediactive is a handbook for anyone who consumes news, produces news, does both, or cares about either.

Dan’s published it under a Creative Commons license on his site, so you can read it for free and share it with friends. It’s also available in print from Lulu and Amazon. Dan views the book as just one more step in a long-term, continuing engagement with the topic.

Dan is one of the good guys of the Net. I’m off to Lulu to buy myself a copy!

Howard Weaver noted in the comment to a previous post of mine that he’s posted a scan of a typewritten 1976 memo [pdf] he wrote when he was at Alaska’s alternative newspaper, urging it to become more engaged. Prescient doesn’t begin to express it.

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Elliot Maxwell is giving a Berkman lunchtime talk called “Openness: How increasing accessibility and responsiveness can transform processes and systems.” H3e says he came to the question by observing the spread and importance of the Net and its effect on institutions. He sees openness as a lens for understanding processes and systems.

Openness is a continuum, Elliot says. For example, open source software benefits from openness, but because decisions are made by assigned individuals, it is not itself fully open. Things are open if they’re accessible and can be modified, repurposed, and redistributed. Openness is in part an attitude, he says. E.g., a doctor is more open if s/he is more willing to listen to the patient and to take her/his time. “Openness is not necessarily a product of IT.”

Also, openness isn’t always the right answer. E.g., an electronic health record should be open enough that doctors can see it and so it can be immediately updated as lab results come in. But, it shouldn’t necessarily be open to other people, insurance companies, or the gov’t. Also, openness can make more haystacks, hiding the needles we need to find.

Elliot began thinking about this when Napster was at its high point. Traditional IP sees control as essential to creating an environment that encourages creation. But, we also want to encourage follow-on creators. There’s not a lot of research about how much incentive first creators need. (And, of course, first creators are themselves follow on creators.) Control is expensive and imperfect. (Think DRM). Open source, on the other hand, thinks value comes by distributing and sharing. But, it can be hard to evaluate all the contributions that come in.

Elliot lists some examples of increased openness, and spends some time talking about the attenmpts to open up clinical trials. (ClinicalTrials.gov and the Journal of Failed Clinical Trials.)

Elliot is also especially interested in higher education, which has been relatively unaffected by openness, although he expects that to change. (It’s easier for Harvard and other research institutions to support open access, he says, than, say, community colleges that have different goals and constraints. ) Elliot sees a rise in open educational resources, which will affect teaching institutions. OER will be increasingly driven by customers, rather than being course materials put up on the Web by a teacher. We will know more about how OERs are being used, they will become more interoperable, and there will be incentives for participation and use.

At CMU and other places, there’s work on harvesting what happens to and around digital educational materials. We need better data on student progress, educational outcomes, and the factors that affect student success. He says we also need research on the cmparative effectiveness of digital edu materials, and best practices. Also, it’d be great to extend fab labs digitally.

Elliot sees progress in opening up research. The Human Genome Project was the seminal event that changed the basic model of research, at least in the bio sciences. Open access journals are growing. But, too many institutions still only count publication in closed journals as a scholarly achievement. We don’t yet have good models for how to reward research that is immediately published.

Intellectual property rules need to be recalibrated to recognize the importance of follow-on innovators, and to enable more use by educators. Bayh-Dole should be modified to enable more open licensing. He would also like to see some “orphan work” legislation.

We should change the default of campus events so that they’re open, unless they’re specifically closed. “We should take advantage of greater openness to improve support services.” The government should fund open access to financial aid materials. NIH-funded research should be open to the public within 12 months should be extended to all non-classified research funded by the 11 fed agencies that spende over $100M in research. And the embargo time should be reudced to 6 months. The government ought to include funds for open access publishing when making grants, Elliot says.

Then there’s openness and transparency about academic degrees. We don’t know what it means to get a degree in something. We need more compatibility, comparability and portability of degrees. The government should encourage accrediting agencies to increase their focus on learning outcomes. (Currently only 19% of accrediting bodies say anything more than that a school is accredited or not.)

Q: [ethanz] You’re conflating openness and judging inputs and outputs. Evaluating schools by outcomes is one thing, but that’s different from openness.
A: Openness has to do with the access to the information.
Q: US News and World Report makes a closed evaluation based on open info. When you go more open, you can get unintended consequences. E.g., no one has done an open search engine, because it’s too game-able. What are the unintended consequences of opening up campus events, for example? E.g., Facebook opening up more and more private data. I was hoping you’d tell us more about where openness is inappropriate.
A: Yes. I’ve been talking about openness because that’s where it’s going.
Q: I agree with your framing of first and follow on innovators and with your general direction. But, the limits are important.
Q: As a historian, your directional arrow seems too one-dimensional. Historically, open and closed have worked hand in glove. E.g., the patent system closes paths but forces innovators to reveal what they have. E.g., the closedness of some medical processes.
A: Changing the default for university events would only be for events that were public anyway. And if I sound like I’m giving a litany of open

Q: [me] Is data more open if it’s been cleaned up and put into standardized formats. It’s more reusable, but it may also mean decisions have been made about it that anticipate some uses and not others?
A: It’s situational. In the long run it’s probably likely that all the slicing and dicing would evolve to a smaller way of using this info, because people would be able to build on that info — that’s just a guess. But, when people are unlikely to agree, getting it out quickly would be more usefl. Standardization has some benefits, but if it’s rigid it’s probably wrong.

Elliot concludes about talking about new means of certification. We’re going to find new ways of certifying people in a global environment. There aren’t educational institutions everywhere, and we have a new generation of self-directed learners. That will allow many more people to be certified.

Q: [wendy] What’s the most effective lever for openness? Is it giving credit for being open?
A: We need to recognize that the closed path is not the only way to build value.

Q: Transparency, openness, and open source are each different.
A: OS is a way of building code. Transparency lets us see, but not by itself affect…
Q: At the level of international relations, we can maybe get transparency, but openness will only come from individual administrations…
A: Transparency would let us see what’s happening. But I want us to be able to act on the info we see.

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