General Journalism // Ricochet by Chrys Wu

I’ve been saying this for a while now: Websites can no longer rely solely on online ads to replace their shrinking offline revenue streams. What’s needed are smart acquisition and diverse partnering strategies.

Tim O’Reilly spoke about just that today at the Tools of Change conference. Joe Grimm sent an update. —Chrys

One of the most powerful words in the English language is also a buzzword at this week’s O’Reilly Tools of Change conference in New York. That word is free, as in free content.

Free content, or audience expectation of it, is bedeviling all media, not just book publishers like those attending the conference.

O’Reilly Media founder and CEO Tim O’Reilly â€“ you might consider him to be the host of the conference â€“ took the stage to talk about how his company deals with free and how other media can.

The big fallacy in free, O’Reilly said, is that the advertiser-supported model of free content is too simplistic. Free, O’Reilly said, is complicated. He attributed the observation to Dilbert creator Scott Adams, the first cartoonist to go to the Internet in big ways.

O’Reilly said it is becoming increasingly important for media companies to develop revenue streams apart from advertising.

His company draws revenue streams out of the pools of users its products – technical manuals, originally – create.

“I’ve been thinking about this for a long time because publishing is my original core business.” O’Reilly said.

In a reconfigured word, he said, his company’s core products are more abstract qualities such as mission, brand and community.

These pour out revenue through sponsorships content, events like this week’s conference, subscriptions to online information and big-ticket premium services and products.

People are driven to those products by free, used as a strategic tool.

“I probably spend too much time on my blog,” O’Reilly said, “but I am actually driving my overall business with free.”

The way forward, O’Reilly said, will be diversified companies that provide a range of services – some of them for free. “Don’t be afraid of free,” he said. “Figure out how to use it.”

Joe Grimm, Poynter.org columnist and the Freep’s recruiting and development editor, guest blogs from the Tools of Change conference in New York, where members of the book publishing industry are discussing their future. — Chrys

Book publishing’s tectonic plates shifted a little more Monday as HarperCollins said it would publish books for free on the Web and Random House said it would test selling books by the chapter.

As their world shifted, hundreds of book publishers, librarians and authors tried to learn how to keep their footing at the O’Reilly Tools of Change Conference in New York.

Stephen Abram, vice president for innovation at SirsiDynix, opened the conference by kicking holes in near folkloric arguments that people don’t read anymore and that the young don’t know anything. He pushed publishers to move beyond Web 2.0, in which anyone can contribute, to Web 3.0, where networks reign.

Content king? No, said Abrams. Context is.

He described a phenomenon that is the opposite of continental drift in which Facebook, YouTube, Flickr and a host of social networks are hooking together. Smart publishers will thrive in an online social world.

Second Life, for example, has 5,000 visits a night to its library, which is staffed 80 hours a week.

Abram urged publishers to get into the networks and follow the lead of its customers, asking for their opinions.

“Are you still threatened by Google? You should be threatened by Facebook,” Abram said. He predicted that most of today’s Web 2.0 companies will fall by the wayside and that focusing on just one or a couple of them distracts from the real change.

The change is already happening, Abram said, with 300,000 people joining MySpace every day and 35 percent of its users posting content every day.

Devices are changing just as rapidly. He put up a slide that showed that a device the size of an iPod will be able to hold a year’s worth of video by 2012, all commercial music ever created by 2015, or all content ever created by all media by 2020. And the United States is woefully behind other parts of the world in its use of mobile devices.

But the solutions and the answers won’t be in any particular Web site or device, but in understanding audiences and letting them in on the fun. Abram said, “If you’re still trying to create a destination site, you’re messing up.”

Abram blogs at Beyond the Job.

The Tools of Change conference is at New York’s Marriott Marquis Feb. 11-13.

Free Ain’t Easy: Joe Grimm at O’Reilly TOC Conference, Day 2

Joe Grimm: Context – Not Content – is King as Book Publishers’ Conference Opens

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