March 25th, 2009
It's a Flat World after all
Flat World Knowledge, whom we profiled last November, has closed an $8 million round of venture funding.
Hooks Johnston, General Partner at Valhalla Partners, compared Flat World’s potential to that of the MP3, but its real innovation is the same one powering this blog, a business model that works for publishers, authors, and readers.
As co-founder Eric Frank (above) explained it to me then, authors get a 20% royalty on everything students buy, but the students can download a Web version of the book text free.
It’s ancillary products that make the model go — iPod versions, Kindle versions, print-outs, study guides, and tutoring businesses built around the text and the class where it’s taught.
Current contracts offer lower royalty rates on lower-cost products, and no cut on tutoring, which is considered an independent revenue stream. Flat World offers 20% on the whole education process created by the book. Frank claims his authors actually do better than with traditional contracts.
That is vital in the college market, where total sales may be small and the authors are often professors.
It might not work in high schools, where a single state contract can be worth millions. But there are other possible solutions there, from the private sector as well as the public.
Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.
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