In 2020-2021, publishers and media companies grappling with digital transformation had three watchwords on top of their minds: Direct-to-Consumer channels, Subscription models, Aggregators.
- Subscription-based business model. On the desk of almost all news publishers: accelerating the transition from advertising as the biggest revenue driver to sustainable reader revenues.
- Aggregators. From Disney+ to HBO Max, rights holders and audiovisual operators are moving to direct distribution of their intellectual properties, via their own aggregators/integrators.
- Direct-to-Consumer. For most publishers, especially those from the book business, DTC means still e-commerce used to complement third party channels, only improved and revamped to meet the growing customer expectations (UX, search, payment options etc.) ignited by the big platforms.
However, some publishers used 2020-2021 to bring a radical transformation of their business to completion. This post covers the professional, learning-oriented publishing and O’Reilly Media as the ultimate case to study.
The company was already on a transformation path that lasted for over ten years and changed the whole nature of the business, from being a book publisher with a diversification strategy to becoming a globally leading learning company.
Meet O’Reilly Media, a game changer since 1995.
The story of O’Reilly Media has been told many times: the oracle of Silicon Valley, the inventor of the term Web 2.0. This post is not about that. What follows is a review of the last five years since 2017: the most transformative of the company history. I look at that period using the lens of three themes that are crucial for the future of all knowledge-driven businesses:
- The virtualisation of customer experiences across all industries beyond publishing and media: encompassing events, courses, meetings, workshops, learning by doing and knowledge sharing.
- That a radical transformation has less to do with technology and more to do with a different (broader, deeper) understanding of the role you can play in the life of your customers, to fulfil their job-to-be-done.
- The awareness that many publishers have still a narrow view of their market and competitors, often driven by a product-centric perspective, not by customer-centricity.
Let me use the bigger lens, first.
Many still define market segments based on the product some vendors offer or have been traditionally offered. Publishers? You either think books or newspapers. MOOCs? You think Universities and Academies and you expect from them a syllabus with the same structure of in-person lectures. What about scholars? You think boring, text-intensive journals with lots of footnotes and list of sources.
If you adopt this point of view, you´ll limit your ability to rethink both your products and your market. Your business metrics will not help, too: book volume sales, trade margins, reach, reflect one model and do not help to imagine different ways to deliver value (and get money for that).
That is what O’Reilly Media made differently since Laura Baldwin took its reins in 2001: it was not so much about embracing the latest tools and technologies, but about rethinking its mission and nature, based on the customers´ job to be done and then, step by step, redesigning the product. I summarize this change of point of view with a couple of diagrams:
What are the main drivers for such convergence?
The three maps above are a conceptual map. The O´Reilly transformative path shows the way it happened. The path was long, the direction clear:
The transformative path accelerated in 2017 and used the pandemic to unfold its full power:
- In 2017, O’Reilly Media announced they would not sell any more books and ebooks on shop.oreilly.com, refocusing their direct-to-consumer offer from e-commerce to subscription, a model which they developed initially as a B2B multimedia service. The experience of that service – Safari Online, with nothing to do with the browser – was that users were consuming more online and multimedia content than downloading ebooks. The subscription business grew at a pace that outpaced most news publishers, while the book sales had been decreasing since the 2000s. From that moment, the learning platform became the centre of all company efforts.
- In November 2019, O’Reilly acquired Katakoda: this is an interactive technology platform enabling hands-on learning. Katacoda’s interactive learning scenarios and sandboxes integrated into learning.oreilly.com. That platform replaced Safari Online to be the one-stop-shoo-platform for all learners, individuals and teams. A few months before, learning.oreilly.com introduced expert playlists, easily shareable content curated by the most respected names in technology and business. Before Katakoda, already Jupyter Notebook had been integrated into the platform, allowing users to input, edit, run code and render live results aligned with the author’s explanation—along with the ability to download notebooks to read, review, and practice with later.
- In the first half 2020, the company took advantage, so to say, of the global lockdowns to implement a decision that was already on their desks: to shutter all live events and replace them with new virtual live series. In-person conferences accounted still for 30% of O´Reilly Media global business and a flagship brand. But the decision to shut down was also strategically based on the evidence that learning and knowledge sharing was becoming more and more a thing to carry out in the flow of work. Ease and accessibility were a demand for events, too. In Summer 2020, the company relaunched events as a virtual “Superstream Series” on the same critical technology topics our in-person events had covered, now hosted throughout the year. What once took a week and required getting on a plane took a few hours and became as simple as opening a laptop. By the end of 2020, more than a million members had registered for O’Reilly virtual events and live online training courses, including over 30,000 for the Superstream Series.
- In October 2020, learning.oreilly.com launched O’Reilly Answers, an advanced natural language processing (NLP) engine that delivers quick, contextually relevant answers to challenging technical questions posed by users. Subscribers can quickly uncover relevant highlights and snippets from the O’Reilly library. The results point them directly to only the most actionable resources: individual chapters, pages, cards and data sheets, eliminating the noise. One-click integration with Slack allows subscribers to pose their questions directly from their work areas.
The result is an environment – learning.oreilly.com – that is at the same time a powerful library, a collection of learning paths and playlists that include all types of media and learning tools, a portal with courses and live events, an immersive platform: at the same time live and on-demand, good for passive learners and for people seeking opportunities for practice.
No risk to be overwhelmed: the platform is clean, usable and intuitive. The online book reading experience is even better than on Amazon Kindle reader. What´s more, you´ll never find a PDF file on the platform. All content is accessible at a deepest granularity: video segments, book chapters, single notebooks and exercises. That is the foundation for extremely focused playlists and paths and for a search experience that delivered best answers. The combined result of: content atomisation + digital asset manament + NLP.
Conclusion. What is a radical transformation for a publisher? Can you afford that?
Now O’Reilly Media is a learning company and a full subscription business. It does not measure its success by book volume sales, nor by event ticket sales, but by subscribers, retention and ultimately Customer Lifetime Cycle.
The radical change has less to do with technology – as Baldwin reminds, with cloud solutions you can tap into the power of AI with no need to establish a full in-house department for that – more with adopting a different mindset and removing your organisational and cultural barriers.
Many are afraid to move ahead because of either fear of cannibalizing their legacy business or not believing their local markets are moving fast as other geographies. Both are not true: you can always start and experiment outside of your core traditional business, provided that you believe in the value of experimenting and do not treat your new business as pure R&D. For how consumers’ behaviour is evolving, just considered what happened with SVOD: even the more traditional viewers have learned to consume video on demand, and the shift to a non-linear consumption is unstoppable.
The mindset is the barrier, yet.
The mindset means, for instance, measuring things to access progress: think about the radical difference between traditional bookselling and subscription business. The object to measure shifts from being an individual title, or a title collection, to a customer or a customer cohort.
The metrics are not sales volumes and margins, but revenues per customer along its life-cycle, which depends on pricing, retention, churn rate and customer activation.But there is always a way to start on this path.
As a publishing business leader, ask yourself: what do you know about your customers right now? Can you involve some of them in small research? Is there a part of your business, a smaller one, you can try to convert into a subscription model?
O´Reilly path was not a change from one day to the next.
Yours does not need to be as well. You do not even need to know from the beginning where your path will take you. But you cannot ignore how your customers are changing. Start asking them a few questions. Start showing them learning.oreilly.com and ask if they would find it valuable for their knowledge domains, too. Just start.