Flat World Knowledge (FWK) both gives away and sells open-source textbooks as a business model, this article analyses the financial sustainability of such a model. The authors peruse data collected during FWK’s first year open to the public (fall 2009 – summer 2010) via the company’s internal reporting and e-commerce systems.
Findings show that the average cost for each of FWK’s first 10 textbooks was $150k. Since the publication of these initial 10, the average price has dropped to $120k. These costs include production and marketing but do not include administrative overhead. As it stands for the data set where revenue per textbook averaged $48k, it would take approximately three years for FWK to recoup expenses for the initial run of textbooks assuming they sold at least the same number of copies each year. Helpful to this cause, and cited by the authors, student enrollment in FWK courses grew from 790 in the private beta to 57,690 in the first year of operation. Ongoing study of FWK will help identify sustainable properties of its business plan and potentially promote a shift in publishing as we know it.