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O’Reilly purchases Pearson’s stake in Safari

45 points by lukethomas 12y ago

turingbook 12y ago
Why did Pearson sell the stake if the business of Safari is good?
- deleted 12y ago
  [deleted]
- EduardoBautista 12y ago
  Maybe they want the money right now? Why would anyone sell anything if it's worth something?
- planckscnst 12y ago
  Because O'Reilly paid what its value was. It seems like O'Reilly started regretting having Pearson as a partner and just wanted to buy it back so they could do what they really want.
  - angrymouse 12y ago
    It was never a happy partnership, more of a relationship out of necessity. Pearson once had a team called the "O'Reilly Killers" whose aim was to compete in highly lucrative fields and well send a hammer blow to O'Reilly's diminishing revenue per title (dropping since the dotcom bubble). It may have been more of a mindset that an actual ambition to send O'Reilly out of business but that was the team's name (the name was retired when they joined forced according to Tim). In regard to the birth of SafariBooks, apparently the story goes that the CEO of Packt chatted to Tim O'Reilly about future of books and ebooks and suggested that an online library would be something developers would use in the future. Tim offered to split the cost and risk having thought about the product and how to bring it into life (it represented a significant risk if no one brought the service as development cos was high) but the CEO of Packt didn't like the cost and risk so Tim, forced to find other partners went to his arch-nemesis Pearson. Pearson having made tons of money out of subscriptions to libraries and institutions instantly saw the value of the proposition and took the risk (at worst, they would be down what they could afford and O'Reilly would be at risk) and that is how apparently the two enemies became uneasy allies. O'Reilly have not seen their revenue per title average return to pre dotcom burst levels (currently around 80-100K per book on average in revenue) but they have seen great returns on SafariBooks and they get to monetize rival content so this move signals to me that they see it as their future beyond "just" content development. -- if you are wondering what Packt did, they made their own cheaper version of SafariBooks on their own which only featured their own books called PacktLib. -- sources: Worked in tech publishing for a few years, had a few chats and was told of some chats as well as http://radar.oreilly.com/2013/09/how-i-failed.html http://radar.oreilly.com/2013/09/how-i-failed.html which is a great read from an interesting man
    - bsilvereagle 12y ago
      > if you are wondering what Packt did, they made their own cheaper version of SafariBooks on their own which only featured their own books called PacktLib. I've found quite a few Packt books on SBO. I'm kind of surprised they are publishing titles there since they have a competing service.
      - angrymouse 12y ago
        In the early days of the PacktLib product Packt refrained from allowing their content being placed on SafariBooks however their product made little and SafariBooks was generating very large revenues for partners so they went all in and that's why they are now a large part of SafariBooks. You can even buy Packt ebooks from the O'Reilly site now which shows the extent that Packt benefits from selling its content through O'Reilly (and indicates how much it lost out on by not being the other half of SafariBooks)
    - ivan_ah 12y ago
      > revenue per title average return currently [of] around 80-100K per book on average This is a very interesting figure. With printing costs and operations, there won't be a lot of profit in there. I imagine each title has a staff editor, copy editor, marketing team, etc. The numbers seem to imply that only $100k / $20 = 5000 copies are sold per title, which is an underestimate, I imagine, because O'Reilly books are generally pretty good---but I guess crash and all... Assumptions: $30 list price so say $20 revenue from each sale of which $5 went for printing and another $3 for logistics, there will be like $12 of profit left. After the $1-2 royalty to the author, we've got $10 profit per sale. It's a 33%-margin business. My guess is with eBooks the margin can go up to 66%, which is much more reasonable. No wonder why everyone is saying eBooks are the future ;)
Joeri 12y ago
I use safari books a lot. There is a lot of information in all those books which is either not found online at all, or is very difficult to uncover/assemble. If google doesn't have my answer, safari most of the time does. I hope they don't change it too much, as I quite like the service as it is.
absherwin 12y ago
They're lowering prices by 50% for the next day. Two interpretations: -They want to take advantage of the publicity to sign up as many people as possible, hoping a decent percentage stay at the higher rate. -They hypothesized the price was too high and are testing the effect of lowering it. I suspect it's a latter with the former as a fallback benefit. Their most recent product change coincided with a 20% price decrease. O'Reilly wants to focus on making the best product possible, even if the higher expenses and lower prices mean reduced profitability in the near-term because he sees how huge this can be in the long-term if done right. Pearson likely doubted the wisdom of short-term sacrifice which is how each side leaves feeling happy.
zetazzed 12y ago
Does this mean that Pearson books will start disappearing from Safari?
- dfan 12y ago
  The O'Reilly press release in the linked URL says: "Pearson will remain a key strategic content partner of Safari. All their current materials remain available, and their future books and videos will be added to the service."
- jamespo 12y ago
  If you read as far as the third paragraph you'd find - no.
incision 12y ago
Sounds good to me. I'm generally happy with Safari, have been a subscriber for many years, and consider it indispensable. On the other hand, I've faced nothing but disappointment and frustration with the Pearson operated sites I've been forced to interact with for school. It's hard for me to imagine Pearson having any sort of positive influence on the product.

45 points by lukethomas 12y ago

turingbook 12y ago

Why did Pearson sell the stake if the business of Safari is good?

deleted 12y ago
[deleted]
EduardoBautista 12y ago
Maybe they want the money right now? Why would anyone sell anything if it's worth something?
planckscnst 12y ago
Because O'Reilly paid what its value was. It seems like O'Reilly started regretting having Pearson as a partner and just wanted to buy it back so they could do what they really want.
- angrymouse 12y ago
  It was never a happy partnership, more of a relationship out of necessity. Pearson once had a team called the "O'Reilly Killers" whose aim was to compete in highly lucrative fields and well send a hammer blow to O'Reilly's diminishing revenue per title (dropping since the dotcom bubble). It may have been more of a mindset that an actual ambition to send O'Reilly out of business but that was the team's name (the name was retired when they joined forced according to Tim). In regard to the birth of SafariBooks, apparently the story goes that the CEO of Packt chatted to Tim O'Reilly about future of books and ebooks and suggested that an online library would be something developers would use in the future. Tim offered to split the cost and risk having thought about the product and how to bring it into life (it represented a significant risk if no one brought the service as development cos was high) but the CEO of Packt didn't like the cost and risk so Tim, forced to find other partners went to his arch-nemesis Pearson. Pearson having made tons of money out of subscriptions to libraries and institutions instantly saw the value of the proposition and took the risk (at worst, they would be down what they could afford and O'Reilly would be at risk) and that is how apparently the two enemies became uneasy allies. O'Reilly have not seen their revenue per title average return to pre dotcom burst levels (currently around 80-100K per book on average in revenue) but they have seen great returns on SafariBooks and they get to monetize rival content so this move signals to me that they see it as their future beyond "just" content development. -- if you are wondering what Packt did, they made their own cheaper version of SafariBooks on their own which only featured their own books called PacktLib. -- sources: Worked in tech publishing for a few years, had a few chats and was told of some chats as well as http://radar.oreilly.com/2013/09/how-i-failed.html http://radar.oreilly.com/2013/09/how-i-failed.html which is a great read from an interesting man
  - bsilvereagle 12y ago
    > if you are wondering what Packt did, they made their own cheaper version of SafariBooks on their own which only featured their own books called PacktLib. I've found quite a few Packt books on SBO. I'm kind of surprised they are publishing titles there since they have a competing service.
    - angrymouse 12y ago
      In the early days of the PacktLib product Packt refrained from allowing their content being placed on SafariBooks however their product made little and SafariBooks was generating very large revenues for partners so they went all in and that's why they are now a large part of SafariBooks. You can even buy Packt ebooks from the O'Reilly site now which shows the extent that Packt benefits from selling its content through O'Reilly (and indicates how much it lost out on by not being the other half of SafariBooks)
  - ivan_ah 12y ago
    > revenue per title average return currently [of] around 80-100K per book on average This is a very interesting figure. With printing costs and operations, there won't be a lot of profit in there. I imagine each title has a staff editor, copy editor, marketing team, etc. The numbers seem to imply that only $100k / $20 = 5000 copies are sold per title, which is an underestimate, I imagine, because O'Reilly books are generally pretty good---but I guess crash and all... Assumptions: $30 list price so say $20 revenue from each sale of which $5 went for printing and another $3 for logistics, there will be like $12 of profit left. After the $1-2 royalty to the author, we've got $10 profit per sale. It's a 33%-margin business. My guess is with eBooks the margin can go up to 66%, which is much more reasonable. No wonder why everyone is saying eBooks are the future ;)

Joeri 12y ago

I use safari books a lot. There is a lot of information in all those books which is either not found online at all, or is very difficult to uncover/assemble. If google doesn't have my answer, safari most of the time does. I hope they don't change it too much, as I quite like the service as it is.

absherwin 12y ago

They're lowering prices by 50% for the next day. Two interpretations: -They want to take advantage of the publicity to sign up as many people as possible, hoping a decent percentage stay at the higher rate. -They hypothesized the price was too high and are testing the effect of lowering it. I suspect it's a latter with the former as a fallback benefit. Their most recent product change coincided with a 20% price decrease. O'Reilly wants to focus on making the best product possible, even if the higher expenses and lower prices mean reduced profitability in the near-term because he sees how huge this can be in the long-term if done right. Pearson likely doubted the wisdom of short-term sacrifice which is how each side leaves feeling happy.

zetazzed 12y ago

Does this mean that Pearson books will start disappearing from Safari?

dfan 12y ago
The O'Reilly press release in the linked URL says: "Pearson will remain a key strategic content partner of Safari. All their current materials remain available, and their future books and videos will be added to the service."
jamespo 12y ago
If you read as far as the third paragraph you'd find - no.

incision 12y ago

Sounds good to me. I'm generally happy with Safari, have been a subscriber for many years, and consider it indispensable. On the other hand, I've faced nothing but disappointment and frustration with the Pearson operated sites I've been forced to interact with for school. It's hard for me to imagine Pearson having any sort of positive influence on the product.