In olden days, a faculty member huddled with a publisher’s sales rep and picked a new textbook, which eventually resulted in its purchase by a student. Today, every link in that chain is under reconsideration – some might say under attack.
A group of education industry investors gathered in Miami recently to hear about new business models and technology formats that are transforming the $3.5 billion textbook business (estimated by some to be closer to $10-$13 billion with the inclusion of K-12 and Higher Ed). In place of textbooks and a library, the biggest player in for-profit education, University of Phoenix (UOP), offers rEsource, a portal of digital content licensed from leading educational publishers such as Pearson, Thomson, McGraw Hill, and John Wiley. In fact, because of UOP’s centralized curriculum, it has quickly become one of the largest customers for textbooks. Beth Aguiar, head of Apollo Publishing, the parent of UOP, noted that the rEsource strategy has brought the cost of textbooks down from an average of about $400 per student to about $170. And in place of the linear, text-only book is a fully searchable, digital reference source that integrates interactive elements such as simulations, and can also be easily updated. For content outside of textbook formats, Google‘s Book Search has opened the door to the ultimate desktop library, with the added benefit of an option to purchase books direct from the publisher or other booksellers. The result is also an important new marketing platform for publishers, says Tom Turvey, head of Google Book Search partnerships. Google can provide deep marketing intelligence to its publishing partners, including the ability to test price points and subscription models with newly launched features for Google Book Search partners. Google Book Search returns search results with books and points to publisher’s and retailer’s websites, which has the potential to give new life to those elusive but important backlists – the so-called “long tail” effect. Turvey argued that within Google’s normal Google Book Search experience, its digital rights management tools protect authors and publishers since the books are limited in their usage (they cannot be printed, for instance, and no more than 20% of a book can be viewed in a month). The argument that browsing leads to buying is fundamental to the Google pitch to publishers, just as it has been for Barnes & Noble superstores for years. Offering something for free also underlies the success of Barnes & Noble’s popular SparkNotes. Dan Weiss, head of Spark Publishing, noted that content ubiquity is the ultimate goal, as young readers will consume content on the desktop, on iPods, on cell phones, and still continue to purchase books that they have read as bit and bytes in other formats. Spark Publishing has expanded into each of these formats, and also offers test prep and college admissions information to its young audience. The highly trafficked website is supported by ad sales as well as sales of content.
What does this mean for textbooks and publishers? Other universities have yet to embrace UOP’s undeniably efficient centralized curriculum development and content portals. Custom publishing and flexible course packs have not exactly pushed print textbooks off the shelf. And the publishing industry – education and trade – continues to struggle with the shift to consumer-controlled content, just as the recording industry has. So far, same old, same old. But if rEsource and Spark Notes and Google Book Search are bellwethers, the moral of the story is that content will continue to build value for authors and publishers – but content will reach its audience through different channels, and will look awfully different when it gets there.
PT thanks Ann Kirschner, head of Comma International, for helping us to continue our current obsession with all things digital. Kirschner attended the Education Industry Investor Conference in Miami from March 21-22. She consults for universities and media companies, and is most recently the author of Sala’s Gift (Free Press, Fall 2006).
