On the face of it, not much has changed in education publishing over the years. Major textbook publishers are still the world’s most profitable publishers. The top five players still have an 85 percent stake in an industry that is worth a dizzying estimated $14bn a year in the US alone.
While nobody can contest the fact that this market is both highly lucrative and ripe for disruption, to date major education publishers haven’t really had to fight the same gruelling battles as their trade and academic cousins. Printed textbook sales and rentals still constitute 87 percent of the overall market and the widespread adoption of e-textbooks, which seemed almost certain to unsettle textbook publishers’ hegemony, has been “just around the corner” for quite some time now.
But change is happening, albeit slowly. Technology start-ups who have traditionally struggled to penetrate this fortress-like market are starting to gradually chip away, and Apple and Amazon have education publishers firmly in their crosshairs with DIY textbook offerings – Amazon launched its Kindle Textbook Creator early this year. In response to these threats, the big publishers are increasing spend on innovation, particularly on digital products such as interactive software and customizable textbooks. So what other trends are driving industry change and keeping education publishers awake at night?
Nothing is more contentious in this industry than pricing. Since 1978 the price of textbooks in the US has gone up by an astonishing 945 percent – a higher rate than property and medical care. And this year a new milestone was reached when a $400 textbook was introduced. In addition to shouldering the burden of a lifetime of debt, the average US college student will spend around $1,200 on textbooks and related supplies each year.
Publishers perhaps rightfully argue that the editorial process involved in compiling textbooks and associated materials is costly to deliver, yet critics will claim they are abusing their monopoly position. Funnily enough though, students still choose printed textbooks over their electronic counterparts, partly because digital products haven’t caught up to the utility of print but also because they are often just as expensive and offer no resell opportunity.
With academics complaining that many students are under-prepared for their courses, and a growing number of students completely avoiding acquiring materials altogether, we are potentially witnessing the beginning of a bottom-up revolution driven by the collective frustrations of academia.
Renting and reselling
It is by no means a new phenomenon, but a knock-on effect of the pricing conundrum is the rise of alternative marketplaces geared towards prolonging a textbook’s lifespan. Coupled with illegal downloads, scanning and photocopying, the rental-textbook market has been damaging publisher profits for years, causing a net decrease of “about 5-10 percent in total unit sales” over the entire publishing cycle, according to McKinsey & Company.
On average, renting a used textbook costs just $37 and some studies claim that around 20 percent of US college students now rent new, and particularly used, textbooks in an effort to bypass shelling out for new material. Companies like Chegg, BookRenter and, perhaps not surprisingly, Amazon, are feeding this second-hand textbook frenzy by giving students places to buy and sell textbooks online, on the cheap.
Many textbook publishers look upon the custom publishing of textbooks as the best way to combat this trend. Pearson and McGraw-Hill, among others, offer services that empower educators to deliver purpose-made, bundled textbook content to their students which in essence renders the rental and resale markets redundant.
The power of free
While companies such as Boundless and Flat World Knowledge have been competing with big publishers by providing students with low cost alternatives, an even more radical movement encouraging free textbooks for students is gathering support.
Last year Rice University-based Open Educational Resource (OER) OpenStax College announced that it had received $9.5m in charitable donations and grants. The non-profit publishes peer-reviewed, customizable textbooks for students on courses with the highest attendance, at a low cost in print, or completely free online. It claimed its textbooks had been downloaded more than 650,000 times and that it had saved students $13m.
The future of textbook publishing is uncertain. Developments that pose a very real threat to publishers and the way they’ve traditionally operated are in the mix. As a result the way textbooks are consumed and purchased, funded and delivered – and by whom – could be completely turned on its head within the next five years, and the big players will need to have the right answers, and innovations, to stay on-top.
Ingenta sales consultancy PCG participated in a panel debate entitled What is a Publisher Now? Lessons from the Classroom—a Spotlight on Education and Textbook Publishers Wednesday, October 14th at Frankfurt Book Fair. This article first appeared in the Frankfurt daily edition of Publishers Weekly.