“Going Digital” Won’t Save the Textbook Industry
Publishers are the only ones keen on leaving textbooks behind
by Alastair Adam
The college textbook publishing industry is fighting for its life. Technologically-powered disruption has driven traditional publishers to the brink of collapse, and technologically-powered innovation can bring them back. But not in the way that they think.
For more than two decades, the textbook industry plodded along in an uncompetitive stupor thanks to a steady dose of high-profit margins and price-driven growth. The few major companies that dominated the space used their uncontested position to drive prices up a staggering 1,041% throughout the 1980s, ‘90s, and early 2000s – a stratospheric ascent more than triple the rate of inflation.
Then came the day of reckoning. The rise of online retailers introduced new competition into the historically sheltered market. Even more significantly, the internet gave birth to an enormous market for used books that would soon balloon to twice the value of the new books market. Publishers watched helplessly as the high profits that they’d enjoyed for decades drained into the more affordable ecosystem of used, imported, and rented books.
Today, the industry is scrambling to adapt. Only 25% of students still buy new textbooks, with the remaining three-fourths relying on used, rented, or borrowed books. Many students will even opt to forgo a textbook altogether rather than pay full-price – an experience that nearly two-thirds of students have had.
To regain control of their renegade market, traditional publishers have overwhelmingly turned to one solution: “going digital.” But simply transitioning to a digital publishing model will not solve the industry’s deep-seated problems. By putting all of their eggs in the digital basket, traditional publishers are failing to prepare for their own long-term sustainability.
Digital Quick-Fixes Distract from Genuine Innovation
It’s easy to understand why going digital is an attractive option for traditional publishers. Digital publishing has significant cost advantages, and allows publishers to drop the price of new textbooks to compete with used copies. Furthermore, the circulation of digital textbooks can be restricted through licensing, preventing the formation of a profit-draining used market.
With these motives in mind, publishers have embarked on wave after wave of digital initiatives. So far, none have been successful. Take the CourseSmart eTextbook initiative, born of a partnership between five of the largest publishers in the industry. Despite the considerable financial investment and intellectual capital behind the initiative, it failed to meet expectations and was put out of its misery via acquisition in 2014.
Ultimately, relying on digital publishing as the answer to all the industry’s challenges is like trying to remedy high airline ticket prices by developing flying cars. Rather than addressing the actual problems within the existing system, publishers are abandoning traditional textbooks altogether. There’s just one problem: they’re the only ones keen on leaving textbooks behind.
The modern textbook, with its authoritative, peer-reviewed, structured content, is still the backbone of classrooms around the world. Professors build courses around textbooks, and have for decades. Students construct their study skills and learning habits around textbooks. The only thing about textbooks that doesn’t work is the price. Rather than scrapping the textbook as we know it, publishers should break down the price barrier through genuine process and business model innovation – just like low-cost airlines did.
Renovating the Wheel
Digital technology is not a magic bullet that will fix all the industry’s problems. But it is an important tool for genuine innovation. To achieve long-term viability, textbook publishers will need to start implementing technological solutions throughout their manufacturing and distribution processes.
Here’s one example. Under the traditional business model, textbook publishers print huge quantities of books, store those books in warehouses, ship them to bookstores at the start of each semester, and then deal with the inevitable flood of returns that comes in a few weeks later. This is profoundly inefficient, and inefficiency drives up cost.
What if publishers took advantage of modern, decentralized e-commerce and distribution technologies to print books on demand and ship them directly to students? Millions of dollars in inventory, shipping, and retail fees are instantly eliminated, and these savings can be passed on to students in the form of lower prices.
Or what if publishers streamlined textbook production by using the same size and quality of paper across their entire product catalog? Countless other manufacturing-based industries use this sort of standardization to improve efficiency and drive down prices. Why shouldn’t textbook publishers follow suit?
Digital publishing alone won’t save the textbook industry. A combination of sustainable, student-centered business strategies and genuine innovation will.
- LA Times - 92% of college students prefer print books to e-books, study finds
- HuffPost - Sorry, Ebooks. These 9 Studies Show Why Print Is Better
- The Hechinger Report - A textbook dilemma: Digital or paper?