PUBLISHERS

Book Industry Trends: College

By Stephanie Oda and Glenn Sanislo

From Book Industry Trends 2008 (New York: Book Industry Study Group, 2008), pp. 179-181. Reprinted with permission.

“Publishers are agnostic about how they deliver their content, and printing is just one delivery method.”

In 2007, higher-education publishers continued to grapple with price resistance to textbooks and competition from the used-book market. What is new is that they are finally making real progress in offering their wares in electronic format and moving to resolve the pricing dilemma, at least in part. While publishers know that critical mass with electronically delivered textbooks will not be attained in the near-term future, they moved closer to that goal last year. And all major publishers have made strides with their popular “born digital” supplemental and assessment programs, such as Pearson’s MyLab.com series and Wiley’s WileyPLUS.

With the cost of college said to be escalating at double the rate of inflation, parents and students have voiced frustration, some think unreasonably, about text­book prices. Public-interest research groups and advocacy groups such as the Advisory Committee on Student Financial Assistance (ACSFA, which advises the U.S. Department of Education on college affordability issues) have been conducting studies and publishing reports that spotlight what they deem excessive outlays on text­books. And movements such as Open Education Resources have been encouraging faculty to use materials other than textbooks.

Publishers defend their pricing by citing the costs of producing high-quality textbooks, the demand for materials that meet public-policy educational objectives as well as those of colleges, and the need to provide meaningful supplemental materials for an ethnically diverse student population. Also, they emphasize, tuition fees have risen much faster than textbook prices.

“Everyone is searching for a silver bullet,” Bruce Hildebrand, Association of American Publishers executive director for higher education, told a committee of the Colorado state legislature recently. “The problem is there is no silver bullet, and simply focusing on price is not a valid policy.” The solution lies in looking to the future rather than the past, he said. The future means the use of technology. Publishers, and to a lesser degree students and faculty, are realizing that textbooks are no longer a matter of paper and ink. “Publishers are agnostic about how they deliver their content, and printing is just one delivery method,” said Ed Stanford, president of McGraw-Hill higher education, in a recent address to ACSFA.

E-Textbooks Inroads

“The e-textbook game has been two years away for 10 years,” says Frank Lyman, president of CourseSmart.com, which makes textbooks from the six largest college publishers available from one site in one format for about 51 percent of the price of a new print book. CourseSmart’s primary mission, Lyman says, is to create an online environment where faculty members can review textbooks for adoption. “Print review copies are a lot of clutter and environmental waste—not the most efficient way if you’re trying to make an intelligent decision about course materials,” he declares.

While studies have found that most college students prefer their textbooks in print rather than digital format, Lyman argues that digital is making inroads. “It’s a big business. A recent study by CourseSmart found that 10 percent of students we polled choose a digital option.” Saving money was part of the attraction, but about 45 percent said they were curious and wanted to try a digital book. And the search capability digital books afford also appeals to students.

Although e-books are now available in most areas of study, they have been used in certain disciplines for a long time, says Frank Daniels III, COO of Ingram Digital. Through its VitalSource online e-textbook distribution system, a few publishers have been providing entire curricula in electronic format for about eight years. The first major distribution was to two dental schools—the University of Texas Health Science Center in San Antonio and SUNY Buffalo—which mandated that students use only digital books and supplied them with their entire curriculum on their first day.

“It is all digital. If a student wants to go out and find a print version, it is up to the student,” says Daniels. The idea, he explains, is that students can look ahead and back as they progress through their courses. They can download all their textbooks, keep them as part of their permanent academic library, and add updates, annotations, and class notes.

Choice Matters

Fair pricing and added value are important issues for John Wiley & Sons, according to Bonnie Lieberman, senior vice president, higher education. “We support digital delivery of our products in many forms. Digital delivery costs less and therefore allows lower price points,” she says. “In addition, we offer many textbooks unbound, three-hole punched, at a discount off the price of the text.” Most of Wiley’s key titles are available in downloadable desktop editions or through CourseSmart, also at a discount off the print edition price.

Offering a wide range of choices is the key to staying competitive in college publishing, says CourseSmart’s Lyman, noting that most college publishers offer customized college courses. As McGraw-Hill’s Stanford points out, these allow instructors to select content and blend methods of delivery—print, digital, multimedia, and interactive—while moderating costs to students. And if the professor continues to use a custom book, it can be resold on that campus.

In addition to e-books, most large publishers have developed “born-digital” programs, such as WileyPLUS, which might be called supplemental but go well beyond that, enabling students to self-tutor, work problems through, self-quiz, and quickly self-assess their progress. These programs are particularly useful to students who need extra help in college, says Chris Ross, senior principal of the Parthenon Group, a Boston-based education consultancy. “Increasing numbers of students go through the high school system and come out unprepared for college,” he reports. “They end up in institutions, particularly the community colleges, that don’t necessarily have the resources to give them the attention they need to be successful. There’s not enough time for the instructor to spend with students who are not prepared.” The born-digital programs can lighten the instructor’s burden, Ross says.

As publishers grapple with e-delivery, they are also confronting accountability, a familiar buzzword in the K–12 arena that is echoing ever more insistently in the halls of academe, where the specter of NCLB-like legislation is on the radar screen. Education Secretary Margaret Spellings has pushed for a uniform measurement of performance at college level, both to improve outcomes and to differentiate among colleges in the competition for federal funding. It is likely that colleges would oppose such regulation. Nevertheless, publishers are on the watch for opportunities to help colleges measure student performance.

“Administrators are looking for ways to improve outcomes and demonstrate them, both to differentiate their own services and to stave off any legislative efforts that would constrict what they could do,” says Ross. Accountability, if not on the level of NCLB, is already an issue in higher education, says Lieberman. “It relates to state mandates and to accreditation. With that said, it is implemented to various degrees in different places.” Wiley already offers a series called Pathways, which publishes texts designed for workforce readiness and relating to competency and outcomes.

It’s And, Not Or

Cognizant of new opportunities, college publishers have invested heavily in their digital future. Pearson claims its MyLab programs, now used in 50 countries, “significantly improve student test scores and instructional productivity.” And Pearson recently acquired e-College, which provides solutions for online learning institutions. Says McGraw-Hill chairman Terry McGraw: “The ongoing digital transformation means we must continue investing to deliver great content and great tools for course management, online instruction courses, and e-books as paper-based products are replaced by electronic products.”

But college publishers are not abandoning the print textbook anytime soon. Although digital offerings are making strides, publishers are not inclined to see them as a panacea either for price resistance or for competition from the used-book market and the open-access movement.

“It’s not an either/or equation,” says Lieberman. “Print and online serve different purposes. For example, calculus students learn best through homework or quizzing where there is instant feedback, but that is difficult to manage traditionally in a time of faculty cutbacks. Spanish students can hear pronunciations through online language labs. Nonetheless, there’s still a role for picking a bound or loose-leaf textbook off a shelf and thumbing through it.”

Of digital publishing, Parthenon’s Ross says: “It hasn’t yet tipped fundamentally. But it should be terrific for students and be good for the publishers as well. They only get the sale of the book the first time, and then the rest of that revenue stream is captured by the bookstore. It will allow them to lower prices and sell to a larger number of students.”

© 2008 Book Industry Study Group