Big educational publishing profits headed down the toilet

The bigger they come, the farther they fall. And textbook publishers are BIG.

Whenever book publishers gather and talk about their plight [their plight is scary, unless one has his head in the sand, in which case it is sandy], someone usually will say, “Oh, profitability is no problem in the educational publishing sector. They are different. They make bundles of money. They’ve got it all sewn up.”

Well, where there is exploitation happening, someone will find an opportunity to turn that sector on its ear. Academics have been talking up various open-source-like models for at least a decade now — figuring there must be a way to change the costs (and other problems) with the current situation. Not much has come of the academics’ grand ideas because — to put it bluntly — most professors know squat about operating a business. Their specialty is nuclear physics or art history or philosophy. Yet, the opportunity is there to see for anyone who does have a business head:

  • textbooks are massively overpriced
  • reasons excuses for this are lame
  • there are a gazillion students who need learning materials
  • there are tens of thousands of wannabe authors (all those professors need to ‘publish or perish’ — creating a textbook does count for some brownie points)
  • much of the subject matter is fairly standard: first year economics, basic physics, European history, etc.
  • “manufacturing costs” have dropped to near zero for distributing digital versions
  • customization and collaboration are now simpler with wikis, print-on-demand and Web 2.0 tools
  • loyalty to the few big textbook companies is vanishing, if it hasn’t already become non-existent
  • studies have shown students using digital texts do just as well as those using printed books.

So check out
http://www.nytimes.com/2008/04/25/opinion/25fri4.html?_r=1&th&emc=th&oref=slogin for a great New York Times editorial about the educational publishing situation. Here is another NYT article, by Randall Stross, continuing the theme:

http://www.nytimes.com/2008/07/27/technology/27digi.html?pagewanted=2&_r=1&th&emc=th

Then go to Flat World Knowledge at

http://www.flatworldknowledge.com

to see one for-profit venture that is going to bust this educational publishing sector wide open. Another group, with a somewhat different approach is Utilium (http://www.utilium.com). Both companies have huge venture capital backing. Flat World has great flash animation — I love those cartoons.

Flat World is offering students a very attractive offer: textbooks for F-R-E-E. If Flat World can balance the very considerable cost of creating/editing/producing each course text, with the revenue stream from sales of POD versions and other “products”, they will have a winner on their hands. You can see from the website that Flat World wants to capture the hearts of students. Imagine the value of having all those students’ eyeballs and emails (if professors select Flat World texts as compulsory). No wonder the venture capitalists oversubscribed their start-up fundraising.

Utilium’s approach seems different, but they are also only in beta. Looks like they are hoping professors will cobble together the texts from free web sources. Utilium’s site is geared toward the professors, not a bad approach since the professor will select the text.
An obvious challenge will be getting professors on side. That buy-in might be forced on them (just listen to the screams of “academic freedom” falling on deaf accountants’ ears) by those who currently have to pay for all those over-priced texts. When a university is granting a “full ride” scholarship, that includes paying for the texts. Lowering textbook expenses could save almost $1,000 per student per year for the university foundations.

Another company offering eTexts is Freeload Press — see them at www.freeloadpress.com — who offer free textbooks that are supported by advertising.

The other group currently paying for textbooks consists of non-full-ride students. Each year the number of students is decreasing. Major colleges and universities, who once had to shut out vast numbers of would-be students, are finding themselves in a competition with other institutions for enough students to keep courses going. If students demand free texts and threaten to vote with their feet, the administrators will soon put the profs on track to adopting the new delivery model.

Wasn’t it Thompson — one of the biggest players in educational publishing — who sold out a few years back, and invested into information and related technologies, such as buying Reuters? They were big; maybe they saw a fall coming.

One Response to “Big educational publishing profits headed down the toilet”

  1. administrator says:

    Here are some more companies and non-profit initiatives intent on an overhaul of the current situation of overpriced textbooks:
    wikibooks, curriki, merlot, connexions and epodia.

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