e-Textbook Market Scaling Up

Do you remember lugging around a 15 pound backpack in middle school - with just half of your day's textbooks?  Those textbooks were heavy.  About the only thing I'd miss going through that with my kids is the ritual wrapping of the textbooks in old paper grocery bags.  (Do kids still do this?  It must be hard, given the scarcity of brown paper grocery bags).

Anyway, that's not likely to be an issue for much longer because e-textbooks are on the move.  There have been a number of recent newsarticles describing the trends in the educational book industry, and the signs are all pointing one way: the decline of traditional textbooks.



Increased use of the iPad in classrooms (if you missed it, check out my earlier post - iPads in the Classroom) is encouraging traditional textbook publishers that tablet computing is the delivery mechanism through which information will be accessed by students.  McGraw-Hill, John Wiley & Sons, and Pearson have all created e-textbooks and are making them available through the Inkling app for the iPad.  Inkling, a start up that seeks to make such textbooks truly interactive (and not just, say, digital copies of offline books, a la the Kindle), itself has competition.  CourseSmart and Xplana are other entrants to the market of creating the new channel for digital textbooks.  Interesting article on these players in the WSJ: Publishers Expand Offerings. 

This article summarizes recent research conducted by Xplana concerning the growth and size of the digital textbook market. Goodbye Wheelie Backpacks. Xplana projects that in 2012, the e-textbook market will capture 6% of the U.S. textbook market, and that by 2017, it will hold 44% of that market.  Apparently, a year ago, Xplana forecasted that e-textbooks would hold 20% of the U.S. textbook market in 2017.  What changed?  Ding ding ding!  You guessed it - the iPad.

The interesting issue in valuing the e-textbook market is determining what the market will bear regarding price.  You see it in other digital book contexts as well: students just expect to pay less for digital books than traditional books.  It might be that students have often felt somewhat screwed by the cost of school books, especially in college and advanced degree programs.  These textbooks are hundreds of dollars, and I always felt like the publishers churned out new editions every year to justify a new, higher price tag without a lot of incremental value.

This is why the used textbook market - both through schools and through Amazon, for example - is thriving.  I would imagine publishers would like to capture back some of that market.  So here's an idea: cut the base prices of digital textbooks, but offer additional features/functionality for an additional fee.  Or, offer free updates for a period of time for an additional fee.  Or, offer the books on a subscription model.  Elementary and middle schools could elect long-term subscriptions on behalf of all their students (and perhaps benefit from volume purchasing).  Individual graduate students could elect year-to-year subscriptions, or on a perpetual basis.

I challenge the publishing market to get creative with pricing - it's either that, or miss the bus on digital textbooks.