Biggest Textbook Publisher Pushing Students To Ebooks Undermining Resale Market

"Over half our annual revenues come from digital sales so we've decided, a little bit like in other industries like newspapers or music or in broadcast, that it is time to flick the switch in how we primarily make and create our products," Pearson plc CEO John Fallon told the BBC.

The move is a doubling down of sorts for Pearson, which made a major investment in higher education courseware (HECW) in the United States, but still suffered a five percent drop in revenue in 2018. Pearson funded the transition to digital textbooks, online coursework and subscription models in part with high-profile sales of subsidiary companies like the Financial Times and the Economist.

Pearson's new strategy for speeding adoption of digital textbooks is to stop updating print textbooks, leaving them to grow more obsolete against ebook alternatives. The typical textbook is revised every three years, with Pearson releasing new editions of approximately one-third of its 1,500 titles every year. Now, rather than 500 new print editions a year, as in 2019, Pearson will only update 100 textbook releases annually. Contrast that with ebook textbook releases, which will be updated on a rolling basis, like video games.

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Textbooks at the Centre for Mathematical Sciences at the University of Cambridge. In Pictures Ltd./Corbis via Getty Images

In a statement, Fallon said the "digital first" model would both increase revenues and lower prices for students, so "they have less reason to turn to the secondary market."

The American Enterprise Institute found that textbook prices increased by 90 percent between 1988 and 2016 (even when accounting for inflation), vastly outpacing other consumer goods and the rest of the book industry. Under the new sales model, Pearson Education claims students will pay an average of $40 for an ebook textbook, or $79 with "a full suite of digital learning tools." For now, the company will still rent print textbooks for an average of around $60. But the strategy is also meant to shift students onto textbook subscriptions.

"For the Netflix and Spotify generation, they expect to rent not own," Fallon told the BBC.

Market analyst Phil Hill of the Phil on Ed Tech blog, described the new strategy as a blunt move aimed at cutting off the rental market for secondhand print textbooks. "It's a bold move," Hill told Inside Higher Ed. "The risk is that it could further alienate nearly all stakeholders by being so obvious in intentions. Students have benefited from the secondhand rental market in pricing, and many prefer print over digital."

A study published in 2016 backs Hill's conclusion, finding that 92 percent of college students prefer print to ebooks. A 2018 Library Journal survey found more nuanced results, with college and graduate students overwhelming preferring print for pleasure or assigned narrative reading, but 45 percent of respondents said they prefer ebooks for research.

The general preference for print material among the actual customers of Pearson's books suggests Pearson's new strategy depends upon the captive student market, which will have no choice but to switch to the product Pearson would prefer—a product that students will no longer be able to own, share, buy used or resell.

"There will still be [print] textbooks in use for many years to come, but I think they will become a progressively smaller part of the learning experience," Fallon said to the BBC, as if it will have happened naturally.

Biggest Textbook Publisher Pushing Students To Ebooks Undermining Resale Market | Education
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