Textbook revolutions – textbooks part 2

In a previous post, we discussed why the textbooks market leads to such consumer frustration. Today, we’ll look at what changes we expect.

The biggest change in the textbook market, at least according to the press, blogosphere, and public opinion, is digital textbooks. But let’s be clear. Digital textbooks alone will not solve this problem. Digital textbooks are more interactive, and lighter, and quicker to deliver. But the high costs, high depreciation rate and planned obsolescence in a captive audience are not due to manufacturing costs and shipping times, but due to textbook control policies by publishers. Digital textbooks will reduce those costs, making it possible for new entrants to the market, whose competition will lead to consumer benefit.

So what do we expect to happen in the textbook market? I see multiple possibilities, all enabled by digital textbooks. I think startups and startins are likely to appear and try all of these, until one or two primary models emerge:

  • Low cost obsolescence: Publishers continue to publish textbooks with a digital shelf life of 1-2 semesters. However, given the very low cost of printing and delivery, and zero inventory and carrying costs, newer publishers are able to sell these books for 25-40% of current prices. Remove the high cost, and customers are far more willing to tolerate the depreciation rate.
  • Upgrades: Rather than planned obsolescence, competitive startup publishers can sell a book for full price, but include upgrades, perhaps for an annual maintenance fee. Digital textbooks have the distinct advantage that they can be upgraded without complete replacement. In this model, the initial purchases buys the product and is able to resell it with the upgrades. The first buyer pays $100, then sells it to the next student for $50. The next student pays the annual $10 maintenance fee, and everyone wins. This is nothing more or less than the enterprise software model.
  • Subscription: Instead of paying and reselling, students simply pay an annual subscription fee, which includes all updates and upgrades. Given the single semester life of a textbook, most students would be more than happy to pay $50/year for the previously $100 textbook.

I don’t know which of these will win, although my instinct is for the subscription model.

About Avi Deitcher

Avi Deitcher is a technology business consultant who lives to dramatically improve fast-moving and fast-growing companies. He writes regularly on this blog, and can be reached via Facebook, Twitter and avi@atomicinc.com.
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