Pearson’s Digital-First Textbook Initiative and Student Choice

Author

Phil Hill
July 16, 2019

This morning Pearson announced a bold move into a digital-first world for textbook publishing, as described by Inside Higher Ed:

Pearson, like many publishers in higher education, has long signaled its intent to move from print textbooks to digital courseware. But today the company went farther than anyone else — announcing that all of its 1,500 U.S. titles will become “digital first.”

From now on, instead of publishing new editions of print textbooks every few years, the publisher will focus its energy on its digital course materials.

The focus of the announcement is about the change in mindset and processes, with ongoing updates to material and removal of the “costly and time-consuming” print revision cycle. Pearson will still rent print textbooks themselves while actively trying to discourage the second-hand rental market mostly through Amazon, college bookstores, and Chegg. They will also push their Inclusive Access programs.

“We want students to have the best and most up-to-date content for the best price,” said Fallon. Pearson plans to lower its prices so that fewer students are tempted to buy secondhand books. It will also push its rental program so that fewer books ever enter the secondhand market.

“We will effectively have three price points. They will vary by discipline, but broadly speaking, the average ebook will be $40. You can still rent a physical textbook for $60. And a fully integrated digital product, like Revel, MyLab or Mastering, will be $65 to $80,” said Fallon.

With inclusive-access deals, where whole classes are signed up for a product and charged for access by their institution, the prices will be 30 to 40 percent lower than those above. Over 700 universities now have inclusive-access deals with the publisher, accounting for about 9 percent of its sales, said Fallon.

This is big news that will change the textbook market, and the whole article is worth reading. EdSurge also has a good report here.

I am quoted in the IHE article expressing skepticism about the removal of student choice in the process.

Phil Hill, partner at MindWires Consulting and publisher of the Phil on Ed Tech blog, said going digital first “makes plenty of sense on paper” for textbook publishers, as it enables them to “re-establish control” over the distribution of their products and cut off the secondhand rental market.

“It’s a bold move,” said Hill. “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.”

Students like having the freedom to choose where to buy textbooks, so taking that ability away “will create big problems,” said Hill. “I suspect bloggers and commentators will have a field day comparing past statements of principles about good corporate intentions with current moves.”

“Sometimes the marketing copy for open educational resources writes itself.”

To be clear, I believe the change in pricing levels, removing the $200 or $300 textbooks over time, is a good move, and I believe the move to ongoing updates and revisions not driven by print cycles is also a good move. My concern is that the approach that Pearson is taking ignores student preferences and their long-running choice in finding the best prices for textbooks. Consider these two charts from the National Association of College Stores (NACS) Student Watch survey released last year. 1 The first chart shows (as have many other studies) that students quite often prefer print textbooks over digital.

Student preference for managing textbook costs

My youngest daughter goes to Santa Clara University, and for the majority of her classes they are not allowed to use laptops or tablets. It’s not just a matter of preference, it can be a matter of policy even in 2019.

It appears it will be nearly impossible to buy a Pearson textbook in the future without first renting it, and the company will allow rent-to-own while they try to control the distribution of these printed copies. In 2017 Pearson introduced a consignment textbook rental program through a subsidiary of NACS, allowing college bookstores to rent material where Pearson owns and controls the pricing of the textbooks (chalk this up to “there have been signs that Pearson is moving this direction for several years).

Beginning this fall, 50 of Pearson’s most popular titles will be available for under $100 via a “rental-only” model; the company plans to expand the titles included in the program over time.

Read this article from March of this year to better understand the consignment rental program. When Pearson, Cengage, and McGraw-Hill sued Follett that same year, Follett claimed that the real purpose was to effectively remove options for students.

Follett believes the intent of the lawsuit is to cripple the campus store’s ability to provide lower-cost course material options, leaving students little choice but to buy higher priced texts from the publishers. Prior to this lawsuit, the publisher group had been pressuring Follett and other campus retailers and text distributors to adopt certain “best practices” created by the publishers that Follett believes would effectively restrict access to low-cost used and rental course materials on campus.

I believe there have been other deals with Amazon and others for some form of consignment rental.

This approach from Pearson, if successful, removes the second-hand nature of the rental market – students selling used textbooks and someone else reselling or renting them out. Pearson-driven rentals but no second-hand rentals. Consider the current sources of textbook rentals and how seldom students use publisher websites:

Course materials: where rented

These charts help explain why I believe the underlying intention is for Pearson to control distribution channels. Unless there is some hidden mechanisms or change in Pearson’s plans (and there many details to iron out), students will not be able to buy and sell back their materials, find best prices through second-hand markets (rental or purchase), but they will benefit from lower initial price points. If they can trust Pearson.

Disclosure: I was paid to speak at a textbook affordability conference that was sponsored by NACS this past spring.

1 Disclosure: I was paid to speak at a textbook affordability conference that was sponsored by NACS this past spring.