Can E-Textbooks Be Both Free And Profitable? Bertelsmann Seems To Think So - Forbes

“ ... ‘Today, I’m running a guest post from Jeff Shelstad, co-founder & CEO of Flat World Knowledge...’ The $200 sticker shock of many new college textbooks is proof enough that the old business model is broken... No doubt textbooks will be more digital in the future. In recent guest posts on this blog, Tom Malek, an executive with McGraw-Hill Higher Education, made the case for lowering the cost of   e-textbooks through mandatory student licensing fees.  Ariel Diaz, CEO of Boundless, countered with an argument to replace textbooks altogether with free open content or Open Educational Resources (OER). What’s missing from these discussions is a viable alternative that combines the advantages of open content with the best of traditional publishing so it works for all parties – students, faculty, institutions, bookstores and authors. That’s our mission at Flat World Knowledge. Our business model is built on the principle of access, affordability and personalization. Publishing our content under a Creative Commons open license makes all three possible... The open license allows us to be both student and instructor-centric, and offer users what other publishers and content companies cannot: core content that can be freely edited, no copy protection, device independence and consistently affordable prices. There’s also a free online option. While students love free, more than 40 percent purchase a digital or print format or personalized study guide. If it’s a fair price, students are willing to pay for the convenience of reading their textbook on a laptop, e-reader, tablet or smartphone; or printing a PDF or creating a personalized study experience.  Our All Access Pass is $35, and includes an online book reader, e-textbook, PDF book and interactive study aids. The personal study guide is $20, and lets students create a ‘study view’ of each chapter, with highlighted passages and notes, learning objectives and key terms. Black and white print books are $40 and up. For professors, a motivator to move to open content is the ability to tailor a textbook to fit their curriculum, which can lead to better learning outcomes. Instructors can treat their book like a platform and delete chapters and sections, add local content, videos, links and notes.  If they choose, they can share their unique version in our catalog for faculty anywhere in the world to use.  This level of content personalization can enrich the learning experience and help improve retention and completion rates − critical issues facing higher education and the U.S. economy... It starts with authors, whose essential role wasn’t acknowledged by Malek or Diaz. I... have long believed that authors are the initial and most sustainable value creators in the industry... Most of them care deeply about changing an industry that has caused students so much financial pain. The broken model hurts authors too; in terms of royalties lost to used books, rentals, online piracy and the gray market; and in terms of having little opportunity to bring a fresh, modern approach to their subject. Authors have the potential to earn more with our model over a longer period of time.  Flat World authors earn 20 percent royalties on all revenues generated around their work, in all channels, in all formats, sold anywhere in the world... Community Colleges, the fastest growing segment of higher education, have been among the first institutions to pilot new approaches to textbook affordability. It’s become a strategic imperative for many community college leaders whose students often pay more for textbooks than tuition, and are juggling school, work and family responsibilities. Prohibitive textbook prices, poor retention and completion rates led the business administration department at Cerritos College, a large community college in Los Angeles County, to implement an open textbook initiative with Flat World Knowledge two years ago. Since then, overall retention has increased by 9.5 percent; for online classes, it’s up 16.1 percent. Compared to the conventional textbook options, the potential savings for the 3,815 business students is estimated at close to $400,000...New technology cobbled onto old models isn’t good enough. An $80 e-textbook that is locked into one device and expires in six months isn’t the solution. An entirely new approach is needed. By changing the conversation, we can change an industry.”