Disruption Comes to Higher-Ed Publishing

"The model that higher education textbook publishers have been using for decades is just not working anymore—neither for publishers nor for students. As a result, higher education is the publishing segment that’s undergoing the most disruptive changes today. Change is coming from everywhere, and it’s an exciting time for business model innovation.

The textbook publishing business has been under multiple threats for years. Publishers have increasingly been competing with used textbooks sales and third-party textbook rental services such as Chegg and Amazon. Textbook sales have also been suffering more and more from course instructors using open educational resources and other free online materials. Piracy of publishers’ titles has also eaten into sales.

Publishers’ primary strategy in coping with these forces has been merely to keep raising prices. For example, Paul Samuelson’s Economics (McGraw-Hill), one of the most enduring textbooks of all time, currently retails for $220 in hardcover—up from its $10 price 50 years ago. Even when adjusted for inflation, the price has more than tripled since 1969. But that strategy has stopped working: the AAP reported that sales of higher educational materials fell 7% in 2018 compared to 2017.

The first major publisher to rethink its textbook delivery model was Cengage, the number-two publisher in the U.S. market. Last year, it launched a subscription service called Cengage Unlimited, which offers students access to all e-textbooks in its catalogue for $120 per semester or $180 per year. It even provides a calculator so that students can determine whether they can save money by signing up for the plan vs. purchasing textbooks individually...."