Dumbing Down of Textbook Publishing?

The textbook market has always offered high reward and with it high risk. Many have tried to corner the market including the big technology giants, chains, publishing joint ventures and new start-ups, but it remains, like its students and their courses - diverse.

Now Google has joined Amazon, Apple, Microsoft in its intent to go after what they all regard as ’low hanging fruit’, but what often turns out to be not Golden Delicious apples but high hanging and sour crab apples.

Of course Google believe that its new Nexus 7 Tablet is 'perfect for students', and therefore intends to stuff a special educational section of its Google Play store with textbooks. Its "comprehensive" selection of titles will be available for purchase and for rental over six-months periods and cover works from the five major textbook publishing houses. Just to add some spice Google is promising that they'll be at discounts of up to 80%. Google’s partners are Pearson, Wiley, Macmillian Higher Education, McGraw-Hill and Cengage Learning.

Given that textbooks are expensive an 80% discount would look attractive. The high cost is regarded as the reason why used textbooks and textbook rentals have been booming of recent years and this together with the entry of all the major technology giants has been heavily impacting the major textbook publishers. On one hand the used and alternative marketplace is stealing sales and on the other they are often have high discount terms being dictate to them.

One way the likes of Pearson and McGraw-Hill Education are trying to address this is to create a new model aimed at developing online versions of their texts that often have interactive features, and then selling the students access codes which expire at the end of the semester. However, persuading students to go digital isn't straightforward and according to research firm Outsell, only 27% of the textbook spend in US secondary schools and colleges was digital.

Pearson is undeterred and are restructuring to emphasize online content. Cengage Learning, has stated its intent to emerge from its recent bankruptcy filing more focused on digital. McGraw-Hill Education, has acquired an equity stake in one software company focused on digital learning and acquired another.

Just to confuse the issue further, the major publishers have created a joint venture called Coursesmart which was set up to offer a joint direct market service to promote and sell digital textbooks. However when one’s parents are spreading their bets it’s not surprising that it has become somewhat of an ‘also ran’.  

Some would say that the publishers are pursuing a multi-channel strategy others would suggest that it is less of a strategy and more of, ‘every which way but win’ and that to compete against yourself and your investment is at best questionable and not wise dot com.

But is digital a forgone conclusion?

In a survey last year by the National Association of College Stores, some 77% of college students said they preferred print to e-books. Another survey, by the research firm Student Monitor, found only 14% of students had classes that required online texts and only 2% bought the majority of their books in digital format.

So is it down to cost and availability through alternative markets or does physical textbook still serve the students’ needs better? One thing that is certain is that both the publishers and technology companies are betting on digital and are trying every which way to win the market. The alternative is seen by them as more used and second-hand Textbooks and stolen sales. Some may argue it’s a choice between a rock and a hard place.

It's All About Content and Rights

Publishers rightly tend to stick to what they good at when it comes to genre and content. The public may not always recognise the Publishing brand and only recognise the author, but focusing on the genre and building authoritative collections is critical to publishing today. Some mistook this focus as being what book sellers should also do, but forgot that book consumers were eclectic in their buying habits and wanted both value and ‘one stop’ shops.

Earlier this year, Wiley sold its Fromer’s travel guide to Google and had declared its intent to dispose of its remaining trade and reference division. Today they concluded that sale to Houghton Mifflin Harcourt (HMH). The sale includes Wiley’s cookbooks, dictionaries and study guides. This continues the new approach within HMH to trade and consolidates material under their Betty Crocker, Better Homes and Gardens and How to Cook Everything brands. We are all aware of the cookbook celebrity brands and success of the likes of Jamie Oliver in the UK and Betty Croker in the US. Cookbooks appear to be holding their own in print and despite the significant growth in cookery applications and websites, account for some 2% of book sales in the US market. HMH now also add Webster’s New World Dictionary to it’s CliffsNotes and educational publishing, test preparation and assessment services.

Growing vertical publishing operations is not new and is publishing. As further publisher consolidation takes place, what we once saw a one industry joined together by a single format - the book is starting to diverge and consolidate into stronger vertical operations. The digital marketplace now allows these focused content repositories to be exploited in ways that were somewhat restricted by the book and the economics of the physical market. Consolidation of ‘book’ content will continue for those wanting a one stop shop and book buying value, but new markets will now evolve for the digital content and context which will be outside of the book market as we know it today. Packaging and licencing rights into new offers will become increasingly important as the content itself starts to become more fluid. We must always remember that Steve Jobs in creating iTunes sold tracks not albums, George Martin said the album was the menu and the concert the meal and that individual recipe could be proportionately more valuable than the collection.

Should publishers become the genre point of focus? Can author brands co-operate to form compelling points of consumer focus, or will they always be reliant of third parties to aggregate them? Who are the genre consolidators that the consumer recognises and how can they cash in on their ‘first point of contact’ opportunity?

Yesterday, books were not stocked by retailers whose primary goal was to sell other stuff,  but as retail itself migrates increasingly online, then adding associated digital content that enhances the proposition and authority of the sale, becomes a potentially no risk, small cost added consumer value and lock-in. Being able to licence that digital content in chunks, collections and many renditions may be the key to many publishers moving forward.

It’s all about content and rights.   

Frommer Has Just Been Googled

Some would suggest that when the BBC Worldwide acquired the Lonely Planet publishing unit they were looking to build a travel brand that could add value to their content, create a community and create a holistic source of travel information. Merely acquiring a travel publisher didn’t make business sense. However, sometime that and makes a marriage hard work. Some would suggest that this is probably where the BBC / Lonely Plant relationship is today.

Now Google has shown it too has eyes on the global travel business, but for different reasons. Today Google has added to its 2010 acquisition of flight booking service company ITA Software and its more recent  £150 million acquisition of Zagat’s, with a raid on Wiley book publishing trade business and acquired Frommers. Earlier this year, Wiley had put its trade business on the block and were looking to disinvest and they must be both surprised and happy with the off loading of the Frommer brand. Wiley still have to find buyers for the other non core units, but given their tight vertical nature they didn’t sit easily with Frommer, or as Wiley have deduced, with themselves.

Google have now got two significant pieces to the travel lifestyle model and one that will sit easily with both their business and consumer local and international, search and advertising revenues. Will it continue to publish Frommer, or flip the brand online and into the greater Google mix? According to eMarketer the online advertising within the US travel industry is estimated to be worth over $2.5 million, with online travel booking clocking up over $100 million last year. Both markets are growing at a significant rate and price Google is paying Wiley is likely to be chump change in the exchange for the advertising revenue potential and added value the information it could offer and its obvious synergy with products such as Google maps, YouTube and their other products .

The question this raises is whether some publishers will find it hard to resist the potential cheques that could be offered by outside interests who may see the content as a means to a bigger end? The other question is whether those left behind on the shelf will be further marinalised? Its hard to see book publishers buying up outside businesses but is now easy to see outside interests buying up certain publishers.