Friday, March 28, 2008
This is an intesting concept -- and one that has both pros and cons. Originally, I wrote a lengthy response to this plea. I decided in the end that going through all of the pros and cons might only stir up the advocates of one side of the equation or the other. Do we need to find a way to reduce the cost of course materials for students? Yes, and it seems pretty clear that mechanisms will step in to help make that happen in the near-to-midterm future. Open-source or open-access content will be one of those mechanisms.
If I have learned anything, though, in this position over the past three years is that the textbook market is far more complex than a simple list of pros and cons could capture. There are many stakeholders (students, faculty, stores, institutions, wholesalers, publishers, authors, parents, online retailers, editors, software developers, etc., etc., etc.) -- it is a sizeable industry. While I am often among the first to argue that old mature industries have a lot of room for improvement and have many opportunities to create improved efficiency and effectiveness, we must also be careful not to sacrifice quality or value at the sake of cost or in a rush to find a quick fix.
A fomer professor of mine used to say, "You can have things better, faster, or cheaper -- pick any two." I believe digital solutions are moving toward some options that are better and cheaper, but we are still learning how to do that, which will take time. We have many complex dynamics to work out. For example, for many institutions, part of the revenue from textbooks directly contributes to financial aid scholarships or supporting student activities on campus. Thus, when students buy through their college store, they are helping support other services for students on their campus. [Note: Is this universally true, no. I am referring to the majority of cases here, not the exceptions.] If stores went to a break-even model tomorrow, covering only costs and generating no profits, some other mechanism would need to step in to cover the revenue shortfall. Because most US academic institutions are heavily tuition-driven or tuition-dependent, either services would need to be cut, or tuition and fees would have to be increased. Again, that does NOT mean that we cannot or should not find ways to reduce the cost of course materials. Philanthropy could be part of that solution. Digital could be part of that solution. Faculty could be part of that solution. Other stakeholders and new entrants to the market could also be part of that solution.
For stores, one way we can help is to provide students options or choices. Digital gives us more opportunities to provide more options. For example, we find that students prefer to read the print, but study from the digital. Faculty contribute greatly to the cost of textbooks -- something I never knew or understood as a faculty member, but now have greater appreciation for having seen more of the economic models embedded in current industry business models. There are ways through the stores that we can still support our institutions, while providing better value at lower costs for students. Many of us are working on those solutions--but that will take some time.
In the interim, philanthropists could help by creating textbook scholarships at institutions, or supporting initiatives that help make quality textbooks more affordable to those who are socio-economically disadvantaged. And to put my money where my mouth is -- I did create an endowed scholarship at my undergraduate alma mater to help defray educational costs for students as they approach their junior and senior years. What would be ideal is to help every institution have fully-endowed financial aid, like we see at Princeton U -- so that no student should be denied a quality education because of the cost. Fully endowed education would make textbooks, and in fact education, appear to be more free for those who need financial assistance most. A daunting goal -- but one equally worth pursuing.
Okay, okay -- so I still wrote a lengthy response to Larry's plea. I probably still managed to stir up advocates on different sides of the equation. I will endeavor to stay off my soapbox going forward. :)
Thursday, March 27, 2008
JN: Network, network, network. Know the people who are working in your marketspace, learn what their interests are, how they do their business and establish friendly relationships with them and remember who they are. They will be going places in their companies (or maybe the one you work for) and become an amazing resource. And do not restrict yourself to meeting people in your specific business. If they are on your campuses or at the meetings you attend you need to know who they are and what they do. Having this kind of perspective not only will pay off in the future as references, it will enhance your work with your primary targets if you better understand all the work of the people in their world.
This is some of the same messaging we have been passing stores as we talk about the store of the future and developments in the digital space. No matter how good we are at relationships now, we must continue to get better. The value is in the network of relationships.
Anway, JOe Wikert's blog has a number of interesting postings, and certainly more of the interview with Jim Nye is worth reading for readers of this blog.
Monday, March 24, 2008
Interestingly, this acquisition comes on the heels of another acquisition of Follett just a few one month ago on February 25 when they acquired Varsity Group, Inc. -- a company that provides online textbook sales and services. A copy of that press release is also available.
I can think of a couple other acquisitions that would really round out Follett's digital portfolio, so it will be interesting to watch and see if any other news emerges in the next few weeks or months. Companies are starting to hone in on what the digital environment for textbooks might look like. We are working in that direction as well. We are refining a partnership model that should guide and help prioritize our initiatives going forward. Much to do!
Friday, March 21, 2008
What are those things that will leave stores "dead in the water" if we do not think about them? How could we take the idea to look outside our industry for new products, services, or concepts that might help us better serve students and our other customers? Of particular interest in this blog, how might digital play into the answer to these two questions?
I seem to remember a discussion from last year where we
came out feeling like things (digital) might be 5 years off. I thought I
heard at CAMEX that we are now looking at 18 months. What is your latest
& greatest crystal ball look like? Any of your current thoughts always
From Crystal Ball Reader
The following was my response -- updated to include a new development from the last few days.
Hi Crystal Ball Reader,
5 years seems realistic for perhaps the bigger shift, but 18 months is more realistic for the point by which more stores will start feeling a bigger impact of digital. If they wait more than 18 months to do anything it could be too late. Why? A couple recent events have spurred this.
- First, Amazon's recent flirtations with entering the market. They have approached several institutions - large, small, public, private and for-profit. From what we have been able to learn from a couple of those institutions, it appears that they are proposing a model where the campus deliver the Kindle via a laptop-program-type initiative (which can be done several ways). Students could then download the textbooks to the Kindle at a reduced cost and some money would go back to the institution. So far it is IT that is being approached, not us. I have not been successful yet at getting a contact at Amazon to talk with us. If they tackle this market full-force, they could change things for us quite radically, quite quickly. And you know they will be advertising their sales not ours. I just received a draft article from a CIO proposing a program like this where 80% of the student textbooks would be delivered over the Kindle on ampus and what that would mean for campus stakeholders - although he forgot to mention the stores. I am supposed to review and provide feedback as an anonymous reviewer. So, Amazon could speed things up.
- Apple is rumored to be working on a reader. We also know that they have signed agreements with publishers to offer a large number of textbooks via iTunesU within the next 2-4 years. I hope to have another update on this before long, but if Apple enters the market in force, it again could mean trouble for us.
- About 10 days before CAMEX I was at a publisher meeting. One interesting point made there was a statistic given by one of the academic publishers who noted that the conversion rate from print to digital this year hit the 2-3 percent mark. Seems low, yes? That happens to be the same conversion rate from traditional media to digital that iTunes had in its first year. Four years later 85 percent of college Freshmen were carrying around iPods and buying music digitally.
- Another item out of that publisher meeting, that I have now heard repeated in other venues, is that the publishers plan to approach institutions and push licensing of digital textbooks. They described this as "the solution" - reducing textbook costs and eliminating the used textbook market. It was how they saw getting the textbook to quote "appear to be as lose to free as possible" for students. I find this approach troubling, as licensing is not as innocent or inexpensive solution as it might appear on the surface. I expect to see a big push on this going into the fall. If an institution decides to digitally license the content and provide textbooks electronically via this method (and you know some will) the impact on the ampus store could be significant. This item seems to be the most logical or realistic threat to our timeline at the moment.
- Open source content could be a threat. It probably will eat only a small chunk, and it is something that we may be able to work with, so that is a minor concern at this time, but much of that content is likely to be digital - increasing available inventory and alternative solutions.
- There is CourseSmart, which will have the largest collection of digital textbook assets. They are popping up all over and will be working with many more institutions over the next year. There may be other companies they are in conversation with as well (I would assume). At least one institution has seen adoption figures of the CourseSmart option at 10 percent of enrollment across the courses tested, with one class reaching 20 percent of enrollment.
- McGraw-Hill made some interesting remarks regarding digital this week in a call for the financial media. Of particular note, I thought, was their plan to have all of their front list available for sampling by August. This signals, yet again, that the barrier of insufficient digital inventory is dropping.
- Finally, the recent tests in Ohio under the OhioLINK program are going to make things much more difficult for us. In their pilot tests, they got over 90 percent of the students in the trial courses to adopt the digital option. That is not a typo - 54 out of 55 students in one class, 54 out of 56 in another, adopted the digital. When compared against a class using just print, those students using the digital performed equivalently. I spoke to one professor involved in a pilot on another campus this semester and he has over 100 students in his large intro-psych course using the digital/e-book option this semester. Their prototype will be expanding to other institutions and large-adoption courses over the next few semesters - but we are already hearing about some of their results in other states.
So - while it may be five years before we see high levels of adoption across the board, I think we will not have that long before we have a larger critical mass of these anecdotal instances of higher adoption. Some of these models could change things overnight. I would rather plan on 18 months and find out we have five years to work with than the opposite.
All that being said, at NACS we are working hard at helping address these challenges for stores, while at the same time trying to provide lower cost solutions for students. For stores this can be doubly difficult because of the complex nature of store economics. Most college stores give revenue back to the institution, which is perhaps most often used to support student activities and student resources on campus. So stores are under pressure to increase revenue. At the same time stores recognize that students have options, and that price is a great concern. In some cases the institutional sources telling stores to generate more revenue are also the same sources telling stores to reduce prices. That is a difficult set of demands to balance - particularly when revenue for most stores comes primarily from textbooks. As digital course materials become more prevalent on campus, these pressures will get tighter for those stores who have not begun to work on campus relationships and rethinking their store capabilities, products and services in advance. Thus, it is better for stores to work for a future that may be just 18 months away than believe in the hope that we may have five more years before the digital impact is felt.
Thoughts or opinions?
In other news this week IDPF released eBook sales statistics for January 2008. The statistics are limited to trade books and roughly a dozen publishers. The data does show an interesting trend line though. The site has links to other interesting e-book statistics as well. Here is the current graph, which you can also find on their site in a slightly larger format with a little more detailed trend data:
Notice the slope of the line. That is an improving trajectory. The volume is still low, but the trend is goinig in the expected direction.
OverDrive to Distribute MP3 Audiobooks to Booksellers and Libraries
Download audiobooks compatible with iPod, Zune, and thousands of MP3 players
Friday, March 14, 2008
The document produced is really more of a strategic vision document than a plan, although it does contain some specific action items. More generally, the plan outlines three priority areas for activity and action: strategic partnerships, enhanced trade infrastructure, and education and awareness. Each of the areas has 4-5 action areas, with generally two items being identified as top priority within each area. A copy of the full document is currently available to NACS members only.
Here is an overview of the priorities, without some of the added detail and description that goes with each. Certainly I welcome discussion or ideas about how to implement any of these items or on the direction itself:
1. (Top priority) Enhance relations and partnerships with publishers and CourseSmart.
2. (Top priority) Assist stores with campus-based partnerships with multiple constituent groups.
3. Enhance industry relations among other trade and retail organizations.
4. Continue developing new partnerships and relationships with a range of organizations.
Enhanced Trade Infrastructure
1. (Top priority) Reposition stores as an essential course materials information center on campus.
2. (Top priority) Create a suite of business models for stores of all shapes and sizes.
3. (Top priority) Assertively pursue improved retail technology offerings for the industry.
4. Engage in more formal knowledge management activities.
5. Continue to explore and consider new and innovative models for the association.
Education and Awareness
1. (Top priority) Develop and implement new approaches to digital content education.
2. (Top priority) Use more of the “store voice” to raise industry awareness.
3. Develop education that places greater emphasis on strategic thinking and planning.
4. Develop basic programs on digital content and e-commerce.
Thursday, March 13, 2008
Wednesday, March 12, 2008
So what we know is that Amazon has approached the IT department at several institutions -- public, private and for-profit. These include campuses with lease, independent, and private stores. One of the CIOs I spoke to could not tell me much, but here is the general gist of what he shared. He tells me that Amazon is essentially proposing something similar to a laptop program, which many universities have invested in over the past decade, which is often run out of the IT area of the institution. These programs take several forms -- fromm rentals, to purchases, to accounting for the cost in the price of tuition or fees, etc. The idea is that the Kindles would be used in teh classroom for the downloading of course materials -- textbooks, readings, etc. and that the institution/IT area would potentially receive a commission on downloaded textbooks.
We also learned of a project at Gettysburg College where the CIO has involved the store. I spoke with the store manager there aws she discussed their project at CAMEX. In this case, the IT department bought about 30 Kindles and are testing them in an upper level course. At the end of the semester the CIO and campus store will conduct a focus group with the students about their experience with the Kindle, what they would be willing to pay for the device, pros and cons of the device for textbook delivery, etc. We have asked the store manager to work with us to write up an article of their experience after the end of the semester.
Not a whole lot of information, but at least a little bit. This is an important development for our industry as it signals a few things. First, new players are entering the market. A big player like Amazon could have a large impact in a short time period. This is also soemthing of a different approach for Amazon, based on what else we have seen, so that is an interesting departure and we do not know exactly what that means for the campus stores. Second, it is another signal that college stores MUST improve campus relations and talk with other campus departments, such as that of the CIO. This is an opportunity to both educate campus stakeholders as to the value provided by stores, and an opportunity to learn more about what is happening with course materials and digital on campus.
If we learn more about the Amazon offering, or are able to get a response to our inquiries, I will post that information here as appropriate. The stores offer a good partnering option for Amazon and we will be trying to find a way to bring this opportunity to the store community.
Thursday, March 6, 2008
I just finished reading your Bridge article about ebooks (What Is It ThatOur Customers Really Want?). I am very curious about ebooks and just spent some time in a Borders scoping out the Sony Reader. It appears as though ebooks are still only available as on-line purchases through places likeAmazon and the like. Are you aware of any college bookstores that areactually selling ebooks in their stores or on their own websites, and if so,how are they doing it? Are they linking their websites to other sites, orare they able to sell ebooks just like other books? Are ebooks even goingto be something that a store would "stock" (ie: a card with an access codeor something)?
Thank you for your time!
Congratulations on taking the first, and in some ways the most important step -- looking around and asking questions. Your questions and comments are direct and get to the root of things, which I always thought is the best place to start.
Scoping out the Sony Reader.
I am glad to hear that you took a few moments to scope out the Sony Reader at Borders. They have the newer edition of the Sony Reader, which is a little better than the first edition which I own. I just played with my first Amazon reader (the Kindle) this past week. It has some definite advantages as readers go at this stage -- with some keyboard capabilty and wireless connectivity. Another new reader due out this year is the Readius by Polymer Vision (another blog posting on that to follow shortly), and even Apple may soon enter this market (or maybe not). All of these technologies have some commonality, so getting some exposure to the "first generation" will give you some sense of how the technology is progressing. My caveat though -- you really have to play with these devices for a little bit before they become comfortable. I found my Sony Reader to be a bit "kludgey" at first, but once I got the hang of its quirks I really like it -- and travel with it everywhere. But to your questions...
Are ebooks only available as on-line purchases through places like Amazon and the like?
No. It is true that e-books are mostly only available as online purchases. This is part of the reason why it is important for stores to have the capability to handle online transactions. In addition to Amazon, many publishers offer direct content sales. Some publishers, like Harlequin, have some very innovative models for selling and delivering their content over a wide range of mobile devices from the Sony Reader to the cell phone. Many e-book titles are also available through public and campus libraries. On the campus library side there are several e-book services available for subscription, some of which carry textbooks (mostly in the computer science area). 24x7 is one example of such a service that is available on many campuses. So as you are looking around to see what else is available, do not forget to check out other options on your own campus.
Are stores actually selling ebooks, and if so, how?
Your questions on this topic are particularly excellent. Yes. There are stores selling digital content. In fact we are starting to see some of the first examples over the past 1-2 semesters where e-book adoptions are reaching 10 percent of enrollment or higher in some classes. In the past week I spoke with college store managers who reported ebook adoptions as high as 35 and 45 percent of sales in specific courses. I attended sessions at another meeting where faculty are experimenting with e-books and saw adoptions as high as 92 percent of enrollment in a few cases. In at least two of those cases the faculty member is trying to figure out how to work with the stores to offer an easier and more convenient method for students to purchase the content.
It is probably true that the majority of stores that are currently selling e-books are using a model where the store "stocks" a product -- such as a card with an access code, or a card where the access code is generated at the register through the POS system. We are seeing other models emerge, however. There are the affiliate programs with companies like CourseSmart and Cengage. In these cases the store often links to the publisher (or other provider) site. These have been controversial among college stores to this point, which is a topic we can discuss more. There are also cases where stores sell CD's pre-loaded with digital course materials. That approach is probably more common in some of the dental schools or health science stores where curricula are more structured. We have a few institutions that are selling e-books at the point of course registration, where the students, after registering for a course, are directed to a connection with the college store where they can purchase the textbooks (print or electronic) for the course. This, of course, requires some additional systems integration work to occur. Such models, often developed in conjunction with companies like VitalSource or CafeScribe, allow students to download the e-book through what appears to be the store's own website, making the solution look as if the store is selling ebooks just like other books. A couple stores are experimenting with selling e-books, such as custom coursepacks, to their students through iTunesU too. There are other examples of stores selling digital beyond the traditional card-stock solution as well. I think that approach is a good way to get started with digital, but we are learning that other approaches may be as or more effective.
I think what is important at this stage is that we are seeing some experimentation among stores. The card-stock model has some advantages, but in many cases we have not seen great sell-through via that approach. That may mean we need to learn how to market those options better. I have heard from some stores that sell-through of traditional books was higher when the e-book was offered along-side it. The reasons offered suggest that students trust the store more because they are being offered choice and they see that the store is trying to provide some lower-cost options.
Thanks again for your questions, and please keep asking them -- of me and others.
I am glad too to see interest in this blog growing. I received a few good e-mails over the past two weeks and some requests for future topics. I also received messages from folks on three other continents and it is interesting to see how these topics play out on an international level. In the past six months I have now spoken with individuals in nine different countries about digital content. I will see if I can create a future posting that captures some of these discussions. I am starting to see how some folks say blogging can be a full-time job, as I have a long list of items I think would be useful to post here, but not so much time to get them all in.
More posts to follow...