by Nancy K. Herther, Sociology/Anthropology Librarian, University of Minnesota (firstname.lastname@example.org)
( Click here for Part 1: OER Takes Main Stage )
A 2014 article by McKinsey & Company analysts considered the future of textbooks. The rise of online superstores like Amazon and the growth of used book options, led their analysts to advise publishers to focus more on digital sales. Given the rise of web analytics, the ability to get highly detailed levels of analytics on textbook users provided a further incentive to publishers and online providers to enter this market.
Last year Inside Higher Ed predicted that “the textbook publishing industry is considering a transformation that could significantly alter how faculty members assign readings, publishers make money and students obtain course materials.” In what they called an inclusive-access model, “instead of shopping for their own textbooks, students pay a course fee that provides access to course materials – delivered digitally unless students pay extra for a print-on-demand copy – on the first day of class.”
In the Inside Higher Ed report, Ken Michaels, CEO of Macmillan Learning, called the new role for publishers as “facilitator[s] of education…I really want to enable professors and administrators to have the black boxes… to be able to link outcomes to curriculum to delivery to learning objectives to learning objects. That’s how we’re trying to move the industry – to give the controls to the professionals that we partner with and not try to keep it within our intelligence for our business models and for our profits.” Online systems and OER create problems, but also sources of new business models, content and more refined data on textbook users than ever available before, making it possible for publishers to more nimbly respond to student behavior and content changes.
A recent Washington Post article posits that “academic publishers have maximized profits from college textbooks by setting high prices to recoup their investment and to offset limited sales.” So what do they do now to solidify their markets in this age of change?
CHANGING STUDENT EXPECTATIONS & PREFERENCES
With the rise of the internet, smartphones and other portable devices, consumer behavior was changing in all demographics, including children and young adults. A 2014 National Literary Trust survey, for example, found 52% of 8- to 16-year-olds preferred reading on screen in 2014, with just 32% preferring print. Research further made it clear that mobile devices (81%) were highly preferred for all types of communication and reading by all students; often working in shorter bursts of studying rather than the traditional patterns of study.
Digital technologies offered significant upgrades to learning tools and we are seeing evidence that these new devices and methods are both supporting new types of reading behaviors and changing what we have traditionally thought of ‘reading’ with more ‘power browsing’ that allow students to move more fluidly through texts and other materials.
Inside Higher Ed recently reported data finding that the use of OER nearly doubled since 2017, yet with only 9% of faculty using these materials, the Open Access movement can hardly claim major success. Yet, Student PIRGS recently released statistics finding that college-level text costs have risen four times U.S. inflation rates. Their research also found that 65% of students cite high costs for not buying all of the educational materials assigned to them for their courses.
Charles Key, one of the directors of Open Doors Group and long-time advocate for educational change and development, in 2015 “branched off College Open Textbooks into a new non-profit called COT Education. Maintaining and improving College Open Textbooks is our primary focus, but are interested in increasing our activities to promote open-access, life-long learning.” From his vantage point he has important perspectives to share with readers:
“The trend for OER has, I believe, been steadily positive, although certainly not overwhelming so. There’s an axiom among entrepreneurs that a product or idea needs to mainstream quickly or it will fail. That hasn’t, unfortunately, been the case with OER but maybe it doesn’t need to be. I was invited to attend the annual meeting of the National Association of College Stores for a couple of years, and was struck by the repeated predictions of the commercial textbook publishers that there products would be completely digital within a year or two. Hasn’t happened and probably won’t anytime soon. One of the interesting things about the millennial generation, who have grown up digital, is that they haven’t abandoned hard-copy textbooks. I think this indicates that education technology changes slowly, so I’m encouraged that the open education movement, including OER, seems to be on a positive slope if not a steep one.”
“When College Open Textbooks started ten years ago,” Key reflects, “open textbooks were overwhelmingly self-published and therefore somewhat difficult to find (that’s the raison d’etre for COT.) One sign of the maturation of OER is the growth of curated repositories, mostly of open textbooks. Some are commercial (e.g. OpenStax) and some non-commercial (e.g. BCCampus). There is a clear enough trend that I think the future of College Open Textbooks lies in becoming a search engine for open textbooks (i.e. rather than COT trying to keep up with every open textbook that’s published, we would instead keep up with the repositories and search them.)” Today Key believes there are about 80 OER English-language repositories around the globe. However, the ability to create a sustainable business model is still an issue. “I think there is one, but we haven’t found it yet. As I point out when I’m invited to talk to various groups about OER, Red Hat Software makes over a billion dollars a year selling free software. I hope we’re getting closer to such a model for higher education.”
TEXTBOOK PUBLISHERS RESPOND TO TECHNOLOGICAL CHANGE
All media companies operate in an environment of constant change (technological, factual, customer need) and must consistently invest large amounts of capital to create and distribute content, creating risk and making financial success unpredictable. Add to this trends in content, teaching methods and technological choices as well as their dependence on the intellectual property of authors protected by copyright law. Add to this cocktail the changing audience tastes and preferences, available technologies, budgetary concerns and changing educational standards and best-practices.
Pearson, Cengage, Houghton-Mifflin, Elsevier, McGraw-Hill, Wiley and other educational publishers have issues of their own in what the Washington Post describes as “a textbook example of technological disruption” today.
Boston-based Cengage is one of the “Big Five” commercial textbook publishers today with 2017 revenue of $1.5 billion and operations in over 40 countries across the world. The company describes itself as “the education and technology company built for learners,” creating “learning experiences that build confidence and momentum toward the future students want.” Although Cengage serves all levels of education on a global scale, much of their current investment is in higher education with their 2017 announcement of Cengage Unlimited, an “all in one” subscription service for students that provides them with access to the company’s entire digital higher education catalog by the semester or year, as an option to single textbook purchases. Currently the service is targeted to begin later this Summer, however marketing for the product began last year.
The company explains the service as a collaboration with VitalSource as “the first-of-its-kind subscription service for digital higher education materials that gives students complete on-demand access to all Cengage digital resources for $119.99 per semester or $179.99 a year.
However, the company is already getting pushback from authors concerned about how this will impact their royalties. “The authors say that receiving a cut of the subscription fee rather than a share of the revenue from the sale of their textbooks is a breach of their publishing agreement and will “substantially” reduce their royalties,” noted Inside Higher Education. The case has already been filed and the plaintiffs attorney, David Slarskey, noted to the newspaper that “they hoped the lawsuit would spur ‘deeper discussion’ about the pros and cons of Cengage’s subscription approach, which, he warned, could ‘completely transform’ the incentives in textbook publishing by ‘pitting authors against each other in competing for their share of a fixed subscription fee base’.”
This Dutch-based division of RELX has been in operation since 1880 providing quality journals and other educational materials to a global marketplace. Publishing 2,500 journals, tens of thousands of academic books across the disciplines each year, and databases. The company’s aggressive pricing and journal acquisition programs have been cited by many academics as the instigation for retaliatory boycotts and pushback from libraries across the globe. Elsevier’s 2017 revenues was nearly $3 billion (US dollars). Evolve, Elsevier’s education portal is one of many efforts to expand access to educational materials and focus on student access to content.
In February Elsevier announced a joint project with Hypothesis, the non-profit open annotation company in order to address “two important shifts in scholarly communications: first, the growing role that annotation plays within the life cycle of research and publication; and second, that data standards and open frameworks are increasingly essential to scientific collaboration and progress.” In 2017 the W3C Web Annotation standards recommendation was announced and Hypothesis officials see this as an excellent opportunity to move open annotation forward: “We’re thrilled that Elsevier is taking a leadership role in recognising the potential benefits for researchers, and moving to integrate Hypothesis’ standards-based and open source annotation solution. We’re also delighted that they recognise the benefit of working with a nonprofit committed to an independent community platform.”
The same month, the company announced a joint project with Beijing University of Chinese Medicine “to create a new taxonomy for traditional Chinese medicine in Embase, the biomedical literature database.” Elsevier has deep pockets and seemingly unlimited ambitions, a combination that has provided innovative solutions and deep-seated hostility in the global library market, something that doesn’t appear to have caused too much angst in Amsterdam. They keep moving forward.
This Boston-based publisher includes textbooks, instructional technology materials, assessments, reference materials, fiction and non-fiction in their catalog of products. Most of HMHCo’s educational materials are targeted to the K-12 market. The company has undergone various changes in ownership and recapitalizations over the years and asserts that, today, the company is “a leading provider of pre-K–12 education content, services, and cutting-edge technology solutions across a variety of media, we enable learning in a changing landscape. HMH is uniquely positioned to create engaging, effective and integrated educational solutions to improve student outcomes. We serve more than 50 million students and three million teachers in over 150 countries worldwide, while our award-winning children’s books, novels, non-fiction, and reference titles are enjoyed by readers throughout the world.”
The company’s focus is on both trade books and the K-12 market by focusing on efforts that will result in “improving educational outcomes for PreK-12 students in underserved communities through a combination of volunteerism, in-kind donations and strategic nonprofit partnerships.” The company has recently not matched analyst predictions for profits and recently reported a quarterly loss.
McGraw-Hill has been publishing for over a hundred years and their education division and professional division provide learning science company as one of what is called the “big three” educational publishers, today focusing on all formats of customized educational content, software, and services throughout the pre-K through postgraduate areas. Headquartered in New York City, the company last month announced a new CEO whose experience is in data analytics. Nana Banerjee was described in press releases as having the “technology-enabled solutions, big-data platforms, and advanced analytics, along with a proven track record of innovation, growth, and profitability serve as the perfect complement” to the future direction of the publishing giant. The company has offices in 45 countries and publishes materials in 60 languages.
British-owned and New York-based textbook publishing giant Pearson is another major player in the textbook marketplace with imprints from Addison-Wesley, Prentice Hall, Benjamin Cummings and others. Considered the world’s largest educational publisher, Pearson’s textbooks, workbooks, and other materials for the entire range of K-12 to higher education and professional markets also includes electronic testing and assessment and skill development tools. organized into three segments: North American Education, International Education, and Professional North American Education segment includes notable businesses such as LearningStudio (formerly called eCollege), a provider of course management, assessment, and e-learning software. Its Longman imprint dates back to 1725 when Thomas Longman published the first book typeset by Benjamin Franklin.
In seeking to be the leading education technology company, Pearson has made significant investments through acquisitions to expand its content, build technology and services offerings, and further grow their international markets. However, their progress hasn’t been without controversy. Recently the company was accused of “surreptitiously embedded psychologically manipulative messages into education software without the students’ knowledge,” according to an article in Education Week. “More than 9,000 students at 165 colleges and universities were subjected last year to what the publisher calls ‘social-psychological’ messages. Through the ‘relatively minor product update’ to the MyLab Programming software program, the publisher sought to determine if encouraging a “growth mindset” might lead students to attempt and complete more problems.” All this without the knowledge or prior consent of the students, their institutions or instructors.
JOHN WILEY & SONS
Hoboken, New Jersey-based Wiley has publishing, marketing, and distribution centers in North America, Europe, Asia, and Australia. In addition to textbooks, Wiley publishes scientific, technical, and medical journals and reference works as well as trade publications.
In a move to expand their focus on online learning, Aref Matin was appointed the company’s new Chief Technology Officer in May and “will lead and accelerate Wiley’s evolution as a world-class, fully integrated technology organization serving the research and education sectors.” With an estimated 60% of their revenues coming from Research, Professional/Trade, and Education, and 20%-or-so from the Education segment alone, this appointment is seen as a significant hire. Today, the US market accounts for more than half of revenue with 14% coming from Asia and 7% from the UK.
CHANGE, YES; REVOLUTION? MAYBE… MAYBE NOT
Data from the Association of American Publishers shows that revenue for PreK-12 Instructional Materials, Higher Education Course Materials, Professional Publishing, and University Presses showed a slight increase in the past year. When one considers all that is required for quality publication and the necessary constant attention to technological issues and markets and promotion…perhaps some solution is what they do best: teaching and research
Consultant Joseph Esposito, writing for the Scholarly Kitchen, sees a potential for increased consolidation and realignment in academic publishing. “Both strategy and opportunity have now moved into position for large scholarly and research publishers to consider acquiring college textbook publishers, which would reduce the number of publishers overall and result in much greater industry consolidation.” Esposito explains that:
“Over the last few years mergers and acquisitions activity has moved from making deals for publishers to making deals for workflow and tools providers — because of the availability of commercial properties in this area (e.g., BEPress, Mendeley, colwiz, SSRN). Another rationale for these deals is that these workflow acquisitions typically open up a new revenue stream that does not derive from a library’s materials budget, thereby enabling growth in the academic sector without further straining library budgets. With inclusive access of college textbooks, research publishers add revenue that does not come out of the library’s budget (typically students pay for the texts when they sign up for a course), but is managed by the library: a perfect set of conditions for consolidation, market dominance, and eventual creeping price increases.”
For universities and colleges, this approach allows libraries greater control “for provisioning textbooks for students, and the management of these arrangements increasingly lies with the library. This makes textbooks a new product category — in addition to journals, books, and databases — for publishers that mostly service libraries.” Esposito is presenting another potential future for libraries and publishers – one that is clearly less contentious than today’s unsettled relationship.
The Babson 2017 survey, Opening the Textbook: Educational Resources in U.S. Higher Education, 2017, found that “the levels of awareness of OER, the licensing tied to it, and overall adoption of OER materials, remains low. Only 10% of faculty reported that they were “very aware” of open educational resources, with 20% saying that they were “aware.” Faculty continue to report significant barriers to OER adoption. The most serious issues continue to be the effort needed to find and evaluate suitable material.” This latest survey, however, did show a highly increased awareness of textbook costs to students (90%) and the availability of OER alternatives (30%).
MORE NEW PUBLISHING MODELS EMERGING
Today, MOOCs, free online study tools and other options exist for supporting students in their studies. OpenStax, a nonprofit tied to Rice University in Houston, is one of the largest providers of open-source books. The company relies on funding from philanthropists, such as the Gates Foundation, to produce peer-reviewed digital textbooks for free and print versions for up to $55.
2007 publishing upstart Flat World Knowledge was established to provide textbooks and related educational content at the college level in digital format freely. This approach nearly led to bankruptcy until two innovators acquired the company in 2016, renamed it FlatWorld and refocused efforts on “working to put high-quality, affordable textbooks back within the reach of every student” at an affordable $29.95 in a variety of formats. The result has been profitability and strong sales. As company co-CEO Alastair Adam explained to Forbes last year, “we believe that professors are at the heart of the learning process. By making textbooks affordable again, we are seeking to leverage their time and knowledge, rather than looking to disintermediate them. The stratospheric price of textbooks is unique to the US market. It didn’t use to be that way, and it doesn’t need to be that way. Just as Southwest, JetBlue, and others disrupted the airline industry, we are disrupting the higher education textbook market. And just like Southwest, the difference is in the details – disrupting the industry by reinventing the business model and the details, not the fundamental concept.”
“I think part of the problem lies with the publishers,” University of Utah’s Rick Anderson explains, “and part of it lies with the publishers’ critics, many of whom refuse to acknowledge that the vast majority of traditional scholarly and scientific publishers are nonprofit organizations, and instead talk about “publishers” in the aggregate as if they were all Elsevier and Wiley. To a very significant degree, the PR problem for “publishers” (writ large) is a consequence of their critics’ unwillingness to make fundamental and important distinctions when discussing problems with the system.”
The issues aren’t just the materials used in education, fault lines exist in many facets of today’s educational system. In the last part of this series we will look at how far more than textbooks are reeling from a system in flux with an unclear future.
In the third part of this series we will look at the broader issues impacting higher education today, examining how this technological disruption is impacting our highly politicized system of education today.