Textbook publishers revamp e-books to fight used market
By Stephanie Simon and Madeline Will
(Reuters) - A booming market in recent years for selling and renting used college textbooks has saved students across the United States a ton of cash.
But it has put textbook publishers in a bind. They don't make a cent unless students buy their books new.
So increasingly, publishers like Pearson Plc and McGraw-Hill Education are turning to a new model: Creating online versions of their texts, often loaded with interactive features, and selling students access codes that expire at semester's end.
Publishers save on printing, shipping and process returns. The e-books are good for learning and good for their bottom line. There's just one catch: Persuading students to go digital isn't easy.
Online products accounted for 27 percent of the $12.4 billion spent on textbooks for secondary schools and colleges in the United States last year, according to research firm Outsell Inc.
But the publishers expect that percentage to grow, and are retooling their businesses to compete in what they see as the future of the industry.
Half of Pearson's total revenue last year came from digital products and services (not all of which are digital), and executives expect that to increase. The company recently announced a restructuring to emphasize online content.
Cengage Learning, which creates customized courses, has pledged to emerge from a recent bankruptcy filing more focused on digital. McGraw-Hill Education, which was recently acquired by private equity firm Apollo Global Management, has taken an equity stake in one software company focused on digital learning and purchased another outright. Continued...