The Great Unbundling of Textbook Publishers

Michael Feldstein:

For most of their existence, the center of the universe for textbook publishers has understandibly been the book. Selling textbooks was a very profitable business for a very long time. Everything else that a publisher produced was called an “ancillary.” Slides? Flash cards? Digital resources? All ancillary to the dead tree product. Even when publishers figured out that they could charge money for some related products and services, they typically thought about them in terms of enhancing their book business. Homework platforms were “aligned” with particular textbooks. “Custom” publishing, where the publisher cobbles together different book sections and other resources for an individual instructor, department or institution, was seen as a means of selling more content to people who wouldn’t select the company’s book off-the-shelf.

All of that is changing. In fact, it has been changing slowly for a while now. Homework platforms have been big business since Pearson scored major success with MyMathLab. As the homework market matured, publishers have, through long process of trial and error, finally begun to hit on general-purpose digital products for disciplines that aren’t heavy in traditional homework. These products move up the value chain, solving both class management and genuine teaching problems that paper textbooks can’t. And publishers are starting to see real business success with them. For example, McGraw-Hill Education announced this year that their unit sales of digital products have overtaken print products. Cengage told IHE in the spring that they are “on track this fiscal year to see digital sales surpass print sales, both in terms of unit sales and revenue.”