Pearson phase out textbooks, Startup Hopes To Lead An Academic Publishing Revolution.
It’s July. Final exams are a fading memory, and second-hand bookshops in university towns up and down the land are looking forward to buying used textbooks at knock-down prices from cash-strapped former students.
At least that was how it used to be. A student would pay perhaps £50 or £60 for a textbook and then sell it on once the course was completed. But today’s students are just as likely to either rent or buy digital copies of the books on their reading lists. Consequently, the day of the thick, dusty and prohibitively expensive academic textbook may be coming to an end.
Witness today’s announcement from U.K.-based academic publisher, Pearson. Responding to changes in the market, Pearson is to phase out physical textbooks in favor of digital alternatives.
A Subscription Revolution?
But there may be a bigger revolution underway. Just as the music industry has seen a download/ownership model being progressively supplanted by subscription-based streaming services, tomorrow’s students may opt to rent their online textbooks rather than own them outright.
All of which is probably good news for U.K. startup, Perlego, a company that styles itself as the Spotify of the textbook market.
Founded by Gauthier Van Malderen and Matthew Davis, the company offers access to digitized versions of more than 200,0000 academic books, with monthly subscription plans starting at £10.00 a month. And as Van Malderen explains, the service was set up to address one of the big financial problems faced by students. “One of the big trends at the moment is the rising price of textbooks,” he says. “This is causing real problems for students because prices are going through the roof.”
One solution is, of course, to buy second hand and a lot of students do just that. But this, in turn, creates problems for publishers. Academic textbooks are expensive to produce in a physical format and many need to be updated every few years in order to remain current. As a result, the cost of production is high. But in charging high prices to academic consumers, the publishers run the risk of losing sales because students buy used rather than new.
Van Malderen says the industry is well aware of this problem and publishers have been open to finding new models that will preserve their revenues while also keeping prices down. This has led not only to a willingness to embrace digital sales – a no brainer, frankly – but also subscription models. “Publishers have been looking at ways of reducing prices,” he says.
This has been helpful to Perlego. Founded in 2016, the company has – with the help of a $4.8 million seed round – signed up more than 600 publishers to its model. In addition to students and academics, its target market includes the kind of professional that needs access to current textbooks.
All of which might raise concerns about income levels for publishers and – perhaps more importantly – authors. In the music industry, the arguments over the financial models operated by the big streaming services are well-rehearsed. With the money paid out for each “play” coming in at something between a quarter and a half of a cent, musicians feel their work is undervalued to a considerable degree.
Good or Bad For Authors?
So will textbook subscription services mean that authors will see their incomes dive? Well, on the face of it, Perlego seems to offer a good deal, with 65% of the monthly subscription going back to the publisher. However, it’s complicated. If a subscriber accesses just one book in a particular month, the whole of that 65% sum will be directed to the publisher concerned, with a proportion of the income ultimately going to the writer in the form of royalties. If on the other hand, if the user accesses several books across a number of publishers, then the same 65% will be divided up accordingly.
Will this mean a good deal for writers? Speaking to the BBC on behalf of Pearson, CEO John Fallon was optimistic about the subscription model, saying it would result in sustainable incomes. That remains to be seen.
Meanwhile, Perlego is intent on growing its user base, which Van Malderen says is currently numbered in thousands. That doesn’t quite represent a consumer-side revolution (as yet) but Pearson’s “digital-first” announcement does suggest that the fusty world of academic publishing is about to undergo a sea change. That could provide a real boost for Perlego and others working in the field.