Are College Course Materials Publishers Paying the Price for Changing Strategies?

Publishers of course materials for the higher education market in 2018 became aggressive in their changes to how they wanted to offer, market and sell those course materials after a tumultuous year in 2017.

As publishers entered 2019, their focus primarily was on new modes of distribution, particularly inclusive access, which provides students with digital access to course materials on the first day of class, often at significantly lower cost, as arranged through agreements with institutions, departments or professors. Increased acceptance of inclusive access will mean an increase in uptake of digital courseware, the endgame for publishers.

But the changes publishers and distributors have made, initially at least, are showing up in lower revenue. In the first half of 2019, publishers generated $918.3 million in net sales in higher education, down 5.3% from the same period in 2018, according to sales figures from the Association of American Publishers. Pearson’s U.S. higher education revenue tumbled 10% in the first nine-months of the year.

Pearson attributed that decline to pressure from lower enrollment and the campus uptake of open-source materials. Simba Information believes the uptake of inclusive access also is driving the revenue decline as colleges sign on to this lower-cost digital option. Eventually, publishers anticipate generating more revenue even with lower prices because of increased penetration among students.

Uptake of Open Source

Uptake of open source textbooks in the higher education market has been slow but persistent. Open source textbooks typically are offered online and available through an open copyright license that allows various levels of attribution and change to the material by users. Most often the online format can be accessed at no cost. Downloading and printing sometimes carry costs.

Think open source textbooks in the college market, and OpenStax out of Rice University likely is the first resource to come to mind. Its impact on the publishing industry is clear. Almost 3 million students are saving an estimated $233 million this year by using free textbooks from OpenStax alone, the company said.

Recognizing a trend, commercial publishers have attempted various ways to work with open source materials, including providing access to such material through their own digital tools. McGraw-Hill Education, for instance, in spring 2019 introduced Open Learning Solutions to provide college instructors with the tools and support to curate and combine content from a variety of sources—digital textbooks, personally authored material, open educational resources, national media, YouTube videos and interactive simulations—with McGraw-Hill’s adaptive technology, assessment tools and mobile reading capabilities.

Harnessing Print Rentals

Publishers also have become more strategic about how they offer print materials to ensure an ongoing, meaningful and profitable role for them in the higher education market. They continued to bring out new editions in print, though they have begun restricting those new editions to rental programs.

Publishers have finalized new revenue-sharing arrangements with bookstores for the sale of print textbooks and prohibited their resale in the secondary market in those new arrangements.

For more information on Simba’s new report, State of College Course Materials 2018-2019, visit: https://www.freedoniagroup.com/simba-information/the-state-of-college-course-materials or call  (US): 888.297.4622 (Int): +1.240.747.3091