All In the Delivery

As publishers and analysts again wonder if e-books are about to take off, the growing popularity of rental options may play as important a role as technology.
August 31, 2010

With another summer ending, the time has come to ask the perennial question: Could this be the year higher education finally embraces the e-book?

Some think that developments since the last buying cycle, particularly the arrival of Apple's iPad computing tablet, might foreshadow an especially good year for the electronic texts. CourseSmart, the e-textbook consortium comprising five major publishers, says it has sold four times more e-textbooks in 2009-10 than it did the previous year (although it would not say how many copies that translates to). CourseSmart would not disclose how e-book sales are going so far this season, saying it was too early, but that it is optimistic. "We expect triple-digit growth to continue," says Heather Shelstad, director of the consortium.

Others are more skeptical about whether e-books will finally boom after years of stalled progress. “They’ve been saying that for the last 10 years,” says Nicole Allen, an advocate for the Student Public Interest Research Groups (PIRGs).

One reason it is difficult to parse the prospects for e-books this year is that many other things are happening in the textbook market that make "traditional textbook vs. e-book" a false dichotomy. These days, traditional books have electronic supplements; some electronic texts have print-on-demand options; and for many students, textbook decisions have more to do with renting vs. buying than print vs. digital.

The iPad and the E-Book

It has been a truism for years that e-books are massing at the gates. For the most part, officials are no longer arguing if the college library will transform from a warehouse of bound volumes to a nexus for accessing various digital resources, but when; in last year’s Campus Computing Project survey, 76 percent of senior campus technology officials predicted that e-books “will be an important source for instructional resources in the next five years.” The explosive growth of online education seems to imply a mainstream acceptance of the computer screen as medium for instruction. And then there is the widely accepted argument that printed textbooks, like other analog vessels, belong to an economic model that no longer makes sense (at least not to many students).

Despite the hype, e-books have remained on the fringes of higher education. In 2008, the first year the Campus Computing Project survey started asking about e-book use, respondents said the electronic texts were used in 2.2 percent of classes. Last year, that percentage “jumped” to 3.5. According to the Student Monitor, a group that does market research on student behavior, e-books accounted for only 2 percent of textbook sales last year. And while publishers have been increasing the number of titles available in digital, half of students surveyed last spring remained unaware that e-books are even an option. What’s more, the percentage of students who were aware of e-books actually dropped from the previous spring, according to that survey.

Digital add-ons, such as Pearson’s Mastering software, have become very popular among professors and de rigueur among publishers. But for the most part, professors are using them alongside print textbooks, not e-textbooks. The only places where e-books are dominant are for-profit institutions such as University of Phoenix, where administrators have required instructors to assign them. (Neither the Campus Computing Project nor Student Monitor data account for students at those institutions.)

However, the e-book market has seen some auspicious developments in recent months. In July, Blackboard announced changes to its popular learning-management platform that would allow professors to assign electronic texts more easily — a potential coup for e-books, since Blackboard boasts by far the most popular learning-management platform in the industry and is well-positioned to influence how professors provide course materials to students.

But the most buzzed-about development with implications for e-books has been the unveiling of the iPad, which, among many other functions, is popular as a reading device. The last version of Amazon’s Kindle e-reader was ill-suited for academic reading, according to a handful of institutions that tried it out. But the iPad is touted as a more hip, versatile breed of e-reader — one that college kids are apt to buy for general purposes. And once they own e-readers, they will be more likely to buy e-books, suggested Eric Weil, managing director of Student Monitor, in a July interview with Inside Higher Ed.

Half the students who responded to Weil’s spring survey either already owned an e-reader or were interested in buying one. The CourseSmart consortium of publishers, for its part, sees the iPad as a "game-changing" device, equating it to the laptop. "As the iPad captures the imagination of the next generation of students, it will raise additional awareness for the digital benefits and cost savings related to e-textbooks," says Shelstad.

In addition to the iPad's cachet, Apple’s arrival on the e-reader scene portends an avalanche of apps, including ones that could offer academic readers that elusive “added value” that many — including Campus Computing Project director (and Inside Higher Ed tech blogger) Kenneth C. Green — argue are absent from the current generation of e-books. Nick Bilton, a technology writer for The New York Times and adjunct professor at New York University, last week wrote about a new app, called Inkling, that lets students interact around passages of digital text. The app also supports dynamic content from publishers; for example, a three-dimensional model of a molecule that students can navigate via the touch screen. Allen, the Student PIRGs advocate, says that a lack of such features — that is, the tendency of e-textbooks to be “flat representations of print books” — has contributed to students’ apathy toward them in the past.

Still, it would be easy to overestimate the effect devices such as the iPad will have on e-book adoption, especially in the short term, says Joseph Esposito, a longtime scholarly publishing consultant. Professors will not assign e-textbooks simply because of the value added by iPad apps, since the majority of students (at institutions that have not arranged iPad giveaways) will not have the iPad, and no professor in his right mind would require his students to buy the $500-and-up device, Esposito says. E-books will probably see a bump in adoption — perhaps a significant one, if CourseSmart is moving as many digital copies as it says it is. But if e-books do win significantly more users this year, it will be primarily because there are significantly more titles available, says Esposito. “We shouldn’t be dismissive of incremental gains by digital text," he says, "but we shouldn’t be looking for revolutionary gains.”

Analog Innovations

Actually, the textbook-delivery trends that stand to see the greatest gains in 2010-11 have less to do with technological innovation than with economic creativity. Textbook rental services — which give students the option of securing the savings of temporary ownership upfront, rather than taking their chances in the fickle buy-back market — have been around for a while, but they are now viral. The National Association of College Stores says rental programs have increased fivefold among its members since last fall, with about 1,500 campuses now offering the rental option. In a recent press release, the association dubbed 2010 "The year of the rental."

Another novel mode of delivery for dead-tree textbooks that appears to be gaining traction is print-on-demand. Flat World Knowledge, a company that offers digital copies of its customizable textbooks for free and printed versions for relatively low prices, has dramatically broadened its reach, winning over at least one professor at each of 800 different colleges this fall, up from 400 a year ago. Flat World uses generous royalties to persuade “top authors” to write textbooks that subscribing professors can then add to and tweak to their liking; students are then given the choice of getting access to an HTML version of the customized textbook for free, buying a color PDF version for $25, ordering a black-and-white paperback version of the textbook for $30, or ordering a color version for $60.

Just like the mainstream publishing houses, Flat World offers a buffet of digital add-ons, such as interactive quizzes, digital flash cards, and the like. These supplements have proven popular among Flat World customers, as they have among users of Pearson and others — a reminder that while e-books might still be on the fringes of academe, e-learning tools have made substantial inroads.

This is not to say e-textbooks will fail to become increasingly relevant, even to people like Eric Frank, the co-founder of Flat World. This fall, Flat World is introducing an e-book version formatted for e-readers. It will cost almost the same as its analog opposite, the black-and-white printed version. Frank says Flat World will be watching with interest to see which option students pick more.

As far as how Flat World users have opted to receive their textbook content so far, the least fancy formats have been the most popular. Half have chosen the free, HTML version. Of those who choose to pay, about 70 percent chose the $30 black-and-white printout, while 15 percent sprang for the $25 color PDF, and only 3 percent bought the $60 color paperback.

It's the Sticker Price, Stupid

What to make of those decisions? On the one hand, the popularity of the HTML version suggests that students are willing to use screen-borne texts. On the other hand, the HTML version was free. Price, not format, is still the top driver of student textbook-buying behavior, says Allen.

E-books have not caught on simply because they are not, in most cases, the cheapest option, Allen says. “From what I’ve been able to tell, the print rental prices are [generally] lower than the e-book rental prices,” she says. And since all e-textbooks are essentially rentals — with access typically expiring after one or two semesters (sometimes less) — they offer no added value over renting a printed textbook as far as permanence of ownership.

That, more than a lack of built-in frills, is why rentals are blowing up while e-books are merely slouching toward wider adoption, says Frank. “[Textbook companies] are saying, ‘We need all these bells and whistles — then we’ll sell more,' " Frank says. But that’s not the key, he says; bells and whistles are fine for the students who are willing to pay for them, but currently that is a decision most publishers are either making themselves or putting in the hands of professors. Students should only have to pay for the frills they want, agrees Allen. Accordingly, Student PIRGs is throwing its weight behind the Flat World model, she says.

One major public system is exploring the idea of reducing the cost of textbooks to students by limiting student choice, rather than broadening it. The California State University System announced on Monday a pilot program in which professors in 32 course sections would require their students to buy e-textbooks. As a result, the system would be able to make larger purchases from the publishers at a discount, which would then be passed on to the student. This strategy of buying e-books in bulk in order to save students money on course materials has been used by for-profit institutions such as the University of Phoenix, and community colleges such as Rio Salado have pursued similar strategies with printed textbooks.

In effect, students involved in the pilot would not have the choice between print or electronic, but they would be spending less than if they were allowed to choose.

For now, the California State move is just an experiment, and a spokesman would not speculate on whether it could lead to broader proscriptions against printed textbooks in the name of savings. But if there comes a time when California State and other institutions decide to address the high cost of course materials by mandating bulk purchases of electronic texts, that would be a bully year for e-books indeed.

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