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Marius Paulikas might be the prototypical Top Hat instructor.

Like many professors, he used to assign his geography students at Bowling Green State University a meteorology textbook from one of the major publishers that cost a “fair amount of money,” despite the fact that he used only a “fraction” of the book in class.

In 2015, Top Hat approached him about using a student engagement tool called Classroom. Using this product, Paulikas could assign in-class work that would be graded instantly, as well as take attendance and use polls to stimulate discussions. With classes of more than 250 students, Paulikas jumped at the chance to reduce the time he spent manually grading students’ work.

In late 2016, Top Hat approached Paulikas again, this time with a new offer. The company asked if he would be interested in writing a textbook -- one tailored specifically to the topics he covered in his class.

“The authorship program they proposed made sense to me, and a full draft of the textbook was completed in seven months,” said Paulikas.

Paulikas’s digital textbook, Weather and Climate: Introductory Principles and Exercises, was created using Top Hat’s free course content creation platform Textbook, and is sold in the Top Hat Marketplace for $49. According to the Top Hat website, the textbook was used by more than 1,000 students in the 2017-18 academic year.

By giving instructors the tools to easily create and sell their own content, Top Hat has created an intriguing new course content creation model -- one industry observers say they are watching closely. Like a typical commercial publisher, Top Hat helps authors sell textbooks and takes a cut of the revenue. But unlike a typical publisher, Top Hat is happy for instructors to give away their work free and enables the creation of open educational resources, freely accessible and openly licensed learning materials designed to help drive down students’ costs.

Top Hat believes this hybrid content creation model offers faculty members a “best of both worlds” option that could shake up the commercial textbook market. But the company’s ambitions of becoming a serious competitor to the likes of Pearson, McGraw-Hill and Cengage are still a long way off.

To realize its goals, Top Hat will need more content to encourage more textbook adoptions, and that means finding dozens more instructors like Paulikas who are willing to put the time and effort into writing textbooks or customizing existing content to fit their needs. Top Hat said it has focused on approaching professors who teach large entry-level classes to write course content, but it also works with authors who teach smaller, more unique courses. Of the professors that Top Hat has approached about creating content, around one in five has done so.

Shifting the role of its instructors from clients to content creators and collaborators will take time. But a year after the launch of Top Hat Marketplace, the company has made started to make some impressive headway. Interviews with numerous instructors and administrators at colleges that are working with Top Hat’s products, including its textbooks, show where the company is on its journey from student response system start-up to full-fledged ed-tech company -- and publisher rival.

The Evolution of Top Hat

Toronto-based Top Hat was founded in 2009 as an alternative to the remote-control clickers widely used in classrooms at the time to take attendance and ask students questions. Rather than giving students extra devices they had to remember to bring to lectures, Top Hat developed an app that would work on students’ laptops and phones.

Top Hat is still best known as a student engagement platform. But the company has been busy expanding its platform into an "all-in-one teaching app" -- a place where instructors can find, create and publish course content and textbooks, as well as teach, engage and assess students.

The company launched Textbook, a self-publishing tool for digital textbooks, quizzes and other course materials, a year ago. Simultaneously, the company launched the Top Hat Marketplace -- a site where instructors can sell their creations or share them freely.

Top Hat reports that more than 7,000 professors and 300,000 students have accessed content from the marketplace. There are 180 textbooks, in addition to many test banks, notes and presentation slides, available on the marketplace. Around 650 authors have contributed course materials.

Even though the company has become a distributor of textbooks and course materials, Nick Stein, chief marketing officer, emphatically rejects the idea that Top Hat has become a publisher.

“We’re definitely not a publisher,” he said. “We’re very much a technology company that is using technology to enable content to be published, adopted, curated and adapted. It’s very different from the traditional publishing model.”

Textbooks in the Top Hat Marketplace can cost up to $90, but they average $53. Some of the textbooks, and lots of course materials, such as presentations, question banks and notes, are available at no charge. Many of these free materials in the marketplace are offered in partnership with OER providers like OpenStax.

Unlike some publishers, Top Hat seems to have genuinely embraced the OER movement. The company sees its marketplace as a space where professors can find, create and share quality OER, alongside “premium” for-sale content.

Uncertainty about where to find good OER has been a persistent barrier to OER adoption for many faculty members, said Stein. And there are few free tools like Textbook available to help instructors adapt and build their own OER, he said.

Several publishers are guilty of “openwashing” -- taking free OER content and putting it behind a paywall. Initially users wishing to access OER content on the Top Hat platform had to pay a subscription fee, but in April the company announced that it would no longer charge any fees to read free content.

Despite the removal of costs for free content, most instructors who adopt Top Hat textbooks choose to teach them with the Classroom tool, which has the added features of attendance taking and in-class assessment. Classroom costs $26 per student for a semester-long subscription, but discounts are available for longer subscriptions and for institutions that have campuswide deals with Top Hat. In some cases, institutions are covering students’ subscription costs completely.

There is some financial risk with making so much content available free, admitted Stein. But making its platform accessible to all students is good for brand awareness, he said.

Stein compared Top Hat’s approach to that of GitHub -- the open-source software code platform recently purchased by Microsoft for $7.5 billion. GitHub made the process of creating software a lot more efficient, more scalable and community driven, said Stein. He thinks Top Hat could do the same for OER. He acknowledges, however, that the option of publishing OER content may not be preferable for all.

“Some authors, when they put a lot of time and effort into creating a full textbook, may want to be remunerated for that work. In other cases, they might just be contributing a course pack or a set of questions, which they will contribute for free as a way to give back to the community,” said Stein.

Peter Zámborský, a senior lecturer in international business and strategy at the University of Auckland Business School, in New Zealand, recently wrote a Top Hat textbook and echoed Stein’s comments. He said he wouldn’t be prepared to write a whole OER textbook, but he would produce OER course materials. “The problem with pure OER content is that authors are not rewarded at all or sufficiently,” he said.

Zámborský wasn’t a Top Hat customer before the company approached him about writing a textbook, but he had written a few textbooks on global business strategy, including one published by Bookboon -- an ebook publisher that uses advertising to offer its titles for free, with some reimbursement to authors.

Zámborský said he agreed to work with Top Hat because he liked the company’s vision for “interactive, quick-to-market, engaging and affordable textbooks.” He taught with his Top Hat textbook and the Classroom platform last semester and said that 75 percent of his students reported that the textbook delivered a better learning experience than other textbooks they had used.

“Top Hat's participant response system is probably the best in the industry, and their price point is acceptable to most students,” said Zámborský.

Zámborský said he earned 45 percent royalties on his book, priced at $61, which he found “quite refreshing,” as most publishers give 10 to 12 percent. Although he likes that Top Hat textbooks are “much cheaper” than textbooks from commercial publishers, Zámborský said he felt that some Top Hat textbooks would “still need to be developed further and provide more content to really compete with the likes of McGraw-Hill and Pearson.”

Top Hat Universities

Top Hat says its platform is used in over 750 of the top 1,000 colleges and universities in North America. At most institutions, the number of professors using the Top Hat platform is small. But once around 10 percent of instructors at an institution start using Top Hat, the company’s sales team attempts to make a campuswide deal with administrators that gives students a subscription discount and encourages other instructors to start using the Top Hat platform. “We typically won’t go into an institution cold,” Stein said.

Some institutions, such as Indiana University, cover students’ Top Hat subscription costs completely. The university announced last month that students across its eight campuses would no longer pay Top Hat subscription fees after IU signed a campuswide deal.

In 2017, IU students spent $665,000 on Top Hat subscriptions. The university said that 30,884 students had actively used the Top Hat platform between May 2017 and May 2018.

Anastasia Morrone, associate vice president of learning technologies at IU, said the university plans to pilot Top Hat Textbook this fall. No faculty members have yet selected a Top Hat title, but “we are pleased that Top Hat is now part of our catalog,” she said.

Ohio University also has a campuswide deal with Top Hat and covers students’ subscription costs. Unlike Indiana, however, Ohio already has 60 professors who’ve adopted Top Hat textbooks. Over 8,500 students are using these books, and nine professors have contributed course materials to the Top Hat Marketplace.

Craig Bantz, chief information officer at Ohio, said faculty members were initially contacted by Top Hat individually, then adoption spread through departments by word of mouth. The institution saw that it would make sense to sign a deal with Top Hat in 2016.

Brad Cohen, Ohio's senior vice provost for instructional innovation, said he was surprised by how quickly faculty members have embraced Top Hat’s platform. More than 350 professors at the university currently use Top Hat Classroom when teaching, accounting for 600 courses and 14,000 students.

Though Top Hat has expanded from a student-response system to a complete learning experience, Bantz said the platform has limitations. It isn’t suitable for online learning, and there isn’t yet a way to mine analytics data for student success, said Bantz, as a number of other technology and publishing platforms in the higher ed space allow.

“There’s a real opportunity to look for patterns that might indicate students’ likely outcomes in a course,” said Bantz. “If we can see that a student hasn’t read these sections and they haven’t responded to a question in class, then that might suggest that the student needs some kind of intervention.” Top Hat executives have said that adding data analytics is on their agenda.

Ohio has been encouraging faculty members to move away from expensive textbooks for a few years, said Cohen. As more faculty members consider OER and low-cost textbook options, Top Hat has made it easy for them to find curated content or create their own. But he acknowledges that Top Hat’s textbooks are just one of many options out there for saving students money. Traditional publishers’ inclusive access programs are also a popular option, he said.

The university recently announced that since switching to OER titles offered by Top Hat last year, it has saved students more than $1 million in textbook costs.

An ‘Existential Threat’ to Publishers

Top Hat CEO Mike Silagadze has previously said that commercial publishers weren’t sure what to make of the company’s foray into digital content.

“Probably by next year, there will be the realization that we are an existential threat to their business,” Silagadze told TechCrunch in June 2017.

More than a year later, little evidence suggests that publishers are quaking in their boots. But the Marketplace, and the use of the Textbook tool, could grow.

Phil Hill, partner at MindWires Consulting (whose Empirical Educator Project is partly sponsored by Top Hat) and co-publisher of the e-Literate blog, has said that Top Hat’s Marketplace is “worth watching.” Hill told Inside Higher Ed that he thinks the Top Hat approach is “intriguing.”

“If the concept of faculty-generated content really took off beyond some early adopters, then the concept would be another existential threat to publishers, but I seriously doubt that the big publishers will see Top Hat that way this year or in the near future,” he said.

What makes Top Hat unique is that the tools in its platform are streamlined, said Stein.

“You don’t have to use five or six different tools with different log-ins,” he said. “You have everything you need to build your course, deliver your course and assess your students.” He added, “There’s nobody else out there doing exactly what we do, but there are many companies out there doing small parts of what we do.”

Mike Hale, vice president of education for North America at VitalSource, a digital content provider, said that Top Hat is "one of the most interesting ed-tech companies out there."

"The tool they've developed to allow faculty, or anybody, to create and enhance content is very well done," said Hale. The biggest problem Top Hat will face is getting enough faculty members to author content, he said.

"Publishers spend a great deal of time and resources to create content for learning. If Top Hat can provide commercially created content as well as content created by faculty, they will have a powerful learning ecosystem."

Looking forward, Hale said that Top Hat could "impact both publishers and maybe even learning management system providers."

Though Top Hat is in competition with big publishers, it hasn’t ruled out selling commercial textbooks in its marketplace.

“We’ve had a lot of interest from publishers wanting to make their content available on Top Hat. Right now we’re trying to determine if that would work, and how that would work,” said Stein.

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