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Pep Carrera is chief operating officer of VitalSource Technologies. I got curious about this company, and Pep agreed to answer my questions.
Question 1: The reason that I'm curious to learn more about VitalSource all comes from a single data point. That data point - sent to me by your company - is that "VitalSource is the world’s largest supplier of etextbooks in the world." Is that even possible? How can VitalSource be the largest player in the etextbook business if I've never heard of the company? Can you put some numbers to this claim?
A: Yes, in fact our scale is a key part of our success. For perspective, we had about 6 million active users last year, 21 million new titles distributed, 2.5 billion pages read across 7000 institutions. These are global numbers -- we’re used across 241 countries and territories, including a fun point that we added Antarctica in 2015. We have eight users there!
These are our billable and conservative numbers. From a pure technology perspective, we could lump in the free samples we provide for faculty, and that raises the total to over 100 million titles ... if you then peel that back and look at the number of times that content has been downloaded by our end users it is approaching half a billion.
So yes, we feel like we’re by far the largest player in the industry. Beyond just raw unit numbers, we’re also the most integrated platform in the industry. We’re in thousands of point of sale systems, learning management systems, ecommerce platforms, and an untold number of custom systems. The majority of our numbers are in higher ed, but we also started trying to solve hard problems in K12; we went from 9 districts to 35 last years alone, and we’re integrating to LMS, SIS, and other integrators such as Clever there. We even have integrations to SharePoint. Even with all of these integrations and volume, we remain strongly focused on using standards, and in fact we sit on many of the education industry standards bodies to try and make sure integrations, content, and data remain open and highly interoperable at scale.
Question 2: Let's dig into this claim about VitalSource being the largest provider of etextbooks. I would have guessed that Pearson, Wiley, Cengage, McGraw-Hill, or Houghton Mifflin Harcourt were the biggest. Don't they use their own platforms? Or maybe Amazon Kindle. Please help me understand this claim?
A: There are several reasons why that isn’t the case. Our volume comes in two key ways that shows why we really are the largest.
1) We are a content neutral platform, with a thousand plus publisher’s content (amounting to well over a million titles), and we distribute that content directly to institutions and via our partner channels. Partners such as Barnes and Noble Education, Follett Higher Education, Ambassador, MBS, Ed Map, Akademos, and many others in the U.S. and abroad.
2) Because of our volume and coverage, we’ve solved, and continue to invest heavily in, the hard problems that are only seen at scale. Accessibility, content remediation, 100 percent offline usage scenarios, LMS, POS, custom integrations like we talked about. We’re native across 37 languages. Every single release across six platforms is tested for accessibility and we do hundreds of releases a year. This knowledge and investment led us to realize we could be core technology enablement for publishers and other technology companies that needed to scale; we call this “LearnKit” and now have what amounts to a ‘content api’ that powers publisher and third party solutions. So in addition to all of our institutions, we also power many publisher and third party platforms that have some of the volume you’re naturally aware of.
A last point here that really is fundamentally important. We’ve been in this space for more than 20 years now. We were born powering institutionally driven content models for course materials. Some industry research, that was trying to estimate the eTextbook market as recently as a few years ago, really undersized the market. We, ourselves, were bigger than what they thought the entire market size was. I tend to believe this was largely because everyone is hyper aware of the student choice course materials market: the one folks like Amazon and other retailers are in.
Fundamentally direct to student etextbooks, as powered by us today, and folks like Amazon, is a small share of etextbooks. The pricing generally isn’t advantageous vs. print rental, and therefore students are choosing physical books in that model. When you can move to an inclusive-access model, the type we’ve been powering for 15-plus years, there are many advantages that exist, from day-one access to an actual integrated curriculum experience, but a key one is pricing. This is where most of the volume for digital has been, and it’s why we have the most volume.
Question 3: My next questions are: a. Why should higher ed people care about VitalSource, and b. Why should VitalSource care that higher ed people know about your company?
A:
a. Why should higher ed people care about VitalSource?
Everyone is well aware of the access and affordability problem. We believe it’s the number issue in higher ed. Predictions seems to align to the fact that children of households making below $40,000 per year are gaining share in college enrollments, even while enrollments are dropping. There is some amazing activity out there to try and really solve both issues, including the drive to 55 in Tennessee, but many of the solutions we are seeing don’t yet fully address content, especially required content. Solving the problem of the $500 course, but not addressing the $300 book seems flawed. Our research, and many other studies have shown a majority of students delay or avoid required content purchases at least once, and >45 percent believe it affects their grade.
Given the problem, our history of having solved the really hard issues of scaling digital programs for over 20 years is by far the reason higher ed people should care about VitalSource. We know where digital works, and doesn’t, and we’re a neutral best-of-breed course materials platform. We’ve seen just about every model, problem and scenario out there, and because we’re a SaaS platform and very customer centric, our institutions and partners gain all of the benefit of this shared knowledge and product; from small pilots to full-blown 100 percent digital programs.
b. Why should VitalSource care that higher ed people know about your company?
We are starting to see awareness really develop around the content affordability and access issue. In fact, there have been developments in many states to address content affordability, from OER initiatives to what it was reported recently in Ohio around textbook affordability legislation.
We feel we have the right history and experience to help be an integral solution to this issue and we want to accelerate that awareness and implementation of the solution.
Question 4: What changed at VitalSource that your company now wants to be visible and known to people in the higher ed world? Why does the the brand recognition of VitalSource matter if the company has been doing well enough to build a dominant platform business?
A: Solving the affordability and access issue is not going to happen in a vacuum. Yes, we’ve reached incredible levels of volume that has really prepared us for this challenge, and we think that the best way to address it is to be very visible so that all the stakeholders that have a hand in solving this issue can rally together to solve the problem. We need to raise our visibility to use our history and previous experience solving the hard problems to show that it really is an addressable issue and make sure that it’s done so as fast and as right as possible. We want to use ourselves as a vehicle to aid in the collaboration across academics, stores, publishers, and technology professionals in solving the access and affordability issue.
Question 5: What are your plans for claiming brainspace in the higher ed ecosystem going forward? How can we expect to see VitalSource enter the conversation about the future of higher education?
A: Higher education should be accessible, and there should be an easy way for institutions and partners to drive insights, a better learning experience, and learning outcomes. A key part of that solution starts with the course materials. You’re going to see us focus on the future of course materials: How we can we all drive the digital transformation, that isn’t an end into itself, but the beginnings of providing faculty, administrators, and publishers with the actual tools needed to have a simplified digital experience, at scale, and with a radical amount of data transparency as to what is really happening as student learn and consume content? The most basic part of solving this issue is through a deeply integrated learning experience, that is affordable, accessible, and where and how the student and faculty want it. With our partners, once we help solve that problem, the sky’s the limit for the analytics, experiences, and outcomes we can build through standards based interoperable platform like ours.
