The E-Book Sector

June 8, 2010

E-textbooks might be the most-talked about and least-used learning tools in traditional higher education. Campus libraries and e-reader manufacturers are betting on electronic learning materials to overtake traditional textbooks in the foreseeable future, but very few students at traditional institutions are currently using e-textbooks, according to recent surveys.

Not so in the world of for-profit online education. Online for-profits such as American Public University System and the University of Phoenix have for years strategically steered students toward e-textbooks in an attempt to shave costs and ensure a more reliable delivery method that, in the context of online education, might seem to make more sense. At Kaplan University's School of Legal Studies, digital texts account for around 80 percent of assigned reading. At Capella University, e-textbooks are an available and accepted option in nearly all 1,250 courses. In for-profit higher education, more than any other sector, the traditional book is becoming obsolete.

Phoenix actually mandates that instructors assign digital materials “whenever feasible” -- a strategic turn the company started to take back in 2003, but which has come to fruition more recently, with so many more materials now available in digital format. At this point, roughly 90 percent of Phoenix’s course content is delivered via e-books or other electronic means -- the only exceptions coming in courses such as art history, where copyright issues surrounding digital renderings of images such as paintings remain a hurdle for e-book publishers, says David Bickford, the vice president of academic affairs at Phoenix.

The American Public University System -- which is a private, for-profit university, despite its name -- has also been consciously promoting the use of e-textbooks, resulting in widespread adoption of the new format among students.

Of the company’s 400 fully online courses, about 300 assign e-textbooks as the default delivery method (with exceptions for overseas military personnel, who make up a significant proportion of the institution’s enrollment and tend to have irregular Web access). While the institution allows stateside students the option of buying print books, more than 90 percent of students opt for the e-textbook, says Fred Stielow, dean of libraries.

Those are staggering adoption rates compared to those at nonprofit online programs and on traditional campuses. Among the respondents to a 2009 Campus Computing Project survey of 182 online programs at nonprofit universities, only 9 percent said e-textbooks were “widely used” at their institutions, while nearly half said electronic versions were “rarely used.” Even fewer brick-and-mortar institutions are deploying e-books in lieu of hard copies, with fewer than 5 percent citing e-book deployment as a key IT priority in the short term, according to another Campus Computing Project survey. And according to data from the Student Monitor, e-textbooks accounted for only 2 percent of all textbook sales last fall.

One reason American Public University System students have adopted e-textbooks so enthusiastically might be because of the company’s unusual practice of including course materials such as books in the cost of tuition. Historically, it has bought students their textbooks. Now, it only buys e-textbooks; if students want to keep using print volumes, they have to pay for them out of their own pockets. “Given textbook inflation… it’s the only way we can continue to underwrite the materials cost for our undergrad students,” says Stielow.

For-profit institutions in general are moving toward wider e-textbook use than other sectors of higher education, Stielow says. “I think a great many [for-profits] are certainly trying to move toward this model,” agrees Bickford. And the ones that have appear to be succeeding.

Why is that?

John Bourne, executive director of the Sloan Consortium, which studies online learning, posits that it might be a function of the more centralized administrative structures at for-profit institutions. “For-profits do things like provide lesson plans for instructors, provide you with what you’re supposed to do; they hire all these adjuncts to deliver all these things that have been sculpted by instructional designers,” says Bourne. Being able to dictate to the faculty what text format they should assign to their students probably makes it easier to implement e-textbook adoption across the institution, he says.

It is more difficult to engineer change at such scale at nonprofits, because of their more distributed governance models. At those colleges, faculty control of curricular texts — including mode of delivery — is “sacred,” Bourne says.

Manny Rivera, a spokesman for Phoenix, says that the online giant’s centralized administration does indeed allow it to make sweeping changes without many hang-ups. “The university is set up to be more nimble to confront market forces,” Rivera says. “So we’re able to innovate more quickly.”

The wide adoption of e-textbooks has also allowed the University of Phoenix to reduce the price it pays for licensing rights to e-textbook material from publishers. “In return for predictable revenue stream, the publishers can generally give best-in-class pricing on digital textbooks and material,” says Bickford. That’s a financial windfall for Phoenix, which pays a licensing fee to publishers and then sells access to its students at a mark-up, investing the revenue in "the development of other multimedia resources."

APUS also gets “deep discounts” -- 30 to 35 percent, usually -- for being able to purchase e-textbooks across the board and sparing the publishers from having to convert individual professors, according to Stielow.

Officials at the for-profits also said that using e-textbooks eliminated issues related to online students sending away by mail for hard-copy textbooks. “I can remember in my first decade of employment here, dealing with panicky student phone calls saying, ‘The UPS driver ate my textbook,’ ” Bickford says.

So switching to e-textbooks seems to be a prudent financial and logistical move. But is it a good educational one?

The jury appears to be out on that question. At APUS, Stielow says an internal survey last year revealed that 90 percent of students opted for the free e-textbooks in the courses where they were assigned. But price was evidently a factor in many cases, since about 42 percent of those said they strongly preferred print texts.

At Phoenix and Kaplan University, officials insist that internal research of e-textbook use has revealed that learning outcomes do not suffer as a result of switching from print texts to digital versions, although both declined to share specific data on proprietary grounds.

“Economics are not a primary driver at all,” says Stephen Burnett, the vice president for auxiliary business at Kaplan Legal Education, where he says digital materials are assigned by default for most classes. “What’s been driving us in a lot of this is we’re an innovative institution.”

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