Analysts: Textbook Rentals Could Pay Off for Publishers

Textbook publishers moving from print sales to rental programs and digital subscription services may find long-term success, but not without reduced earnings “for the next couple of years,” Moody’s Investors Service predicted in a new report.

The Oct. 25 report, available to Moody’s subscribers, said that shifting to rental models would give publishers such as Cengage, McGraw-Hill Education and Pearson “a chance to generate and sustain earnings while they undergo a larger-shift toward digital-only learning materials." But Moody's suggests earnings may be lower and "less predictable" in the next 18 to 24 months.