To contemplate where the market for digital classroom materials may be heading, it’s helpful to consider the recent history of trade books. As Jason Epstein has recently recounted, the main revenue and profitability for traditional trade publishing—general consumer and professional titles—had long been centered on backlists: for while these older titles individually may not have sold many copies at any given time, the vastness of the backlist titles assured publishers of a steady stream of revenue from the collection in aggregate.
Trade publishing, then, to use a more fashionable term, was largely a “long tail” business. As Epstein points out, this changed rapidly beginning in the 1980s as bookstore chains pushed out small bookshops. The bookstore chains are discounters and often occupy expensive suburban real estate (such as shopping malls). Unlike the small bookshops that they replaced, the chains’ business depends on moving books in high volume. And so while publishers were preoccupied with the tail, the dominant booksellers focused on the head, that is, the bestsellers. Publishers have likewise adjusted their business to accommodate this new reality and now we find that a very large portion of revenue from the major publishers comes from a relatively small group of hit titles.
Internet sales were, of course, non-existent in the 1980’s and hardly noticeable through the 1990’s when these dramatic shifts took place. Yet it is crucial to recognize, as Epstein does, that online book retailers—beginning with, but no longer limited to, Amazon—stepped in to fill the role of selling the backlist catalog. The vastness of the online retailers’ catalogue (our own includes more than six million titles) meant that publishers would once again have viable channels for backlists. To be sure, the early days of ecommerce still could not return publishing back to the pre-1980’s, if only because, even today, it accounts for a minority of book sales.
The educational publishing business is a crystalline form of the trade publishing industry: while trade book publishing has consolidated and the most profitable titles have narrowed, this is even more strongly the case in educational publishing. After consolidating in the past thirty years, the core textbook business is now dominated by five large publishing houses each competing for adoption of high volume introductory classes of the most popular subjects, with a special focus on the high enrollment institutions—a competition so intense that some, for example Pearson Education, maintain two distinct imprints (Addison Wesley and Prentiss Hall, each with separate management) just so that they can always have at least two dogs in the race in the key adoptions.
Seventy five percent of the roughly 16 million college students in the US attend just 500 colleges and this is the focus of textbook publishers’ efforts. Today, their higher education business depends on the lifecycle of adoption and planned obsolescence (edition changes every two or three years, often primarily to reduce used textbook sales) in introductory classes at 500 schools.
Like trade book publishing, this transformation of educational publishing took place with little regard for ecommerce, much less for a digital “turn.” For both trade and educational publishing, the forces that shaped them into their present form were “on the ground”—in the shopping malls and on the campuses, respectively, long before they were inscribed with the epitaph “bricks and mortar.”
Ecommerce has enabled backlists to enjoy a revival; there’s little doubt that, as a second phase, digital distribution—ebooks for the trade industry—is furthering this revival. So far, however, the effect of ecommerce on educational publishing has largely been a negative one, for it has made the used book market, rental programs, and textbook exchanges more efficient. And while this has done a lot to lower costs for students this efficiency has come at the cost of forcing publishers factor in ever-greater used book sales when pricing, and planning the production for, their own materials.
Will traditional educational publishers reinvent themselves in order to embrace the technological changes that threaten their business model? It’s certainly an opportunity open to them but the history of technology suggests otherwise. As Epstein notes, “Technological change is discontinuous. The monks in their scriptoria did not invent the printing press, horse breeders did not invent the motor car, and the music industry did not invent the iPod or launch iTunes.”
In Epstein’s view, “A separate, self-financed, digital industry will coexist with and over time replace many functions of the traditional [publishing] firms as the logic and the economies of digital technology increasingly assert themselves.” While it’s unlikely that traditional educational publishers will be replaced on a large scale in the near term, there are abundant opportunities emerging now for new entrants in this market and I believe that some of these—to benefit of all the members of educational institutions—will be successful.
In my next post, I will take up what this digital industry might look like for educational content. Educational institutions—its administrators, faculty, and staff—are not usually early technology adopters. In my view, however, the digital wave now upon us can fundamentally change the perceived value of the content such that considerations for budgets, academic excellence, and student demand will conspire to open an entirely new way of producing, accessing, and using classroom materials.