Lower the Cost of College Operations or Else: Ideas on Preparing for Digital Textbook Delivery

The higher education conference season is in full effect. I attended an ed tech conference called UBTech held by University Business magazine earlier this month in Orlando, Florida. This was my first time attending UBTech, having formerly mainly focused on the CampusTech conference. UBTech had a good mix of college and university chief technology officers, chief information officers, chief financial officers, and similar roles. It also attracted ed tech companies, textbook publishers, bookstore services providers, and other organizations in the industry.

A central theme in Orlando this year was reducing college operating costs to manage net revenue. Speakers called out that the higher education business model and delivery system appears broken. Particularly at those institutions that are struggling with revenue generation. Why do we continue to push a traditional college delivery model in areas where technology is clearly positioned to disrupt (yes, it is overused, but you get the idea) business-as-usual? For my part, I spoke at a session about trends in bookstore services and textbook delivery. My session attracted a diverse mix of college CTOs, CIOs and CFOs, as well as publishers, our textbook rental partners CampusBookRentals, and some friendly competition by way of bookstore service operators like Follett and Rafter.

The data I presented contrasted how college technology officers and financial officers see the future of the college bookstore. For example, while only 18% of college business officers in our textbook delivery survey stated college bookstores will sell textbooks completely via their online store, 95% of college technology officers we (more informally) surveyed at UBTech see the future of textbooks as delivered completely in an online bookstore. Now, given we were at a tech conference, I am not surprised. But the technology folks also noted they are ‘not so much’ involved in decisions about the bookstore. Which leads me to the question, Why are our CTOs and CIOs not more involved in the selection of bookstore service operators and strategies?

I usually approach conferences as an opportunity to listen. I might come prepared with a leading question or a thesis I am trying to get feedback on. This year, it was definitely about asking how involved college CTOs and CIOs are in textbook delivery and bookstore services. But also, and perhaps more nuanced, how much do they want to be involved, to be included in the textbook dialogue?

Those that attended our UBTech session were self-selected in that they chose to attend a session about bookstore services, so with that, are telling us they want to be more involved. But overall at the conference, most tech folks I spoke with shared that they were somewhat neutral on the topic of bookstore services. But they were quick to offer that online delivery is the way to go. In my session’s group discussion, the majority of schools shared that they have brick-and-mortar components to their textbook sales process. They also said that one of the biggest drivers to building out bookstores in the future is the eventual adoption of digital texts by students and faculty. Our contemporary at Follett estimated that number at an average of 10%, while Rafter and CampusBookRenters had less information on digital text adoption, likely because the rental market focuses more on physical textbook delivery. Everyone from vendors to schools agreed that eTextbook adoption was doubling each year, though still at small numbers.

But if eBook adoption is doubling year-over-year at colleges, when eTextbooks do indeed reach the tipping point, the mass adoption of digital texts by college students will happen “fast and furiously” (to quote the keynote speaker…more on that in a minute). The colleges and universities in my session said this was one of their biggest concerns—they want to be prepared when ‘digital happens.’ So while competition by third party sites selling textbooks (such as Amazon) was a dominant concern for CFOs, digital textbook adoption was the clear driving issue for our information technology officers.

Now on to that keynote address I mentioned. The opening keynote was delivered by Gene Wade, co-founder and CEO of UniversityNow, was well received. I’d heard of UniversityNow before but didn’t really know what they did. Here is the gist:

UniversityNow identify themselves as a social venture whose mission it is to ensure that a quality higher education is available to people everywhere. They manage Patten University and New Charter University, both online institutions serving predominantly working adults and offering course delivery within a somewhat new paradigm. For example, one set of instructors teaches you, while a different set grades you (anonymously). Tuition is based on how long it takes to complete your program (typically about 2-3K a semester for as many classes as you can muster). Learning is self-paced. Exams aren’t “unlocked” until students can show within the LMS that they have mastered the skill sets needed to pass them. Classes are held completely online. Course materials are digital.

Mr. Wade shared that MOOCs have made going to school online “sexier,” but that they are not addressing the market need (eg., a call center employee who is getting left behind because he or she does not have a bachelor’s degree; and needs a convenient, affordable degree that represents key learning competencies learned). According to the speaker, UniversityNow’s flagship school, Patten University, costs 11x less than a 4-year private school. At some schools, cost of operation, of delivery, is higher than net tuition coming in. His point was that we need to lower the cost of delivery or else.

His most powerful message? That five years from now, most colleges and universities will be dealing with “the wreckage.” Schools like UniversityNow are happening (as its namesake suggests) now. His metaphor…the rest of world will go straight to cell phones while ‘old schools’ will be dealing with their outdated land-line systems. And, of course, what is that cost of that?

If college bookstore administrators want to be ready for the move to online textbook delivery, they might consider the parallels of planning for online course delivery. The MOOCs and SOOCs are indeed coming. If schools can equate online course delivery with online textbook delivery, and maybe capitalize on the popularity (and hysteria) of MOOCs in order to frame the strategies for digital textbook delivery, we think they can be well prepared to build an innovative yet practical vision for the college bookstore of the future.

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Breaking News: GAO Releases HEOA Textbook Affordability Provision Report

The Government Accountability Office (GAO) today released its report on the implementation of the Textbook Affordability Provision of the Higher Education Opportunity Act. The report was released on-time (early, even) and comes two years after the provision was passed.

The GAO found a majority of colleges and universities stated they do provide textbook information online, though the report was unclear the number of schools the data represents.

  • 81% – schools provide textbook information online
  • 19% – schools DO NOT provide textbook information online

Of the schools that did not provide textbook information online, 12% stated they included textbook cost in tuition or fees.

The GAO report also noted that publishers stated they are disclosing the textbook information required by HEOA (such as pricing and format options) and are also offering unbundled course materials. But according to the report, “stakeholders GAO interviewed said these practices have had little effect on faculty decisions.” Faculty interviewed by the GAO shared that they prioritize “selecting the most appropriate materials for their courses over pricing and format,” which is no surprise and is as it should be. Faculty also added “they are more aware of affordability issues than they used to be,” though there was no data to judge progress on faculty awareness.

GAO also shared feedback from students they interviewed that “students have benefited from timely and dependable textbook information” such as having “sufficient information and time to comparison shop for their course materials before each academic term.”

Overall, the report made no recommendations, but in noting that they stakeholders they interviewed believed these new textbook affordability practices were not impacting faculty adoption decisions, underscores the lack of significant data that could track whether faculty have indeed received textbook information such as costs, and whether faculty have weighed this information in their textbook adoptions.

The Textbook Affordability Provision (SEC. 133 of HEOA) was passed in 2010. Its purpose is to ensure that students have access to affordable course materials by decreasing costs to students and enhancing transparency and disclosure with respect to the selection, purchase, sale, and use of course materials.

GAO was tasked with reporting on implementation by institutions of higher education, college bookstores, and publishers, with a focus on the availability of college textbook information on course schedules; pricing information to faculty publishers; use of bundled and unbundled material in the college textbook marketplace; and implementation of the provision by institutions of higher education, including the costs and benefits to such institutions and to students, all on or before July 1, 2013.

 

 

 

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