I recently had coffee with a dear man that has spent his entire career in textbook publishing. He told me that his industry was essentially “broken”. Of course, this is now a common view of textbook publishing. The industry is dealing with a number of challenges: regulatory changes, reimportation of their products at lower price points, a more efficient second-hand book market, greater costs that come with product customization, piracy and more. The greatest threat to the industry, though, is the rise of substitute products – to use the parlance of economists. Increasingly, college Instructors are turning to freely available content from the Net to supplement, sometimes outright replace their textbooks. The competitive landscape of textbook publishing has changed and it’s not going to get easier for the traditional parties.
However, I think it’s possible for the industry to regain the advantage that made them such a strong presence for decades in education. To do this, publishers will need to determine how – given the new market conditions – their competencies, brand and infrastructure can produce a competitive advantage – and to ensure that this new market position meets the needs of the new higher education market. Easier said than done, right? I think, though, the same logic and value proposition that gave rise to the industry will ultimately be the means by which publishers once again establish their place in higher education. Let me attempt to unpack this before I get anymore abstract.
Let’s start with the twin foundations of the industry: the rise of common curriculum that came with public mass education, and the capacity of the industrial model to produce content for this common curriculum at prices below what is available by other means. It is the latter condition, the industrial model of production and distribution, that can form as the basis for publishing’s future competitive advantage.
Other than textbook publishing, content in higher ed is produced in a “cottage industry” manner. The bulk of the responsibilities for course design and development falls to the individual academic. And the content created in this manner is then used in a single course in the host institution (exception: large proprietary colleges). The content is not typically sold to other educational institutions that offer similar courses.
There is, then, a sharp limit on the investment that can be made in the development of course content in the “cottage” model. Without economies from scale (i.e., volume), investment must be restricted to the revenue generated by a single course. (Indeed, in some universities, it is not uncommon for there to be two versions of a single course because more than one instructor teaches it.)
The cottage model actually lends itself very well to the creation of articles. This form of instructional media is traditionally created in relative isolation by a single academic; it doesn’t require the involvement of a wide range of experts. The tasks involved in writing articles aligns perfectly with the skills and expertise traditionally required (and rewarded) of academics. Unlike other types of instructional media, the production of articles is supported by the university (i.e., writing is part of the academic job description). It is not accidental that the overwhelming majority of content shared between academics takes the form of articles, despite the multi-media properties of the Net.
The development of shared repositories of content (e.g., Merlot, Connexions, MIT-OCW) does not solve the limits of the cottage model. The majority of the instructional content on these sites is produced in this same cottage fashion. The repository model only addresses the access problem (distribution), not the quality problem (production and finance).
The kind of educational media that the cottage model cannot provide – rich media – will increasingly be in demand. My use of the phrase “rich media”, here, refers to high-production value audio, video, animations, edu-games and the like; used for both social interaction with other learners and for independent learning. Rich media has two requirements: (1) significant investment with a sustainable business model (return on investment) and (2) the talents of a wide range of professionals. In other words, the industrial model.
It’s theoretically possible for colleges to develop rich media and sell it to other schools. And there is some work being done in this area. However, the inability of our colleges to create rich educational media reflects the realities of higher education. Bringing university content to the market means addressing faculty IP issues, the traditions of faculty control over academic processes, developing a “go-to-market” capacity where little exists, and more. Nor is it likely, given the employment practices of most colleges and universities, that the institutions could compete on price with private sector providers.
Publishers need to recognize that the water level is rising; that basic text content is going to be increasingly available from other sources. The tools for creating, distributing, locating and managing basic text is improving rapidly. More and more content from academia is being made freely available to the public as “open content” becomes an expectation. Despite these conditions, the majority of investments in traditional publishing remain focussed on text-based content (whether print or digital) – exactly where its competitors offer a meaningful alternative.
By focussing on rich media, publishers return to the essence of the strategy that made them such a grand presence in the first place: offering products that are otherwise not available to their clients. And in doing this, they will move toward where the market is growing. In the next 3 to 4 years, the demand for rich media will grow quickly, particularly among online schools (and within that group, most intensely among proprietary schools). This growth in demand will be driven by a number of factors:
- Growing competition for students, particularly among online programs
- Content represents one of the few ways in which a college can offer a tangible (and thus marketable) difference (See Lloyd Armstrong’s piece on quality surrogates in higher education).
- Discriminating students that switch institutions at increasing rate
- The drive for productivity in higher education brought on by funding deficits will lead to increased interest in courseware that lessens the institution’s dependence on faculty labour (which incidentally, has served as the value-proposition of publishing for decades)
Change in publishing won’t come easily. They are being pulled in two directions at once. On the one hand, their investors expect them to “go digital” as soon as possible (no one wants to own stock in a print company these days). On the other hand, the demand for strong quarterly results encourages them to stick to their core business of print textbooks, which still constitute the bulk of their earnings. (One of the major publishers boasts having 95% of their inventory in ebook format, although the industry-wide market for ebooks still resides south of 5% of sales.)
Nevertheless, I don’t think that traditional publishing can afford to rely on its current product mix. In order to maintain their relevance they will need to return to the fundamental value-proposition that made the industry viable in the first place: by providing their clients with what they can’t or won’t provide for themselves. In the past, this need was limited to clearly written, well-researched, peer-reviewed content. Today, content of this type is being increasingly satisfied by other, cheaper means. Publishers need to respond to this challenge by moving up the digital content “food chain” and to focus on the development of sophisticated educational media that takes full advantage of the properties of technology. Fortunately, for publishers, this kind of media can only be produced consistently and at a desirable price point through the industrial approach – the very model that they introduced to education.