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What You Should Know About Publishers and their Amazing Discounted Prices

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According to Pearson’s website, 64% of students surveyed are opting out of buying course materials and this “decision is having a negative impact on [their] choices,” which include “taking fewer courses per semester, not registering for a course, dropping a course, failing a course.” Leeward students reported similar, though, slightly lower percentages in our own textbook survey back in 2015. Our students are making the same hard choices as college students everywhere, even when the choices they make are detrimental to their academic success.

Pearson provides a complex diagram (to view, click the link and scroll down the page) showing the many decisions students make before they actually get their hands on a textbook. The interesting thing about this chart is that it leaves the obvious out of the picture – purchasing a textbook from the bookstore. It’s been clear for a while now that many students avoid the easiest way to get their textbooks because they can’t or won’t pay the retail prices.

Publishers are responsible for this situation. Their sky-high prices enabled by captive markets have allowed them to gouge students year after year.  Students are going through extraordinary means to acquire textbooks at more affordable prices and the publishers are with them every step of the way, erecting barriers to protect their revenue. Is this endless cat and mouse game helping us create the ideal climate for learning?

How is this impacting the publishers and why you should care

The current system is breaking down. Students are choosing not to buy their textbooks and the publishers are feeling the pinch. Revenues for the largest textbook publisher are down by double digits in 2016. According to Coram Williams, CFO, Pearson PLC:

[O]ur US higher education courseware business declined an unprecedented 18%, driven by three factors.

Firstly, enrolments were again weaker than our expectations, driven by pressures in the for-profit and community college channels.

Secondly, we saw a bigger-than-anticipated impact from rental.

And thirdly, and largest of all, at around two-thirds of the total, or 12%, we saw a significant inventory correction in the sales channel.

To recap, enrollments fell, alternative textbook acquisition models rose, and students are not buying textbooks from traditional retailers.

The publishers are responding to the changes in the marketplace. At a February 2017 conference call with investors, Kevin Capitani, President, North America, Pearson PLC, said “the year is shaping up fantastic,”

So we’re actually expanding what we’re doing in terms of how we’re going to attack the market at an institution or an administrator level, in addition to adoption level selling, which will remain incredibly important. But also, more direct to the consumer or the customer and the student. And if we set the business unit in higher ed particularly in that manner, we’ll be able to attack it a lot better, more comprehensive, and drive, let’s say, additional revenue at different points in the year, rather than just the adoption selling at two key intervals at each semester.

Beware of publishers bearing gifts

The digital direct access (DDA) strategy adopted by Pearson North America is one attempt to recapture revenue lost when students acquire textbooks through alternative methods and/or decide to not purchase them at all. The promise is affordability and access, but at what cost?

The language used by OER proponents and the publisher’s is becoming disquietly similar, but clearly the objectives are not. We are educators seeking to impart knowledge and help our students succeed in life. Ultimately, publishers are in the business to make a profit and students are the market. Students become even more valuable customers when they aren’t given a choice. You might say they don’t have a choice now when an instructor requires a textbook, but of course they have choices with used books, textbook rentals, book sharing, course reserves, etc. However, individual freedom to obtain lower priced course materials vanishes with the digital delivery model. Digital course materials are available only through a publisher’s proprietary (closed) platform. They control the content, the delivery, and the access. Sure, they might offer discounted prices, but you have to wonder why they couldn’t offer the same discounts in the first place with print textbooks. And just how long will the low prices last?

DDA programs automatically charge students for course materials at the time of enrollment. It’s not an opt-in, but an opt-out model. The opt-out is presented as a choice, but is it a real one? What happens when a student decides to opt-out? There is no secondary market for used digital textbooks or access codes. Without access to course materials, the student is in same bind as before trying to succeed when one of the essential requirements for succeeding is not available to them.

The sole purpose of DDA is to ensure steady, guaranteed revenue for the publisher. Minimum enrollment requirements ensure that the model also preserves the existing print textbook market. With DDA, publishers promise a near 100% sell-through rate for the program. Let’s say the e-text and platform access is priced at $50 (50% off the price for the print).  For a course with 100 students this will generate $5,000 in revenue.  The print version of the same textbook priced at $100 with a 50% sell-through rate (only half the students purchase it retail) generates the same revenue. The discount offered will never jeopardize what remains of the print market.  In other words, the discount received is in exchange for guaranteeing 100% sell-through rates to the publisher. What kind of bargain is this?

So what now?

Ultimately, the choice is yours. Just know that other options exist for course materials besides the traditional publishers. OER doesn’t require negotiating prices at all.  There are no access codes and the material is available to students indefinitely. You can even customize the material to better suit your students and your teaching needs. OER is developed by dedicated educators who decided that reliance on for-profit companies to develop educational materials leads to unaffordable prices, questionable practices, and lack of innovation. With OER, you are in control of the material, the teaching, and the learning.

If you looked for OER before but were not able to find materials that were satisfactory to you, don’t give up! Ask a librarian for help, they’re excellent searchers. And if nothing is available today it just means someone is hard at work developing great material they will share with you tomorrow.  That’s the beauty of OER, it’s a global collective of educators working for the common good. Lastly, don’t forget to ask your colleagues who made the switch. They are the best people to address your questions and concerns.

OER is becoming a greater threat to the publishing industry, John Fallon, CEO, Pearson PLC:

We’re also dealing with some potentially very disruptive threats. Currently, the negative impact that we’ve seen from OER is small, but it’s growing.

Indeed, OER may still be small but it’s a quickly growing movement. OER enables educators to collaboratively develop and distribute the materials needed to ensure affordable and equitable access to education for all students without compromise.

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