Combating the Higher-Ed Used Book Market
Mike Shannon is co-founder of Packback, a platform that allows college students to rent e-textbooks.
The higher education textbook market is currently experiencing a period of landscape-altering challenges, which are being met with deep innovation. Developments such as adaptive learning technologies are underway that will truly shape the future of education. However, a major lull in this progress is the revenue lost to publishers and learning companies due to the used textbook market.
Roughly $5.5 billion of the over $8 billion higher education textbook market is caught in the secondary market. This is lost revenue that would otherwise be invested into the development of valuable new learning technologies. Students remain price incentivized to seek used textbooks while the digital adoption rate remains frustratingly low. A lack of digital adoption hinders progress toward the heightened level of engagement between the students and educational content providers that ultimately improves educational outcomes through new product offerings.
There are three primary industry efforts in place to combat the used book market and increase engagement with students through digital products. My company, Packback, spent twelve months working with Chicago-based market research firm, Shapiro & Associates. Together we rigorously observed student learning behaviors as they relate to engagement with educational content. The goal was to uncover precisely why digital adoption has lagged in higher education and thus develop a new solution.
Following is a summary of the three leading industry strategies currently in place to transition students from used books to digital formats, along with the barriers these strategies face in reaching widespread adoption.
1. Top down, "built into tuition" model
In this model, students receive significant discounts on required materials by automatically purchasing content through fees embedded into the tuition for a given course. These prices are negotiated at the institutional level. From a pure cost perspective, this model presents a strong value proposition for both students and learning companies. Learning companies are able to provide steep discounts on course materials given that 100% sell-through rate is guaranteed in the course. When properly implemented, the students win because they are benefitting from low prices on content in a course where the professor is presumably heavily reliant upon that content. Learning companies also win because they are eliminating the used book market threat while gaining revenue, and far more importantly, engagement, from 100% of the students.