Using the book by Jeff Jarvis called “What Would Google Do?” as our standard, we will look at different companies currently existing and go over what you could do if you are trying to compete with the big guys. This week we analyze how the textbook industry makes it’s money and figure out how one can make textbooks and education more open.
What is the Current Market Analysis? Textbooks are expensive and textbook companies as well as schools and colleges make a killing in selling physical textbooks to students. They use tactics like yearly additions in order to bolster sales and loose money due to a large behind the scenes textbook resale market.
What is the Current Market Problem? It’s hard for college students to afford textbooks and even harder for highschools and middle schools to purchase them and keep up with the latest edition. Textbook info is usually outdated and no one legitimate is willing to canabalize their own pofits in order to fix it. With textbook prices ranging between 50 to 200 dollars, and the manufacturing cost only being around 5 to 15 dollars, you can see why they like those kind of profit margins.
What is the Current Market Solutions? The market is excited about the possibility of things like the iPad being the alternative and have already started building applications for both iOS and Android devices in an attempt to enter this market. This solution is near sighted in that both the cost of these devices will take years to address and most textbook manufacturers still wants the school or consumer to pay the same amount of money that they pay now for a textbook but as a digital product.
What is the Industry Core Business? If you remove the book printing side of making text books which many text book companies still think is their core business but is usually outsourced to a third party anyway and you remove the overwhelming price placed on a textbook that we all know is not sustainable over the long haul with more and more schools looking for a cheaper alternative and more and more students wanting a lower price, what exactly does a textbook company do anyway? They simply provide a learning tool for schools to use when they come up with their curriculum and with the advent of the internet much of this data can be found online anyway and much of it is either more up to date online than in a printed textbook as well as cheaper to get at.
What is the Industry Myths? The industry and the schools that support that industry think that the reason for buying a textbook over getting the same information online is because of peer review, they are assured mostly by the textbook companies that these issues have only the information that has been researched and agreed upon by the experts in the industry the book covers. Yet in many cases because of this need to rush a new edition to market, it’s pretty common that books come out with mistakes and in an attempt to get a totally new addition out many companies release information that has to be removed later on due to inacuracy. As many who buy and sell textbooks know, it’s a completely inefficient business practice but because of the high profit margins very few are interested in changing it.
What is the Industry Cannibalization? When you think of a textbook company as providing learning tools for schools and students to base their curriculum around, then you need to really consider what parts of your business still needs to be there and which are worth canibalizing in order to grow the business further. In an industry that is famous for backroom dealings and special gifts granted to school boards and university presidents for special consideration when their organization is ready to make a large order or assign a certain book to a certain class, it’s hard to suggest that textbook companies get out of the book industry all together and focus their efforts in the information business but this is what is needed.
What is the Industry Competition? With groups like the Open Textbook Consortium (http://oerconsortium.org/discipline-specific/) and OpenTextbook.org who provide valuable free textbook information, it’s hard to believe that a textbook company can exist just in information alone. Many attack sites like Wikipedia and other user generated content as sub par and thus not fit for scholarly or university consumption. The point to make here is that someone who wants to enter this industry and upset the establishment has to look at it both from a utilitarian point of view as well as a political one. Much like the legs of a tripod, one can enter this industry strong and compete but first they must consider which legs to take down before removing the giant from it’s pedestal.
How to make it an Open Business? I think an Open Textbook company will embrace these initiatives like the Consortium and others as a source of information but will also provide their own internal network of data as an addon bonus to doing business with them. This bonus could include automatically updating schools and students with updated versions of their product when done in an electronic format or even providing free online tools as many already do to purchasers that compliment the purchase. These tools can include giving schools an online system for teachers to give their students homework if they choose that can be done electronically or providing teachers with fun in class ideas that don’t necessarily come with the book in the cases of classes that are considered boring like science and math allowing teachers to choose how they wish to use your textbooks verses just forcing them to follow your schedule. Not numbering your texts into chapters but instead using titles also helps teachers better plan their students reading requirements choosing to remove entire chapters from your work if they feel it’s unecessary for their class.
Automation is also key, textbook authors are also a large reason why the books are so expensive at times as companies try to hire the smartest and most well versed experts in the field and this comes at a hefty cost per book. Focusing on a system of shared information verses a single textbook author writing each and everybook may not be the most prefered method of right now but it’s where this industry needs to eventually get to in order to keep up with the change of pace in information. Whether that’s a system that automatically turns the information provided by these systems into a readable PDF that can later be printed or reproduced electronically without the need of an editor working with each page and wasting time making sure the “book” looks right is one thing.
Another important point is making sure that their focus is more on the interactive rather than the physical so in many ways the textbook company might sell the school cheap ebooks like the Ectaco Jetbook http://www.jetbook.net/ or something more akin to a tablet pc like the iPad or an Android based tablet for wealthier institutions with all the textbooks they need alread in them or as well as have the ability to sell these to students who may want to pay more for an iPad than to get the free cheap ebook from his school. What’s important to understand here is that you are selling a much needed service to a school that allows them to focus less on the textbooks themselves and more on the material in them. Automatic updates allow of content allow schools to make changes themselves if they wish to the content or request the company make the changes to future editions more quickly than the physical hardbooks of today.
Also price point becomes the biggest issue, just like in any other digital good like music or movies, books that essential start and are sold electronically need to be at a low enough price point that prevents piracy and allows universities and grade schools to be able to look at it and see it as affordable. Dropping your price too low may at first may prevent people from wanting to do business with you because they think your product is too cheap but your ultimate goal should be to reduce your price to the lowest possible point short of loosing money all the while allowing for the largest distribution possible giving you full integration into most schools and universities as possible. You ultimately don’t want to be the biggest textbook seller, you want to be the most available and influential source of information in an industry schools that prides itself in reputation and saturation.
Now you still want to provide physical books for those that prefer them but by creating an automated system for publishing PDF documents from the information that is always updated means that you can have a third party publisher like Lulu.com and others who focus on as needed publishing and since this is not your core business anymore you shouldn’t worry to much about the profits you are making from this side of the business. This is merely an extension to the service you provide for schools and allows them to transition from the old school world of printing books to the future of electronic book readers and tablets. Thinking distributed is one of the most important things to do in an industry where most of the companies try to do everything in house.
Finally making your textbook business more open means allowing for an openness of how you do business and letting both your customers and those who use your products know that you are doing your best to provide them the most modern system available while still ensuring them that they are taking the best path necessary to grow their school and their student’s learning experience. You need to show them that you will be there for the long haul so that they feel they can invest in your company since schools and universities are some of the oldest organizations in the country. In the end this is a sensitive subject as we are talking about the destruction of an entire industry that is so vital to our infrastructure, but only when new ideas are formed and invested into businesses that work can industries be changed for the better. Let me know if you are in the textbook industry and like or plan to implement any of these ideas or if you are against them, either way we want to hear back from you.