(This article was published previously at Six Slides.com)
The current economic crisis is proving to be a game-changer in many industries. Car makers are re-evaluating their new car models and their expectations for sales. Financial institutions, beyond hoping for mere survival, are being forced to change their assumptions about profitability and regulation. Around the world people are evaluating the old way of doing things in business and trying to find the right paths for thriving in a world with new and different rules.
Textbook publishing, particularly in Higher Education, is certainly not immune from the changes heralded by changes in the global economy. By way of brief example, consider what my wife and I heard his past week.
A friend of ours — an associate professor at a large public university — has been assigned to a faculty committee charged with setting per-course spending limits for textbooks. The committee’s mandate, it seems, originates primarily from increased student pressure over the cost of course materials. This pressure isn’t new, mind you, but it has heightened severely due to the financial difficulties faced by so many families.
One of the things that shocked our friend most — she teaches upper-division courses with relatively low textbook costs — was the actual prices students pay for new course materials in many of their classes. She was shocked that students can pay as much as $200-$400 for new course materials for some required classes.
The first thing that I want to point out is that our friend’s reaction is actually validation of what textbook publishers have been claiming for years — university faculty are quite complicit in the price of new course materials.
While students actually buy the materials, it is the faculty who select the materials to be purchased. And, the reality is that price has not been much of a determining factor for selection by many faculty members in the past. My experience has been that most faculty members have been largely unaware of the actual price being charged for course materials.
I am not suggesting, however, that faculty are ultimately responsible for the price of course materials. Rather, I am merely pointing out that instructors have been participants — along with textbook publishers, bookstores, and institutions — in the escalation of the costs.
The good news is that the academy in general seems to be waking up and institutions along with their faculty members are taking increasing responsibility for providing solutions to a problem that has gone largely unchecked.
I bring all of this up because our friend’s experience is not unique. A number of universities in the Unites States are hoping ti set price limits on course materials. This, of course, is in addition to legislation in many states that attempts to enforce processes that will help keep the cost of course materials down.
The result, of course, is increased “squeeze” on the textbook industry. The harsh fact is that fewer new print textbooks will be sold in the future and that prices of books will level off and, in many cases, decrease. In this scenario of lower unit sales and prices, increased revenues cannot be maintained simply by raising prices. In addition, channels of production and distribution are changing rapidly and textbook companies are under pressure to remain competitive in a changed market landscape. Finally, textbook publishers may not want to believe it but the customers themselves are changing. Actually they have already changed.
The economy will not change overnight but textbook publishers will need to respond decisively to the new market challenges in order to remain viable. Here are some systemic changes I believe are necessary if they want to survive the next decade and maintain some level of fiscal health.
- Move to a turnkey digital environment that places priority of digital rather than analog — Like newspaper and other publishing entities, textbook publishers have struggled with the simultaneous existence of highly-individual print products and templatized digital products and production. To date, companies have championed the print process with which they are familiar (analog), and simply added digital extensions to that process. This has provided them with digital products but not true digital processes. As a result, internal costs are too high and cannot be lowered without significant changes.
- Adopt common, open, and customizable product templates — Ask any textbook publisher and he or she will tell you that the value of his/her company is in its brand and content. And yet, extraordinary costs are driven by individual product (i.e. book) differentiation through unique layouts and cover designs. Like the newspaper conglomerates, textbook publishers must find greater efficiencies through less product individualization and smart templatization.
- Adopt open models of distribution — Another problem facing the textbook industry is that each company is trying to own or control their content as well as the means of production and distribution. This philosophy leads to a continuous churn and re-inventing of the wheel. In order to be successful, textbook companies need to focus more on partnership and existing models of distribution. Trying to control the channels has not worked for any company in the overall media industry and will not be a long-term solution for textbook publishers that thrive.
- Become dynamic instead of static in terms of product vision — Current textbook publisher models are built around the creation of content for print products. These models are generally two to three-year cycles and view content as static and fairly immutable. Moving forward, textbook companies will need to re-invent their processes and concepts of product with a focus on learning materials as dynamic constructs that can be revised and updated as needed and customized instantaneously based on consumer demand and community focus.
- Build real communities with customers — The current approach by textbook publishers is to drive textbook sales by focusing on committee adoptions at larger schools by selling and marketing aggressively and by signing up authors form those schools. In a nutshell, it’s about influencing individuals and it is an expensive process. Moving forward, textbook publishers would be well advised to start building real community partnerships with educational institutions across the board. To be clear, I’m not talking about lip service to partnership for the sake of closing a large adoption — I’m suggesting that textbook publishers form new kinds of partnerships with their users and communities that provide needed services and information, much like successful Web companies (including some newspaper and magazines) are starting to do.
The biggest challenge to effecting changes like the ones listed above is that tit would require textbook publishers to overhaul their accounting systems, sales organizations, and general company structures. Carol Bartz at Yahoo can probably tell us a thing or two about how difficult real company change can be. It certainly ain’t easy.
In the end, however, textbook publishers aren’t any different than other companies whose survival is challenged by the economic shift. The old way was destined to be replaced eventually. It just hapened sooner than folks thought it would. Now is definitely the time for change if companies want to be viable within ten ten years.
Source: Rob Reynolds