Digital Textbooks
E-Texts and the Future of the College Bookstore
With digital content available in multiple formats for nearly all instructional materials, college and university bookstores are facing multiple challenges to provide the content desired by students and faculty, to reduce the cost of instructional content and to compete with multiple retail sources for this content.
The acceptance and adoption of digital content in the classroom has been a slow, but, progressing evolution. Until all of the components of a successful conversion were available to higher education, adoption had been limited and digital content experiences less than desirable. Now, these components (interactive digital content, fully functional learning-experience platform software, hardware, connectivity and affordability) are readily available and are being piloted and implemented at increasing rates of acceptance and success.
Students are demanding lower-cost alternatives to the current printed textbook and are seeking those alternatives through various means. Out of a hundred students, 50 percent or more don't acquire a textbook because of cost, rather than availability; another 30 to 35 percent seek less expensive used textbooks from college bookstores, online sources, other students or anywhere they find a source. Unfortunately, another small percentage are using "pirated" textbooks or other forms of copyright-infringed content. This leaves 10 to 15 percent of textbook sales in the form of new textbooks.
While these percentages vary among institutions by region, type of institution, program and/or textbook availability, these findings and statements from college and university CFOs and business operations staff are fairly consistent. The current, traditional bookstore model is broken and does not serve student and faculty needs. Too many students don't acquire textbooks due to high costs. Too many students come to class unprepared or acquire textbook content too late in the term (when they can obtain an additional source of funds). Too many students state that their primary reason for dropping courses, withdrawing, taking fewer credit hours and not being as successful in their academic efforts as they desire is the high cost of textbooks and other instructional materials, and their lack of acquiring them.
A Progression of Textbook Providers
1) The traditional campus bookstore. For many years, college bookstores have been operated in one of two provider formats: self-operated by the institution or contracted to a third-party bookstore operator. If institutionally operated, the financial goal is predominantly to be self-supporting and produce a positive net income. Contracted bookstores usually result in some form of a commission structure to the institution. Over the years, both forms of campus stores have experienced much competition from "off-campus" bookstores and, more recently, online textbook sales. Many institutions currently experience far less than half of their potential textbook sales as students seek less expensive options — or more often, don't acquire textbooks at all.
2) Textbook rentals. Textbook rental options, whether via the bookstore or an additional third party, provided the next attempt to lower high textbook costs. All too often, the cost of textbook rentals resulted in a savings only equivalent to the purchase price of the textbook less the average buy-back price, and students only gained an initial reduction of out-of-pocket costs. Many textbook rental programs required the institution to contractually agree to retain the use of that textbook edition for a specified period of time, to attempt to secure the rental provider's ROI. Faculty or departmental committee textbook selection would then be affected by contractual multiyear rental agreements or practices. Lastly, off-campus and online textbook rental sources further diluted potential bookstore revenues.
3) Online retail options. Textbook availability via online sources, both printed and electronic, provided students with another avenue to seek lower costs. Students both praise and criticize these services. Advantages may include "shopping online" with no long bookstore lines, potentially lower textbook costs and access to older textbook additions that may be approved by the faculty. Disadvantages may include the time spent surfing the Internet to acquire all of the student's textbook needs, shipping costs (where required), difficulty in acquiring "bundled" textbook and required supplemental content, the inability to inspect a used textbook before buying (though some bookstores also do not allow students to shop through the stacks to self-select used books), difficulty in dealing with returns and refunds, potential shipping costs on returned textbooks and the possible lack of timeliness in processing online textbook refunds. Again, bookstore's textbook sales were potentially diluted.
4) E-text/e-book options. Prior to about mid-2010, student and faculty evaluations of e-texts were mixed. Many interviewed students and faculty were less than enthralled with early e-text solutions as functionality was limited, restrictions on printing and access time were unacceptable and ADA compliance was unacceptable. Plus, students who used early e-text solutions quite often had to navigate through multiple software platforms, as various digital content may be content-provider-centric or hardware-centric. Online- or offline-only solutions also led to limited e-text use.
5) Open educational resources (OER) and institutional-generated/digital-born content. The validity, quality and effectiveness of OER have drawn varied levels of scrutiny and criticism from some faculty. Current organizations that organize and maintain OER holdings have done much to dispel these concerns. Many OER providers implement the same degree of professional evaluation and content standards as traditional proprietary content. These no- to low-cost alternatives to the printed proprietary textbook or e-text version are becoming more accepted and are receiving considerable attention, especially in public educational systems where legislative mandates are requiring alternatives that will reduce the cost of education for the citizens they serve. Numerous sources of digital courseware, content and supplemental materials are being created and are being sought by progressive institutions. Content aggregators are additionally sought out to focus instructional content to meet the exact needs of faculty. In addition, institutions are encouraging the creation of digital content via their most talented faculty and instructional designers.
The E-Text Business Model
Simple business economics have helped institutions address the business model that best promotes cost reductions for textbooks and instructional materials. No longer are the traditional financial solutions deemed the only acceptable solutions for college bookstore operations. When one addresses three variables — volume pricing, volume distribution and provider cost reductions — the resulting business model has the desired effect of: 1) A major reduction in textbook costs for students, 2) Content providers who are more than willing to participate, and 3) Maintaining the institution's source of Auxiliary Fund revenues from bookstore operations. A win-win-win. Here is the basic eText business model:
Step 1: Negotiate with content providers to offer the institution e-text content and supplemental content at very low prices, in return for a guaranteed 100 percent sell-through (a guarantee that few content providers receive) — not their current 10 to 15 percent share of potential textbook sales.
Step 2: If e-text content is adopted by the faculty and/or the institution and 100 percent sales are guaranteed via collection or assessment of the negotiated e-text costs at the point in time when tuition and other fees are assessed, every student comes to class prepared with the instructional materials to assist them in the successful completion of their coursework. This fee assessment/collection is much like the assessment and collection of traditional lab fees or other "mandatory" fees. Simple drop/add processes are applied to e-text and digital course materials costs (even bundled content).
Step 3: The institution and/or its e-text software platform provider then financially "square up" with the content providers at the end of the traditional drop/add period.
There will be no bookstore lines for returning printed textbooks for dropped courses, no bookstore refunds and no printed textbook/access code/workbook/CD "bundles" to be disallowed for refunding because they were "opened." The cost of the e-text will include the reduced cost of the content (or no cost for much OER content) and the cost of the digital content platform (usually under $10.00 per course, regardless of the number of e-texts and other digital content used in the course).
To protect the institution's revenue stream generated from bookstore net profits or commissions, one simply adds a third cost element, the desired profit replacement. This nominal amount can be calculated by dividing the institution's annual budgeted net profit or commission by the potential number of students in all textbook-required classes for the year. This calculated amount can be added to the fee and is kept by the institution. The important fact is this: Currently, only those students utilizing the college bookstore for textbooks are contributing to the bookstore's sales revenue — often less than 50 percent of the student body. With the new model, 100 percent of the students will potentially be contributing to the bookstore sales revenue. College bookstores also may be able to replace net revenues from textbook-related sales by promoting other retail opportunities and by reducing bookstore operating costs as the transfer from printed to electronic text takes place over time (no shipping, storing, stocking, overstocked returns, buy-back, nor obsolete textbook inventory losses).
Future Predictions
Having addressed many of the issues and challenges college and university bookstores are now facing, one can draw a number of fairly evident conclusions and make a few predictions. I don't predict that the college bookstore will go the way of Blockbusters or other businesses replaced by technology; rather, the progressive bookstore will plan ahead, take advantage of changing textbook technologies and clearly secure its place within the institution. Here are a number of interesting bookstore issues to consider:
1) Conversion time. The conversion from printed textbooks to e-texts appears to be a gradual process. Innovative institutions, faculty and administrators are at the forefront with e-text adoption, while others are slower to the game. The adoption of e-texts clearly needs faculty leadership, support and acceptance. Acceptance among students comes much quicker as they experience the many benefits of a fully interactive, fully functional learning-experience software platform. The majority of institutions currently implementing e-text technology are providing faculty the opportunity to review this technology and participate in pilot projects or elected adoption. Peer experiences and student demand will continue to encourage e-text implementation.
Early estimates predicted seven-plus years to obtain maximum elected e-text conversion. Now, with a number of institutions in their third year of conversion or longer, estimated conversion time has been found to be shorter than seven years where the technology is a priority for the institution, faculty and students, vs. seven to 10 years where the adoptions are encouraged, supported, but not an institutional priority. As the printed, traditional hardback textbook becomes less in demand, more expensive and eventually approaches extinction, the need to adopt e-text technology obviously will become more paramount. Hopefully, institutions that elect to "wait and see" will have the same opportunities to implement e-text technology under terms and conditions most favorable to the institution and the student, rather than having to accept a less favorable solution because of time constraints.
2) Retail vs. technical. Bookstore personnel who are concerned about job security should consider this: As e-text technology expands, so does the opportunity for the bookstore to become a provider of technology-based services to support e-text technology. These services could include digital content aggregation, faculty and student training, e-text help desk services, etc. If one reviews the salary plans at most institutions, technology-based positions tend to command higher compensation than retail- or clerical-based positions. As the conversion from a "Book"store to a Campus Store (or some other appropriate name) takes place, so might the salary levels of the bookstore staff. Other bookstore personnel who are not interested in being trained to assume a new role should have ample time to seek other institutional, non-technical positions during the gradual conversion time to e-text technology. Normal attrition will also assist in any gradual bookstore staff restructuring.
3) Expansion of retail opportunities. Many college and university bookstores are already expanding their retail offerings to address the student demand for more affordable computer hardware, software and peripherals. Many bookstores already have become a focal point for student retail services with offerings from clothing, entertainment, coffee shops, gathering sites, travel planning assistance — any significant student need that can justifiably be met. Continued expansion of these on-campus and online offerings is expected.
4) Aggregation focal point. With the most robust learning-experience software platforms, digital content, in all of its formats, can be combined — "aggregated" — by faculty, e-text content providers, learning-experience platform providers and instructional designers. Why not also by bookstore personnel? They have already been the focal point for book orders and the go-between for the faculty/department and the content providers. It may be a natural progression.
5) Faculty and student training/help desk. Initial and refresher e-text software training, as well as assistance with continually developing e-text features and functions, may find a "home" in the bookstore. Who better has continual access to and contact with the content providers from all sources? Help desk services for e-text software and usage might be provided by bookstore personnel, either to augment the institution's help desk services or to place fewer burdens on the help desk provider, who may be already at maximum capacity.
6) Sales considerations. If an institution elects to maximize cost reductions by adopting a 100 percent sell-through e-text business model, and if the institution elects to add a nominal fee for bookstore services to the low-cost negotiated content and software platform price, the institution may even exceed the net income from previous textbook sales or commissions and "cover" other bookstore operating costs with the gross revenues generated from retail sales other than e-texts. Better to interact with all students rather than 40 to 50 percent (maybe more at some institutions, less at others) of students who currently frequent the bookstore.
7) Consortia considerations. An interesting approach to negotiating e-text costs is that of consortia arrangements. When multiple institutions join forces to seek e-text and supplemental digital content pricing from all forms of digital content providers (proprietary/publisher, open educational resources, institutional-generated and commercially digital-born), the resulting provider responses may just be amazing. What digital content provider wouldn't desire to participate in the following scenario:
- 100 percent sell-through is required in all e-text elected or required courses;
- The institution retains full control over the selection and use of the learning-experience platform and is only requesting the digital content from the provider;
- The content provider can continually expand its e-text and supplemental digital content offerings through the Consortium;
- The Consortium maintains a dynamic Web-based e-text and supplemental digital content "catalog"; and
- Participating institutions control and maintain the consortium activities.
These kinds of consortium efforts have already resulted in textbook cost savings of 65 to 75 percent compared to the printed textbook. As OER use expands, and as institutions seek and create more institutional-generated digital content, the price drops even more. When the cost of instructional materials to the student is as nominal as a movie and a burger, the textbook cost dilemma will be solved.
