“More than half of our annual revenue comes from digital sales, so we decided, much like in other industries like newspapers, music or broadcasting, that it was time to change the way we manufacture and mainly create our products. CEO of Pearson plc John Fallon told the BBC.
The move is somewhat of a doubling for Pearson, who made a major investment in higher education courseware (HECW) in the United States, but still suffered a 5% drop in revenue in 2018. Pearson funded the transition to digital textbooks, online courses. and subscription models in part with high-profile sales from affiliates like the Financial Times and the Economist.
Pearson’s new strategy to accelerate the adoption of digital textbooks is to stop updating printed textbooks, letting them become increasingly obsolete compared to alternatives to e-books. The typical textbook is revised every three years, with Pearson releasing new editions of about a third of its 1,500 titles each year. Now, instead of 500 new editions printed per year, as in 2019, Pearson will only update 100 editions of textbooks per year. Compare this with electronic textbook versions, which will be updated regularly, such as video games.
In a statement, Fallon said the “digital first” model would increase incomes and lower prices for students, so that they “have less reason to turn to the aftermarket.”
The American Enterprise Institute found that textbook prices increased 90% between 1988 and 2016 (even after accounting for inflation), far outpacing other consumer goods and the rest of the book industry. Under the new sales model, Pearson Education says students will pay an average of $ 40 for an electronic textbook, or $ 79 with “a full suite of digital learning tools.” For now, the company will still rent printed textbooks for an average of around $ 60. But the strategy also aims to steer students towards textbook subscriptions.
“For the Netflix and Spotify generation, they expect to rent, not to own,” Fallon told the BBC.
Market Analyst Phil Hill of the Phil on the Ed Tech blog, described the new strategy as a brutal step to cut off the rental market for second-hand printed textbooks. “It’s a bold move,” Hill said Inside higher education. “The risk is that it may further alienate almost all stakeholders by being so obvious in intentions. Students have taken advantage of the used rental market in terms of price, and many prefer print over digital.”
A study published in 2016 supports Hill’s conclusion, concluding that 92 percent of students prefer print to e-books. A 2018 Library Newspaper Survey found more nuanced results, with an overwhelming majority of university and graduate students preferring print for fun or assigned narrative reading, but 45% of respondents said they preferred e-books for research.
The general preference for printed material among actual customers of Pearson’s books suggests that Pearson’s new strategy depends on the captive student market, which will have no choice but to switch to the product Pearson would prefer – a product that the students will no longer be able to own, share, buy second hand or resell.
“There will still be [print] textbooks used for many years to come, but I think they will become a smaller and smaller part of the learning experience, ”Fallon told the BBC, as if it had happened naturally.