Cengage Learning, one of the major textbook publishers, announced last month that it has accumulated a million subscribers to the subscription college text content service, Cengage Unlimited, that it launched for the Fall 2018 semester. Students can subscribe for $120 per semester or $180 per year, with print textbook rentals available for a flat $7.99 each. The fast uptake of Cengage Unlimited — faster, the company claims, than Netflix, Hulu, and Spotify — indicates a tipping point in a segment of the publishing industry that’s been ripe for disruption for many years.

It all stems from the perverse economics of textbooks. College professors adopt textbooks for their classes and in many cases only assign a few chapters to the students. Some professors are often oblivious to the fact that textbook prices have been rising much faster than inflation, and students have no choice but to buy them even though they typically only need them for a semester or two.

Several phenomena have arisen in response to this. The oldest is the market for used and rental textbooks — which, thanks to the Internet and services like Chegg and eFollett, are just a click away in a competitive market. Publishers have tried to put out new editions of textbooks as often as possible, to make the old ones obsolete, but that’s expensive and doesn’t scale. More recently, professors have been adopting open or publicly available materials instead of traditional text materials. (And on more than a few occasions, professors have distributed unauthorized copies of textbook chapters.)

Until now, publishers’ responses to this have been tepid and incremental, such as distributing e-textbooks with the option to have them expire (through DRM) after a semester at lower prices. Publishers have also wanted to migrate college text material from print and e-books to pure web-based content so that students must always pay to access it, but that process has proven to be too long and difficult.

The “holy grail” solution to this problem has been to create a Spotify or Netflix-style service for e-textbook content by aggregating titles from multiple publishers and offering them in a single service. (I worked with a startup that attempted a rudimentary version of this back in 2001.) There are many huge obstacles to this, such as unifying its structure and metadata into a coherent scheme and clearing all the rights; but there has been an implicit understanding that you need content across a range of publishers to make such a service relevant.

The furthest that the industry has gotten towards this goal has been CourseSmart, a joint venture that six of the largest college textbook publishers founded in 2007. CourseSmart sold e-textbooks online and supported semester or year-long e-rentals. In 2014, the company was sold to Ingram, the giant distributor and publishing service provider, to be integrated with its VitalSource platform; but publishers didn’t allow all their titles to migrate to VitalSource.

Meanwhile, the textbook industry has consolidated over the years so that five publishers control the vast majority of the higher ed market: Pearson, Wiley, McGraw-Hill, Macmillan, and Cengage. This has made it more feasible for a subset of them to offer a set of content in a single service that’s meaningful to course instructors and public college administrators.

Cengage declared bankruptcy in 2013 and thus was in a position to take more risks than usual as part of its reorganization plan. In launching Cengage Unlimited last summer, it hoped to undercut the move to publicly available or open-licensed content as well as the used textbook market. Cengage provides a calculator that students can use to determine whether they can save money by subscribing to Cengage Unlimited based on the actual courses they are taking. It’s positioning the service as an antidote to the spiraling costs of textbooks. At the same time, it’s marketing the service to course instructors who bridle at the thought of being coerced into adopting any specific material; it reassures them that they can recommend Cengage Unlimited to their students while still being free to adopt whatever curricula they want.

Of the several risks that Cengage has taken, two in particular are major. One has to do with the gargantuan task of clearing rights to material from thousands of authors over a long period of time. Cengage decided to launch the service with all of its content and not allow authors to opt out. Undoubtedly, much of the content was written under author contracts that did not envision this type of usage. Sure enough, authors have filed (and settled) purported class action lawsuits against the publisher, and it has started an effort to reach out to authors proactively to settle royalty claims.

The other big risk is that of using its brand name to attract faculty and students, despite the fact that book publishers’ brands rarely mean anything to readers. (Imagine a trade e-book service called Hachette Unlimited with only Hachette titles, or a streaming music service called Warner Music Unlimited. Actually, some of the major record labels tried this in the early days of digital music, such as Universal’s BlueMatter, but those were primarily intended as experiments.)

The returns that Cengage hopes to get from these risks are not immediately clear. Cengage may be running Cengage Unlimited as a loss leader in the near term to build up its brand. It may have figured that even with only its own content available on the service, it can benefit financially by drawing market share away from used textbooks and free online content. Or it may intend to attract other major textbook publishers to the service and build the multi-publisher “holy grail” service. O’Reilly Media did something analogous with its groundbreaking Safari Books Online service for IT-related content – which it started in 2001 and which today features content from dozens of other publishers.

Book publishing is one of the last – if not the last – media industry segment to embrace subscription models. (Many indie publishers have licensed their titles to subscription services, but most of the majors haven’t.) As I’ve discussed for trade publishing, there are various logistically-based reasons for that, such as how hard it is for consumers to create their own digital copies of print books (as opposed, say, to music CDs). But one big reason is that book publishers haven’t been hungry or hurting enough to take the risks that Cengage Learning is taking now. If Cengage Unlimited continues to grow in adoption, then other publishers will probably consider the risks to be lowered and join in.