UC Davis’s Plan to Disrupt Textbook Publishing

We are entering a period of real disruption in the textbook publishing industry, as the major textbook publishers are finding out that their strategy of continuously raising prices isn’t working anymore. As we saw a couple of weeks ago, Pearson’s new strategy includes taking over relationships with professors and students instead of ceding them to intermediaries such as college bookstores and third-party services. But now universities are emerging as another type of intermediary that could remake the dynamics of the industry.

The University of California at Davis is building a new course material distribution program called Equitable Access. The basic idea of the plan is to inject predictability into textbook pricing so that students pay more or less the same for each course, regardless of the subject or major. UC Davis will manage delivery of materials to students and limit the prices that publishers can charge for each title.

The basic bargain for publishers is this: UC Davis will guarantee publishers up to a fixed amount of money — currently envisioned as $20 — for every student in every class that adopts one of the publisher’s books. This would replace the status quo, in which only a few students actually buy new textbooks, while the others buy used, obtain unauthorized copies, or do without. UC Davis argues that the vast majority of publishers will make more money — in some cases much more — this way.

The default mode of delivery in Equitable Access is e-textbooks; print will be available only for titles that aren’t available digitally. The system will be run by VitalSource, a division of publishing services giant Ingram Content Group that has been in the e-textbook distribution business for several years. Unlike previous e-textbook platforms such as CourseSmart, it will be integrated with other systems such as the university’s learning management system (LMS), which tracks students’ course enrollments, grades, and so on.

The $20 per student per title target contrasts with Pearson’s newly announced digital-first strategy, which will make e-textbooks available for an average of $40 per title, and Cengage’s Unlimited service, which charges students $120 per semester or $180 per year for all the e-textbooks they need (as long as they are Cengage titles). UC Davis is currently negotiating with publishers to launch the system in fall of 2020.

UC Davis started this initiative because it found that course materials were the only student costs that it couldn’t control. The majority of students at the school are on full financial aid packages, which include coverage of other fees such as student activities, recreation, and health insurance. Textbook prices are the only variables, and the astronomical prices of some titles can be barriers to some students being able to afford to major in fields like science and engineering.

So UC Davis decided to price text materials like health insurance. Just as every student pays the same health insurance premiums whether they are healthy or have serious illnesses, under Equitable Access every student will pay the same for course materials whether they major in literature or mechanical engineering. (UC Davis will encourage but not require faculty to adopt Equitable Access materials.) In fact, UC Davis hired the same actuarial firm to figure out the economics of flat-fee textbooks that it uses to calculate health insurance premiums. If the university makes an excess of revenue on text materials in a given year, it will simply roll the excess over to the next year, and the actuarial firm will figure that money into its calculations.

If a critical mass of universities adopt this model, it will shift the dynamics of the industry so that universities control distribution channels, with VitalSource or another third party as their service providers, instead of college bookstore operators like Follett being in control. (In a way, this would take universities back full circle to older days when they each operated their own campus bookstores and had their own relationships with publishers — before they outsourced all those bookstores’ operations.) It will also thwart plans that the major publishers apparently have now for taking control of distribution channels themselves. 

Yet Equitable Access is in early days. So far, just two other universities have announced plans to adopt models similar to Equitable Access.

Nevertheless, widespread adoption of models like Equitable Access has implications for publishers beyond pricing and distribution channels. More and more course instructors have been moving from expensive textbooks from major publishers to cheaper, lower-quality alternatives, OER (open educational resources), or free online content. If publishers sign on to Equitable Access, they could win back more course adoptions. They will also be able to compete more on quality than on price.

Also, influencing publishers toward prioritizing digital over print delivery should accelerate the “digital first” trend that Pearson announced, in which authors update text materials continuously instead of one edition at a time. In other words, Equitable Access will have implications all the way back to publishers’ editorial processes and the role that textbook authorship plays in academics’ careers.

We’ll know by this time next year whether UC Davis’s plan will succeed, but it’s going to be far from the only disruptive force in textbook publishing.

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