Trends in educational publishing: Cengage, McGraw-Hill, Pearson, Houghton, Wiley, Sage; textbooks, courseware, and edtech; OER, inclusive access; what formats students like and what they spend; instructor satisfaction with course materials

1. The 2019 Book Report
EducationalPublishingandEdTech
Presented by June Jamrich Parsons
at the Text and Academic Authors Association annual conference June 14, 2019

2. The Headlines
What events and trends should authors be
aware of?

3. CENGAGE UNLIMITED ACHIEVES
SIGNIFICANT MILESTONE IN JUST
SEVEN MONTHS OF COMMERCIAL
AVAILABILITY
BOSTON—February 25,
2019 Cengage today announced that
its new subscription service,
Cengage Unlimited, has sold one
million subscriptions in just seven
months of commercial availability.
College students have saved $60
million using Cengage Unlimited
subscription service for textbooks
and course materials. Subscriptions
cost $119.99 a semester ($179.99 a
year) and are available directly
from Cengage, online or at campus
and off-campus bookstores.
https://news.cengage.com/46/one-million-subscriptions-sold-and-counting-cengage-unlimited-achieves-significant-milestone-in-just-seven-months-of-
commercial-availability/

4. PLANNED MERGER OF CENGAGE
AND MCGRAW-HILL COULD
REMAKE COLLEGE-TEXTBOOK
MARKET
The merger is slated to be completed in
early 2020. The new company will take
the McGraw-Hill name and may
eventually go public.
Combined, the two companies
generated an estimated $3.1 billion in
revenue in 2018, and will boast a
library of 44,000 textbook titles.
According to Cengage CEO Michael
Hansen, the merger will save an
estimated $300 million over the next
three years—savings that he claims will
be passed down to make college
materials more affordable.
https://www.chronicle.com/article/Planned-Merger-of-Cengage-and/246224
https://www.insidehighered.com/digital-learning/article/2019/05/02/cengage-and-mcgraw-hill-merge

5. WILEY TO ACQUIRE
KNEWTON’S ASSETS, MARKING
AN END TO AN EXPENSIVE
STARTUP JOURNEY
After blowing through $180
million in venture capital,
Knewton’s assets are being
acquired by Wiley. Those
assets include Alta, a mix of
openly-licensed material
distributed within Knewton’s
adaptive learning platform.
“Knewton will integrate into
Wiley’s existing Higher
Education business,” remarked
Wiley’s vice president.
https://www.edsurge.com/news/2019-05-06-wiley-to-acquire-knewton-s-assets-marking-an-end-to-an-expensive-startup-journey

6. NOTHING SAYS WELCOME
TO COLLEGE LIKE
EXORBITANT TEXTBOOK
PRICES:
When the cost of a textbook could feed a family of four for a week
“Paid today for my freshman
daughter’s textbooks at @lsu. $700 for
one semester. She was stunned. I was
stunned. How do faculty and admin
allow these publishers to shake down
students like this??”
You don’t need a college degree to
understand that textbook publishers
and postsecondary institutions are
taking advantage of students’ need to
go to college. It’s also clear you don’t
need to get a college degree to get
rich. You just have to own a publishing
company.
https://hechingerreport.org/nothing-says-welcome-to-college-like-exorbitant-textbook-prices/

7. $1 BILLION IN SAVINGS THROUGH
OPEN EDUCATIONAL RESOURCES
October 12, 2018 -- At the
2013 Open Education
Conference, SPARC issued a
challenge to the OER
community to save students
$1 billion by 2018. Analysis of
data from over 4,000
institutions shows that
challenge has been achieved.
SPARC (the Scholarly
Publishing and Academic
Resources Coalition) works to
enable the open sharing of
research outputs and
educational materials in
order to democratize access
to knowledge, accelerate
discovery, and increase the
return on our investment in
research and education.
https://sparcopen.org/news/2018/1-billion-in-savings-through-open-educational-resources/

8. CARNEGIE MELLON ANNOUNCES
RELEASE OF TOOLKIT TO
KICKSTART GLOBAL REVOLUTION
IN EDUCATIONAL EFFECTIVENESS
Carnegie Mellon has announced it
will unveil a major release of tools,
software and content that is
intended to catalyze a new era of
progress in educational
effectiveness. The suite of tools is
the product of over $100 million of
research and development from a
wide variety of funders.
Included are Echo for authoring
materials, customizing existing OER
materials, and evaluating those
materials from a data-science
perspective, and CTAT a tool suite
that enables instructors to add
learning by doing to online
courses.
https://www.insidehighered.com/news/2018/12/12/switch-digital-first-products-publishers-are-signing-fewer-textbook-authors

9. BILL GATES:
TEXTBOOKS ARE
BECOMING OBSOLETE
I read more than my share of
textbooks. But it’s a pretty limited
way to learn something… But now,
thanks to software, the standalone
textbook is becoming a thing of the
past.
https://www.cnbc.com/2019/02/12/bill-gates-the-best-way-to-learn-today-is-not-from-
textbooks.htmlhttps://www.washingtonpost.com/education/2019/04/16/um-who-are-melinda-bill-gates-trying-kid/?utm_term=.58cb078a1492

10. SHIFTING FOCUS OF
PUBLISHERS SIGNALS TOUGH
TIMES FOR TEXTBOOK
AUTHORS
Leading academic publishers are
signing fewer textbook authors and
instead channeling investments into
digital courseware.
Rather than signing new authors,
Pearson is primarily “reincarnating in
digital format” successful textbook
franchises from established authors.
Cengage published 120 first-edition
textbooks in the past four years but is
scheduled to publish just 11 in 2020.
VP of Oxford University Press says that
there will still be opportunities for
academics to contribute to courseware,
but they may be one of many
contributing authors.
https://www.insidehighered.com/news/2018/12/12/switch-digital-first-products-publishers-are-signing-fewer-textbook-authors

11. THE DECLINE OF THE
TEXTBOOK EMPIRE:
How easy is it really to publish your own interactive
textbook
https://tophat.com/teaching-resources/infographics/average-cost-of-textbooks-infographic/

12. The Industry
Are publishers making insane profits?
Can mergers lead to stronger companies?
What is the take-away for authors?

13. 1 National Center for Education Statistics
Fast facts
The U.S. has about 4,600 colleges and
universities with a fairly stable combined
enrollment of 19 million graduate and
undergraduate students1
U.S. higher ed market for “instructional
solutions” was about $3.4 billion in
20171
In the U.S. approx. 132,000 K-12 schools
enroll about 56 million students1
U.S. K-12 “instructional solutions”
market is $6.9 billion annually1

14. Major
Educational
Publishers

15. Publisher
Profitability
(millions)
Publisher Revenue Profit 2019 |
2018
Debt
Cengage $1,445 -1.4% $(97) | $(1.8) $2,200 +4%
McGraw-Hill $1,597 -7% $(160) | $(65) $1,900 +5%
Pearson $5,241 -1% $751 | $519 $181 -67%
Houghton
Mifflin
$1,322 -.4% $(92) | $(96) $763 0%
Wiley $1,796 +5% $260 | $54 $73 -1%
Academic
Press
$401 +3% $22 | $13 0
Data compiled from annual reports

16. Industry
Profitability:
Takeaway
Profits are down... Authors need to
adapt to changes as companies try
new strategies.
Mergers and digital conversions
may lead to a downsized list of
titles and fewer opportunities to
author new titles.
As courseware replaces fixed
content, authors may have the
opportunity to retool as
instructional designers.
Read the annual reports produced
by your publishing company.

17. Textbook Prices
How much have textbook prices increased?
What does the average student spend?

18. 78%
70%
62%
61%
60%
57%
57%
57%
54%
54%
53%
51%
Apple AirPods
AppleiPhone
Instagram
Coffee
Apple watch
Text messaging
Dringking beer
Snapchat
Apple MacBook
Working out
Smoking marijuana
Hooking up
What was “IN” on campus in 2018?
Student Monitor Spring 2019 http://files.studentmonitor.com/s19/

19. The Myths
The average cost of textbooks
is $1200 per year
65% of students do not
purchase required textbooks
because they are too
expensive
11% of community college
students are homeless because
they have to buy expensive
textbooks

20. The Facts
Students spend on average
about $500 per year for
required course materials
15% of students have opted
out of a course because the
price of course materials was
too high
 33% did not obtain all of the
required materials, 42% of
those citing “too expensive”
National Association of College Stores https://www.nacs.org/advocacynewsmedia/pressreleases/tabid/1579/ArticleID/771/Course-Material-Spending-Declines-
for-2017-18-Academic-Year.aspx
Student Monitor Spring 2019 http://files.studentmonitor.com/s19/

21. The Affects
 Textbook Purchases Increase Student Stress: Eighty-five
percent of current and former students say that their textbook
and course material expenses are financially stressful, more so
than meals and food (63 percent), healthcare (69 percent),
housing (73 percent) and barely less stressful than tuition (88
percent).
 Students Sacrifice Food for Textbooks: Nearly half of current
and former college students (43 percent) say they’ve saved
money by skipping meals to afford course materials.
 Minority Students Are Disproportionally Impacted: Minority
students are more likely to report taking fewer classes to save
on textbook costs; African American students are also 35
percent more likely to save money for books by skipping a trip
home.
 Coping with the Financial Burden: Almost seven in 10
students report having to get a job during the school year to
pay for college textbooks; 43 percent have taken out a loan;
and 31 percent have taken fewer classes to save on textbooks
costs
Today’s Learner: Student Views 2018 a study conducted for Cengage Learning. https://news.cengage.com/corporate/new-survey-college-students-consider-
buying-course-materials-a-top-source-of-financial-stress/

22. Prices
0
5
10
15
20
25
30
35
2012 2013 2014 2015 2016 2017 2018
Textbook Price Increases CPI
Textbook Prices CPI
$134
Bureau of Labor Statistics Economic News Releases 2012-2018
$100
$108
$114
$120
$126
$132 $131

23. National Association of College Stores
https://www.nacs.org/advocacynewsmedia/pressreleases/tabid/1579/ArticleID/771/Course-Material-Spending-
Declines-for-2017-18-Academic-Year.aspx
Spending

24. Textbook Prices:
Takeaway
Students are spending less on course
materials than in the past.
Decreased spending is good for
students.
As spending decreases, author
royalties can also be expected to
decrease.
Although textbook pricing may be less
than the hype, the PERCEIVED burden
affects student purchasing, which will
continue to depress the market.
The perception of high textbook
pricing promotes OER.

25. Publishing Formats
Which formats are trending?
How are distribution options changing?
What is the take-away for authors?

26. Content:
Learning core
Media
Homework
Assessment
Course
Format:
Print
Digital
Distribution:
Purchase new
Purchase used
Rent
Subscription
Inclusive access
OER
Pirate

27. Student
Purchases
Spring 2019
Source Students
Acquiring
Average price Publisher/Author1
Purchase
new printed
46% (52%) $99 ($82) $65/ $8
Purchase
used printed
47% (54%) $51 ($57) $0/ $0
Rent a
printed
textbook
39% (40%) $46 ($53) $30/ $4
Purchase
eBook
20% (16%) $62 ($41) $62/ $7
Rent eBook 12% (1`5%) $38 ($34) $38/ $4
OHS 16% (20%) $97 ($34) $97/ $0
Pirate 18% (17%) $0 $0/ $0
OER 9% (14%) $0 $0/ $0
Shared 20% $0 $0/$0
Borrowed 23% $0 $0/$0
Student Monitor Spring 2018 http://files.studentmonitor.com/s19/
1 Based on 12% royalty rate

28. 0
10
20
30
40
50
60
New Print Used Print Rent Print eBook UL eBook L OER Pirated OHS Inlcu/Access
Student Acquisition Trends
2015 2016 2017 2018 2019
Student Monitor 2015 – 2019 Spring semesters

29. Digital
Revenue
59%
53%
39%
62%
55%
45%
0%
10%
20%
30%
40%
50%
60%
70%
Pearson Cengage McGrawHill
2017 2018

30. Publishing
Formats:
Takeaway
Despite the fact the some students still
prefer printed textbooks, there is a steady
increase in digital use and revenue.
Publishers continue to push digital solutions,
which are intended to reduce used book
sales and rentals for which publishers gain no
revenue. This is a good thing for authors who
get no royalties from used book sales.
BUT because digital solutions are priced
lower than print, and because publishers
subtract a “digital royalty allocation” for the
platform and ancillaries not created by the
author.

31. Instructors
How are instructors using our content?
Do they like our books?
How many are considering OER?

32. 68%
53%
22%
20%
20%
69%
47%
37%
28%
19%
19%
7%
Textbooks (print or digital)
Articles or case studies
Online homework system
Videos
Software
Other
Inclusive access subscription
What types of learning materials are faculty requiring?
2017 2018
Freeing the Textbook: Educational Resources in U.S. Higher Education, 2018 by Julia E. Seaman and Jeff
Seaman; Babson Survey Research Group

33. 68%
70%
41%
21%
20%
8%
72%
65%
43%
38%
22%
20%
9%
Skipped sections of the textbook
Changed order of topics
Replaced material with insgtructor's
Replced content from other sources
Corrected inaccuracies
Revised content
Other
How do faculty use textbook material?
All faculty Intro course faculty
Freeing the Textbook: Educational Resources in U.S. Higher Education, 2018 by Julia E. Seaman and Jeff
Seaman; Babson Survey Research Group

34. 43%
39%
32%
34%
18%
19%
20%
15%
47%
44%
49%
39%
39%
31%
28%
28%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Accuracy
Scope and coverage
Level
Currency
Adaptable
Ancillaries
Cost
Test banks
Are faculty satisfied with adopted course materials?
Very satisfied Satisfied
Freeing the Textbook: Educational Resources in U.S. Higher Education, 2018 by Julia E. Seaman and Jeff
Seaman; Babson Survey Research Group

35. 32%
25%
39%
36%
29%
40%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2017
2018
Do faculty prefer print or digital materials?
Prefer print Neutral Prefer digital
Freeing the Textbook: Educational Resources in U.S. Higher Education, 2018 by Julia E. Seaman and Jeff
Seaman; Babson Survey Research Group

36. 34%
33%
2017
2018
How many faculty members use digital courseware?
2017 and 2018 Survey of Faculty Attitudes on Technology: A study by Higher Ed and Gallup.
https://mediasite.com/wp-content/uploads/2018/11/2018-Faculty-Survey-Mediasite.pdf

37. 5%
7%
10%
13%
15%
19%
20%
18%
14%
16%
15%
15%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2015
2016
2017
2018
Are faculty aware of OER?
Very aware Aware Somewhat aware
Freeing the Textbook: Educational Resources in U.S. Higher Education, 2018 by Julia E. Seaman and Jeff
Seaman; Babson Survey Research Group

38. 5%
6%
13%
8%
15%
22%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2016
2017
2018
How many faculty are requiring OER in any course?
All faculty Intro courses
Freeing the Textbook: Educational Resources in U.S. Higher Education, 2018 by Julia E. Seaman and Jeff
Seaman; Babson Survey Research Group

39. 7%
7%
6%
31%
37%
32%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2016
2017
2018
How many faculty will use OER in next three years?
Yes Will consider
Freeing the Textbook: Educational Resources in U.S. Higher Education, 2018 by Julia E. Seaman and Jeff
Seaman; Babson Survey Research Group

40. Use less expensive
materials even if
lesser quality
Colleges should
embrace OER
Help students save
money even if faculty
lose control over
selection
Strongly agree
5 15% 42% 6%
4 17% 28% 15%
3 20% 23% 19%
2 21% 5% 18%
Strongly disagree
1 28% 3% 42%
At what cost lower cost?
2018 Survey of Faculty Attitudes on Technology: A study by Higher Ed and Gallup.
https://mediasite.com/wp-content/uploads/2018/11/2018-Faculty-Survey-Mediasite.pdf

41. 40%
31%
6%
23%
IA reduces cost and improves
outcomes
IA only reduces costs
IA only improves outcomes
IA idoes not save costs or improve
outcomes
Do faculty like inclusive access?
2018 Survey of Faculty Attitudes on Technology: A study by Higher Ed and Gallup.
https://mediasite.com/wp-content/uploads/2018/11/2018-Faculty-Survey-Mediasite.pdf

42. Instructors:
The takeaway
Instructors do yet seem to have a preference
for digital, so the advantages of multimedia and
interactivity have not been recognized (as
hoped by publishers).
Instructors are generally satisfied with the
content of textbooks, but not with test banks.
Instructors use textbooks flexibly—something
to keep in mind when authoring.
Instructors are increasingly enthusiastic about
OER as long as quality is high and they have
control over selection.
Some faculty are concerned that OER might
create a two-tiered system that could harm
lower-income students.

43. Overall
Takeaway
 Educational publishers are seeking ways to offset
declining revenues and profit.
 Students and instructors are seeking ways to reduce
the cost of course materials.
 Various solutions such as digital subscriptions, OER,
and inclusive access are not likely to satisfy all the
stakeholders.
 Authors are caught in the middle of an increasingly
price-sensitive market.
 Traditional authoring is clearly in transition. How will
the role of authors evolve amongst all the
disruption?
 Authors can look for opportunities to create
alternative content, such as video scripts, homework
helpers, and adaptive learning paths.
 New formats and distribution methods may require
different remuneration terms. Be prepared for new
types of contracts.

44. End
June Jamrich Parsons
junejamrichparsons@gmail.com
Watch the presentation on
SlideShare

45. INDUSTRY
RIVALRY
Publishing
Companies
THREAT OF
SUBSTITUTES
Rentals
Used
OER
Digital
THREAT OF
NEW
ENTRANTS
Edtech Developers
Non-profits
Schools
States & Feds
BARGAINING
POWER OF
BUYERS
Students
Professors
School Boards
BARGAINING
POWER OF
SUPPLIERS
Authors
STATE OF THE EDUCATIONAL PUBLISHING INDUSTRY

46. Deals
revealed
 A professor at Arizona State University sent an email to
all students in the economics department alleging that
Cengage provided a large monetary grant in return for
a department wide adoption of the MindTap for two
introductory courses. Additionally, they did not think
students should be required to purchase MindTap to
do assignments.
 each ASU student end-user who accessed either of the
Courses would pay $100.00 during a one-year pilot
project. During that year, ASU retained $21.00 of the
$100.00 fee. Under the original contract terms, after
the one-year pilot, ASU would retain $1.00 of the
$100.00 fee.
 In the psychology contract, ASU retained first $25.00
and then $5.00 of the $100.00 user fee
 Cogbooks paid ASU $149,732.60 for development of
Biology and U.S. History courseware.
 both parties will provide content to develop the
courseware and that each party retains intellectual
property rights in the content it provides
Report to Provost Mark Searle: Allegations of Unethical Conduct in the Department of Economics from RuthV. McGregor May 24, 2019
https://provost.asu.edu/sites/default/files/page/3142/asu_economics_report.pdf

47. Report to Provost Mark Searle: Allegations of Unethical Conduct in the Department of Economics from RuthV. McGregor May 24, 2019
https://provost.asu.edu/sites/default/files/page/3142/asu_economics_report.pdf