TEXTBOOK
INDUSTRY
The Digital Trend
Implications for:
“Our CEO predicts that, in 36 months,
the entire textbook industry will have
converted from PRINT to DIGITAL.”
Josh Dunnill
McGraw Hill Publisher Representative
Textbook Industry:
The Story
What is Digital?
Simulations
Articles
Online
Quizzes
E-Books
Interactive
Interfaces
Disruptive technology is why we
see the shift from paper to digital
0
10
20
30
40
50
60
70
80
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2010 2011 2012 2013 2014
TabletUsersinUS(MM)
DigitalTextbooksMarketShare
Year
Digital Textbooks
Tablet Users (US)
SUPPLIERS RIVALRY BUYERS
ENTRY
SUBSTITUTES
Digital
Textbook
Industry
Textbook Industry:
Case Studies
Houghton Mifflin
90/10 physical to digital sales 30/70 physical to digital sales
-15%Physical textbook sales
+40%Digital educational service sales
McGraw Hill
Houghton Mifflin
90/10 physical to digital sales 30/70 physical to digital sales
-15% +40%Digital educational service sales
McGraw Hill
Physical textbook sales
Houghton Mifflin
90/10 physical to digital sales 30/70 physical to digital sales
McGraw Hill
Cengage Learning
75/25 physical to digital sales
Houghton Mifflin
90/10 physical to digital sales 30/70 physical to digital sales
McGraw Hill
Cengage Learning
75/25 physical to digital sales
Avoid Houghton Mifflin’s fate.
"It's hard to believe they are focused on
an IPO when they need to be focused
on staying in business."
Spencer Godfrey
KDP Investment Advisors Analyst
DON’T PLAY IT SAFE.
BE BOLD.
BE DIFFERENT.
Textbook Industry:
Recommendations
LEAPFROG.
Paper
Textbook
Producer
eBook
Producer
Digital
Content
Producer
Digital
Content
Broker
The Next Big Thing
1.0
2.0
3.0
4.0
Current Course
Material
Network
YouTube
Cengage
TV
Business
Cases
Other
Websites
Newsprint
Simulation
Professors
VALUABLE RARE INIMITABLE
YouTube
TV
Business
Cases
Other
Websites
Newsprint
Simulation
Professors
Current Course
Material
Network Cengage
Proposed Course
Material
Network
YouTube
Professor
TV
Business
Cases
Other
Websites
Newsprint
Simulation
Cengage
#1: Digital Focus
#2: Content Broker
Textbook Industry:
Questions
Textbook Industry:
Appendix
Louie Chen, Wenqin Chen, Daniel Hart,
Bennet Kim, David Regan, Nick Steiner
Strategy 390 Consultants
Stephen M. Ross School of Business

Digital Content Strategy for Cengage Learning