The Move to Digital: A Conversation with Eric Frank of Flat World Knowledge, Part Two

Move to Digital

Last week, I sat down with Eric Frank, the founder and president of Flat World Knowledge, a leader in open-source and digital textbooks. You can find first part of our interview here, and stay tuned for part three later this week.

The biggest points brought up this week were:

  • FLAT WORLD KNOWLEDGE:  “I think we’re certainly going to be over 3,000 unique faculty, 1,800 colleges and some where in the neighborhood of a couple hundred thousand students when the doors open in the fall. And by then we’ll have 40 books published that we would marketing in the fall semester.”
  • ONE PURCHASE, MULTIPLE PLATFORMS: “What we are saying is: so, you bought a book from us and we are going to give these files and you are going to be able to access these files via your handheld device or on your desktop, or on your iPhone via the scan reader that reads the e-pub file. So, by and large, you are making one purchase and you are getting an e-book that renders in multiple places for you.”
  • CUSTOMIZABILITY: “And we have a platform on that site called M.I.Y.O. or “make it your own,” that allows someone to go in someone to drag and drop table of contents into a different order; click trashcans to delete things that they don’t cover; click any paragraph or act in the book and edit it directly online using a browser based editor; upload PDF’s; insert YouTube videos; and do all that in a pretty simple interface.”
  • REPLACING STANDARD TEXTBOOKS: “It wouldn’t be very difficult to market to the Campbell Biology users and say, ‘there’s an alterative, try it for two weeks and if it isn’t working for you, then buy Campbell.’ “
[soundcloud url=”http://api.soundcloud.com/tracks/18043112″ params=”show_comments=true&auto_play=false&color=c51013″ width=”100%” height=”81″ ]

Jeff Cohen, The Textbook Guru: What numbers you are allowed to share, can you share some numbers about titles that you have, adoptions, numbers of colleges–where you guys are currently at, or what you are expecting for August? It is my belief that the buzz of 2010 was the rental buzz. We saw the market go from three rental players to 10 or 11rental players last August, and it seems like the buzz leading up to August this year is really going to be around the e-textbook as people are really starting to understand the difference between e-book and an e-textbook, and a lot more players are entering the field. So, do you think, could you speak to your adoptions, your number of titles and schools you are currently covering or you are expecting on covering for the August back to school period?

Eric Frank, Flat World Knowledge:  Sure. During this spring selling season we had 31 to 32 titles available—as we went into the spring season we had 2,100 individual unique faculty that have adopted Flat World Books since we published the first one back in spring of 2009, with about 115,000 students in those courses at about 1,200 unique institutions. So those were the numbers as we went into the spring semester and started marketing those 32 books for summer, fall options.Our market’s funny: publishers know pretty much by today what their business is going to look like for summer and fall, because faculty have to fill out a form on our site to adopt. Most of our adoptions come in in August and in the last two weeks. We forecast a lot based on various activity that we’re doing—response rates, things like that. I think we’re certainly going to be over 3,000 unique faculty, 1,800 colleges and some where in the neighborhood of a couple hundred thousand students when the doors open in the fall. And by then we’ll have 40 books published that we would marketing in the fall semester.
JC: Can you speak to some of the audience that read this in the bookstore business—how does your sales affect a book store? Is there a way for the bookstore to carry these titles on their shelf? What’s the student experience for purchasing this book? Is it strictly in their website or is it in a combination with the campus book store?
EF: There’s a number in different ways that we work with bookstores. One thing we do-the standard of the industry-we provide a discount off of net. We have a net price and have a discount off of that and sell it to the bookstore who can buy it in bulk and than mark-up and resale. Generally the way we work our pricing is if a book store were to average of 25% they would be basically be pricing the book on their shelves that a student would be willing to buy it, including shipping on the Flat Word side. So more than half our revenue is generated today though bookstore sales. It’s clearly a real market, and I think we’ll continue to be one.
JC: As I understand it, students have access to the text online only for the free version, but if they want a downloadable version, an ad-free version, or a printed version, they pay for that?
EF: That’s correct. The web-hosted HTML version of the textbook is free, and then everything else, whether you are downloading a PDF, an e-pub file, a dotMobi file, an audio book, or buying a printed book from us or the book store, you pay for all of that.
JC: And is it a hybrid model if I pay for the iPad app, do I also get the iPhone app? Or do you pay for the specific app—is Flat World specifically picking what one you want?
EF: Yeah, and we’re generally going a step further, in that when you buy an e-book, for example, one of the choices in the shopping cart what you are downloading are two files, an e-pub file and a dotMobi file and they both are hosted on your machine. At that point you can read those files on your desktop, on your dedicated handheld reader that reads an e-pub file-which is pretty much every reader-as you know. Or you have the mobi file if you happen to get a Kindle—or if you had one to begin with. What we are saying is, so you bought a book from us and we are going to give these files and you are going to be able to access these files via your handheld device or on your desktop, or on your iPhone via the scan reader reads the e-pub file. So by and large you are making one purchase and you are getting an e-book that renders in multiple places for you.
JC: And of course the read online version always comes free with everything else?
EF: That’s always there—even when they buy a print book or pay for a downloaded version, which is a lot of them, about 56% today who are enrolled make a purchase—44% read exclusively free online. Of that 56% a lot of them utilize the online book. So as we dig into that subjectively with students, what’s going in there, it’s what you’d expect. I bought a print book, but I don’t bring it to work with me, and when I got a 15-minute break I don’t want to schlep the book but I can just put it online at a computer and read for 15-minutes. You see a lot of value placed on that. It’s this idea that I can get it in some different ways over the course of the semester.
JC: Do you find that particular subject matters sell better in print than in digital? For instance a math book does better in print because they want to have something to physical write on to work out the equation, versus consumer behavior book which is just reading that needs to be done—or not necessarily and it is the individual user?
EF:  You know it’s probably premature for me to say too much about that, because we—I mean maybe not. We published our first 26 titles in Business and Economics—and we recently started to publish our elementary algebra books, and our chemistry books, so we don’t have a tremendous amount of data points outside of those business and economic titles yet. I guess even within that you can look at some fairly radically different books, from very quantitative titles, like “Intermediate Microeconomics” to fairly soft titles like “Introduction to Business.” Actually, we don’t see much differentiation in the buying patterns. We thought we would, but I think we can conclude from that subset that it’s more the individual and more dictated by probably budget than anything else, and after that a consumer preference secondarily for how I’d like to utilize this.
JC: Are book titles and ISBN specific to the school and are they customized at a school level, or not necessarily?
EF: One of the things that we did that I think was pretty cool was that we built a company that has a digital first publishing infrastructure—meaning, we aren’t going to create a print book and than try and make a bunch of digital formats. The short answer to your question is, we publish a book in our catalog and we call that our canonical book internally—this is Mike Solomon’s “Advertising” textbook. And then the license of course enables users to make modifications to the book.  And we have a platform on that site called M.I.Y.O. or “make it your own,” that allows someone to go in someone to drag and drop table of contents into a different order; click trashcans to delete things that they don’t cover; click any paragraph or act in the book and edit it directly online using a browser based editor; upload PDF’s; insert YouTube videos; and do all that in a pretty simple interface.
And when they are done because we’re digital first, we sort of store all of the changes as database objects and then grab them all together—and run through and then render them as an HTML file. And then we run them through a different file transform and render them as a PDF and we send them off to print them on demand. Or we render them as an e-pub file so we can load them into the shopping cart. Within minutes, someone making a lot of changes to a book, it’s available in every format I just described, in the shopping cart waiting to be purchased. When a professor adopts, they’re either going to adopt the canonical version which has a standard ISBN or they’re going to costumize the book and when they are done it’s going to pump out a bunch of formats and it’s going to assign an ISBN on the fly to those things.
JC: Very cool!
EF: Yeah, it’s great and it’s fun! It’s just a different world that we’re in that you can go into a textbook make a bunch of changes.
JC: That’s a relatively new tool—what percentages of professors are taking your can version of a mathematic book versus editing that book and making it their own?
EF:  As we enter January we had a limited toolset available. You could change the order, and you could delete and you could insert comments before. Those were the things available in January. About 26% of people using the books had changed them in January, we don’t know yet what that will be in summer or fall of this year. But given the level of activity we’re seeing in the database it’s pretty high, I’d say we’d be somewhere in the mid 30 to 40%, but that’s speculated forecast at this point.
JC: One of the concepts I’ve always felt in digital was one of the challenges in higher based education, which is the adoption-based system—it’s not that you just need a biology book, it’s that you need Campbell’s biology book. Is your system set up in anyway, or can it be used in a way, that if I’m a student and I’m taking a mathematics class, that you have a basic algebra that follows the concepts of basic algebra and I can pick up that book for free in addition to my book or as supplement to my book without having to buy the book that the school is requiring?
EF: It’s so interesting that you say that—the answer is yeah. Today you could go to our catalog and you could click on “browse by ‘mathematics’ ” and there’s your elementary algebra book, you could click “read now” and read the whole thing. You don’t even need to log in or create an account. So the answer is, yeah, elementary algebra is elementary algebra, I’m going to read the free one- you could do that today.
We haven’t aggressively or in fact at all marketed that directly to students yet. We’ve focused sort of on marketing for the adoption market. But it’s always kind of sitting there on the back burner where we’re saying it wouldn’t be very difficult to market to the Campbell Biology users and say, “there’s an alterative, try it for two weeks and if it isn’t working for you, then buy Campbell.” We haven’t done it yet for a number of reasons but it certainly not beyond possible that we could be more aggressive in marketing that option.
JC: And my guess is that if I happen to follow exactly what you said and I look at the elementary algebra and I look on a chapter on fractions—the only thing theoretically that’s different between the chapter on fractions and the chapter I’m being assigned in school might be homework assignments, the practice problems at the end of the chapter.
EF: Yeah and that maybe the place where some patterns emerge on where that kind of student initiative won’t be dictated. So in that, it probably would be hard, because they probably have to turn in problem sets from the book or from the specific test bank provided with a specific book. But in Consumer Behavior it’s quite likely that it’s going to be topics that they need to do reading on. You might find in those non-quantitative disciplines that, that sort of student behavior starts to become more prevalent.
JC: I personally think the mapping of subjects is where it’s ultimately going to play out. What I like to say there’s the lazy student who’s going to buy the adopted book and then there’s student who is willing to put in some time and effort and I think if I was a teacher personally, and my student came to me and said, “I’m not going to buy your algebra book, but I have this algebra book, and the questions are the same, isn’t it more important than I’m doing the exercises in this book versus this book” and at least see. Because I think ultimately that’s where things are going to play out.
There are so many applications out there right now, especially in math, where you just plug the equation into a website and it just tells you how to solve in anyway. I don’t want to say, “what’s the point of homework;” the point of homework is: did you do the work to understand the concept from the lesson that were being taught.  Not necessarily did you do question number two on page 32 correctly. Obviously in higher ed it creates problems if the homework’s being collected for grades by the TA’s and stuff, but if it’s just conceptually doing the work—then it’s there.
EF: I agree, and I’ll tell you I think that one of the things that’s nice about our business is we’ve got to build the books one way or the other—whether you are going for adoptions or direct the edge at the student market. The mapping of content for leading titles to Flat World titles are very easy task in the marketing of all that is not that difficult either. If at some point we feel that the markets going to break that way, then we have a really nice body of knowledge to be able to do that with. Certainly I’ve always said that if students could choose today 80% of them, if we had a book we’d be at 80% record share in that course—it’s a no brainer. So the issue is, students do increasingly make that choice is a great thing for us.

Comments (3)

  1. Corianda Dimes

    Teachers already customize material via coursebooks, but purchasing publishing rights of articles often hikes up the price. Would customizable digital textbooks offer a cheaper alternative, being able to link to external articles rather than reprint?

    Reply
  2. Pingback: The Move to Digital: A Conversation with Eric Frank of Flat World Knowledge, Part Three «

  3. Pingback: The Move to Digital: Why Publishers Want It to Succeed (and what we’ve learned) «

Leave a Comment

Your email address will not be published. Required fields are marked *