Bulk-Purchasing eTextbooks and Moving Around the Bookstore

As reported by The Chronicle’s Wired Campus, a new business model is emerging, one that seeks to deliver eTextbooks directly to students through bulk purchases by schools. Instead of the traditional model by which a professor adopts a book then notifies the bookstore and then the student purchases the book, the new model works directly with the department to sell the school a bulk-license and access to a digital platform. The eBooks broker is Courseload and the publisher in the initial pilot is McGraw-Hill’s education publishing division.

The good news is that bulk-purchasing allows students to access books at a lower cost. In the first test pilot, completed in spring 2012, five schools purchased 1,000 licenses for $20,000 each. Without seeing a list of the books provided, it is hard to tell exactly how much of a savings, if any, this model brings. The model for fall 2012 increased the price to $35,000 but didn’t mention how many students that cost would provide for. The model as it was explained to me by the CEO of Courseload is in a test phase and expected to be modified along the way. “The economics work so that if more students are using the book, the publisher can sell the book for less. This will drive down the cost of the book for students,” stated Mickey Levitan, CEO of Courseload.

While we call this a new business model, the truth is we have seen this before just not in the public sector. I mean, we all know that buying in bulk cuts costs. Warehouse clubs operate on this principle as do newer collective-buying services like Groupon. What’s new is the concept of a single device providing course materials under a bundled course material fee where the institution buys in bulk and passes the savings on to individual students. And that remains TBD in terms of results.

In this new model, the publisher wins but I am not sure just yet who else benefits. Without more data, it is hard to understand the exact value or specific savings that is being passed to the student. In theory, by bypassing the bookstore, the publisher is guaranteed increased market-share but while the bookstore loses out in potential profit, the student lose out in the ability to shop on his or her own for a better deal.

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