Tag Archive: Chegg.com

Pearson and Chegg Partner on Exclusive Rentals

In an effort “to make college more accessible and more affordable for students” (and to maintain a foothold in a changing textbook-distribution landscape), Pearson Education (NYSE: PSO) has partnered with Chegg (NYSE: CHGG) in an exclusive eBooks/textbook-rentals crossover plan.

Rollout Expectations & Textbook Conditions

Pearson will make available — via Chegg only — roughly 50 deeply-discounted high-sales textbooks in time for Fall 2017 semester.

Each of these 50 selected textbooks will meet the following criteria:

  • Not for purchase; available as rental only
  • Consigned to and rented exclusively through Chegg
  • Available as print OR digital download
  • Renting at a price point of $100 or less

Upon success of the rollout, Pearson plans to release more Chegg-exclusive titles for future terms.

Phase Two of the Pearson Plan

This announcement follows one made in January when Pearson announced immediate plans to reduce the prices of 2,000 eBook titles by up to 50 percent. Whereas that first phase lowered prices on eBooks only, this second phase does so for print books. It also makes them available as Chegg-only rentals. Pearson estimates that this will allow them to cut the costs of these books by up to 60 percent.

The Lead-Up

Perhaps most interesting about the Pearson-Chegg partnership is the way in which it combines rentals and eBooks. In the past, we’ve seen companies like Chegg and CampusBookRentals bank heavily on print rentals. Publishers like Pearson and Wiley have distributed their new print textbooks through college bookstores and kept eBook offerings to direct website downloads.

In assessing the Pearson-Chegg announcement, we must consider that just a few years ago, textbook conditions were limited to:

  • bookstore and Internet sales and rentals of new and used print textbooks
  • a small selection of academic digital downloads specific to publishers and/or usage platforms

Then we saw the blurring of textbook-condition boundaries in the forms of:

  • an increasing number of eBook textbook titles available as rentals for various durations
  • print textbook sales and rentals that contained complementary or supplementary digital content as well
  • digital-only direct distributors such as RedShelf who offered academic titles from multiple publishers for both sales and rentals

Reconfiguration Rather Than Innovation

In the latest Pearson-Chegg endeavor, we see a new kind of blurring: publisher-specific budget-priced textbook titles available only as rentals and only through a single website. That website is the work of the company most responsible for making print textbook rentals what they are today.

Offering multi-publisher print rentals online and outside of the college boosktore, Chegg undoubtedly changed the game in the mid-to-late 2000s. There is also no doubt that direct-from-publisher digital downloads disrupted traditional college bookstores in the years following the rentals boom. In the upcoming scenario where Chegg exclusively offers heavily-discounted Pearson titles, we see a reconfiguration rather than innovation or even reinvention.

It isn’t the same sort of game changer but it may be a smart way of creating a new option that students find attractive. Surely one must imagine that if initial rollout is successful, Pearson will increase the number of titles offered and other publishers will follow suit. This would be yet another blow for bricks-and-mortar college bookstores who will be excluded from yet another distribution model and revenue stream.

Chegg – Internet Study Hall – Banking on the Future

If you’ve been following Chegg as I have, you’ve seen a company grow and nimbly stretch in many different directions in attempts to innovate. Chegg has evolved from a classifieds website into a textbook-rentals giant. When Chegg entered the textbook rental market, well . . . there was no market and they shaped the game. Sure, it could be argued that Book Renter (Rafter) and Campus Book Rentals were on the scene and rentals were occurring on campus, but it was nothing like we see today and Chegg deserves a lot of the credit for the ubiquity of rentals now. (more…)

Chegg makes big moves to reposition itself

Reportchegg

But what does this mean for the industry, competitors, and a possible IPO?

Late last week, in a press release entitled “Chegg Expands Beyond Textbook Rental Industry; New Educational Services Include Class Scheduling and Homework Help,” the textbook-rental giant discussed its expansion into other educational areas such as homework help and class selection. While many news sites simply reprinted the story, I dug deeper to look at what Chegg has done and the bigger-picture ramifications. 

Let’s start with some history: In early 2010, I made a prediction (and since it never came to fruition, I’m off the hook for having to prove that I made it!). I was positive that Chegg was going to purchase a large marketplace website. To me, it made perfect sense and was a natural fit: if a rental company owned a big marketplace, the company would have access to all of the sellers and most of the inventory, essentially creating a ready-made drop-ship fulfillment model. And in some senses, this has played out, though not exactly as I envisioned. The changes manifested in the form of websites such as Alibris.com providing textbook-rental sites (and other sites as well) with access to the inventory data without the rental sites having to build (or buy) any of the infrastructure.

Based on observations and predictions, I posit that in order for Chegg to go public (the direction in which it the company is apparently headed), Chegg must address three main points:
 1) How it would obtain inventory
 2) How it would engage students during the school year
 3) How it would handle the emergence of eTextbooks