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.
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.