Over the last 20 years, the major US higher educational publishers have abandoned publishing books and course-ware for any but the top 200 courses offered in higher ed.
That leaves around 4,000 regularly taught, standard courses for which there are few or no textbooks available (Source: Market Data Retrieval, a D&B Company). Most, if not all, of these courses are taught in 4 year programs, so set aside the Community College market for this article. Some of these abandoned courses typically enroll large numbers of students, very often 100+ at state universities, for instance. In fact, it may be safe to estimate that more than 40% of total FTE enrollments are represented by these courses.
To get a quick and visceral feel for how deliberately publishers (who now fashion themselves “learning companies” only) have abandoned this once profitable arena, go to their websites. The home pages, and pages layers deep, are devoted to services, electronic learning materials, and platforms, but you will find it less obvious to discover the product catalog for courses not in the top 200. This sort of roundabout site navigation to non-top 200 courses makes their priorities clear.
So, let’s go back in Mr. Peabody’s WayBack Machine to Prentice Hall circa 1992, where I worked at the time, to see just how much things have changed:
Prentice Hall prided itself on publishing for virtually every course taught at the undergraduate level in the US (and, for that matter, the world), and many graduate level courses. It was a mantra, and it was beaten into our heads as part of the “Prentice Hall Story”. (To help understand what are “Upper Level” courses, see Appendix below.).
There were many reasons why PH did this, but three stand out:
• Providing professors with good books for their upper division courses created good will with professors when the rep turned the conversation to talk about the largest enrollment courses (which most professors really didn’t relish talking about, because: a. “books are all the same for basic courses”; b. many to most professors are disinterested in what book is used in the basic courses, or—for that matter, teaching the basic courses; and, c. reps could, and did, eat up a lot of the professor’s time chasing the basic course adoption.)
The upper level courses were (and still are today) where professors’ passions lie, and where students tend to be more passionate about the material as well, and PH made it easy for them to find an authoritative book to use.
• Prentice Hall derived around 50% of its sales and a higher percentage of its profits from Upper Level courses (A, B, and C, see Appendix).
• There were little to no used books for these courses, so the revenue was evergreen.
It remains one of the mysteries of the universe why Prentice Hall (at that time named Simon & Schuster Education, then Pearson Education)—and its competitors– abandoned this market. I have heard all the justifications, but they do not hold water for me. However, this article is not about the merit of that decision, but to describe the large opportunity left in its wake.
Now, let’s go to one of the Big 3 educational publisher’s current website and look at text offerings in disciplines like the Humanities, Social Sciences, and Business, where the highest percentage of overall enrollments in the 4 year college and university market are found. Three things jump out:
• There are no books for A, B, and C courses;
• There are sometimes no books for AA courses (remember, an AA book was a book projected to sell over $250,000 per year in 1985!);
• For courses where there is a recently published book or electronic learning material, there is only one offering, reducing choice in the market.
Another way to view this is to go to a few university web sites and match courses to texts from this publisher. Going to the University of Texas and The Ohio State University sites, and then to the Psychology Dept courses, we find no book for over 60% of the courses for undergraduates for fall 2015. And looking at a small liberal arts college, as another data point, Holy Cross College, we find the same for 40% of their Psychology Dept courses (I eliminated any course that is a Seminar or Special Topics Course, leaving only standard offerings).
This leaves a vast terrain of courses for which there are no texts or hard to discover non-texts that might serve for these courses. The courses are still being taught; it’s just that almost no one is publishing for them.
Another facet of this opportunity is that many professors really want to write text books for these courses. Many are motivated to write a book, because they often say “I can’t find the right book for my course, so I’d like to write it”. Many want to contribute to the general welfare of learning in their discipline. Many welcome the extra, sometimes quite sizable income that comes—or used to come–from writing and publishing a text for an upper level course. So, there is a ready and eager pool of available talent out there to write books that are needed. Many have taken to self-publishing to fill this void, but their works are hard to find, as you would expect.
Someone should fill this gap, whether a start up or some other publishing company. Here are some reasons why:
• The market opportunity.
• The revenue associated with upper level textbooks is predictable and budgetable; each year more or less the same number of students take Course X in the US, and an entrant would likely have the only text available for over 90% of those offerings, I would estimate;
• There is an eager and ready talent pool that will welcome the opportunity to write texts again;
• It will bring good will to that entrant from institutions and professors, and from students as well—particularly if the entrant’s pricing strategy undermines current pricing strategies;
• These texts have been traditionally relatively easy to market, and would be especially so in our current search-dominated world;
• There is currently virtually no competition; it is Blue Ocean;
• And because these markets are global, the entrant can sell the English language versions to third parties for international distribution and sell Foreign Language Rights as well.
• It will be highly profitable: upper level texts were enjoying 40%+ net profit margins.
All of which leads to a stable and highly profitable business. A legacy business with upside. Who wants to seize this opportunity? It is there for the taking.
Prentice Hall had a long standing priority rating for identifying the importance of each new book published each year. I will use 1985 for the date to fix for this example:
• AAA: A book projected to sell at least $500,000 in Year 1
• AA: A book projected to sell at least $250,000 in Year 1
• A: A book projected to sell at least $100,000 in Year 1
• B: A book projected to sell at least $50,000 in Year 1
• C: A book projected to sell at least $25,000 in Year 1.
(A, B, and C courses were/are typically taught at the junior and senior level, although many could/are offered at the sophomore level.)
This was 1985, when the average text book sold for a list price of about $30, as against the $125-250 of today. Gee, conservatively a C book today would sell $100,000 in Year 1.
Timothy C. Moore
The Hatch Group and Milamber Ventures, PLC