Bucking the e-book trend
Maggie Shiels | 10:20 UK time, Wednesday, 27 April 2011
The growth of electronic books is simply staggering.
The Association of American Publishers (AAP) has revealed that its latest stats for February show a growth of 202%. The annual figures from January/February 2010 to the same time this year is equally impressive - a 169% rise to $164m (£100m).
Print books fared badly in the last year with sales falling 25% to $442m (£270m). But there is one area that is bucking that trend, which does not show up in AAP's figures. That is the market for renting books - the printed versions, not the e-book versions.
And the audience that is the most open to this practice is arguably the most digitally literate: students. Chegg is the leading book-renter in the industry and has been dubbed the Netflix of college textbooks. Its chief executive officer Dan Rosensweig says that, for students, accessing information in what might be regarded "the old fashioned' way is all about the bottom line:
"Our mission has not been to rent textbooks or not rent textbooks. Our mission has been to save students time, money and help them get smarter," said Mr Rosensweig, who previously worked as an exec at Yahoo and at Activision Blizzard.
"The higher education market textbooks continue to be easily 98% of the market. The reason for that is the technology is only getting ready now. Books have a better battery life. You can always depend on them. But just as importantly, you can rent a textbook substantially cheaper than you can get a new textbook, or a used one, or one that you can buy digitally," said Mr Rosensweig.
"Students are looking to get access to the content they want in the easiest format and at the least expense. For the moment, that means renting books."
Chegg said that last year it reached 25% of college students and plants a tree for every book it rents out. The company has just announced that it has planted its five-millionth tree, so I will leave you to do the maths.
In cold hard cash, Chegg said in January 2010 it had saved students a total of $100m. That represented the difference between what a student would have had to pay to buy a book versus renting it.
"This is a $10bn market, with over 200 million books changing hands every year," said Mr Rosensweig.
"If a textbook was $120 new to the student it would cost $100 used and we would probably rent it for about $55. That represents a substantial saving at a time when families in the US are struggling and education becomes more and more expensive."
A number of other players vying for the attention of struggling students agree there is money to be made in second hand books.
Rival company CampusBookRentals.com said about 10% of college students rent their books.
BookRenter.com, which had a bit of spat with Chegg over just who could lay claim to the #1 slot moniker, said it serves six million students, representing about 31% of the North American market. The company also claims to be "one of the fastest growing start-ups in Silicon Valley, growing at over 725% each year".
ValoreBooks.com promises to provide the cheapest textbooks in the nation by having students sell to students:
"We are an online marketplace. What an online marketplace is is an open platform. Anybody can sell their books and any buyer can buy any book," said CEO Bobby Brannigan.
"As you get more sellers on the site it drives price down. It's basic economics."
A new competitor will enter the fray at the beginning of next month, proving the industry is booming.
BookDecay.com will allow students to review how professors use required textbooks in a class, helping others to make informed decisions as to how - or whether - they should obtain the book themselves.
"One semester I bought several books, and they sat on a windowsill and kind of decayed, if you will," Rocco Carzo told the Democrat And Chronicle.
The site will allow students to buy, swap or rent books and will link to Chegg and Amazon.
While the physical textbook doesn't seem set to be replaced anytime soon, what about its digital rival? Why have e-textbooks failed to penetrate?
"It is a matter of getting the experience right and the price," said Mr Rosensweig.
"One of the things that holds it back isn't so much the technology, which will be solved. It's that school starts once a year. If it's not this August, it's next August.
"Education is one of the areas where technology has not yet had a chance to work its magic. Like everything in technology, you can't pick the day it is going to flip but you need to make sure you are ready for it. But it is going to happen."
He is betting that 2012 is the year the digital future will arrive.
Credit: BBC (www.bbc.co.uk)
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