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NACS Board Confronts Digital Challenges, Next Moves
03/27/09
Editor's note: This story has been modified for clarity since its original publication.
The NACS Board of Trustees reviewed an analysis of the digital content market and discussed how college stores can succeed despite accelerating change and competition at its March 12 meeting during CAMEX in Anaheim, CA.
The market analysis, produced by NACS Digital Content Strategist Mark Nelson, indicated 10% to 15% of all textbook sales could be digital by the 2011-12 academic year. Yet according to a recent NACS survey, only 38.1% of independent and private college stores currently sell digital course materials.
"This number was lower than we anticipated and should be a source of concern for the industry," Nelson said in his report. Major barriers to stores selling digital materials include faculty's reluctance to adopt them, meager demand from students, and stores' concerns over slimmer margins.
The analysis also noted more professors are using open-access course materials (free materials available on the Internet or prepared by faculty for their own classes).
Persuading more stores to recognize the growth of digital and to be prepared to provide content in whatever form the customer wants will take "a mind change," former NACS President Dennis Mekelburg, CCR, told the trustees, but he also pointed out "the current economy will drive change." Mekelburg, associate director, Arizona State University Bookstore, Tempe, and chair of the NACS Media Solutions (NMS) board, reported the new subsidiary now has its first pilot projects in full swing. Although the pilots required more setup time than originally planned, once in place they paved the way for negotiations with additional technology and content partners for NMS.
NMS was launched last July to help college stores provide course materials in any format. By the end of 2009, at least 125 stores are expected to participate in NMS programs.
College and university administrators are becoming more interested in digital course materials, as evidenced by last year's agreement between the OhioLINK higher education consortium and CourseSmart, the online marketplace for academic publishers. The agreement allowed Ohio college students to buy digitized textbooks at a discount directly from CourseSmart.
NACS and a group of managers from various types of Ohio college stores recently met with OhioLINK representatives to discuss the agreement's ramifications. Ed Schlichenmayer, NACS deputy CEO and NMS president/chief operations officer, reported to the board that OhioLINK intended to provide students with more options in textbook formats and price, but the consortium hadn't considered how shifting those sales away from the college store could affect institutional budgets. Both OhioLINK and CourseSmart seemed amenable to creating a task force or advisory group with stores and possibly other campus entities such as libraries.
However, the agreement demonstrates the type of challenges facing college stores as new players get involved in the course materials arena. Trustees identified a number of actions that stores or the association should take, including:
- Learn the particulars of buying and selling new and used textbooks on the web, with NACS' help. (Trustee/Midwest Robert Warner, University Book Store Inc., serving Western Michigan University, Kalamazoo, MI)
- Find ways to counteract students' perception that course materials (and other products) are always cheaper from online sellers. (Trustee/East Roger DeLarco, University Store, East Stroudsburg University, East Stroudsburg, PA)
- Reinforce to students the educational value of course materials. (President-Elect Carol Miller, CCR, NDSU Bookstore, North Dakota State University, Fargo)
- Watch for hidden opportunities. For example, the move toward open-access materials may open up possibilities for stores to create custom-published books for faculty. (Trustee at Large Steve Alb, CCR, The Book Store at Western, University of Western Ontario, London, Canada)
- Tell your campus stakeholders how your store and your industry are working to offer course materials in every format available. (Trustee/Southeast George Masforroll, Broward College Bookstore, Davie, FL)
- Make sure your schools understand exactly how your store is contributing financially to the campus and community. (Trustee/West Margaret "Peg" Godwin, University of Idaho Bookstore, Moscow)
Fleischaker asked board members, and other NACS members, to alert him to deceptive online claims. He is also seeking specific evidence of online sellers that are offering new textbooks at retail prices that are approximately equivalent to college stores' wholesale or net prices.
To help stores move forward, the NACS Foundation is undertaking a $300,000 project to "research, define, and promulgate the college store of 2015." With the help of a retail consulting firm, the Foundation will identify trends, opportunities, and "best in class" retail practices to develop recommendations and tools to guide stores over the next five years. Results of the project will be unveiled at CAMEX 2010 in Orlando, FL. (More details about this project will appear in a future issue of Campus Marketplace.)
Among other business items at the March 12 meeting, the trustees:
- Approved the final operating and capital budget for fiscal year 2010 (April 1, 2009, to March 31, 2010). Developed by the Finance and Budget Committee, the FY 2010 budget assumes membership dues account for 20% to 25% of association revenues (excluding NACS Discount Shipping Program revenues), holds personnel costs to no more than 35% of expenses, and aims for an annual income-before-tax (IBT) surplus of 10%. No new full-time equivalent (FTE) positions are planned for NACS staffing. The final budget trimmed about $200,000 from the draft budget expenditures reviewed by the board in November.
- Reviewed a proposal to revise the volunteer committee structure to enable committees to function at a more strategic level and permit the association to respond more quickly to industry needs. The modified structure, which will begin transitioning in July in conjunction with volunteer recruitment for FY 2010, would encompass volunteer-led standing and board committees, content-related work groups known as councils, communities of practices tied to constituency groups (smaller stores and community colleges, for example), special-interest groups, advisory groups, and ad hoc groups convened for short-term projects.
- Appointed Jay Dominick, associate provost and chief information officer at the University of North Carolina, Charlotte, and Malle Vallik, director of digital content and interactivity for Harlequin Enterprises Ltd., to the NACS Media Solutions Board of Directors.
—Cindy Ruckman
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