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The Book on CourseSmart
11/9/07
CourseSmart, an e-textbook web site created by six textbook publishers, claims to want to partner with college stores. The beta version is still fuzzy on convincing details.The six higher education textbook publishers—Bedford, Freeman & Worth Publishing Group; Cengage Learning (formerly Thomson Learning); Houghton Mifflin; McGraw-Hill Education; Pearson Education; and John Wiley & Sons—teamed up to offer their textbooks in e-format via www.CourseSmart.com, the site vowing to add thousands more titles within the next several months.
In the special edition of Campus Marketplace sent to members on Nov. 6, the NACS Board of Trustees expressed its concerns regarding CourseSmart, as well as its hopes that a dialogue can be maintained with representatives from CourseSmart and its parent higher education publishers so that productive relationships can be developed between the e-venture and college stores. Some NACS members have also indicated misgivings on NACS' online discussion lists about what CourseSmart will mean for their stores.
"We're looking to partner with college stores," said Frank Lyman, the site's executive vice president, marketing. "We're working very hard on models for college retailers that'll get them excited about distributing CourseSmart e-textbooks."
CourseSmart offers a two-tiered affiliate program for selling its e-books: basic and premier. At the basic level, said Lyman, affiliates don't have to do much. "They can send CourseSmart a customer and get 5% commission if that customer buys," he explained. "I don't anticipate that's the program that the majority of college stores are going to participate in," although he added that some have already signed up for it.
"The core elements of our premier program are a partner who can do a deeper integration and a partner who will commit to certain co-marketing elements," Lyman said. "A deeper integration means that instead of putting a banner up on your site just pointing people to CourseSmart.com, do what the students want you to do, which is offer up a CourseSmart option right next to their other options for that course: New, Used, Digital."
He added that premier affiliates will also likely be asked "to do certain merchandising things at point of sale or on their web site, and in return we'll give them a deeper affiliate share of the transaction." What that share might be he couldn't say yet while the site was still in beta mode. "At this point, we're not going to have a public rate sheet with that. Any of the conversations we're in are sort of one-off and custom integration," he said.
While the basic level sounds as if anyone could apply—such as a campus social fraternity hoping to sell some e-books fast to raise funds for a kegger—Lyman said CourseSmart is closely evaluating anyone who applies. "A legitimate web retailer who's in the business of selling course materials or wants to get in the business of course materials is a good affiliate for us. I'm not going to be teaming up with people who will damage my brand or damage the brand of the publishers who are supporting us."
College stores might worry that selling a CourseSmart e-book will effectively hand that transaction, and that customer relationship, to CourseSmart. Lyman claimed that "capturing the transaction, actually doing the credit card transaction, capturing the student is not religious for CourseSmart. We're happy to give that up in our premier affiliate program for the right type of partnership.
"What we do anticipate," he added, "is that that student's experience with the product will always be a CourseSmart experience. They're not going to rebrand CourseSmart. But the transaction itself can be owned by somebody else in various models that we're in conversations about," but which are not yet represented on the beta site.
The launch of CourseSmart can be viewed as an attempt by several of the major publishers to address the cost of textbooks, and increasing government pressure to lower those costs. But according to Lyman, that wasn't the dominant factor. "The thing that really got them to the table was the notion of creating a new tool for faculty members," he said.
"It's obvious that digital sampling adds real value for a faculty member who's trying to review course materials. And it's also obvious it wasn't going to happen if that faculty member needed to go to six different platforms in order to do it."
So the competing publishing houses joined forces to create a common format and assemble "a critical mass of content," the two things that Lyman said the e-book market has been missing. The publishers hope that combination will jump-start a market that's been spinning its wheels for a long time. Lyman noted that a standing joke in the industry is that the takeoff of e-books has been two years away for the past 10 years.
He added that faculty members who have tested the beta site are "really excited" about CourseSmart. They can review more textbooks initially and wait until they've whittled their selections down to a shortlist before ordering print copies. That reduces shipping costs and environmental impact.
While the initial impetus might have been e-books for faculty review, much of the site's focus is on selling to students, which is the obvious and vastly broader market.
It's still beta days for CourseSmart, though, and the savings indicated so far don't always provide a clear immediate advantage for the student.
As an example, Understanding Basic Statistics, 4th Edition, is available from CourseSmart for $54.76 for a 180-day subscription—44% less than the new, unused price on Amazon.com, which is $97.57. (If the e-text was needed for more than that six-month period, however, the subscription would need to be renewed, sending the e-book's cost above $100.)
Those savings still might not be enough to lure as many students as the site anticipates, since continued hunting on Amazon.com showed a "new" copy complete with CD-ROM offered by a seller for $53.85. Used softcover versions ran as low as $39.99 on both Amazon and eBay. And unlike print versions, of course, the CourseSmart e-textbook carries no return value for the student at buyback.
In fact, CourseSmart customers are prohibited by their subscription contract from selling or sharing their e-textbook or using it or any printouts derived from it for anything but their own personal studies. But enforcing those restrictions on thousands of campuses across the U.S. may prove problematic. Absent a sense of guilt or fear, there is nothing in place to prevent a subscriber from copying a printout of an e-text for a classmate—or an entire classroom.
Lyman pointed out that restrictions on the beta version limit students to printing one page at a time. "If you really wanted to make copies for a group of students, you might be better off buying a printed book new or used and cutting off the spine," he said. "We're making it hard enough so it's not as if you can press a button and print out a whole book."
He added that he's sure some students will share subscriptions, but that he didn't see it being "a dramatic problem."
Users can cancel their subscription and request a refund within two weeks of their initial subscription—provided they haven't yet printed 20% or more of their e-textbook. That provision could leave some students high and dry if a class is dropped.
Other publishers may add their titles to those of the original six houses. "We've already reached out to other people who have a real business selling textbooks to see if they want to participate," Lyman said. "We're basically open to the people that our faculty customers are going to want to see included on the site."
CourseSmart's functional beta site launched in August with 148 titles. Version 1.0 (slated for renaming) may go live in December or perhaps not until spring. Lyman said refinements for that release will focus on the user experience rather than on any significant changes to the site's business practices.
—Michael von Glahn
Sound Off!
Matthew Branca (mbranca@pct.edu) 11/12/2007 9:27:20 AM
A large group of publishers have created a pretty intelligent way to increase their market share, unfortunately, that increase will come from our store's decreases. However, as it is pointed out in the article, the retail price of e-books is not a good deal for our students. That is the message that we need to make sure gets out. I am all for helping our students save money wherever possible. The fact is that with a below-the-average gross margin pricing structure, along with a consistently strong Used Textbook program, the savings that we can offer our students are much greater than the discounts received by purchasing an e-book.
We all need to learn to promote the benefits of purchasing from your local college bookstore. We need to protect our market share just like the publishers are trying to protect theirs. We just need to do it better than they do.
Instead of trying to change Course Smart, I will concentrate on promoting our store, showing the students how much money we save them on their textbook purchases and what we do to help them save money whereever possible. Having said that, when a company develops a business model for e-books that truly saves students money, and not just up-front savings, I will gladly spend time looking at partnership opportunities.
Terri Meinel (meinelt@uww.edu) 11/9/2007 3:56:58 PM
I am interested in seing what type of commission structure this program may offer. With iChapters, Cengage (Thomson) was offering up to 15% for premium level which, in my estimation, is as good as selling bound books since there's no overhead and no risk. Since we're already losing sales to a myriad of internet ventures as well as price resistance on the part of students, and since faculty and students are using electronic media to a far greater degree, we can't not look at all options. I am not particularly comfortable with the rate of speed with which my (beloved) industry is changing (the age thing, you know), but it's a reality and I'm hopeful that the changes will include bookstores as partners.
Chris Smallwood (smallwood@concord.edu) 11/9/2007 2:59:13 PM
I guess the next thing we can look forward to is seeing the coursesmart link on the Academic Division web sites or Faculty home pages. Has anyone seen Faculty providing links to e-book sites on their home pages? I have seen instances of some Faculty including links to sites such as Amazon.com on their home page. Does anyone know of any regulations or campus polocies regulating this? WV State law states that Faculty cannot receive any kickbacks from companies by providing these links, but what is to stop them if no money is changing hands?
Chris Worthington (cworthin@jccc.edu) 11/9/2007 1:26:52 PM
What is their definition of a,"...legitimate web partner"? Anyone can become a legitimate web retailer...Would like to see how this develops (Lyman said CourseSmart is closely evaluating anyone who applies. "A legitimate web retailer who's in the business of selling course materials or wants to get in the business of course materials is a good affiliate for us. I'm not going to be teaming up with people who will damage my brand or damage the brand of the publishers who are supporting us.")
If they truly do want to work with us (the stores) than do so! Don't select only a few operations with the most likelyhood of obtaining the publisher's desired results (taking nothing away from our peers who were selected to participate)-work with a much broader beta group to find the most beneficial partnership program at all levels of store operations (there are hundreds of us who will work with you...but any program must be mutually beneficial -not just token percentages. We are waiting for the type of program that will (positively) excite us, as opposed to negatively impacting us. ("We're working very hard on models for college retailers that'll get them excited about distributing CourseSmart e-textbooks.")
Take a few steps back and learn to work with the stores, your number one distribution channel & business partners. Partnerships are more than words, and they are a two-way street. Actions speak louder than words - demonstrate that you do want to work with the stores, utilize the incredible pool of information, talent and resources at your disposal - the stores!
We continue to extend an open invitation to any publisher to include us in your beta testing/brainstorming. And by us, I include the many, many folks who all share the desire to be innovative & successful in how we collectively serve our customers.
Chris Worthington
Manager, JCCC Bookstore
Johnson County Community College
12345 College Blvd.
Overland Park, KS 66210
(913) 469-8500 x3326
cworthin@jccc.edu
Scott Franz (Gonzaga University) (Scott.l.franz@gonzaga.edu) 11/9/2007 11:16:44 AM
These are uncertain times in the textbook business and I don't blame publishers for looking at a new business model/channel.
I wonder, though, if this particular model will ever be more than marginal. It seems to me that there are two major obstacles to success. So far ebooks have been rejected. The market seems to indicate that students prefer hard copy. This may change with successive generations but my numbers at Gonzaga also show that most students still keep their books. For this reason, CourseSmart seems to alienate most students.
I still think that bookstores will be a viable channel in the future if we provide quality products and services for the majority of students who keep their book and overhaul our pricing model for the minority who are most likely to show an interest in CourseSmart.
Paula Baier (pbaier@brookdalecc.edu) 11/9/2007 9:44:38 AM
A good article---glad to be getting more info.
However, no matter how you look at it, this is pure genious on the part of the publishing houses. You partner with your biggest competetors and put together a program that targets an audience that is ripe for relief in the text market--and why not?
On the other hand, I dare say I might not use the term "partner" when refering to the relationship that this will create between the college store and CourseSmart. Oh well, when all is said and done...give me the "old fashioned hard cover book any day.
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