5 Universities to Test Bulk-Purchasing of E-Textbooks in Bid to Rein In Costs

January 18, 2012

An effort by college leaders to shake up the textbook industry got a boost this week, as five universities announced plans to try bulk purchasing of e-textbooks. The news comes just one day before an Apple news conference that is expected to feature that company's entrance into the e-textbook space, and it highlights steps that colleges themselves are taking to rein in textbook prices rather than wait for the market to reshape itself.

The game-changing business model being tested in the bulk-purchasing experiment goes like this: End the need for students to buy their own books each semester by requiring them to pay a course-materials fee to the university, which would use the money to purchase e-textbooks at deeply-discounted prices. It's a model that publishers appear interested in, because it gives them a steadier and more predictable source of income than the current practice of letting students find textbooks any way they can—used, new, borrowed, or downloaded.

The five colleges involved in the project are: Cornell University, the University of California at Berkeley, the University of Minnesota, the University of Virginia, and the University of Wisconsin. They jointly negotiated the e-textbook deal in a process led by Internet2, as part of its relatively new program to try to pool the buying power of colleges in technology purchases.

Indiana University recently tried the bulk-textbook-purchasing approach in a project of its own, and its leaders are working with Internet2 on the new project.

So far only one publisher—McGraw-Hill—is involved in the effort. But if the experiment goes well, leaders hope to persuade other publishers to join in, and to get more colleges to sign on.

At the moment, however, leaders of the project expressed how tentative the five universities are in endorsing the approach. Only a handful of courses at each campus will try the e-textbooks this spring. And for now, instead of charging students a fee for the textbooks, the universities are covering the costs. But if the project continues, students would pay the fee.

"This is an instance where it is really a pilot," H. David Lambert, Internet2's president, said in an interview on Tuesday. "The question is, What model is most likely to be scalable, serve the students' and the institutions' and the publishers' interests?"

Mr. Lambert did note that many college officials are eager to push for something to help reduce textbook costs for students. "The current model is so illogical in terms of the best interests of universities and students that we have to find our way toward a new model," he said.

Wooing Publishers

The toughest part of the negotiations with publishers, both for Indiana and for Internet2, has been over price per textbook, says Bradley C. Wheeler, chief information officer at Indiana University at Bloomington. But he argues that publishers would "make more money on this model than they do right now," even if colleges succeed in pushing prices lower than the sticker price for e-textbooks.

"I think more of them will come into this model," he said of publishers. "When you look at what's behind Door Number 2 for them, it's not particularly good," he added, noting that textbook publishers are particularly worried about piracy taking off if they do not find the right model for digital distribution.

Mr. Wheeler stressed that the arrangements give students a better deal than some students got in a recent pilot project at Daytona State College: At Daytona State, many students who bought e-textbooks saved only $1, compared with counterparts who purchased traditional printed materials.

Specifically, the students in the Indiana pilot project saved an average of $25 per book, according to new data released this week by the university. That e-textbook project has involved some 5,300 students in 130 class sections so far, and officials plan to expand it this semester.

The new project moves Internet2 into unprecedented territory. The nonprofit organization is known mainly for the nationwide high-speed computer network it built for its hundreds of member colleges. It has not previously worked with educational content.

That could be a signal of how much textbooks are changing, becoming as much of a kind of software as a set of words on a page, argues Jed Macosko, an associate professor of physics at Wake Forest University, who is working on an e-textbook project of his own called BioBook.

"The line between textbooks and software is blurring because we now have everything digital," he said. "They're not just print, they're interactive programs."

And some colleges have a tradition of buying software in bulk for students. At Wake Forest, for instance, students are required to purchase a laptop from the university, and the machines come loaded with software that was deeply discounted because of the university's purchasing power.