Format War Heats Up Among Publishers of Electronic Textbooks

February 22, 2010

Major textbook publishers are firing the first shots in a format war over their electronic editions, with several players hoping to control distribution to students and to make used textbooks extinct in a future they see as increasingly digital.

Macmillan Publishers plans to announce on Monday its entry in the battle: an unusual publishing platform for electronic textbooks that it hopes to lure other publishers to use as well (in exchange for a cut of their sales). And to entice faculty members to assign the books, the company will even pay some of them (if the professors enhance the volumes).

The system, called DynamicBooks, lets any professor make a customized version of one of the company's existing titles. That means that chemistry professors can take one of the company's chemistry textbooks, rewrite some parts, add their own papers or chapters, or embed videos or homework questions they've created. Any passage added or changed is clearly labeled as not part of the original book, so students know what is original and what is customized—a concession that was made to textbook authors.

Professors who customize a textbook have a chance to make some extra money. For each customized copy that a student buys, the professor who contributed the material gets a dollar. That could add up if a professor's retooled book becomes popular and is assigned by professors at other colleges.

The titles will underprice some competitors, and most of the 20 textbooks in the pilot version of DynamicBooks will be sold at less than half the price of the printed versions.

The effort joins a quickly growing list of souped-up textbook systems aimed at upending the traditional business model in the textbook industry. Last year, McGraw-Hill unveiled its own format for enhanced e-textbooks, called Connect. John Wiley & Sons recently started a similar line of books called WileyPlus.

The publishers argue that their new platform strategy makes textbooks better educational tools because of all the new interactive features. As Rik Kranenburg, McGraw-Hill's president for higher education, professional, and international publishing, put it recently: "Software and content meld together to provide instructional experience, and that is where we find we will add value."

A Kind of Kickback?

All of the new systems offer advanced features and services that go beyond simply displaying the pages of existing textbooks on a screen. They mix multimedia, online testing tools, and social-media features that publishers hope will persuade professors to assign them and students to choose them over printed versions.

One consequence is that they make it difficult or impossible for a student to resell the book to someone else. Most of the new e-books self-destruct after a set period of time, say a semester or a year, to prevent resales.

Another feature, likely to frustrate some users, is that these platforms have their own interfaces and formats that the companies control. Advanced e-textbooks from one company are not compatible with other companies' platforms, and each system has its own quirks and a learning curve for students and professors.

Professors are telling the companies they want a standard, so they have to learn just one tool that will work for all the courses they teach. That's why Macmillan says it plans to invite its competitors to place their books in the DynamicBooks system for professors who want to use only that interface.

"It's not just Macmillan books that will go in this," said Clancy Marshall, general manager of DynamicBooks, a subsidiary of the publishing company. Other publishers can upload a digital copy of one of their books, and the company will place it in the system, in exchange for an 18-percent markup that will go to Macmillan, she said. No competitor has yet agreed to participate, but they have not yet been briefed on the specifics because details of the project have been kept a secret until now, says Ms. Marshall.

Macmillan is not the first publisher to allow professors to customize its textbooks. Flat World Knowledge Inc., an upstart publisher that gives textbooks away online but charges for printed versions and study guides, has the feature as well, but it does not offer a financial incentive to professors to make improvements to the books.

Paying professors a dollar per book could be seen as a kind of kickback. But Ms. Marshall defends the practice, saying that only professors who make significant changes in a book will qualify for payment. The company has devised a list of 10 types of changes that qualify, and professors must do at least six of them for their changes to be considered significant. "We don't want to just be bribing instructors to use this," she said.

But the creative plan shows how competitive the e-textbook market is becoming, and suggests that, in the short term, professors and students will have a confusing abundance of options.