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© 2011, Bowker
The eBook R/Evolution: Where Do Campus Stores Fit In?
Presenter: Kelly Gallagher, RR Bowker
© 2011, Bowker
© 2011, Bowker
© 2011, Bowker
the times they are a chang’n
© 2011, Bowker
rate of…
motivation for…
direction of…
CHANGE…in strategy
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© 2011, Bowker
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Who’s problems are we looking
to solve?
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Publisher?
Used Books Open-Source
e-Book Transition
COGS
Piracy
Rentals
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Administration?
EnrollmentFaculty
Facilities
Funding
Tuition
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Bookstore?
e-tail Off-Campus
e-BooksFaculty
Administration
Rentals
© 2011, Bowker
Student?
Convenience Relevance
Requirements
Expertise
Cost
© 2011, Bowker
So looking ahead…
…how do we set strategies in times of uncertainty?
© 2011, Bowker
Know the market trends…
Know the end user…
Know your value proposition!
© 2011, Bowker
Know the market trends…
© 2011, Bowker
Sell-through
Tracks new and used Point-of-
Sale Data from 4-yr, 2-yr, and For-
Profit schools
Sample represents ~63% (FTE) of the US
Higher Ed market
Data collected from ~2,400
bookstores, & online e-tailers
Adoption
Course Book in Use data
collected from college
registrars office
Demand
Pre-order wholesaler data from over 4200
stores and e-tailers
19
Overview of Textbook Market for AY 2010
© 2011, Bowker
Pop Quiz!!
© 2011, Bowker
True or False?1. For the first time on
record, the textbook industry shrank ($$$) last year?
© 2011, Bowker
AY2005 AY2006 AY2007 AY2008 AY2009 AY2010 $-
$1,000.0
$2,000.0
$3,000.0
$4,000.0
$5,000.0
$6,000.0
$7,000.0
$8,000.0
$9,000.0
$5,733.2 $6,017.1 $6,272.2 $6,346.3 $7,318.0 $7,703.2
Total Dollar Market Size (in millions)
22
The College Textbook market continues to grow in spite of dire predictions
© 2011, Bowker
Multiple Choice2. The average price of a new
textbook in AY2010 was a) $74b) $84c) $94d) $104
© 2011, Bowker
AY2005 AY2006 AY2007 AY2008 AY2009 AY2010 $50.00
$60.00
$70.00
$80.00
$90.00
$100.00
$110.00
$83.73 $87.16
$92.03 $96.70
$101.63
$104.14
$63.52 $66.58
$70.24
$76.05 $80.24
$82.83
New average price Used average price
24
Students are Right: Textbook Prices Rising
© 2011, Bowker
Multiple Choice3. The used textbook market is
a) >60%b) >50%c) >40%d) >30%of the total (units) market?
© 2011, Bowker
AY2005 AY2006 AY2007 AY2008 AY2009 AY20100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
65.2% 66.5% 66.1% 64.3% 65.5% 67.8%
34.8% 33.5% 33.9% 35.7% 34.5% 32.2%
New Units Used Units
26
Two Thirds of Units Sold are New Units
© 2011, Bowker
AY2005 AY2006 AY2007 AY2008 AY2009 AY20100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
70.4% 71.0% 71.7% 69.5% 70.0% 72.5%
29.6% 29.0% 28.3% 30.5% 30.0%27.5%
New Sales Used Sales
27
Over 70% of Textbook Dollars Sold are New Units
© 2011, Bowker
AY 2010
ESL 9.84%
Vo-Tech 9.89%
Library Information Science 11.70%
Nursing 12.89%
Food Science 14.28%
Foreign Languages and Literature 16.38%
Medical Sciences 17.21%
Legal Studies 18.98%
Accounting 19.23%
Computer Training & Certification 19.83%
28
Career Texts are Keepers - Top 10 Disciplines with Lowest Used Book Rates
© 2011, Bowker
AY 2010
Museum Studies 43.85%
Theater 40.53%
Dance 40.10%
Geography 39.53%
History 38.36%
Philosophy 37.43%
Anthropology 37.21%
Art 36.49%
Paralegal Studies 35.96%
Sociology 35.34%
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Liberal Use of Used Texts -Top 10 Disciplines with Highest Used Book Rates
© 2011, Bowker
True or False?4. Math, English, and Science
comprise the top 3 selling ($$$) disciplines?
© 2011, Bowker
AY 2010
Mathematics $ 839.8
English $ 704.2
Biological Sciences $ 490.8
Psychology $481.1
Education $ 296.7
Accounting $ 268.4
History $ 261.3 Foreign Languages and Literature $ 250.2
Chemistry $ 243.2
Management $ 206.6
31
‘The Basics’ Top 10 Disciplines in Total Dollar Sales (millions)
© 2011, Bowker
AY 2009 to AY 2010
Computers & Information Systems 36.8%
Food Science 28.0%
Parks & Recreation 25.9%
Vo-Tech 24.8%
Computer Training & Certification 23.8%
Business Education/Vo-Tech 19.5%
Social Work 16.5%
Health & Health Related Professions 15.0%
Criminal Justice 14.1%
Medical Sciences 13.8%
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Jobs, Jobs, Jobs – Top 10 Growing Disciplines
© 2011, Bowker
AY 2009 to AY 2010
Theater -1.47%
Management Information Systems -3.06%
Family & Consumer Studies -3.34%
Finance -4.47%
Marketing -5.03%
Classics -5.04%
Astronomy -5.22%
Linguistics -5.43%
Dance -8.74%
Architecture -13.46%
33
Liberal Arts Not Supported -Top 10 Declining Disciplines
© 2011, Bowker
Multiple Choice5. Psychology and ________
a) Spanishb) Chemistryc) Biologyd) None of the aboveare the top selling ($$$) courses?
© 2011, Bowker
AY 2010
Psychology: Introductory $106.7
Spanish: Language: Elementary $ 76.8
Chemistry: Introductory $ 68.0
MIS: Applications $ 66.5
English: Composition: Rhetoric $ 62.7English: Composition: Introductory $ 59.7
Human Anatomy and Physiology $ 54.3
Biological Sciences: Introductory $ 51.6 Mathematics: Probability and Statistics $ 44.1
Biological Sciences: Introductory $ 43.7
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101 - Psych & Spanish Top 10 Courses in Total Dollar Sales (millions)
© 2011, Bowker
AY 2010The Art of Public Speaking (PK w/Connect Lucas), Lucas, McGraw-Hill, Inc.
$ 11.4
Biology (PK w/Mastering Biology), Campbell, Pearson Higher Education
$ 10.1
Human Anatomy and Physiology, Marieb, Pearson Higher Education
$ 6.2
Uderstanding Business, Nickels, McGraw-Hill, Inc.
$ 5.2
Biology: Concepts and Connections, Campbell/Reece, Pearson Higher Education
$ 5.1
Publication Manual of the American Psychological Assoc.
$ 4.8
Psychology, Myers, Macmillan $ 4.3
Exploring Psychology (P), Myers, Macmillan
$ 4.1
Thinking Mathematically (PK) Blitze, Pearson Higher Education
$ 3.7
Prentice Hall Guide for College Writers, Reid, Pearson Higher Education
$ 3.5 36
Speech & Biology TextsTop 10 Textbooks (ISBN’s) in Total Dollar Sales (millions)
© 2011, Bowker
Title Ed (C)Total Sales
Share of Franchise
New Avg Price
Used Avg Price Used Share
Exploring Psychology (P) 7 2007 $1,963 24.3% $101.19 $69.32 83.4%
Psychology 9 2008 $1,587 19.6% $133.19 $97.34 71.6%Exploring Psychology in Modules 7 2007 $814 10.1% $99.15 $70.80 74.4%
Psychology in Everyday Life 9 2008 $551 6.8% $75.77 $54.50 54.0%
Exploring Psychology 8 2009 $430 5.3% $100.77 $76.47 17.8%Psychology (PK w/Study Guide, PsychSim 5. 0 CD-ROM and Booklet) 9 2009 $271 3.4% $148.12 $111.81 1.6.0%
Psychology in Modules 9 2009 $254 3.2% $131.50 $97.81 12.7%Exploring Psychology in Modules 7E (Paper) and Study Guide 7 2007 $194 2.4% $119.49 $81.19 57.6%
Psychology 8 2006 $162 2.0% $129.81 $78.57 95.7%
Psychology in Everyday Life 9 2009 $153 1.9% $46.75 $35.13 0.5%
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A Tale of Two Revenues – The “Myers” Intro to Psych Franchise
© 2011, Bowker
Know the end-user
© 2011, Bowker 39
Student Attitudes Study• The semi-annual survey focuses on college student perceptions related to
educational content in the higher education market. • Key areas of focus were to determine:
– Rate of change and preference for digital texts– Value of content and learning platforms– Illicit behaviors with content
• It is powered by Bowker's PubTrack Consumer Panel, the publishing industry's exclusive resource for understanding buying behavior.
• The online survey polled 1505 college students drawn from a nationally representative panel.
© 2011, Bowker
Multiple Choice6. By the end of 2010 e-Books
represented over ___%a) 5%b) 10%c) 20%d) 25%of the total book market.
© 2011, Bowker
Overall eBook Trends
Apr_09
May_0
9
Jun_09
July_09
Aug_09
Sept_0
9
Oct_09
Nov_09
Dec _0
9
Jan_1
0
Feb_1
0
Mar_10
Apr_10
May_1
0
Jun_10
Jul_10
Aug_10
Sept_1
0
Oct_10
Nov_10
Dec_10
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
6.3%
5.0%
6.1%6.9%
4.8%
5.9%6.6%
6.0%
4.9%
6.9%6.4%
8.3%8.7%
7.7% 7.9%
9.5% 9.6%
10.7%11.1%
12.7%
12.8%
1.9%
2.8% 2.8%2.0%
2.4% 2.6%2.0%
2.8%2.0%
2.8%
3.9%3.5% 3.6%
3.2%
4.1% 4.3% 4.6%5.2% 4.9%
7.0%
10.9%
% read ebooks (daily/weekly) est. % ebooks purchased
© 2011, Bowker
Do readers really prefer digital?
• Trade Publishing – After reading ‘e’–17% say that they prefer print–And 17% say that they were not
satisfied with the digital display–66% report they are generally satisfied
with digital books
42
© 2011, Bowker
Do readers really prefer print?
• Other publishing segments have asked the same question…
• Newspaperso 61% of people now read news everyday on the Internet
vs. 50% who read newspapers (Pew Project)
• Magazineso 3 years ago only 1.5% of subscribers selected digital
replica consumer magazineso Now 38% of iPad owners are reading digital
magazines (Changewave Research)
43
© 2011, Bowker 44
What About E-Textbooks,
56%27%
7%7% 3%
E-Text ~7% MarketOverall Digital Content ~10 – 12%
Print TextbooksBundles & PacksCustomsE-ContentOther
© 2011, Bowker
AY 2010
Management
Psychology
Business
English
M.I.S.
Marketing
Mathematics
Education
Accounting
Economics
45
Wide Aray of ‘e’Top 10 Disciplines with Highest e-Textbook Rates
© 2011, Bowker
Multiple Choice7. When given a choice ___%
a) 55%b) 65%c) 75%d) 85%of students would choose print over text.
© 2011, Bowker 47
Key Finding-Print vs. e-Textbook
• 75% of students preferred traditional printed textbooks over digital replica e-textbooks.– Like the look and feel
of print– Potential for
permanence of ownership
– Opportunity for resale
© 2011, Bowker 48© 2011, the Book Industry Study Group
Students reported low satisfaction with e-Textbooks
© 2011, Bowker
True or False?8. Kindle, iPad, & Nook have
now surpassed PC’s as the primary eText reading devices?
© 2011, Bowker
Laptops remain the top device for reading eTextbooks
© 2011, Bowker
Multiple Choice9. Trade ‘e’ sales are expected to hit
25% by 2013. Most predict Higher Ed will reach that number ina) 2014b) 2015c) 2016d) 2017
© 2011, Bowker
Most new devices lack the computing power and functionality required by students.
Most students are unlikely to purchase and carry multiple devices.
DRM Tech-savvy does not = instant conversion Digital Fatigue
Result: eTextbook and eResources sales are projected to be 25% of Higher Education Sales in 2016
Higher Education Barriers to Rapid Digital Growth
© 2011, Bowker
So where does this leave us?
© 2011, Bowker
© 2011, Bowker
Compete on the value propositions you know you can win on… & choose no more the two!
5 Core Retail Value Propositions1. Price2. Service3. Convenience4. Selection5. Relationship or Experience
© 2011, Bowker
Student & Bookstore Affinity – what values are you already winning on?
Lowest
Price
Order Q
uickly / E
asily
Can get books b
efore classe
s
All the te
xtbooks I
need
Accurate Book lis
ts
Recommended by cla
ssmates/f
riends/f
amily
Recommended by pro
fessors
0
1
2
3
4
5
6
7
8
9
10 9.238.25 7.9 7.6 7.41
6.28
2.1
3.8
7.98.2 8.2 8.6
5.66.9
Source B&N College
© 2011, Bowker
© 2011, Bowker
Keeping Perspective
© 2011, Bowker
Multiple Choice10. My Alma Mater is…
a) The College of New Jerseyb) Yalec) Northern Arizona U.d) University of Houston