January 24, 2012 | by Brian Jacobs | in Commentary

Why Apple’s Textbook Initiative Still hasn’t Solved the Problem of Cost

Is Apple now set to “disrupt” textbook publishing in the same way that they have the music industry? Will the combination of iBooks 2, iBooks Author, and the iPad have a similar effect that iTunes and iPods had a decade earlier? The features of these new applications, as demonstrated last Thursday at the Guggenheim in NY, are impressive. While some of these features already exist on the platforms of other companies, Apple’s slick single package and extensive market reach may be the catalysts that finally transform the way educational materials are produced and distributed. It’s possible, at least.

But the textbook business is not the music industry and that much was already evident at Thursday’s announcement. A decade ago, record labels were falling apart as illegal music downloading went mainstream. The 99 cent/song cost was forged under severe market conditions for the content owners. Apple helped the traditional media companies stabilize, but at the cost of cannibalizing their own CD sales.

The textbook publishers are in quite a different situation. Through practices like textbook “bundling”, frequent edition changes, and twice-annual price increases, their higher education divisions have held up relatively well.  It’s really the K-12 divisions that have suffered the most as states cut education budgets, forcing teachers and students to make do with old textbooks. What’s more, states around the country are actively pursuing “open educational resources” (OER) textbook solutions, through organizations like CK-12. Adoption of such materials, which are freely available, would obviate the need for at least a portion of commercial textbooks.  To be sure, OER’s pose a serious threat to both sides of the educational publishing business but it is a threat that aggravates an already weak K-12 outlook.

It’s no coincidence, then, that Apple’s first foray into the textbook market focuses on the business that’s hurting the publishers the most. For among the many obstacles holding back widespread adoption of digital textbooks, pricing is certainly high on the list. As such, an announcement of a new pricing model was critical for the opening ceremony and, apparently at this time, is achievable only with K-12 publishing.

And yet even the new model for this market achieves substantially less than it seems. Wall Street Journal columnist Peter Kafka suggested that the annual $14.99 textbook price in this model equates to the $75 per book he thinks school districts pay each five-year adoption cycle.  If this is right, then school districts would be paying substantially more for these materials than they are currently since there would be a hardware purchase on top of the annual content costs.  Avram Piltch, Editorial Director at LAPTOP Magazine thinks the numbers are actually far worse than that.  He points out that school districts often pay a lot less than $75 per book and hold on to them for more than five years.  As an example he cites North Carolina, which spends less than $43 on elementary texts, and less than $60 for high school—and many of these books are kept far longer than five years.  Leaving aside all the other issues iBooks2 raises for education (such as the still uncertain value of digital interactivity for addressing what ails American education), it’s hard to make the economics work at a pretty fundamental level.

The difficult irony is that the very budgetary pressures that have led publishers to try this Apple partnership also effectively preclude the possibility of wholesales purchases of iPads. Of course, K-12 schools are not uniformly under the same pressure, and what could well  emerge is a situation, as Piltch suggests, in which the wealthy school districts and the well-to-do private schools embrace solutions like this while the vast majority will need to find less expensive alternatives, and these are likely to be a long time coming.