Will a Netflix Model Work for Textbooks?

Digital Learning

Will a Netflix Model Work for Textbooks?

By Tina Nazerian     Sep 8, 2017

Will a Netflix Model Work for Textbooks?

As he started his second semester as an undergraduate, Olivier Mercier was looking for the cheapest way to get the textbooks he needed for his classes.

Mercier, who’s now a sophomore studying business management at City, University of London’s Cass Business School, found three of them on a new service called Perlego, a UK-based company which wants to be the Netflix of academic content. Perlego gives users access to a library of content, including digital textbooks. The physical copy of each of those books would have cost him about $50 on Amazon, far more expensive than the cost of his Perlego student subscription, about $15 a month. The service has a premium version that costs about $20 a month.

Perlego officially launched in January 2017, and raised almost $700,000 for its seed funding round last year. So far the company has won participation by major textbook publishers, including Palgrave, Wiley and Pearson. And it’s currently in the process of closing an agreement with McGraw-Hill. Non-textbook publishers it works with include Atlantic Books and Greenleaf Book Group. Perlego also has a free version that gives access to more than 50,000 public domain books such as "The Great Gatsby." There are publications like major reports, white papers and case studies too. And what’s more, students can collaborate on the platform. For example, one user can tag another to check a highlighted or annotated quotation.

Gauthier Van Malderen, Perlego’s founder, says his company currently is involved with pilots in 12 universities.

Val Malderen says Perlego wants to give students all of their academic content in one place, and also wants to help publishers “recover lost market share.”

That falling market share is well documented. One partner, Pearson, took a pre-tax loss of approximately $3.2 billion for 2016—it’s biggest loss in history. In July 2017, it sold 22 percent of its stake in Penguin Random House. And a month later, Pearson announced that it would lay off 3,000 more employees.

The publisher closed a deal with Perlego last month involving its European division. Van Malderen says Pearson wants to first see if the model works in Europe before taking it worldwide.

Ethan Senack, outreach and policy manager at Creative Commons USA, says if he had to describe the current state of the textbook industry in one word, he’d say “broken.” He believes the internet should be enabling more sharing of knowledge for students, but right now, publishers are “leveraging technology to limit access” to information.

“The textbook market is not delivering what students need in the current day and age,” adds Senack. “There’s real need for alternatives in the market.”

Senack thinks the concern over textbook prices has reached a “fever pitch” in recent years, and publishers “are looking for ways to respond, or at least appear to respond, to consumer concerns.”

Van Malderen says Perlego pays back publishers based on how frequently their titles are used. For instance, if a user only reads one book, 65 percent of the subscription price by that user goes to the publisher. But if a student reads two or three different books, the payment is “split up, depending on the consumption.” He says that unlike Amazon’s Kindle Unlimited subscription service, Perlego considers the price of the book in its royalty model.

Publishers get more than money when they join Perlego. According to Van Malderen, they also receive usage data that lets them know who has been reading what, how much time is being spent on a specific book, and which chapters of a book were more popular. Publishers can even learn about the reading habits in a particular geographic location—for instance, if students at a particular university are reading a lot of chemistry content.

In terms of copyright protection, Val Malderen says a user can copy ten percent of the material per title. Perlego also has a mechanism in place that lets it know when people are taking screenshots. And users can only access the service on three devices—mobile, tablet and desktop.

Van Malderen says most users Perlego targets are between 18 and 24 years old, and are tech savvy and comfortable with learning online. He adds that some users have requested a mix of both online and physical versions of the content. Perlego currently does not give users the option to purchase physical copies of textbooks through its platform, but is looking into that possibility.

While publishers are rushing to digital, not all students prefer it. Richelle Perry, a current student in an associate’s program for American Sign Language interpreting at St. Louis Community College’s Florissant Valley campus, says she still wants print textbooks, because she likes taking notes actually on the text. And, she adds, Perlego might not work for her because many of her textbooks are not from big publishers.

She says with the caveat of being able to print, which is not possible on Perlego, she’d consider Perlego, but would have to determine if the subscription cost and the cost of printing things out for a semester would be more cost-effective than purchasing a used textbook.

But Mercier, the student in London, wishes he had discovered Perlego during the very first semester of his undergraduate studies. “Looking back, if I had discovered this before, then I would’ve saved quite a bit of money."

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