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Thursday, August 28, 2008

University System of Ohio and CourseSmart

There have been a few items in the press this week about a new arrangement between the University System of Ohio (USO) and CourseSmart (CS). Here are links to a few of the stories and press releases:

Apparently the timetable for this announcement was pushed up a bit after leaks to the media resulted in some of the above pieces. So what does this mean for stores? Well, it is a little complicated. In addition to the above articles we have been talking to some of the different parties involved to understand the arrangement and its implications. Here are some of the pieces of information:

  • As discussed with USO and CS earlier this year, there is opportunity and capability for stores to handle the transaction. CS is willing to negotiate a few points with stores to cover transaction costs (such as credit card interchange fees). Stores can set their own price for the materials sold through their store. USO itself will not receive revenue from the textbooks sold.
  • OhioLINK can authenticate, by IP address, where a student is coming from (i.e., which campus). Thus, stores that choose to participate will have transactions from those campuses routed through their store. For example, a student from University "X" would be recognized by their IP address, and would be presented an option to buy the digital version of the textbook from their college store with no option to buy it from USO directly or elsewhere. Students from that institution would then pay the price set by that college store or university. This arrangement is necessary due to legal contractual obligations present on some campuses.
  • This arrangement applies to all colleges and universities in the state of Ohio that belong to OhioLINK (which I understand is pretty much all institutions except for a handful of smaller schools).

For stores and institutions (public and private), this takes some control away from what are normally local decisions around content, format, price, and vendor selection. It also presumes that faculty and students will choose cost over options that best fit their pedagogical or learning styles. As the recent PIRG study notes, digital does not necessarily mean reduced cost for students either, particularly when printing and other total cost of ownership factors are added up. Stores do have an opportunity to participate and maintain ownership of the transaction -- allowing them to continue as the key authentication source for course content on a campus. By maintaining the transaction at the store level it allows students to pay for content in forms other than credit card, such as cash, finiancial aid, or campus-based accounts (where permitted). However, it also makes store margins visible, potentially resulting in negative press even if those margins are set at only a cost-recovery level. For the off-campus stores, (aka private stores), it is not clear whether or not they will have an option to participate in this model under the same terms.

This arrangement has implications beyond Ohio. Other states might choose to pursue similar models for gaining access to digital course materials. The implications of a state entity selecting a vendor and terms for both public and private institutions is troublesome. While the motive of reducing costs of textbooks to students is laudable, digital is not necessarily the solution at this time. It is important to offer choice, and convenience. And stores should be offering students digital options. If we do not, someone else will and on terms where we may have little input or control relative to the vendor or margins. At the same time, institutions will need to understand that providing students with lower cost textbook options may result in lower revenues from the college store. That in turn means fewer resources coming in to support student activities or other campus functions to which college store revenue contributes.

Another important aspect of this change is how quickly it occured. In a matter of months this went from a discussion of possiblities, to a completed arrangement that affects nearly 200 institutions of higher education, and an even a greater number of college stores if we add private, off-campus stores to the accounting. That is a significant change in short order. Stores that have held off considering digital because they see it as years away might want to rethink that position.

Of course, all of this concern may be moot, as many students will likely be unaware of the option to buy digital, and of those who are aware, only a fraction will choose to purchase course materials in a digital format even at the lower up-front price. Perhaps it is just another signal that digital options are maturing and that stores must take steps to control their role or involvement in the future of course materials, or risk having future decisions made for them. Like paperbacks and used books before them, electronic textbooks, as an option for students, look like they are now here to stay.

1 comment:

Chava said...

Interesting to know.