There was some big news for our industry last week when Cengage Learning announced that it will be the first higher education publisher to offer a textbook rental program. The publisher entrance follows hundreds of college based rental programs already in existence —some running for more then 100 years. According to the press release, the rental titles will be available through the CengageBrain.com website at 40 to 70 percent less than the publisher’s list price. For students that participate in the rental program, the first chapter of the book will be made available in e-book format while the book is sent to the student. Students can select a rental term of 60, 90, or 130 days and then choose to return the book or purchase it.
The New York Times recently featured an article about this news and it became one the Times most e-mailed articles for a few days proving that there is growing interest in finding alternatives to purchasing traditional textbooks. Rental programs are becoming more popular because they may give students a lower upfront cost option.
Follett Higher Education Group, McGraw Hill, and Barnes & Noble College Booksellers as well as a number of independent college bookstores are also initiating new programs for the fall semester. Follett will begin a pilot rental program at several college stores including: State University of Buffalo, Grand Rapids Community College, and California State University. McGraw-Hill will soon announce a partnership with Chegg.com, an online service for renting and selling textbooks, which will make 25 books available on the Chegg website. McGraw-Hill is also reportedly in discussions with a number of college bookstores to launch similar programs. Barnes & Noble College Booksellers will also begin a pilot rental program at three of its stores.
A possible difference between the new publisher based programs and those offered by campuses through the college store is the campus based model allows institutions a certain level of control over the rental price and lifecycle of the adoption, thus providing greater potential savings for the students. In contrast, a publisher based program establishes its base rental price on the current print price of a new book. In many cases this price escalates annually or even biannually. As a result, the publisher based model could eventually lead to rental prices at levels above what students believe to be acceptable. A parallel to this is what has happened with publisher based subscriptions for digital journals.
Stores must become even more creative in developing and supporting new business models. The rental model being developed by Follett for example is an interesting one as it brings more options and choices for students and limits start-up costs. There are opportunities for groups of stores to collaborate with both publishers and used book wholesalers to make similar models work that include the college store.
Stores still bring many important value propositions to the table. However, they must be prepared for significant changes in how their businesses operate. We must be innovative and provide alternatives that leverage advantages of the new models while also leveraging our core strengths and advantages. Failure to innovate will result in continued loss of market share and relevance for the college store and other booksellers.
Note: The posting has been revised to reflect new information.