It’s no secret many colleges and universities are struggling to meet their budgets due to funding cuts and stagnant endowments. Many students, too, are having trouble covering tuition. But academic publishers are feeling the pinch as well, even as schools gear up for the fall term—the course-materials equivalent of the holiday shopping season.
Recent financial moves by two of the biggest college textbook publishers reveal signs of stress, which could redefine relationships with campus bookstores.
Last September, McGraw-Hill said it would spin off its educational publishing from its more profitable financial data publishing, creating two companies. However, the Wall Street Journal reported July 13 that a private equity firm is sniffing around the educational unit and may put in a bid to buy it.
In a separate report by Bloomberg News, Cengage Learning, grappling with debt from its own acquisition five years ago, may be considering an initial public offering to bring in cash.
“The academic publishers are under threat, and campus stores should not assume that they are immune or unaffected by that or similar factors. We should not look at challenging times among the publishers as a good thing,” says Mark Nelson, NACS chief information officer and vice president of NACS Media Solutions.
For independent and institutional campus stores, the situation doesn’t bode well. These stores are already a difficult (read: costly) channel for textbook publishers because each store must be dealt with on an individual basis. Systems vary from store to store, and some stores, astonishingly in this era, still don’t have full inventory management or e-commerce capabilities. Some tussle mightily with publishers who are trying to move into digital course materials.
“The more stores fight against publishers, the more publishers will be pushed to look at alternative channels they can potentially trust, such as direct-to-student,” Nelson says. “If they are working around campus stores as a channel, did anyone ever give thought to the possibility that it is because stores aren’t adding value to them as a channel as they once did?”
Yet the key to survival for both academic publishers and campus stores may lie in stronger partnerships. “The publishers need campus stores, and we need them if we are going to make it through the digital transition ahead,” Nelson says.
“Within NACS, we are developing or considering several mechanisms to improve publisher relations and industry relevance,” Nelson says. “We’re looking at communications that help publishers understand what we’re doing, both as an association and an industry. We’re looking to create a publisher advisory board to provide us with input into how to develop better programs and services, and create a stronger communication channel between stores and publishers.
“Logistically, this may be executed later this year through The Hub, the new online collaboration and knowledge management environment NACS is preparing to unveil at CAMEX 2013,” he adds. “NACS alone cannot solve these problems, however, if stores and publishers are unwilling to change their perspectives. If we fail to do so, we may all fail to transition.”