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Enhancing E-book Purchases: Consumer Driven Models From the Text Book Industry

By John Konczal, Global Industry Executive, Sterling Commerce, an IBM Company

When the mere act of delivering content digitally isn’t enough, textbook publishers are coming up with new sales models for digital content.

Thanks to the emergence of the Kindle and other electronic reading devices, today’s consumer can choose from a multitude of ways to consume content with multiple delivery model preferences. It is all about consumers and what they want, when they want it and how they want it. With consumer expectations higher than ever, the question becomes how can publishers meet these growing consumer demands while also generating revenue? Unfortunately, the mere act of delivering content digitally is not enough. Publishers today need to go beyond the book to embrace innovative ways to enhance the e-book purchase to meet their customer’s desire for convenience, personalization and flexibility.

Textbook e-Business Models Leading the Way

Forging the way for general consumer to purchase digital content, academic textbook publishers have been among the first to offer new product models that take advantage of the flexibility of the digital format to provide greater value and align with students’ increasing expectations. And there are a number of ways they’re doing this.

One option is to offer a rental program on e-formatted textbooks. Students can check out e-textbooks for a specific time, at the end of which their digital rights management (DRM) license privileges would be revoked. This is a stopgap solution allowing more rapid adoption of the electronic format while the industry comes to terms with DRM-free distribution of digital books. Web sites like eCampus.com are now providing this service, offering e-textbooks that can be rented for a fraction of the traditional purchase price. This means, for example, an engineering student could spend $50 instead of $500 per semester on his books while at the same time the publisher retains control of the content.

A natural evolution of this example might include a subscription program where the student is granted digital access to all the materials he needs for a flat fee per month so long as he uses an app or device that allows the monitoring and management of the service. Music companies have been doing this for years now. The student gets the opportunity to access more course materials for less upfront money, and the publisher gets the benefit of the recurring revenue stream, which can be much more profitable over the long haul than a one-time purchase.

Companies like Cengage Learning with its Cengagebrain.com site take this model even further. Cengage Learning not only supports renting textbooks but also supports bundling of the textbook, either delivered physically or digitally, with supplementary educational materials, such as study guides. For one discounted price, a student can obtain a package of materials best suited to support the student’s personal learning needs. So not only can Cengage’s customers rent traditional and digital books, price their rentals based on rental length, monitor their rental time period, and manage renewals and returns online, they can create personalized learning packages that best meet their needs.

Cengage Brain website

Embracing a New Business Model

Many of the same business models implemented by the textbook industry can be applied to other aspects of the publishing industry. For example, in selling the latest John Grisham book, a publisher could also offer multiple additional products, delivered physically or digitally and priced a la carte or bundled, such as exclusive author notes, book group guides, an excerpt from a Grisham work in progress, or the opportunity to participate in a video chat with the author. Bundling digital materials with the core book is a value-added package for the customer. To take it a step further, publishers might allow consumers to create their own bundles.

Book Incentives

Additionally, as book consumers become savvier, they will demand the same capabilities of traditional print resources that they now demand from music and video resources, including access to new purchasing models and fulfillment methods. Publishers can follow the lead of the retail industry by adopting a few of these business tools and practices to meet the emerging needs of their customers:

  • Personalized Offer Management Capabilities that enable a publisher to rapidly deploy creative offers, giving customers personalization opportunities. These enable new revenue streams, such as bundles, subscriptions and rental plans. This would include:
    • Product and Pricing Definition Tools to allow business users to define market offers in hours or days rather than weeks or month. The idea is to put the power in the hands of the business users, the marketers, to use their creativity to create enticing offers.
    • Pricing Capabilities to facilitate creative pricing plans and promotions. An example of this would be a time-based subscription model with renewals or customer-defined content bundles.
    • Rules-based Personalization and Segmentation Capabilities to promote products and create market offers based on individual segments as well as customer needs and desires. In higher learning, for example, offers could be pegged to specific universities. Or, customers who previously spent a certain amount could be sent specific offers via e-mail.
  • Multi-channel E-commerce Capabilities that enable publishers to market and sell direct to customers over the Web or any mobile device. This would include:
    • Multiple Storefronts that enable a media provider to deploy and use multiple branded electronic storefronts to sell based on specific product lines or specific market segments. Cengage Learning, for example, creates branded Web pages for each university, and even offers branded pages by professor. In general publishing, a book might have its own micro site, such as a page for the blockbuster Girl with the Dragon Tattoo and sequels.
    • Personalized Selling that leads customers through the process of personalizing purchases for their needs, informing them of appropriate offers related to their current account profile and product, meeting their pricing and fulfillment desires, while maintaining awareness of all product and service availability and times.
  • Diversified Fulfillment Methods that provide customers considerable flexibility in how and when they obtain their purchases. This means not only supporting digital fulfillment methods, but also flexible fulfillment methods for physical media. For example, retailers rely on drop-shipping, using third-party suppliers to provide goods and services from within the retailers’ own networks. This extends the retailers’ ability to offer goods to their customers without having to carry more inventory. Publishers should have the ability to use this same approach to transform the traditional distribution chains into a distribution web of multiple fulfillment options.

The digital age of publishing is here to stay. The choice is no longer in delivering content digitally, but in how you choose to leverage that content. By following the suit of the textbook industry and embracing new consumer-driven models, publishers not only can take great strides in enhancing the customer experience -– they’ll also be able to grow their market share.

DISCUSS: Could E-book Rentals Ever Be Viable for Trade Publishers?

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4 Comments

  1. Posted April 5, 2011 at 7:23 am | Permalink

    I have started to embed a trailer in my books and am probably also about to start embedding a second trailer at the end, about the next book. I would also like to put an extract of another of my backlist books, but as I’m still in the throes of trying to get all my rights back, there might be copyright issues.

  2. Posted April 5, 2011 at 9:48 am | Permalink

    A nice model would be the adoption of upgrades just like in software.
    I have a background on computer science and always got frustrated when bought a book on some programming language and when a new update on the language got out a new edition of the book was launched but I had to purchase a new book that was 80-90% equal but with a new chapter or two.
    E-books made this update model feasible. They could even charge a fee for the update.

  3. Posted April 5, 2011 at 2:14 pm | Permalink

    A problem I see with any of these models is that it will NOT be driven by what the customer wants, but what the publisher THINKS the customer wants. For example, bundling content will end up like cable TV; you want specific channels, well you have to pay for a ‘bundle’ which includes 99 others that you don’t want.

  4. Vincent
    Posted June 25, 2012 at 4:45 am | Permalink

    I agree with Widdershins.

    Time and time again, we hear of a author thats breaks into the big time by writing – suprise suprise – a good book.
    How many times have we bought a book or watched a film because of the hype, only to be let down?

    Publishers need at the moment to justify their existence at the moment. The digital age has been eroding the classic business plan for years now. With so many ways for people to self publish its harder for them to control the arena. Many authors are put off by the endless format questions; the blogging, the web page design, social interaction. Its a mine field for a solo aurthor to cope with. Some do and grow, some need the publisher – a helping hand – and thats the area they need to concentrate on. Making the skills of the publisher more open.

    After all. If the publishers knew everything, the next best seller wouldn`t be a suprise would it!

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