Pearson Signals Demise of the College Textbook in Digital Drive
(Bloomberg) -- The world’s biggest educational publisher will release all future editions of its U.S. titles digitally first, as students dump their traditional textbooks and switch to online learning.
Britain’s Pearson Plc used to rely heavily on selling the chunky, expensive textbooks that students needed to pass their exams. The arrival of cheaper information online and a new trend for renting rather than buying course materials forced it into a painful adjustment.
The company said Tuesday it will now update its 1,500 active U.S. titles on an ongoing basis digitally when there are new developments in the field of study.
"Our digital first model lowers prices for students and, over time, increases our revenues," Chief Executive Officer John Fallon said in a statement. "By providing better value to students, they have less reason to turn to the secondary market.”
Students expect to pay about $40 on average for an electronic book, and $79 for a full suite of digital learning tools, Pearson said. The company will still offer print books for rent, for an average price of $60.
“What this looks like is a tacit admission that there is no return to the days of high textbook prices,” Liberum analysts led by Ian Whittaker wrote in a research note.
Pearson shares were up 2.8% as of 9:25 a.m. in London.
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Pearson has struggled to maintain its foothold in the U.S. market -- its largest source of income -- and faces competition from new rivals including Amazon.com Inc. Its U.S. sales have fallen by more than $200 million since 2016, according to Bloomberg calculations.
The company said almost two-thirds of its revenue now comes from digital or digitally enabled products and services. Non-publishing activities such as professional testing and virtual degrees have been growing, with the company expecting overall sales to stabilise in 2019.
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