Cengage ams to disrupt the college textbook market

Record ID: 1355547

  • Title: Cengage ams to disrupt the college textbook market
  • Date: 10th September 2018
  • Summary: NEW YORK, NEW YORK, UNITED STATES (AUGUST 27, 2018) (REUTERS) ROW OF TEXTBOOKS PUBLISHED BY CENGAGE CENGAGE LEARNING CEO, MICHAEL HANSEN, TALKING TO STAFF MEMBER (SOUNDBITE) (English) CENGAGE LEARNING CEO, MICHAEL HANSEN, SAYING: "We deliberately set out to fix that broken business model. And the business model was about selling students more and more books. The more courses you enroll, the more books we sell you. What we said is, it's important to put affordability in the center together with quality of education, put affordability in the center." NEW YORK, NEW YORK, UNITED STATES (AUGUST 30, 2018) (REUTERS) TILT UP FROM PRICE LIST FOR NEW AND USED COPIES OF 'PRINCIPLES OF ECONOMICS' TEXTBOOK TO TEXTBOOK WRITTEN BY GREGORY MANKIW AD ON BOOKSHELF FOR CENGAGE UNLIMITED SERVICE PAN DOWN FROM TEXTBOOK SIGN AT BOOKSTORE TO STUDENTS WAITING IN LINE AT REGISTER (SOUNDBITE) (English) FORDHAM UNIVERSITY GRADUATE STUDENT, LAU-RENE MANUEL, SAYING: "Where do I sign up? Yes, I would be." (SOUNDBITE) (English) FORDHAM UNIVERSITY FRESHMAN, GRAYSON BROWN, SAYING: "Yes. I would do that." (SOUNDBITE) (English) FORDHAM UNIVERSITY SENIOR, CAROLYN FALLER, SAYING: "I would say I like having like hardback, hard cover, or like paper textbooks rather than online. I find it's a lot easier to read and remember the information. I like writing and like highlighting." STACK OF USED BOOKS ON SHELF FORDHAM UNIVERSITY MARKETING PROFESSOR, ALBERT GRECO, WALKING OUT OF SCHOOL BUILDING (SOUNDBITE) (English) FORDHAM UNIVERSITY GABELLI SCHOOL OF BUSINESS MARKETING PROFESSOR, ALBERT GRECO, SAYING: "The model is innovative. They're probably ahead of the curve. They're clearly ahead of the students. Now, at some point, students may well to move to 100 percent digital. But it's not going to be quickly. It's not going to be in the next couple of years." NEW YORK, NEW YORK, UNITED STATES (AUGUST 27, 2018) (REUTERS) VARIOUS OF WORKERS AT CENGAGE OFFICE ENTRANCE TO CENGAGE OFFICE
  • Embargoed: 24th September 2018 18:53
  • Keywords: Michael Hanson shake up the college textbook market subscription plan Cengage royalty payments all-you-can-read plan lawsuit Gregory Mankiw Albert Greco sales force
  • Location: NEW YORK, NEW YORK, UNITED STATES
  • City: NEW YORK, NEW YORK, UNITED STATES
  • Country: USA
  • Topics: Company News Markets,Economic Events
  • Reuters ID: LVA0048X1OGWD
  • Aspect Ratio: 16:9
  • Story Text:Unbeknownst to many students as they go back to school across the U.S., a major publisher threatens to shake up the college textbook market.
    Cengage is offering a Netflix-like, all-you-can-read plan in its subscription service, Cengage Unlimited.
    Students get access to its entire catalog of over 20,000 digital textbooks for a flat fee: $120 a semester or $180 for the full year. Users can also rent physical copies but must pay $8 for shipping per book.
    That could provide big relief to students who fork out on average more than $1200 a year on books and supplies, but only if their teachers assign books published by Cengage.
    "We deliberately set out to fix that broken business model. And the business model was about selling students more and more books. The more courses you enroll, the more books we sell you. What we said is, it's important to put affordability in the center together with quality of education, put affordability in the center," Cengage CEO Michael Hansen told Reuters.
    Cengage's catalog includes standards like Gregory Mankiw's Principles of Economics. It costs $250 to buy a new copy at Fordham University's bookstore run by Barnes & Noble and $118 to rent a used copy.
    Cengage is counting on its student ambassadors, social media and word of mouth. It also plugs the service on bookstore shelves.
    But none of the six students Reuters spoke to at Fordham were aware of the service.
    "Absolutely. Where do I sign up?" Asked Lau-Rene Manuel when a reporter told her about it.
    "I would do that," said freshman Grayson Brown.
    But all said they still prefer reading books on paper over a flat screen.
    English major Carolyn Faller, added, "I would say I like having like hardback, hard cover, or like paper textbooks rather than online. I find it's a lot easier to read and remember the information. I like writing and like highlighting."
    Fordham marketing professor Albert Greco, who has studied the textbook publishing market and Cengage's plans, said the "model is innovative".
    "They're probably ahead of the curve. They're clearly ahead of the students. Now, at some point, students may well to move to 100 percent digital. But it's not going to be quickly. It's not going to be in the next couple of years," Greco told Reuters.
    In the meantime, Greco says, Cengage must ramp up its sales force to convince professors like him to assign Cengage titles to their students.
    The company also has to get over a legal hurdle. Two authors have sued Cengage, alleging the subscription service will rob them of royalty payments.
    Armed with their wallets, students will also help determine the final grade on whether Cengage succeeds.
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