UV Letter - Volume II, #4
From the 1994 film Barcelona:
Fred: Maybe you can clarify something for me. Since I've been, you know, waiting for the fleet to show
up, I've read a lot, and...
Fred: And one of the things that keeps popping up is about "subtext." Plays, novels, songs - they all have a "subtext," which I take to mean a hidden message or import of some kind. So subtext we know. But what do you call the message or meaning that's right there on the surface, completely open and obvious? They never talk about that. What do you call what's above the subtext?
Ted: The text.
Fred: OK, that's right, but they never talk about that.
They never talk about the text, but they sure are talking about textbooks.
Over the past few years, the once sleepy $8 billion higher education textbook industry has received unprecedented attention from activists, entrepreneurs, investors and the media. A microcosm of the current storm over college affordability, at first blush the textbook tempest has an identical cause: unsustainable high prices. Textbook prices have increased at four times the rate of inflation over the past decades.
The result is that students have more choices than ever for sourcing their textbooks. The used textbook market, which used to be informal and local to each campus, is now national and online. The market leader, Chegg, has raised $220M from venture and growth investors and likely generated over $200M in revenue in 2011. With the ambition of becoming the Netflix of education, last year Chegg hired the former COO of Netflix.
But just as Netflix’s DVD-by-mail model is (or was) a transitional business model awaiting the advent of big bandwidth and streaming movies, Chegg’s textbook rental model is establishing market leadership in advance of the coming eTextbook boom.
eTextbooks had their official coming out party last month when Apple unveiled its eTextbook strategy at the Guggenheim Museum in New York. Apple’s vision for eTextbooks is two-fold: (1) Radically lower prices; and (2) Improve learning. Both are laudable goals, so let’s explore them.
Certainly textbooks cost too much, but the affordability issue is likely overstated. The student PIRG “Make Textbooks Affordable” (sponsor of the Textbook Rebellion Petition that your favorite college student has probably signed) states that college students spend $900 each year on textbooks. But that assumes every student buys every required book new at the college bookstore. The reality is that many students don’t purchase all books, and many are buying used books or renting from Chegg or Bookrenter. According to Student Monitor, each year students spent an average of $534 on textbooks – down 17% in five years. So in comparison with public four-year college, where average tuition and fees increased 40% in the same period, textbook affordability may not merit so much agida. Moreover, what Apple says generally goes. And Apple has said eTextbooks are coming: Tablets and e-Readers will be standard student accessories, and students will naturally want their books on their platform of choice. Most estimates show eTextbooks cutting that annual $534 spend nearly in half. So unlike higher education itself, there is a plan and path for solving textbook affordability.
Much more agitation is warranted as to the question of whether and how eTextbooks will improve learning. According to Phil Schiller, Apple’s SVP of Worldwide Marketing, “Kids are really going to love to learn with iBooks.” This is because, according to the Apple Web site: “Today’s students have grown up completely immersed in technology. iPod, iPad, computer – these are the ways they interact with their world. They need a textbook made for the way they learn.” As a result, iBooks are interactive. Pinch to zoom on cellular structures, watch videos about the space race. Learning becomes more exciting. These are “textbooks they won’t want to put down.” They are “truly interactive” and “engrossing.”
The vision is compelling, and could cause other eTextbook companies to follow this path. After all, as David Wiley, Professor of Instructional Psychology and Technology at BYU noted on his opencontent.org blog last week:
“If video-based, multimedia-rich, interactive textbooks are only worth $14.99 to the big publishers, what are relatively static, text-based books with a few photos worth to them?” Think about that for a minute… When you could have video, multimedia, simulations, and interactive assessments for $15, why would you take a traditional book… even if it is free?”
Here’s where Steve Jobs’ utopian vision for eTextbooks becomes somewhat dystopian. Apple is correct: in part due to its products, Millenials have grown up immersed in technology and their interactions with technology have had a significant effect on the way they interact with the world. Studies have shown that today’s students have shockingly short attention spans (~ 10 minutes) and correlated this phenomenon to screen time. The result on campus is that students are studying less than ever. A University of California study found that today’s student studies just 14 hours per week – down from 24 hours 50 years ago. Clay Christensen at HBS has stated he believes students’ curiosity has declined over the past two decades. Many faculty members share the views of this anonymous professor, blogging on Mother Jones:
"More and more students are uncomfortable with reading. They read less. They don't enjoy reading. Most of the homework that a professor assigns is reading or involves reading -- so the 'collective mass' can't handle what professors would like to assign.”
To paraphrase Donald Rumsfeld, we go to college with the students we have, not the students we wish for. That said, we have two choices: design eTextbooks to the way millenials are used to learning (i.e., interactive, video), or take a “tough love” approach and use eTextbooks to introduce students to higher education level texts, requiring them to struggle with the long, difficult reading that will ultimately help define them as college-educated adults.
Education requires engagement, but it also requires effort in order to develop fundamental literacy and communication skills. Interactive animations and videos may engage, but they do so in much the same way as some popular professors: spoon feeding material to students. Focused reading is different – a fundamentally more important skill for employment and economic competitiveness. While it’s important for students to become effective consumers of information, it’s more important that they become creative problem solvers and critical thinkers. So we opt for curtain #2. And we think that’s the more likely outcome because Apple’s vision for eTextbooks recalls the dot-com consensus around online learning: online courses would be all about rich media, interactive animations, simulations and cost as much as a million dollars per course. Twelve years later, millions of students are enrolled in online courses, nearly all text-based. Interactive content did not prove to be the accelerant to the adoption of online learning.
The good news for students is that text-focused eTextbooks won’t feel like “tough love.” This is because on the winning eTextbook platforms, embedded applications in and around the text will provide students with a social learning experience as they read – akin to the text-based interactions they’re accustomed to on Facebook and Twitter. And as they read, they will write. The social learning that will be embedded in the eTextbooks of the future will produce more reading and writing than we’re seeing from today’s students. And in a virtuous circle, the resulting data capture will engender better instruction.
We hope Apple and other would-be leaders of the eTextbook revolution come to appreciate the educational importance of text, reading and writing in eTextbooks. If they do, future generations of college students will talk about “what’s above the subtext.”
University Ventures (UV) is the premier investment firm focused exclusively on the global higher
education sector. UV pursues a differentiated strategy of ‘innovation from within’. By partnering with
top-tier universities and colleges, and then strategically directing private capital to develop programs of
exceptional quality that address major economic and social needs, UV expects to set new standards for
student outcomes and advance the development of the next generation of colleges and universities on a