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Sustainable Business Models for Open Textbooks

Will open textbooks become a sustainable alternative to traditional textbooks? (Here I use textbooks to mean both print and digital formats.) As founder of Textbook Equity I believe they will. Replacements will be slow at first, but will increase exponentially as instructors gain more confidence in the efficacy of open textbooks and come to trust the freedom that open licenses provide.

Everyone should be aware that all the parts of the supply-side of open textbooks are ready or almost ready.

Today, there are enough usable open textbooks to cover all core requirements, as well as many specialized and advanced classes. There are many organizations building inventories of open textbooks, learning modules, and learning objects. There are substantial grants funding open content creation and associated technologies. And there are many people who actively support the replacement of expensive traditional textbooks with low cost and free ones.

To produce open textbooks we find that quality content is freely available under a variety of open and free-use licenses. Inexpensive or free computer software is available to create sophisticated texts, images, and graphics. Print-on-demand services are inexpensive and easy to use. Thousands of academics are willing and able to adopt open textbooks or create their own, and students and taxpayers will save millions upon millions of dollars, providing a strong motivation to produce open textbooks.

So what business model (i.e. business processes) will make this happen? It’s quite simple, actually. There are many flavors, but one example is a business that offers the textbooks for free or very low cost in digital format while providing printed copies at cost plus a reasonable mark-up. The profits are distributed to the company for providing the service, to the authors for providing and maintaining the content, and possibly to the students for achieving a high grade in the course. These textbooks can be sold, at profit, from $15.00 to $40.00, maybe even less. Anyone can create and publish an open textbook. Anyone can make a “clone” of the top selling textbook using open content without fear of copyright violations or creating ethical issues. Other business models will work, and there will be an industry shakedown in the coming years as traditional publishers begin to feel the impact of price competition. Their current response is focused at using technology products to enter into exclusive, non-competitive agreements with colleges. I’m betting that print versions will not go away any more than did movie theaters, landlines, analog watches, or the combustion engine. Textbooks will physically shrink, and assignments will morph into a hybrid of online and paper. But paper will remain.

The challenge to growth rests on the demand-side. And that potential demand is large.

According to a National Education Statistics report there are about 1.4 million post-secondary faculty in the U.S. (2007). Given the independent nature of college instructors, this means there are 1.4 million separate decision-makers. Throw in the 328,000 graduate assistants and we are close to 2 million decision-makers. In most post-secondary institutions, I am told, the instructors are free to choose the textbook they wish to use for their class. But de facto many are bound to some degree by departmental deans, contractual obligations with bookstores, and other administrative policies.

But if they are free to adopt what they want, instructors are hesitant to adopt open textbooks because open textbooks providers do not offer the convenience of traditional textbooks, and instructors often perceive open textbooks as being less than fully reliable, comprehensive, or authoritative as traditional textbooks. In some cases, this is true. It is difficult to know where to find consistently reliable and current open textbooks. The publishers do much of the upfront screening.

My ad hoc interviews with college professors yielded this consistent criterion in selecting a textbook: Does it have all content I need for my class? Is that content current and authoritative? Does it complement my teaching style? Is it useful?

Open textbook business models, then, need to emulate the same type of authoritativeness, stability, and reliability that traditional publishers offer. This is not hard or expensive to do. I estimate that I can sell a printed open textbook identical in content for about 80% less than traditional publishers. Thus, a $140 math book would sell for $28.00. That $28.00 yields enough profit to pay the production costs, the author, and reinvestment for another textbook, and, still offer digital versions for free.

Here are other issues with open textbooks:
* Ambiguous copyright information
* Ambiguous sources of content
* Ambiguous grade level
* Poor quality writing, graphs, photos, schematics
* Outdated content
* Too granular – broken into too many “modules” or “learning units”
* Undocumented sources or appears non-authoritative
* Don’t know who else is using it
* Few or non-existent questions, problems, solutions

Notice that all of these problems can be overcome, relatively quickly and cheaply. The traditional publisher business models solved many of these problems years ago and provide excellent textbooks (in most cases). They have enjoyed many years of oligopolistic pricing and profits, but, as I attempted to demonstrate above, the proliferation of quality open content plus changes in technology have removed traditional barriers to entry. A more price competitive industry in inevitable. The education dollar can thus go further.

Bill Buxton, February 2011

This article and other open textbook information can be found at www.textbookequity.com.

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