Affordable Content Models

Chapter 17 – Commercial Content Doesn’t Have to be Expensive

Brad Zurcher

by Brad Zurcher, Unizin Consortium (bio)

Introduction

Textbooks are expensive. The price of commercial textbooks continues to rise (87.5% in the last decade), exceeding the rate of inflation by more than 3.5 times (Bureau of Labor Statistics, U.S. Department of Labor, 2016). And while evidence suggests that the rise in actual student spending has plateaued (Association of American Publishers, 2017), a simple search of social media around the beginning of a term will show that price does not meet perceived value—especially in August, when new freshmen discover the actual cost of course materials.

The concept of All Students Acquire has been growing in acceptance and adoption over the last decade. This chapter gives an overview of the model, compares it to other content acquisition models, and establishes its pros and cons.

The concept of All Students Acquire has been growing in acceptance and adoption over the last decade (McKenzie, 2017). This chapter gives an overview of the model, compares it to other content acquisition models, and establishes its pros and cons.

Review of Affordability Programs

Retail Rental Programs

Bookstore rental programs are designed to reuse the same copy of a title over multiple terms. A student goes to the bookstore or website, obtains a copy of the book, and uses it for the duration of the rental period; as long as the student returns the book to the retailer in a reusable condition, the transaction is complete. The idea behind rental is that if multiple students use the same copy, the acquisition price of a new copy can be shared rather than paid in full by one person.

With prices typically 50-70% lower than those of new copies (compared to retail used, which averages 25% off the list price), and thus very appealing to students, this program works well for the retailer, who will start seeing profits on an individual book during the third term. Students like this option not only for the lower price but because it avoids the roulette game of buyback, where, for example, the student in front of them in line gets $45 and they get $7, simply because the bookstore has hit their quota of copies needed. As long as a student returns the copy in a usable condition, there are no additional fees.

Tuition-Based Rental Program

While similar to retail rental programs, tuition-based programs include content price in the student’s course fees. In exchange for assurances that content will be used for a number of terms, the margins for these programs are often lower; prices are thus typically lower for students than those of retail rental programs.

Students often appreciate this type of program because of cost savings and the ease of acquisition. Because the rental price is included in their fees, they need only register for a class and pick up the content from the bookstore or some other entity (or receive via mail if they are remote). There are no out-of-pocket expenses, which students and parents appreciate, and there is no time wasted shopping for the best possible price. It is a simple two-step process.

Retail eText

The purchase of digital versions of textbooks is another growing option for students who want to lower their cost of obtaining texts, and who are comfortable using a computer or tablet as a reading device. Discounts can vary greatly by publisher and by the length of access; larger publishers with higher print list prices tend to discount more heavily than smaller publishers with relatively lower list prices. Depending on an eText’s subject and publisher, the title may be rented for a specific length of time or perpetually.

While growing in popularity with students (National Association of College Stores, 2017), the digital option still accounts for only a small fraction of textbook purchases. But as the number of physical copies continue to decline, so should the prices for digital textbooks, making them an increasingly appealing option for students.

Unintended Consequences – Economics

The programs mentioned above, and others like them, succeed in lowering the cost to students as compared to the price of the new print list price at a specific moment in time. The problem with a snapshot, however, is that it fails to fully take in its surroundings.

Used and rental options ultimately contribute to the rising cost of textbooks. While bookstores and retailers see revenue on the transactions of rental copies, publishers do not.

Used and rental options ultimately contribute to the rising cost of textbooks. While bookstores and retailers see revenue on the transactions of rental copies, publishers do not. When an introductory statistics textbook, for example, is rented six times, the publisher receives royalties only on the initial order. After that first term, they see nothing. The retailer, however, can add margin to the rental price for each and every transaction. This to-student acquisition option achieves the goal of lowering the price of that piece of content at that time for that particular student, but it also incentivizes publishers to produce content that is not rentable or to produce more and more unnecessary new editions. These new editions, and website access available only with the bundled purchase of a new title, help publishers ensure higher unit sales over the life of an edition, in turn ensuring that more students are paying for new content rather than used and thus resulting in a larger average cost of acquisition.

Rental and used-book programs can also contribute to the rising list prices for all content. The creation of content has a fixed cost; Whether a textbook sells 5,000 units or 50,000, the costs of producing that content are largely the same. And the demand for new textbooks is largely inelastic. There is little incentive, for example, for a student to purchase new rather than used simply because a new copy’s list price has moved from $315 to $310. This works in the other direction as well, but with benefit to the seller. If a publisher changes the list price from $315 to $320, this potential $10 difference between lowering the price $5 and raising the price $5 will result in roughly the same number of units sold. The already high price of content plus the dwindling number of new units sold ensure that the publisher can continue to raise the price of content on a regular basis without affecting market share and unit sales. In addition, used and rental prices are typically a percentage of the new list price, so when publishers raise the price for a new copy, the price will also go up for used and rental copies of the same content.

Unintended Consequences – Academic

Along with increasing the price of content, used and rental options also incentivize students to show up to school unprepared. While freshmen may assume they have to buy all required materials for their courses, and have to purchase new copies, many upperclassmen only purchase content after they have gone to class to determine if the book is really needed.

Student unpreparedness is a phenomenon with broad reach; 65% of students have made the conscience decision not to purchase required content for a course, with 94% of these students knowing that the decision would be likely to have a negative impact on their grade (U.S. PIRG Education Fund and The Student PIRGs, 2014). Again, a simple social media search around the start of a term provides anecdotal proof that students are willing to do just about anything to avoid paying for content, and are willing to give strong voice to their opinions on textbooks.

Economics, when boiled down, is really just a study of how humans respond to incentives. The used and rental textbook options have created incentives for publishers to continue raising the price of content and for students to avoid acquiring that content. These options may lower content costs during a particular semester, but they have the opposite effect over the long term, and they contribute as well to the phenomenon of student unpreparedness.

All Students Acquire Model

One way to address these issues is the All Students Acquire (ASA) model. This model has many different names from many different sources: Inclusive Access, Institutional Sales, B2B, 100% Sell Through, IncludED, and more. Inclusive Access is the most common name, but these two words have a way of implying, incorrectly, that the content has a level of openness or superior accessibility. With these concepts so important in higher education, the name can create confusion. All Students Acquire, in contrast, accurately describes the business model, and does not lend itself to misinterpretations.

ASA is essentially a form of enterprise purchase—a familiar concept in higher education IT and in teaching and learning circles. ASA delivers digital content to all students registered for a specific course and section. Adopted content is often delivered through the learning management system (LMS) via LTI (bypassing a login page, which ensures that users do not need to manage an additional set of credentials), and students receive access to the content on or before the first day of class. Content is purchased directly by the institution, which then typically adds the price to students’ bursar bills.

Strengths of the ASA model

Affordability

ASA offers several advantages over traditional content acquisition models, with affordability receiving the most attention. Publishers are willing to heavily discount their content in exchange for sales of content to the full class. Because the difference in unit transactions is so significant (100% of enrollment vs. 20-30% in a student choice model), publishers can afford to discount heavily and still see flat to higher revenue.

ASA offers several advantages over traditional content acquisition models, with affordability receiving the most attention.

ASA also helps institutions address affordability by enabling additional payment options, including financial aid. Eighty-three percent of students receive financial aid (National Center for Education Statistics, 2016), yet only 30% (U.S. PIRG Education Fund and The Student PIRGs, 2016) use this aid to purchase course content. This means that more than two-thirds of our students purchase content using only cash or credit. Including content fees in the bursar bill allows students to use their scholarships, grants, and student loans to acquire course content.

Preservation of Academic Freedom in the Selection of Course Materials

The ASA model does not have to be administered and required at an institutional level. Many institutions where instructor choice over course materials is paramount have implemented eText programs where instructors opt-in. Institutions that require ASA participation will often see an advantage over opt-in institutions when it comes to negotiating prices, as they are able to guarantee a certain level of revenue for the publisher. But as more faculty learn about the advantages of ASA, and as the program continues to grow, the comparative negotiating power of institutions that do not support instructor choice will decline.

Data

Digital content distribution also creates unique opportunities for data collection and analysis. With all students in a course using the digital content, ASA platforms can deliver demonstrably superior datasets compared to platforms where students opt in or acquire content on their own. ASA data can be a valuable asset for calculating the cost of attendance, informing course design and teaching practice, and providing new data for academic research.

Institutions have long bemoaned the need to purchase academic research articles and journals they themselves have produced. The issue of data generated on ASA platforms is similar. These data should be made available, free of charge, to the institution by the platform provider.

A word on data privacy and data application. The use of data from content platforms and from LMSs, Student Information Systems (SISs), and the myriad of teaching and learning technologies is a sensitive issue that, like politics and religion, can quickly divide a room. Promoting data as a strength of ASA assumes that institutions can do a substantial amount of good with data, data platforms, and business intelligence. With that said, in no way are we condoning or condemning specific use cases or disseminating full and effective policies. Our intent is only to identify some of the potential opportunities. How data is utilized, and to what extent this use is communicated to students and the public, is up to each institution.

Content Consumption and Advising

ASA data can help create a better learning experience. When made available in real-time or near real-time, for example, these data can be used by instructors to measure student preparedness before a class session. Instructors can also review student consumption of the content in association with exam scores to help assess the effectiveness of their teaching, and use these data to guide content adoption in the future.

ASA data can also be used by advisors, in conjunction with LMS and SIS data and data from other sources, to identify students who may require additional support or tutoring.

ASA data can also be used by advisors, in conjunction with LMS and SIS data and data from other sources, to identify students who may require additional support or tutoring.

Student usage data also has tremendous potential application for students themselves. Allowing students to compare themselves to others using the course materials, whether to peers in their section/course or to a larger group of students, may drive those with a competitive spirit to increase their efforts in order to keep up or surpass their peers. This competitiveness can be a strong supplement to other motivations offered by the instructor. In addition, these data could also be used in badging or gamification applications.

Instructional Design (ID)

Instructional designers can build better courses with ASA data. Integrating analytics into the process of course design is not a new idea; institutions around the world have been incorporating analytics into their ID practice for years. In its 2016 Horizon Report, for instance, the New Media Consortium recommended incorporating learning analytics and adaptive learning (2016). ASA makes it possible to assess digital learning by using a combination of data from the delivery platform and student results on related assignments/quizzes/exams. By looking at course content usage data, instructional designers can better assess the efficacy of content and methods, seeing how interaction with a learning object plays into student results.

Institutional research and academic research

Data generated on digital platforms through ASA also allow institutions to include course content usage, tied to learning objectives (when so designed), in decision-making that can lead to better university performance and, ultimately, to higher retention rates. Institutional researchers have identified withdraws and student retention as significant factors in the overall cost of education. Nearly every higher education institution wants to reduce student turnover. The data generated on digital content platforms utilizing ASA adds tremendous insight to an important variable for student success, itself a key component in student turnover.

ASA data also have value to academic researchers studying the art and science of teaching and learning. ASA data is far more reliable than self-reported data from users, which to this point have been the only data available to researchers.

Data-Assisted Affordability

The data derived from ASA distribution create additional opportunities to build systems that can help lower the cost of education.

Imagine an application that takes usage and event data from a course content platform, combines these data with learning objectives, adds anonymized exam results over time from the LMS, considers the price of the learning object, and computes a measure of effectiveness of the materials and the price paid for that effectiveness. The computed data could then be compiled into a database of learning objects that accounts for both price and effectiveness. This database would make it possible for instructors or course designers to look through the learning objects for a particular objective and hone in on those that deliver the best results for the lowest relative price. Such an application would not directly affect the price of a particular piece of content, but would contribute to lowering of the price of content and thus help with affordability goals.

Advisor interaction with the data can also help lower the cost of attendance. If advisors can more effectively and accurately identify and help potentially at-risk students, the institution should see fewer courses being failed or dropped, which should lead to fewer withdrawals from the institution. Greater retention means fewer resources devoted to replacing departing students, which should lead to greater maximization of capital and resources, ultimately contributing to a lower cost of attendance.

Risks and Weaknesses of ASA

While the ASA model is becoming more widely adopted and accepted, it is not without drawbacks.

Principal-Agent Problem is Not Addressed

The Principal-Agent Problem is an economic term describing a decision maker in a financial transaction who is not the consumer paying for the decision’s result. In terms of course content, this can be seen with instructors designating content as “required” even if it would be more appropriately listed as “recommended”—a decision that results in unnecessary student spending. Many of those who fight for more affordable content point to the fact that faculty who require students to purchase textbooks have little incentive to choose less expensive content. While data can be used after the fact in efforts to help instructors consider the price and efficacy of assigned content, the ASA model does not address the issue of who ultimately chooses the content students must acquire.

Course Fees

The ASA model requires institutions to recoup content costs by adding fees to student accounts. With state legislators and student newspapers scrutinizing the costs of education, new fees that make it appear that attendance costs are rising can be problematic, even though the discounts secured by ASA use are in fact lowering those costs.

Additionally, some institutions and systems have policies in place that prohibit the inclusion of new fees or require approval from the board of trustees. ASA can be a difficult sell in such environments.

Resistance of Transition to Digital

Many instructors resist the idea of transitioning from print to digital course content. They may distrust student use of computers in the lecture hall, or not be interested in learning new teaching technologies in their very limited spare time. Whether the decision to implement ASA is institutional or optional, in these early days there are more instructors who will fight the transition than support it.

Resistance to digital is not just limited to instructors. While extremely comfortable using technology in their personal and social lives, today’s students are still skeptical of the reading experience on a device when the reading is academic and weighty rather than personal and short.

I have seen this resistance in my own experience managing a campus bookstore. One semester, for instance, a student came to me incredibly concerned that the textbook adopted by one of his instructors was only available new for more than $250, and he was unable to find used or rentable copies. I offered him a digital copy of the text for around $100, letting him try the platform on my computer before making the purchasing decision. After about five minutes, he told me that the platform was great and he had no doubts that digital was the future, but he would rather spend the money on a new text. He then took the new copy to the cashier and paid full list price, even after saying that price was the most important part of his purchasing decision.

It is expected that students will continue to become less resistant to digital learning materials. With K-12 students being introduced to digital materials earlier in life (deNoyelles and Raible, 2017), students are beginning not only to be comfortable with digital, but to expect it as they progress in their academic career. This offers hope for the future, but a level of resistance to digital is still an issue to address today.

It is expected that students will continue to become less resistant to digital learning materials. With K-12 students being introduced to digital materials earlier in life, students are beginning not only to be comfortable with digital, but to expect it as they progress in their academic career.

1,000 to Approve, One to Kill

ASA must be institutionally supported on a campus. Whether being implemented universally or as an option, it may require approval of the provosts, deans, faculty senates, registrars, bursars, Teaching and Learning groups, bookstores, libraries, IT, helpdesks, student governments, accessibility/disability services offices, and more. ASA often requires an up vote from some or all of these constituents, yet it can take just one person to shut the whole project down if they see something objectionable. Many potential concerns, like those referenced above, are nearly universal, while others can be campus-specific.

Co-op for Success

Any institution and any provider can offer ASA and derive strong benefits from it. But ASA offers a unique opportunity—specifically for school systems, state systems, and academic consortia—to take the benefits to another level. Imagine what can happen when a large state system like SUNY or Ivy Tech combines this purchasing model with its own expertise and scale.

Operational Scale

Some ASA operational functions demand local, “boots-on-the-ground” effort. Faculty recruitment, for example, requires a level of trust that would be hard to replicate from a regional office. But other ASA functions lend themselves well to a collaborative effort on behalf of the institutions represented. Two great examples are the creation of marketing/publicity materials and training for faculty and students. Both are necessary for the establishment and growth of a robust digital initiative using ASA, and both are often standard enough that individuals could drive them on behalf of many institutions.

Drive Price Down Further by Aggregating Scale

The size and scale of a group of institutions allows specialists to negotiate on behalf of the group, which in turn creates the potential for superior pricing. The potential of larger unit sales moves commercial content creators and platform providers to offer lower and lower prices. The more institutions represented at the bargaining table, the better the discounts.

Larger Data Sets

Institutions working together can also combine data. Data provided and shared by a system or consortium of 20 institutions become a robust dataset tying content to price and outcomes.

Improve Access to Other Features or Services

The size and scale of a system or consortium can create a stronger influence on commercial content and products. A group of institutions working together is far more effective at advocating for change than a single organization. With accessibility, for instance, the burden of ensuring that all students have the same access to content and features typically falls on the institution, but it is an issue best addressed during the creation and design phase. A group of institutions loudly broadcasting the same message and prioritizing an issue will be more effective than individual institutions doing the same.

Birds of a Feather

Common problems often have common solutions. When jumping into the world of digital content and ASA, it is important to find others who have traveled this same road, as they are an invaluable resource to those just starting down the path. Likewise, having a group of administrators from different institutions all starting at the same point is helpful in facing the common problems of taking a project from pilot to program. Membership in a system or consortium affords built-in opportunities to network with colleagues who understand the issues presenting themselves and can help resolve them quickly and effectively.

Summary

Textbook expense has resulted in a variety of programs and options aimed at helping students save money. But while used and rental options are less expensive, they often have unintended economic consequences that contribute to the rising costs of course materials. The ASA business model solves a number of needs (affordability, day-one access, behavioral and outcomes data) and provides benefits for students, institutions, and publishers alike. While there are potential roadblocks in the adoption of this model, it does provide an opportunity for institutions to band together in their efforts to make content more affordable for their students.

Conclusion

Instituting a digital content initiative that takes advantage of the ASA model is a growing trend across higher education, and shows no signs of stopping. While ASA has its own set of issues, it is better positioned to have a more positive effect on content affordability than any other commercial solution. In addition to the immediate effect on affordability, it promises to continue to bring the price of commercial content down as more and more units are transacted. These short- and long-term benefits, combined with the potential benefits of data-driven decision making at a course and institutional level, promise to lower the price of content as well as the overall cost of attendance.

References

McKenzie, L. (2017, November 7). ‘Inclusive access’ takes off. Retrieved from https://www.insidehighered.com/news/2017/11/07/inclusive-access-takes-model-college-textbook-sales

Bureau of Labor Statistics, U.S. Department of Labor. (2016, August 30). College tuition and fees increase 63 percent since January 2006. The Economics Daily. Retrieved from http://www.bls.gov/opub/ted/2016/college-tuition-and-fees-increase-63-percent-since-january-2006.htm

Association of American Publishers. (2017, August 24). Student spending on textbooks declines to $579 or less during 2016-2017 academic year. Retrieved from http://newsroom.publishers.org/student-spending-on-textbooks-declines-to-579-or-less-during-2016-2017-academic-year/

National Association of College Stores. (2017). Infographic: Course materials – student spending and preferences. Retrieved from https://www.nacs.org/advocacynewsmedia/StudentSpendingInfographics.aspx

U.S. PIRG Education Fund and The Student PIRGs. (2014, January 27). Fixing the broken textbook market: How students respond to high textbook costs and demand alternatives. Washington, DC: Ethan Senack. Retrieved from https://uspirg.org/reports/usp/fixing-broken-textbook-market

U.S. Department of Education, National Center for Education Statistics (2016, November). Full-time, first-time degree/certificate-seeking undergraduate students enrolled in degree granting postsecondary institutions, by participation and average amount awarded in financial aid programs, and control and level of intuition: 2000-01 through 2014-15. Retrieved from https://nces.ed.gov/programs/digest/d16/tables/dt16_331.20.asp

U.S. PIRG Education Fund and The Student PIRGs (2016, February). Covering the cost: Why we can no longer afford to ignore high textbook prices. Washington, DC: Ethan Senack. Retrieved from https://studentpirgs.org/reports/sp/covering-cost

Johnson, L., Adams Becker, S., Cummins, M,. Estrada, V., Freeman, A., and Hall, C. (2016). NMC horizon report: 2016 higher education edition. Austin, TX: The New Media Consortium. Retrieved from https://www.nmc.org/publication/nmc-horizon-report-2016-higher-education-edition/

deNoyelles, A. & Raible, J. (2017, October 9). Exploring the use of e-textbooks in higher education: A multiyear study. Retrieved from https://er.educause.edu/articles/2017/10/exploring-the-use-of-e-textbooks-in-higher-education-a-multiyear-study


Author Bio:

Brad Zurcher is Director of Business Development at Unizin and has spent nearly two decades working throughout the content distribution path: trade retail, academic retail, for profit-digital platform services, non-profit digital platform services, open content, commercial content, and business development.

Brad’s mission is not insignificant: to fix the broken commercial content market in a way that is fair to institutions, students, and content creators. He is carrying out this mission by working with Unizin and its member institutions in support of their digital content initiatives.

Brad graduated from Olivet Nazarene University with a BA in Marketing. In his free time he enjoys playing/watching sports and traveling with his two hilarious kids and his amazing and amazingly tolerant wife.