LONDON (Reuters) - Pearson, the world’s biggest education company, will release all its titles for the United States college market in digital form first, in a break from the traditional and more expensive textbook publishing model.
The British provider of textbooks, courseware and testing has been hit in recent years by changes in the U.S. market as students sought to save money by buying second-hand books, hammering its sales and profit.
However it hailed a tipping point earlier this year when it said its offering of cheaper e-books, designed to appeal to the “Spotify generation”, had enabled it to forecast sales growth in 2020 following more than five years of declines.
“I am increasingly confident and excited about this,” Pearson Chief Executive John Fallon told Reuters.
The rapid switch to digital, which is similar to the changes endured by the music, film and newspaper industries, has forced the 175-year-old firm to cut thousands of jobs and sell assets to rebuild.
From now on, all future releases of its 1,500 active U.S. titles will be “digital first” and updated on an ongoing basis when there are new developments in the field of study. Previously many textbooks were updated every 3 years.
College students already access over 10 million digital courses and e-books each year from Pearson.
While they pay less for a digital version, at an average price of $40 for an ebook and $79 for a full suite of e-learning tools such as feedback, Pearson believes the company will in time have more predictable revenue as students have less reason to turn to second-hand books.
An average textbook costs around $110, but can stretch as high as $200 to $300.
The move will also help the company in its drive to cut costs. Fallon said the switch would not change the company’s guidance but gave him increasing confidence he could stabilize the U.S. college business and get the top line growing again.
Pearson said 62% of its revenue now comes from digital or digital enabled products and services.
Reporting by Kate Holton; editing by David Evans