Tagged: Academic Economics

The shift toward digital doesn’t spell the end of print…(right)!

Publisher’s Bankruptcy Filing comes as Market for Print Textbooks Shrinks (Chronicle of Higher Education, July 2, 2013)

Cengage Learning Inc., one of the nation’s largest publishers of textbooks and other educational content, filed for bankruptcy protection on Tuesday, seeking relief under Chapter 11 of the Bankruptcy Code for what it said was about $5.8-billion in outstanding debt. The move will not only reduce that debt but allow Cengage to restructure to support its “long-term business strategy of transitioning from traditional print models to digital educational and research materials,” the company said in a written statement.  [Market changes driving this action] include a rise in textbook rentals and “the open-source materials that are being pushed by large states like California,” he said. “Some of the trends that caused this are putting pressure on all publishers who publish for an academic audience.”


When publishers continue to focus on harvesting value for legacy products and formats they are putting the future of their business – and their markets – at risk.  While the decline of print is a definite trend in educational content, the speed and impacts are critical uncertainties for academicians.  Publishers are strong partners – with robust resources – and will have continuing roles as the need for greater use and efficacy of (and thus more expensive) assessments (especially those in digital modes) become more common.


As curricula commoditize, prices will fall and profits shrink

From: Samsung Cuts Its Forecast as Sales Growth Slows for Its Costliest Smartphones (New York Times, July 4, 2013)

Samsung Electronics may be having the same problem Apple has: nearly everyone in the world who can afford an expensive smartphone has one already.  But for Samsung, the real problem may be that much of the growth in smartphone sales in coming years will be at the lower end of the market, where Chinese manufacturers are gaining share. Samsung simply does not have the most appealing models for those consumers. As smartphones become increasingly commoditized, prices will fall and profit margins will shrink.


While many academics question the relevance of business models when predicting academic transformation – instructional models are increasingly looking like – and behaving like business models.  The impact of cost-efficient instructional innovations, especially in the general education space, imply lower tuition rates ahead for postsecondary providers that cannot leverage unique benefits or high brand value.