Change is coming to E-Book Market

The Department of Justice recently filed a motion asking that its settlement with Hachette, HarperCollins, and Simon & Schuster in its e-book pricing lawsuit be approved in federal court. No surprise there.

If accepted, sometime around the middle of September, retailers will be able to set their own prices for e-books, at least from the three publishers in the settlement.  The settlement allows the agency-pricing model that came under DOJ scrutiny to remain, but the provisions of the settlement make anything resembling the current agency model highly unlikely.

While the settlement allows retailers to set the sales prices, publishers can prohibit discounts on their books. That provision comes into play when the total sales of a year exceed the margin the retailer has earned, according to an analysis of the agreement in The Shatzkin Files.

However, the article also points out how easily that discount prohibition may be sidestepped. For instance, a retailer such as Amazon may choose to cut e-book prices way below its costs during a specific time frame, such as the upcoming holiday season, figuring to make up the margin over the next nine months. In the meantime, other publishers who may still be clinging to the agency-pricing model may have to lower its prices just to stay competitive.

Which is exactly what many in the bookselling industry feared all along.

Cengage Places Bid to Buy McGraw-Hill Education

Last month, Standard & Poor’s reported that Cengage Learning’s cash flow was “less than adequate” to cover its needs over the next 12 to 18 months. Last week, reports surfaced that Cengage made a bid to purchase McGraw-Hill Education (MHE). So what gives?

As it turns out, buying MHE could be a way for Cengage to increase its revenue, according to the report. The S&P report about Cengage’s cash flow was based on an assumption that future refinancing costs would be too high, with the Reuters article adding that “may be driving Cengage and its private equity owners to consider acquisitions that would boost its cash flow.”

“It wouldn’t be appropriate for us to comment on what McGraw-Hill might or might not do with respect to a sale or spin-off of its education business,” said Cengage CEO Ron Dunn in the Reuters story. “With regards to Cengage Learning, we continue to generate strong cash flows from operations and we are very confident that we can service our debt while continuing to fund our business at appropriate levels as we lead the migration to digital solutions in all our markets.”

Cengage isn’t alone in its interest in MHE. Reuters reports that Bain Capital, Thomas H. Lee Partners, and Apollo Global Management have also placed bids for the firm that could be valued at around $3 billion, according to The Bookseller. Reuters also reports Cengage is looking to make a bid for EmbanetCompass, an online education services company.

McGraw-Hill decided last September to split into two publicly traded companies by the end of 2012 after calls from minority shareholders to restructure the business. MHE earned $2.3 billion in revenues and had an operating income of $260 million last year. Digital-related solutions accounted for more than 20% of its 2011 revenue

As in any business venture, there are risks for Cengage, particularly if its cash flow declines. Consolidating that much debt into one company could also be a concern for the industry, but the potential for reduced store-channel leverage and more direct-to-customer and institutional sales models are also long-term concerns stemming from more consolidated content.

Or the bid could provide Cengage with some breathing room.

Legitimate Online Education? How To Spot A Credible Online Degree Program

While it is understandable for anyone who is just beginning to look into an online degree to wonder which online programs are legitimate and which ones are scams, the truth of the matter is that the vast majority of the degrees that are offered over the internet these days are considered just as valid as any other degree. That having been said, there are a few easy things that every person can do to ensure that the academic institution that they are considering is legitimate. In some cases this is simply a matter of common sense, while in other cases a potential student will need to know how to read between the lines. Here is what you need to know in order to ensure that a degree program that is offered over the internet is legitimate.

The easiest way to find out whether an online degree program is legitimate is by simply checking to make sure that the academic institution offering the degree program is actually accredited. This is particularly easy when you are looking at colleges and universities that are offering bachelors and masters degrees. If the school that you are considering is not well known, simply check online to see whether the institution is accredited. Do not take the school's representatives or documentation as evidence. Instead, visit website for the United Stated Department of Education's Database of Accredited Institutions and Programs.

Ensuring that an online degree program can be somewhat more difficult when you are checking up on a trade school or any other institution that specializes in topics that outside of the formal university system. Thankfully, nearly all professional trades have formal organizations that provide their own accreditation to schools that meet their educational requirements. Again, do not simply take a schools word for it when they claim that they are accredited with a particular organization. In some cases, you may need to contact the professional trade organization on your own to double check that a school is indeed accredited for your particular field.

When you are in doubt of whether or not a school is legitimate, you can also take a quick look at the online lists of known diploma mills to see if the school that you were looking at is on that list. Diploma mills are companies that specialize in providing students with a supposed degree or certificate without requiring that a student complete any real training. A number of government and private organizations provide lists online of all known diploma mills so that students and employers know which supposed academic institutions are fraudulent.

New Study Shows Readers' Format Preferences Vary

The percentage of consumers are buying titles in digital formats has fallen, but more people are also saying they have no preference when it comes to the format of a book, according to the latest Book Industry Study Group e-book reading survey.

Consumer Attitudes Toward E-Book Reading reports the portion of consumers who “exclusively or mostly” buy e-books fell from nearly 70% in August 2011 to 60% just nine months later. At the same time, the percentage of respondents who either had no preference between e-book or print formats, or who bought some of both, went up from 25% to 34%, signaling that consumers have become more comfortable with a variety of reading formats.

The study found that ownership of the Amazon Kindle Fire has increased from 7% to 20% of respondents from December 2011 to June 2011, and that the use of multifunctional tables as a primary reading device is growing at about the same pace that the preference for dedicated e-readers has dropped. Preference for the Kindle as a primary reading device fell from 48% in August 2011 to 35% in May 2012, while black-and-white and color versions of the Nook e-reader slipped from 17% to 13% over the same period.

The Apple iPad remained steady in the ownership survey at 17% from August 2011 to May 2012, but now trails the Kindle Fire in the ownership category. The number of respondents who use the iPad as an e-reader also dipped from 10% to 9%.

While the iPad may have moved into second place in the BISG consumer survey, Student Monitor found that 66% of respondents to its survey of 1,200 college students say that the iPad was the “in” device on campus, even though fewer than 12% actually own one. At the same time, the Student Monitor research showed that 88% of students own a laptop computer, 19% have desktops, and just 10% say they own a tablet.

The research also found students’ preference in course material formats may be shifting. Printed textbooks continue to dominate sales, but students saying they “prefer traditional textbooks” has declined from 50% two years ago to 39% in the most recent Student Monitor report.

Open-Access Deal a First for Canada Campuses

Here and there across the U.S., colleges and universities are trying out open-access course materials, often cautiously as part of structured pilots. Now Canadian schools are starting to join them. Recently the University of Windsor in Ontario became the first to sign a licensing agreement for open digital materials for a fall course in management information systems.

In its press announcement of the deal, the school touted the cost savings to students. The local paper, the Windsor Star, also beat the same drum, starting off its report, “There’s a lot to hate about traditional textbooks…”

Students will pay $20 for e-books and study aids that can be downloaded to a computer, laptop, smartphone, e-reader, or tablet. The materials are being provided through Flat World Knowledge. About 200 students are expected to take part in this initial pilot.

If that goes well, the university plans to add more courses for the second term and then expand depending on how quickly faculty are willing to adopt Flat World titles. There may be somewhat more pressure on them to do so than at other institutions, given that Windsor’s tagline is “Thinking forward.”

The University of Windsor Bookstore already sells e-books and furnishes online assistance with e-reader apps as part of an array of textbook services that includes rentals, used books, and an RSS feed to provide textbook updates. The store is also one of a handful of campus stores offering print-on-demand through an in-store Espresso book-printing machine.

University of Minnesota Creates E-Book in 10 Weeks

The University of Minnesota launched its online open-text catalog at the end of April in an effort to give students access to textbooks online for free, or printed for a small fee. Now, university faculty and staff have created a 317-page e-book in 10 weeks.

Cultivating Change in the Academy: 50+ Stories from the Digital Frontlines at the University of Minnesota in 2012 is a compilation of contributions from 57 faculty members, 51 staffers, 17 graduate students, and five undergrads, all of whom volunteered their work so there would be no cost to producing the title, according to Ann Hill Duin, professor of writing studies at the Twin Cities campus.

The book was released July 9 to the University of Minnesota Digital Conservancy, which serves the online open-access repository. The conservancy also provided a permanent web address for the book.

“We really want to maintain access just like we do with our print,” said Lisa Johnston, research services librarian at the Twin Cities campus and co-director of the conservancy. She contributed to a chapter on the conservancy’s role in curating digital research. “We are a service that makes information available to the public via the web.”

The book focuses on “ideas for transforming teaching methods, solutions to specific classroom problems, examples of campus leaders providing direction and support for these efforts, and ways the university is spreading innovation off campus,” according to a report in Inside Higher Education.

“The e-book is far greater than the sum of the parts,” said Duin. “It’s connecting people with the innovative, imaginative, creative, collaborative dynamic work under way.”

The book is already attracting a following. Abram Anders, assistant professor of business communications at UM-Duluth’s Labovitz School of Business and Economics, reports more than 4,000 views so far of the chapter he wrote about his work with Google Apps script.

“I can see that we’re getting some people coming to our site from the press release that the school put out, some people coming from e-mail links, some people coming from Facebook,” he said, adding that people are also finding the site through Twitter posts.

New Study Shows Potential of Online Learning

A new report found that college students using an interactive learning online (ILO) system with one hour of classroom instruction each week scored the same in standardized tests as students taking the same course through traditional classroom methods. Results from the study may lessen concern about students’ learning results when taking online courses.

“This method appears to have potential,” says Matthew M. Chingos, a senior research consultant for Ithaka S+R.  “I view this research as a proof of concept that at least one instance of a high-quality online course can produce equivalent outcomes, and hopefully future versions that are higher quality will do even better.”

In fact, students in the hybrid course scored slightly higher and devoted 25% less time to coursework, according to the report Interactive Learning Online at Public Universities: Evidence from Randomized Trials. However, students also reported enjoying the hybrid course less than students taking the traditional class.

Chingos says he believes the ILO course lacked features students expected from an online course, which led to the lower score. He also speculated that better features would produce better results.

“If you could imagine a future version of a course like this, taking advantage of more addictive, interactive, exciting features, getting students even more involved in it, the hope is that in the long run, this won’t just produce the same outcomes in less time for less money, but will actually improve the quality of the educational experience,” he says.