A startup plans to disrupt the textbook industry with an on-demand model, Tina Nazerian reports for EdSurge.
The cost of textbooks is soaring. Textbook prices rose 1,041% from January 1977 to June 2015, according to an analysis of Bureau of Labor Statistics data by NBC News. For some students, the cost of their textbooks even rivals the cost of their tuition. Meanwhile, insofar as it is feasible for them, students have begun acquiring their textbooks from publishers through alternative means, such as renting them or buying used versions.
This has culminated in what Nazerian reports was the biggest pre-tax loss for Pearson Education in history, at approximately $3.2 billion for 2016. The company also laid off 3,000 employees. Other large textbook publishers have had similar financial troubles, she reports.
Why free tuition isn't enough for some students
The startup hopes its new approach will help both publishers and students. Perlego, which launched in January 2017, is aiming to be the Netflix of academic content, especially digital textbooks, Nazerian writes.
Perlego has a free version, which allows users to access over 50,000 public domain books, including classic titles like The Great Gatsby. It also offers a subscription, which allows students to access full digital textbooks for $15 per month. Students have the ability to highlight and annotate textbooks using the platform, as well as collaborate with their peers.
Perlego has secured partnerships with several major publishers, including Palgrave Macmillan, Wiley, and Pearson, according to Nazerian. It has also received nearly $700,000 in seed funding.
The hidden costs of college
According to Gauthier Van Malderen, the founder of Perlego, the startup is offering more favorable terms to publishers than its rivals. For example, when setting royalties, Perlego considers the market price of a textbook, rather than just how many times the book is read. It also provides publishers with data on students' reading habits, Van Malderen says.
However, not all students are convinced that Perlego will work for them. For example, one student studying for an associate degree in American Sign Language interpreting told EdSurge she prefers physical textbooks because she can take notes directly onto them. She also likes being able to print her electronic materials, which is not possible through Perlego.
Besides, she says, most of her textbooks are not from the big publishers who make up most of Perlego's partners so far (Nazerian, EdSurge, 9/8).
How to predict financial attrition
Next in Today's Briefing
5 facts you may not know about millennials