E-Books: The End of the Textbook

You've heard it before: Digital technologies blew up the music industry's moneymaking model, and the textbook business is next.

For years observers have predicted a coming wave of e-textbooks. But so far it just hasn't happened. One explanation for the delay is that while music fans were eager to try a new, more portable form of entertainment, students tend to be more conservative when choosing required materials for their studies. For a real disruption in the textbook market, students may have to be forced to change.

That's exactly what some companies and college leaders are now proposing. They're saying that e-textbooks should be required reading and that colleges should be the ones charging for them. It is the best way to control skyrocketing costs and may actually save the textbook industry from digital piracy, they claim. Major players like the McGraw-Hill Companies, Pearson, and John Wiley & Sons are getting involved.

To understand what a radical shift that would be, think about the current textbook model. Every professor expects students to have ready access to required texts, but technically, purchasing them is optional. So over the years students have improvised a range of ways to dodge buying a new copy—picking up a used textbook, borrowing a copy from the library, sharing with a roommate, renting one, downloading an illegal version, or simply going without. Publishers collect a fee only when students buy new books, giving the companies a financial impetus to crank out updated editions whether the content needs refreshing or not.

The new plan: Colleges require students to pay a course-materials fee, which would be used to buy e-books for all of them (whatever text the professor recommends, just as in the old model).