January 5th, 2011
Welcome to this morning’s Daily Research Update. If you want more context for this research, take a look at our Education and Technology Trends for 2010. You may also be interested in our Weekly Research Index, or you can follow our live, daily research on our Current News page.
(Click here to see a simple listing of today’s suggested reading)
Tablets Are the New Black (Especially for Digital Textbooks)
CES will kick off formally tonight with keynote presentations for Microsoft and others. When all is said and done over the weekend, however, one word will stand out — tablets. Yes, many of the products shown at Las Vegas will never make it to market, but the sheer volume of product being debuted supports Forrester’s prediction that one-third of the U.S. will be tablet consumers by 2015. The firm says that it expects sales to more than double in 2011 to 24.1 million units. Of these sales, most will be iPads, as Forrester predicts Apple’s dominance over the tablet market will continue through 2012.
Particularly important in the Forrester market assessment is its belief that tablets will be treated by people as lifestyle devices, more like MP3 players and iPhones than computers. This means they will be purchased in addition to other utilitarian devices, like computers, and that the market growth is not necessarily restricted by a particular feature set based on specific needs.
This means the tablet market will grow more aggressively than netbooks or other utilitarian devices and users will not balk at having a tablet and a personal PC.
Translated — Expect tablets to be hitting campuses in droves by fall 2011.
Amazon certainly sees the opportunity. It is promising tablet-specific Kindle apps for Android and Windows slates. In addition, the company is moving forward with its own, proprietary app store for Android devices (smartphones and tablets). Unlike what Google does for its Market Place, “Amazon is going to take a leaf from Apple’s book and spend about a week analyzing each app before giving it the thumb’s up.” They also plan to attract developers by offering them the standard 70 percent take from each app purchase.
The end result of all this is clear — in Higher Education, tablets will become firmly established as the device to focus on for tool and content product development in 2011. In fact, I’ll go a step further. Tablet devices should be the center and starting point for content and application development within Higher Education content publishing. This means:
Will E-textbooks Be E-books?
The modern textbook is simply a collection of content designed to be the core set of resources around which a course is taught. The advent of digital in general and tablets in particular is challenging us to reexamine both the nature and form of what we call or use as that core course content.
The definition and very nature of textbooks are certainly changing with the entry of new Born Digital content publishers in Higher Education, as well as with the growth of open textbooks. These groups conceive of textbooks as general collections of course material than as physical books per se. This, in turn, affects their content models, workflows, and concepts about packaging and distribution. Unencumbered by the notion of a physical print product, they are able to adapt to changes in form much more rapidly and cost effectively.
Translated — We will see a rapid evolution of the textbook model over the next three years, fueled by digital content and open textbook models.
I’m also mindful of the changes coming the digital textbook world as I look at products like RIM’s new PlayBook tablet and its impressive browser. In its most recent demonstrations of the tablet, RIM “has chosen to highlight its latest browser improvements to prove just how “real” the web is on the PlayBook. HTML5 video playback looks super smooth, as does Flash video in the desktop YouTube site. Impressively, the entire Facebook experience works exactly like it does on the desktop — even supporting Facebook chat, which the iPad’s browser can’t handle.”
One of the takeaways here is that “learning content” is going to redefined, in part, by the capabilities of the new containers (tablets). Everyone needs to be thinking more three dimensionally, of organic multimedia presentations, and in terms of student-centered discoverability.
Another thing to keep in mind when it comes to the next wave of digital textbooks is that, in their tablet designs, they can assume much greater computing power than basic trade e-books which are designed for e-reading devices like the Kindle of NOOK. The coming wave of tablets will support dual processors and more robust media handling. This poses particular difficulty for products like Barnes & Noble’s NOOKcolor, which is positioned between the e-reader and tablet worlds. Its current hardware configuration will not keep pace with new tablet functionality or app demands, and it will inevitably lose a head-to-head battle with the Kindle.
Why Rental Matters and Doesn’t in E-textbooks
“But what about rental?” you say. “Isn’t that the next big thing?”
No. Rental is a short-term product niche driven by a desire for lower textbook costs (think current, soon-to-change paradigm). Chegg had revenues of between $135 million and $150 million in 2010, and the total rental market did not exceed $375 million. This represents less than 5% of the Higher Education textbook market. If nothing changes — publishers don’t react with digital competition and the market remains as it is right now — that number could go as high as 10%-12% in the next two years.
There are two problems with this, beyond the fact that rental has low margins and intense competition (see Neebo’s new tact). First, the current rental market is based on a traditional print book paradigm that will indeed evolve rapidly in the coming years. Second, and more important, the digital textbook market is expanding rapidly and will also reach double digits within the next 2-3 years. And digital textbooks present publishers and other distributors with what is, in essence, a new kind of rental program. This will provide incentive for traditional publishers to focus even more aggressively on digital as it represents a way to fight both rental and used books in general.
Now, do Chegg and other rental companies see rental as merely a channel for getting student eyeballs and driving other products and services? Certainly. But that is a dangerous game because of the heavy investment — warehouse, distribution, and service centers — require to support rental operations.
Other Items of Interest
Speaking of open source textbooks, David Thornburg has this nice article on the subject over at Edutopia. Here’s an excerpt.
Unlike commercial textbooks (which can cost over $200 apiece), open source textbooks are able to undergo constant revision as new developments emerge. This is especially important in the sciences where a new discovery can shift our view of the world overnight. How many textbooks have you seen that are still in use from the days when we thought of Pluto as a planet? Within and hour of the NASA announcement regarding Arsenic-containing bacteria, I sent an e-mail to a major textbook publisher and to a major provider of open-source textbooks (http://www.ck12.org). While it took over two weeks to even hear back from the commercial publisher, I was informed a day later by CK12 that the modifications to their life sciences textbooks had already been made. In other words, anyone who downloads their free textbooks will have a more accurate textbook than one published by the mainstream commercial publishers – and the process of updating the textbooks took only one day!
Also, take note that Firefox now leads the way for browsers in Europe. “For the first time in a decade, Microsoft’s Internet Explorer is no longer the leading Web browser in Europe, ceding the position to Mozilla’s Firefox, an Irish research company that tracks Web use said on Tuesday. While three research companies also active in the field disputed the finding, StatCounter, a company in Dublin, said Firefox surpassed Internet Explorer as the top European browser in December, with a 38.1 percent share, compared with Explorer’s 37.5 percent. ”
Finally, I see that, according to the latest Pew survey, the Internet has surpassed television as the main source of news for young adults. “In 2010, 65% of people younger than 30 cited the Internet (Internet) as their go-to source for news, nearly doubling from 34% in 2007. The number who consider television as their main news source dropped from 68% to 52% during that time.”
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