Despite promises of a “digital destruction” of the textbook market, Apple’s actual iBooks announcements raise more questions than they answer. Now that the dust has settled, it’s time for a deeper look.
On January 19, Apple held an “education event” where they announced a new version of iBooks, a new set of tools for creating digital textbooks (iBooks Author), and an expansion of their iTunes U program. Video of the announcement can be found here. Joe Esposito took a first look that day, and rightly suggested that despite the high-minded statements about education, this was really about selling more iPads.
Since then, we’ve learned more about Apple’s offerings here and new questions have been raised about Apple’s strategy, and the effect this may or may not have on the publishing industry.
Is Apple Intent on Becoming A Publisher?
Kent Anderson recently suggested that Apple and Amazon were on their way to becoming publishers. While I think he’s right regarding Amazon, I’m not so sure about Apple. Amazon and Apple have very different business models. One is a reseller of products and bases its business on a huge quantity of low margin sales (combined with a superb level of service and convenience). The other is a manufacturer of products, and the business is, as it has always been for Apple, selling high-margin electronic devices.
While Amazon moves ever closer to becoming a product manufacturer, in this case a publisher, providing curation and some of the services offered by publishers, Apple instead views content as a means to sell more devices. That’s the reason why, despite the success of iTunes, that Apple has not become a music label or a movie studio. Similarly, it doesn’t make sense for them to take on content creation for books. One can’t really argue with their strategy, given that Apple’s recent Q1 profit alone was $3 billion more than Hollywood’s gross box office receipts for all of 2011. Really, why would Apple want to move into such a low margin business as book publishing?
What About That Dreaded EULA?
Once people got their hands on iBooks Author, the End User License Agreement (EULA) raised quite a few hackles, particularly this section:
If you charge a fee for any book or other work you generate using this software (a “Work”), you may only sell or distribute such Work through Apple (e.g., through the iBookstore) and such distribution will be subject to a separate agreement with Apple.
Essentially, if you use Apple’s tools to create a textbook, you either have to give it away at no cost, or sell it exclusively through Apple. Some claim this is unenforceable, and others suggest that it’s unnecessary, given that the files created are so proprietary that they couldn’t actually be used on any other platform.
Regardless, it’s disappointing and takes much of the luster off of Apple’s announcements. Apple is certainly within their rights to make this restriction, and there’s a business case to be made for doing so (it offers an advantage to Apple’s platform, hence more iPad sales). But the limits imposed limit the impact on education. If these sorts of textbooks are truly revolutionary (see below), and Apple really gives a damn about education, then why place limits on improving things?
Is K-12 Really the Appropriate Market?
Apple’s presentation focused exclusively on the K-12 market. This seems a bit odd, as the solutions offered here make immediate sense for college and graduate education and very difficult to apply in K-12. College students buy their own textbooks and given the high cost of those books, the additional expense of an iPad can readily be offset by lower electronic textbook prices. There are no school boards to go through, no tax funding to secure. You’re selling direct to the student, which fits with Apple’s iBookstore’s reach. There are obvious reasons why Apple is targeting K-12 instead, but many obstacles to having much of an impact there.
The first reason is the size of the market. The K-12 textbook market is estimated at $8 billion annually, with some 50 million students in public schools in the US. If you’re going to aim high, you obviously want to appeal to the largest possible market.
Second, the math for textbook publishers works better here. McGraw Hill normally sells a high school textbook for $75 and the school usually uses it over the course of five years. With an iTextbook, you’d sell it for $15, but you’d sell a copy to every student each year. That results in the same overall $75 revenue for the same five year period.
It’s easy to get textbook manufacturers to sign on when you offer them a chance to lower prices but keep revenues even (it’s worth noting that McGraw-Hill sees $15 as a “pilot” price, while Apple insists it’s a permanent one). College students, however, buy their textbooks once — they aren’t repurchasing them over the course of their education. So you’re only going to get one sale to replace your paper textbook sale, not 5. Which makes an 80% reduction in price much more difficult to put into sustainable practice and it’s likely Apple failed to get buy-in from publishers in this market.
As you go higher and higher in education, textbooks become niche products. Compare the number of 5th graders studying Biology to the number of college students taking a molecular genetics course to the number of graduate students taking a seminar on RNAi. The lower volumes mean higher prices are needed to cover the costs of creating a textbook for a high level specialized course.
And that’s a tougher message for Apple to sell — buy a $500 device, then buy digital textbooks at a slight discount (digital textbooks that you can’t resell by the way).
So it’s pretty clear why K-12 was the target here. But the reality of the situation presents some extremely tough hurdles. Even if you could somehow cut the price of an iPad in half, outfitting the 50 million students in public schools alone means spending $12.5 billion. And that’s just for the hardware and assumes no student loses or breaks their iPad, no support whatsoever is needed, no wifi costs, and no textbooks are purchased. Then there’s the harsh reality of the mundane world, things like the dearth of electrical outlets in schools.
Are eTextbooks Really Revolutionary Tools?
It’s not hard to market a panacea in academia these days.
We need to look behind the hype and try to better understand the nature of what’s being offered here. Is Apple really offering anything different than the CD-ROM of the 1990′s? Is this just a tablet-based version of Microsoft Encarta?
I have no doubt that new technologies can create useful tools for educational purposes. Cold Spring Harbor Laboratory’s DNA Learning Center does spectacular things in this vein. I worry though, that what we’ll mostly be seeing instead are half-hearted efforts, low-hanging fruit. Is “The Sun Also Rises” a more meaningful reading experience if you add in bull-fighting videos? Is “Breakfast of Champions” a better read with clips from the movie?
There’s likely a reason why so many Silicon Valley leaders send their children to schools where computers are banned from the classroom. In the early years of their education, children are learning how to navigate the real world. Don’t they have to learn how to use real-world objects before understanding skeuomorphed virtual versions of those same objects? If those designs are indeed usable because of nostalgia, don’t children need something to be nostalgic about?
Part of that real world navigation involves interacting with other human beings. The more we encourage them to interact via online social networks at an early age, the more we may be stunting their social development.
The notion that the internet is changing the way we think has caused an enormous level of debate. I take the position that yes, the way we read and think while using the internet is different than other ways of thinking, but it’s an additive skill. Learning to use Google hasn’t prevented me from reading a long novel or doing in-depth research. But those were skills I had already developed before I used the internet. We can clearly add the shallow skimming of the online world to an established ability to concentrate deeply, but can we do the reverse? Can a child raised on a diet of hopping from link to link, reading only aggregated summaries later learn directed deep concentration?
I don’t know the answer to that question, which is why I’m hesitant to assume these new technological tools will serve as the sole guiding force in education. Not being connected, not having lots of distractions, really losing oneself in a subject is an important part of learning. Let’s use technology in the appropriate places, rather than across the board to best suit a private company’s business model.
I used to think that technology could help education. I’ve probably spearheaded giving away more computer equipment to schools than anybody else on the planet. But I’ve had to come to the inevitable conclusion that the problem is not one that technology can hope to solve. What’s wrong with education cannot be fixed with technology. No amount of technology will make a dent.