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Has anyone mapped the business model for textbook publishers?

Hello All,

I am looking into e-textbooks and physical textbook publishers. I am having difficulty determining the cost structure. Very broad, general numbers can be scraped from 10K’s filed by the public companies, but not much more.

How can I determine the cost savings of publishing on an e-textbook format rather than a physical textbook format?

There must be a way to reduce the cost of textbooks for students. Inking.com and flatworldknowledge.com have taken important first steps, but I know there is more.

Thanks

Tags: e-publishing, e-textbook, publisher, textbook

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Permalink Reply by Izam Ryan Bahrin on January 15, 2012 at 3:54am

The cost structure of a traditional book publisher might be quite similar to that of a CD publisher:

1. Content creation - paying off authors.
2. Book printing - manufacturing.
3. Distribution & marketing - overheads of shipping products through the supply chain and marketing the books to wholesalers/retailers/consumers
4. Wholesale/retail - book retailers
(5. The publisher's profit margin)

I think if you were to look at the suggested retail price of a text book as the sum of the parts (1) to (5) above and compare it to the value chain in the CD publishing world you might see that digital products have much more efficient cost structures.

(3) and (4) probably takes a disproportionate bite out of the pie.

Taking these out of the equation significantly reduces the cost of delivering content when it's distributed digitally.

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Permalink Reply by Izam Ryan Bahrin on January 15, 2012 at 3:56am

Cost structure is just one part of the equation.

But you should also look at the value added brought from digitizing text books.

If you look at it from just a cost efficiency point of view, you may be short changing yourself and your students.