Monday, May 7, 2012

US Textbooks Will Be the New Digital Battlefield

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By Richard Blackden / 4:12PM BST 03 May 2012

If you missed it, the deal will see the two companies create a new venture that will own the Nook, the digital reading device that Barnes & Noble introduced in 2009 to compete with Amazon's Kindle. [snip].

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But there is more to the deal than the possibility of a new tablet hitting the shops in the US, Britain and elsewhere. The companies' joint venture also owns Barnes & Noble's university textbook business, which some believe might give Microsoft a real chance to make up ground on its rivals. Chemistry and economics textbooks are not the sexy corner of the publishing business, but they are a lucrative one.

US university students spent $4.5bn on textbooks in 2010, according to the Association of American Publishers, with the vast majority going on traditional printed books. That is largely because digital versions of textbooks have so far amounted to little more than insipid imitations of their paper-based cousins. [snip].

Indeed, Apple is already eyeing the education book market. In January, the iPad maker struck a deal with three publishers to produce digital textbooks for US school classrooms. It has yet to target the university market, potentially giving Microsoft - so often the laggard in the digital race - a rare headstart. Barnes & Noble's position as the leading retailer of printed university textbooks in America lends brand recognition among students and a distribution platform should the new venture produce a device. "College publishers will eventually go digital only," says Al Greco, a publishing expert at Fordham University in New York. "Who is going to win the market?"

While Barnes & Noble has advantages in the student market that Amazon and Apple don't, Greco cautions that the stunning success of the iPad since its launch two years ago makes it a formidable competitor in any market. [snip].

An advantage for Apple, Amazon and, potentially, Microsoft, is the evidence that US university students are warming to digital textbooks. Just over 60pc of them expect printed textbooks to disappear in five years, according to a March survey from the Pearson Foundation. [snip].

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Although Windows remains a dominant force on desktop PCs and in the workplace, James McQuivey, an analyst at Forrester, says that "Microsoft never imagined it could be so easily replaced" in the consumer market. With help from Barnes & Noble, US university students may prove a very helpful entry point for Microsoft into the tablet market, but it will have to move quickly. It should make for an interesting couple of years in the less than glamorous US university textbook market. UK universities should keep an eye on it.

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