A New Textbook Publishing Model for the Internet Age

College students living at or below the poverty line often have difficult choices to make; buy groceries, pay rent or purchase textbooks. To Eric Frank, co-founder of Flat World Knowledge, this is not really a choice. When it comes to eating or buying a textbook, most will choose to eat. 

“The biggest barrier to learning on scale is access to information. If we don’t solve that problem, then on scale we are never going to educate the number of people who want to be educated and who are not only capable of excelling but in many ways need that education to improve their quality of life,” says Frank.

Eric Frank, Co-Founder, Flat World Knowledge

Eric Frank, Co-Founder, Flat World Knowledge

But Frank is optimistic that his new textbook publishing model will eliminate those barriers that prevent economically disadvantaged students from accessing information and continuing their education. Frank’s com-pany, Flat World Knowledge, publishes open-licensed textbooks. His model not only allows college professors to choose the book they prefer for their courses, it also allows students to choose the price and the format of the book. What makes Flat World textbooks open-licensed is a set of rights that allow an individual professor to improve upon the book for his or her class. With an open license and with Flat World’s open publishing platform, instructors can create new editions for their students if they attribute the work to the original author, don’t use the work for commercial purposes and distribute their remixed version under the original license.
Like their professors, college students also enjoy a number of free-doms, not the least of which is free textbooks. Students can read Web-host-ed versions for free, or purchase other formats, such as paperback books, PDFs, audio books, e-books and interactive study aids, all for a fraction of the cost of traditional textbooks.
“It’s truly the shift from information and knowledge being a scarce good wrapped up between a cover of books, or in some other physical manifestation, to being an abundant good. Everybody can access this knowledge at the same time, and it doesn’t take away from anyone else. There is this exciting opportunity, I think, to take down these barriers that have existed, and it’s these old business models that were built pre-Internet that are still building up walls around knowledge and content,” says Frank.
According to Eric Weil, managing partner of Student Monitor, a higher education research group, 69 percent of college students purchase new textbooks, 76 percent purchase used textbooks, 10 percent purchase E-books, and 20 percent rent their textbooks. Those who purchase new text-books pay, on average, $83 per book. Those who buy used textbooks pay an average of $54 per book. Students who purchase E-books and rent books spend about $6 and $9, respectively, on their books. The College Board estimates that students can spend from $1,133 to $1,181 on books and supplies per year. The Student Public Interest Research Group, a con-sortium of organized college students, indicates that in 2010, the average price of the 100 top-selling textbooks was $175 for a new edition and$132 for a used one.
To understand how walls and barriers were erected and how the cost of textbooks has risen so precipitously, one must first understand the evolu-tion of textbook publishing. In the late 1970s, there were several small publishers, what Frank calls scholarly publishers. Then in the 1980s, these small publishers were bought up by bigger corporate parents, becoming the “cash cows for those corporations,” says Frank. Realizing that academ-ic textbooks were becoming big business, these corporations invested in large sales forces, complete with sales reps with expense accounts. This investment, however, cost the corporations big bucks, and they passed those expenses on to the student in the form of higher textbook prices.

“The biggest barrier to learning on scale is access to information. If we don’t solve that problem, then on scale we are never going to educate the number of people who want to be educated and who are not only capable of excelling but in many ways need that education to improve their quality of life.”
— Eric Frank, Co-Founder, Flat World Knowledge

By the 1990s, a wave of consolidation in the publishing industry turned 65 publishers into a mere five significant publishers. “With less downward price pressure, publishing companies set prices, and nobody broke rank,” says Frank.
A “nuclear arms race of supplements” emerged among publishers as each tried to outdo its competition by offering “fancy CDs or a video or something that the other guy doesn’t have. So they started exploding these teacher supplement packages, and that started adding tons of cost to the product. So prices started going up faster in the ’90s. And that’s what pre-cipitated the arrival of a significantly overpriced textbook,” says Frank.
But then came the great equalizer, or so cash-strapped students thought. Angry about the high price of textbooks, students turned to the Internet to find a low-cost alternative to the publishing companies’ high prices. They found it. Students were no longer forced to fork over gobs of cash for their textbooks. Nor did they have to rely on the campus book-store to find used copies. Sites such as Amazon.com dealt in used copies while other sites offered textbook rentals. Some students even found pirat-ed copies of texts that they could download for free.
However, as students began snapping up used textbooks on Amazon and downloading free texts, publishers saw their sales decline. To preserve their revenues, publishers were forced to raise their prices for new books. “So what used to be a 4 percent-a-year price increase had gone to over 10 percent a year,” says Frank.
Working under the assumption that there is no single prototypical col-lege student, Frank’s model of information delivery accommodates a vari-ety of learning styles and lifestyles. Some students are in their 40s and returning to school for career training, others are traditional 18- to 22-year-olds living in a quad on campus while others have scratched their way into college from the lowest rungs of America’s economic pyramid, the first in their families to attend college, says Frank.
“We at Flat World have taken the position that we want to be delivery and platform agnostic. However a consumer wants to read and consume, we should try to provide that,” says Frank. All Flat World texts are offered for free on the Internet. But for the student who wishes to hold and read a hardbound textbook, Flat World will sell a black and white edition for about$30 or a color edition for $60. For those who are auditory learners or want to consume their textbooks while driving or jogging, Flat World offers audio versions of its books in the form of MP3s. For those who read on Kindles, Nooks or the iPad, Flat World can deliver texts to these devices as well.
Frank developed three core components to the Flat World business model. First, he says, Flat World publishes great textbooks, nothing radi-cally different than any other textbook publishers. Flat World finds leading scholars in their respective fields who then write exclusive textbooks for Flat World. Flat World provides various editorial resources, such as peer reviewers, editors, illustrators and designers and applies technology and automation to keep the final cost of the textbook down.
But what differentiates Flat World from other publishers is its second component, openly licensed textbooks. In other words, Flat World does not publish its books under “all rights reserved,” but instead under a “creative commons license.”

“This in effect transfers legal control” from Flat World Knowledge “to the user, the faculty member, to be able to take control of that content,” says Frank.
Professors have varying perspectives, opinions, course objectives and audiences. No two professors approach their courses in precisely the same manner. Frank believes that professors should have the opportunity to improve upon an existing text, and Flat World provides the legal control for professors to modify texts through its creative commons license and also provides the ability to make modifications through its online editing platform. Professors can drag, drop, click, delete, edit and even insert YouTube videos, all within an open-license textbook. “So we’re giving a lot of control to the faculty to take something that is great and build upon it and make it better,” says Frank.
The third component of the Flat World model is to provide students with the ability to choose from a variety of formats and a variety of price points. Delivery options include free textbooks offered over the Internet, hardbound texts, MP3s and PDFs. Flat World textbooks also offer students a variety of study aids, such as flash cards, practice quizzes and audio chapter summaries. “It’s all about choice for the student. They can buy it or not buy it and read it for free on the Internet,” says Frank. In essence, Flat World is putting the student in the driver’s seat by offering all the mate-rial necessary for a student to succeed in a particular course, says Frank.
One would think that an economic model that allowed students to access materials for free would be doomed to fail. But Frank thinks otherwise and explains his financial model like this: In semester one, 55 percent of students buy some material from Flat World while 45 percent read the materials on the Internet for free. In that same semester, Prentice Hall, for example, sells materials to about 70 percent of students. But when the second semester rolls around, Flat World still sells to 55 percent of the new students. Prentice Hall, on the other hand, sells to only about 35 percent because many second-semester students choose to purchase used material or borrow texts. By semester three, Prentice Hall’s sales have dipped to around 15 percent while Flat World is still selling to 55 percent of the third-semester students.
“Semester four we’re still selling at 55 percent, and Prentice Hall’s not selling a lick. Now they have to spend money to revise the book and bring it out faster to flush the market of used books. We can keep our book going longer. At the end of the day, we are earning equal revenues; we’re just earning them more slowly over time,” says Frank.
Flat World published its first free textbooks in March of 2009, and since then more than 1,600 professors at over 900 colleges have adopted a Flat World textbook for their courses. Demand is also growing internation-ally. Students in 44 countries are among the 100,000 who will use Flat World books during the 2010-11 academic year.
Another way that Flat World is partnering with colleges to lower student costs and improve completion rates is through institutional textbook licensing agreements. In this model, institutions buy per student seat licenses for digital access to textbooks, and charge students a small fee as part of tuition.
Currently, Flat World publishes 28 titles. Of those, 22 are for business and economics courses. Frank plans to continue publishing aggressively in the business and economics field. But moving forward, he hopes to tackle general education courses, those courses that are often required within a student’s first two years and comprise virtually the entire community col-lege experience, where the financial pain is most keenly felt.
Frank concedes that Flat World is not going to publish thousands of books like the big publishers, but by focusing on the general education titles, he is convinced that Flat World will find a niche. “Introduction to psychology, sociology, algebra, history all those courses. We are focused on publishing 125 general education courses by 2014, and we’ve already started that,” says Frank. This fall, Flat World published three general edu-cation courses and has three more titles coming out for the spring.
One of the 1,600 professors who have turned to Flat World textbooks is Economics Professor Erik Huntsinger of Estrella Mountain Community College in Avondale, Ariz.
“I adopted the Flat World text in my classes because students shouldn’t have to pay more than $100 for a textbook in college classes. A new copy of the previous text I used cost more than $150 for students, and used books were not that much more of a cost savings,” says Huntsinger. “I would hear students sharing stories about how expensive the textbook was, regardless if they bought it at the bookstore or from an online vendor.”
Thirty-nine percent of Estrella Mountain’s student body is Hispanic, and 55 percent receive some form of aid. Huntsinger says that many of his students work full time and take on massive amounts of student loan debt just to go to college, and he did not want to add to their financial woes by requiring them to purchase expensive textbooks. In the past, students who purchased used texts had out-of-date textbooks, making it difficult for Huntsinger to be consistent with page numbers and up-to-date graphics.
Huntsinger calls the Flat World textbook he currently assigns “one of the best economics textbooks I’ve used in my teaching experience.” Chapters are relatively short and easy to read, which increases the chance the students will actually do the assigned reading.
Frank, who holds a B.A. in literature from the University of Massachusetts-Amherst and worked as a director of marketing for a divi-sion of Pearson, says that Flat World is building the next-generation pub-lisher “with our own model and our own author stable, under what we think is the right model for the Internet era.”