Earlier this week Amazon announced a new distribution deal with the Brazilian govt to distribute 200 distribute textbook titles to teachers and students across Brazil.
While this is quite the coup for Amazon, there's a bigger story here. This deal, along with several other unrelated developments, are all signs that the digital textbook market bubble, in particular the one where textbooks were going to be sold to students, is defunct.
I know it might sound strange to extrapolate from one deal and make general statements about the market, but if you consider the past few major stories about digital textbooks I think you'll agree with me.
- In November 2013 Intel acquired the digital textbook startup Kno. This firm had been launched with the idea of selling digital textbooks to students (also a Kno tablet, but that died a long time ago). Kno was sold for $15 million, far short of the $73 million Kno had raised.
- In March 2014 Ingram bought CourseSmart, a competing digital textbook retailer, with the likely goal of combining CourseSmart with VitalSource, Ingram's own digital textbook platform. According to my sources CourseSmart had been struggling for the past 2 years, and that it's major weakness was its focus on selling to students (B2C) rather than selling to schools (B2B) like VitalSource.
- And this week we have Amazon signing a distribution deal with a government agency. This retailer had initially gotten into ebooks and digital textbooks with the goal of selling and renting them to consumers (including students), but now they're going after deals with organizations.
Don't those 3 points make an interesting line?
They would seem to suggest that the consumer digital textbook market is unworkable for some reason, probably because people aren't buying them.
Assuming that there is a market for digital textbooks, it would seem that the way forward will be for publishers to sell to schools rather than individuals. Of course, that's already happening, but it hasn't gotten nearly as much attention as the efforts to sell digital textbooks to consumers. The latter market got all the press, but it seems to have fizzled.
If I am right then the digital textbook market is going to be generating a lot less buzz over the next few years. I doubt it's going to shrink, but it will be less visible. In fact, with more school districts launching 1:1 programs I would expect that the digital textbook market will grow significantly.
Also, this does not bode well for Inkling. This 3 year old startup focused on selling digital textbooks to students, just like Kno and CourseSmart, which means that they need to pivot before they go under. Given their acqui-hire of Open Air Publishing last Fall, I would think Inkling already figured that out.