There’s an article over on Fast Company about Inkling, the digital textbook startup. It’s well worth your time, but I especially want to highlight a couple points:
When Inkling took their technology beyond simply digitizing textbooks they discovered educational companies who were building adaptive learning platforms, search databases for reference materials and much more sophisticated beyond-the book kinds of products. “That’s actually where our technology shines,” says McInnis. Today, Inkling applies its technology to all types of reference materials, from cookbooks to medical books for physicians.
The majority of Inkling’s revenue now comes from licencing their platform to publishers. “There was a core business model shift where we went from being about consumer retail to being about licensing software to businesses (the publishers themselves),” says McInnis.
While Inkling had originally viewed textbook publishers as necessary evils, they now view them as partners, and while they originally pegged students as their customers they now realize the customer is the publisher. “We thought we were a B-to-C company. We’re actually a B-to-B company,” says McInnis.
Just like Amazon pursued the Brazilian textbook deal, Inkling has pivoted from generating revenue by selling digital textbooks to licensing their platform. They’re now making more from the latter than from the former.
This ties in fairly well with what I wrote last week concerning Amazon’s deal:
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.
Macinnis doesn’t come out and say that there is no market for selling digital textbooks to students, but Inkling is following the same trend I identified last week.
Kno tried to sell digital textbooks to students and went bankrupt, CourseSmart did the same and had to be bought up by a competitor, and Amazon is focusing on industry deals rather than selling digital textbooks at retail.
And now Inkling is focusing on industry deals rather than selling textbooks to students. Use whatever spin you want, but at the very least this says that there is less money in digital textbook retail than the previous hype led us to believe.
This comes as no surprise to me; I’ve been saying that since 2012. I most recently made this point in July 2013 when Inkling raised their latest round of capital. I described the retail market for digital textbooks as tepid, and that was based on a recent survey which showed the vast majority of students choosing not to adopt digital textbooks.
Given that students are (1) involuntary customers with (2) limited funds, I thought it was pretty clear that students would never make up a sizable digital textbook market. And now it would seem that Amazon and Inkling have reached the same conclusion.