Why Education Publishing Is Big Business

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInPin on PinterestShare on RedditEmail this to someone

Courtesy of Wired.com:

On the heels of Apple’s big education and iBooks event, it’s worth taking a quick snapshot of the education publishing industry as it stands today.

Not because the tools announced today will inevitably transform the future of education the way iTunes and the iPhone did the music and smartphone industries — however fun that may be to imagine.

Rather, you simply can’t understand Apple’s interest in breaking into the education market without at least a little understanding of that market’s scope. And you can’t understand why Apple’s adopted the approach that it has without understanding that market’s connection to our wider media ecosystem.

So, first things first.

The biggest publishers in the world today are education publishers.

It’s not even close. In 2009, Pearson’s Education division alone brought in more revenue than any other book publisher besides number two, Reed Elsevier, whose biggest businesses are Lexis-Nexis and Elsevier Science.

Education publishers dwarf trade presses. Only the top trade press, Random House (itself owned by Bertelsmann) is bigger than Cengage, the little-known education publishing division that Thomson spun off in 2008 before merging with Reuters.

Education publishers are also much bigger than other media companies that attract much more attention. Pearson is far bigger than AOL or The New York Times Company (and much more profitable). In order to find publishers with greater revenue or profits, you have to go up the ladder to companies like News Corp that include global television markets, or retail entities, like Amazon. This makes companies like Pearson too big to ignore, especially when they’re willing to partner up.

Education publishers own lots of “little” publishers, too.

On Wednesday, Daring Fireball’s John Gruber wondered whether Apple wouldn’t go it alone with textbooks and dare the big publishers to follow — similar to how it built up the iPod as the top music player and only then partnered up with labels to sell their catalogs through iTunes.

“I can see how the music labels resent Apple’s rise to dominance, but I can’t see how Apple does,” writes Gruber. After all, in Walter Isaacson’s biography, Jobs mentions giving textbooks away for free as a way to route around approval by state and local education committees.

“I’m guessing Apple’s pitch to the textbook companies is something like this,” says Gruber:

Digital transformation of your industry is inevitable. Here’s our plan; we’d like you to come along for the ride. But if you choose not to, we won’t hesitate to leave you behind.

Maybe Apple did play that kind of hardball, either with all three big textbook publishers or pitting them against each other. But Apple has literally billions of other reasons to play nice.

Let’s suppose you don’t really care about textbooks. Pearson also owns Penguin, the world’s second largest trade publisher. They also own the Financial Times and a 50% share of The Economist.

That’s the same Penguin that partnered with Apple to help launch iBooks along with the iPad. And that’s the same Financial Times that proved publishers could bypass the App Store’s 30% cut and still grow their subscriber base on iPhone and iPad.

Likewise, Houghton Mifflin Harcourt publishes a ton of textbooks — but they also publish The Hobbit and The Lord of the Rings.

Oh, hi, Apple. Do I have your attention now?

About Guest Writer