Digital Textbooks Gaining Favor

As printed books get more expensive, electronic versions are on the rise as a popular, cost-saving alternative

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By Dan Macsai

It's a time-honored college tradition to spend big at the bookstore. Since the mid-1980s, textbook prices have nearly tripled; now they set students back an average of $900 per year, or 14% of annual tuition at an average public school (BusinessWeek, 10/20/08). But in growing numbers, the college crowd is demanding a cheaper alternative: the digital textbook.

Within the last year or so, traffic has surged at Web stores like CourseSmart and iChapters, where students can download $100 textbooks for as little as $50. CourseSmart, which launched last August, has already lured "hundreds of thousands" of users from 2,500 campuses, says CEO Sean Devine. From July through September, iChapters averaged two million hits per month, up 63% over the same period last year. "This is a natural evolution," says Devine, who spent six years heading Safari Books Online, a provider of computer and business e-books. "Every other form of media—movies, music, TV shows—is available electronically. Why not textbooks?"

Both sites are backed by publishing titans, who are vying for shares of the $5.5 billion textbook industry. Cengage Learning launched iChapters in early 2007. CourseSmart, which touts 4,486 available titles, is supported by six textbook publishers, including Cengage, Pearson, Wiley and McGraw-Hill, (publisher of BusinessWeek). "We're all about choice," says Stephen Hochheiser, a VP at Cengage. "If students want to buy books in a certain way, we'll make it happen."

Better Than Print

Content-wise, most e-books mirror their print predecessors: The authors, text, and page numbers remain the same. What sets them apart is their use of "rich media," or embedded video clips, audio tracks, and hyperlinks. Geology students can read about erosion, then watch it happen; aspiring chemists can manipulate 3D atom models. And since all e-books have a search feature, it's easy to find specific terms. "It's a lot more convenient than I expected," says Elizabeth Popp, a 29-year-old CourseSmart user at Webster University in St. Louis.

Mary Hughes Stone, a psychology professor at San Francisco State, often directs her students to iChapters. Stone says it's an "optimal system" for visual learners and she sees "definite value" in the multimedia components. Because the e-books are distributed on the Internet, they also have the advantage of being weightless and easily accessible from any computer.

But they're not as cost-effective as they appear. At most college bookstores, often-used titles can be sold back for a percentage of the purchase price (usually about 50%). Not so with iChapters and CourseSmart: Initial prices are low, but there's no rebate potential. Depending on the book, Stone warns, "you could lose money in the long run." Plus, buying a used book in the first place has long been a cost-saving option.