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Online fee-paying libraries tackle textbook inflation

When Belgium-born Gauthier Van Malderen was doing his masters in entrepreneurship at the Judge Institute in Cambridge in the United Kingdom, he found he was paying more than £300 (US$368) per term for textbooks and saw a business opportunity to launch a digital alternative to having to buy key academic titles.

Launched in 2016, the Perlego online library for academic textbooks now employs a 32-strong team of international graduates in London and offers students across Europe easy access to hundreds of thousands of titles at a discounted subscription fee of £12 a month – or £96 for an annual fee for students.

Access to 200,000 titles across Europe

“We’ve already negotiated access to more than 200,000 titles from over 2,300 publishers including Bloomsbury, SAGE, Pearson, Princeton University Press and Simon & Schuster for a fraction of the cost of a single print book, which on average costs £49,” Van Malderen told University World News.

Perlego’s Vice-President for Content Acquisition and Strategy Matthew Jones said a big difference between Perlego’s approach and that of say Spotify for music or Netflix for films is that 65% of the subscription fee goes back to the publishers – who decide how much to pass on to the authors.

“On average users access three books a month, so the 65% (£7.80 for students paying £12 a month) is split between the three publishers of the books read. It doesn’t matter if it is a £150 reference book or a £49 textbook,” Jones explained to University World News.

Textbook price inflation

“The publishers are receptive to the model because it helps them monetise segments of the market that up until now they have struggled to access – price sensitive readers who have turned to second-hand sales or piracy,” Jones explained.

And it is not surprising students are price sensitive. The cost of academic textbooks has been soaring, with the Financial Timesreporting in 2016 that textbook prices had increased by over 800% in the United States between 1978 and 2014. That’s more than triple the cost of inflation and more than the rate of increase in college tuition fees in the US.

In the UK, the cost of academic titles has risen even faster, according to a blog on the University of Essex Online website, which said in May 2016: “According to official data, textbook inflation since 1977 is 1,041% – almost four times the overall rate of inflation.”

Cautious about asking students to pay

But despite the price rises, universities approached by University World News, both in the UK and on the European continent, were cautious about welcoming subscription-based online libraries, such as that offered by Perlego, because of uncertainty about how students would react to being asked to pay to rent books.

But a spokesman for the UK’s Universities and Colleges Admissions Service, or UCAS, told University World News: “We work with them though they aren’t an official partner” and Perlego’s 20% discount for students subscribing to the online library is highlighted on the UCAS Tech website.

And a vote of confidence in the Perlego initiative came from Laksamana College of Business, a Brunei-subsidiary of the independently run Kensington College of Business, London.

Sivarajah Subramaniam, chief operating officer and deputy principal, told University World News: “Our academics and students are delighted with the service provided by Perlego and appreciate the selection of books available online. The reports they provide to us are very useful as we can monitor the group that uses their online library regularly.”

Part of the reluctance at being seen to be too keen despite the access to a huge range of titles is that many universities claim they already provide most of the texts that learners should need for free, either online or through printed books on the library shelves.

Essex Online, which offers degrees awarded and validated by the University of Essex with courses delivered by Kaplan Open Learning, told University World News that core texts were made available free of charge to students through a service called VitalSource.

These can be accessed from any device and learners can also use the University of Essex online library, which “gives them access to numerous further academic journals and texts”, said a spokeswoman.

At the Rotterdam School of Management at Erasmus University, which was highlighted in the Financial Times story on soaring textbook inflation in 2016, the use of books on masters courses has been replaced with digital case studies and articles are available through the university library, which pays for the copyrights. As a result, students should not have to pay extra for the material, the paper reported.

The Rotterdam School of Management’s Executive Director of MSc Programmes Dr Gabi Helfert told University World News: “We do not ask students to pay for mandatory education material or educational activities. In fact, it is forbidden by Dutch law to do so in government-funded programmes.”

Many of the case studies used are developed by the school’s own Case Development Centre – and again free of charge for the 6,700 masters and bachelor students.

On some courses, instructors may suggest educational material that costs money; but if they do, they also offer an alternative free-of-charge assignment. “Students who do choose the paid route rarely pay more than €100 per academic year for credit-related activities,” said Helfert.

Most pay zero on study material

So she thinks neither Dutch nor international masters students at the Rotterdam School of Management would find Perlego’s offer very attractive. “If it was £12 per quarter, maybe, but most of our students will spend next to zero on study material,” she told University World News.

That feeling is shared by Lars Egeland, director of the library at Oslo Metropolitan University in Norway. He said students might be interested in Perlego’s online library if it could supply all the curriculum books they need, but he doubted they could manage that as they differ so much between different universities and studies.

He also questioned whether students at Norwegian universities would be willing to pay £12 a month to get additional books as more and more curriculum material is offered for free from libraries as e-books and links to journal articles where libraries pay for access.

One of the stumbling blocks to offering paid-for subscription to access academic titles is that students in many European universities pay little or nothing in tuition fees. At Erasmus University, European masters students pay a statutory fee contribution of just €2,083 (US$2,300) a year (non-EU students pay much more, approximately €18,000 per year on a MSc programme). In Norwegian and German public universities, higher education is free at public universities.

Egeland told University World News that while students are supposed to buy their own curriculum books, his impression was that they preferred to queue up in front of library scanners and copy what they need from printed material despite the cost of making paper copies.

“As soon as you have made a digital copy you can distribute it to a whole group of students. That might be one reason why the sale of books in Norway decreased by around 7% last year,” he said.

Interest in streaming services

At Friedrich Schiller University Jena, one of Germany’s oldest comprehensive public universities which attracts international students from around 100 countries, Vice-President for Learning and Teaching Professor Dr Iris Winkler told University World News: “Streaming services for scientific and academic information such as textbooks, journals and databases are being looked at by German institutions of higher education and research.

“At the moment there are various offers developing on the German market and it is still completely open which service will prevail. We are therefore watching the development closely, including what is happening in other countries like the UK and US.

"The publishers are still firmly in control of the business, but I think our students would want to access streaming services especially in fields where textbooks are very expensive and have no long-term value, such as in the natural sciences.”

Winkler added: “Whether students would be willing to pay is another matter. Those who already buy their own books might, but there are also students who rely on the library and simply can’t afford to buy their own textbooks.”

Real push across Europe

Despite the obvious hurdles, Perlego’s Matthew Jones says it is a key strategic objective to make “a real push across Europe” by offering more textbooks for loan in languages other than English, with the current focus on adding German, Italian, French and Spanish titles.

Future plans include extending the lending service to countries in Asia, the Middle East and Africa, where Jones believes there is huge potential.

For the moment, they are not trying to break into the US market, which Jones said was “more closely protected by the publishers”, but also where price inflation of not just textbooks but also tuition fees has been among the highest in the world.
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