Netflix model spreads to college textbooks

November 3, 2010

E-textbooks may be the way of the future for college campuses, but some scrappy companies are banking on the here and now by offering a solution to bring low-cost textbooks to students, and in some ways they’re taking a page out of movie rental company Netflix Inc’s playbook.Reader

New college textbooks are a $4.5 billion business for dominant players such as Pearson PLC, privately held Cengage Learning and McGraw-Hill Companies Inc.  But upstart companies such as Chegg and are gaining momentum by offering used books at a discount on their websites, and shipping them to students, who later ship the books back when they are done with them.

If that sounds a little like Netflix’s business model, it may not be that much of a coincidence. Marc Randolph, who was a co-founder of Netflix, is a board member on the privately-held

“Very similar to Netflix, we are going to get you your educational content at the most affordable price and the way the students want it,” said Mehdi Maghsoodnia, CEO of

Maghsoodnia said the total available market for the used college textbook market is about $4 billion, and his company is in a race with Chegg to capture that market, although at the moment it is only a third the size of Chegg. Maghsoodnia said that BookRenter’s annual revenue is under $50 million, but growing fast.

With new devices such as Apple Inc’s iPad helping drive e-books, research firm Simba Information expects digital sales to grow to 11 percent of overall textbook sales by 2013, compared to 4 percent this year.

But some are expecting the ease of rented textbooks, which are often a third the price of a new textbook and are still cheaper than a digital text, to keep attracting students, perhaps at the expense of e-textbooks.

“They’re just saying, ‘Hey what’s the cheapest way I can get by getting the books I need and right now,’ and rental is it,” said Charlie Schmidt, a spokesman for the National Association of College Stores.

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Actually Rental is still expensive. The true way to solve the problem is buying those alternative version. I use to purchase international edition textbooks last semesters and save up to 75% of total cost! and yes, it is legal to do that .Those books have the same contents and only difference is softcover , yeah I know the softcover is softcover but who cares, I really want to save and I gonna tell my friends about this.

Posted by jerryattulsa | Report as abusive