MediaFile

Netflix model spreads to college textbooks

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.

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 BookRenter.com 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 BookRenter.com.

“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 BookRenter.com.

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.

from Summit Notebook:

All I want for Christmas is a blockbuster

Nicola Leske

Nov 30, 2009 15:26 EST

What's a great holiday gift in a recession, yes a good old fashioned book. Random House just got its new Dan Brown bestseller on the shelves.

Pearson's Chief Financial Officer admitted that its consumer publisher Penguin does not have a blockbuster for the holiday season but -- in a rare glimpse of corporate honesty -- said it sure would like to have one.

" I think we've got some good books for Christmas," Pearson's Robin Freestone said at the Reuters Media Summit on the upcoming holiday shopping season.

"We haven't got a blockbuster in the sort of Dan Brown mode or the Stephanie Meyer mode. We sort of pretend we don't really want a blockbuster but that isn't true at all."

"We'd love to have a blockbuster... but we have some suprises," he said.

"The MI5 history, which is a whopping great thick book, is selling extremely well. "

Talking with Thomson Reuters chief about print

Robert MacMillan

Nov 5, 2009 15:28 EST

Covering Thomson Reuters Corp for almost two years has taught me that people like to cast my company in a recurring role in media deal parlor games. Now that the company’s arch-rival Bloomberg LP will buy BusinessWeek magazine from McGraw-Hill, lots of my pals in the media world are wondering: Will Thomson Reuters buy a mainstream news or business news magazine? Or newspaper? Why not Forbes? Why not the Financial Times?

Keep in mind that Thomson Reuters likes to remind people when they ask these questions that Thomson Corp, before buying Reuters, got out of its Canadian newspaper empire for a reason. (See below)

I asked our chief executive, Tom Glocer, a question along these lines on a Thursday phone call he had with reporters to discuss the company’s third-quarter financial results.

Here is what he said:

Thomson did a remarkable job, far earlier than any other company I know, of seeing what was coming and transitioning their business out of print for the most part… I don’t see any particular time or reason at this juncture why we should go the other way.

Later on Thursday, when I interviewed Glocer, we returned to this theme. (I can’t help it, I’m a print guy.) I used the Financial Times, owned by Pearson Plc and beloved of its CEO, Dame Marjorie Scardino, as a sample target:

Here is Glocer’s reply:

What’s new with the Redstone family?

Paul Thomasch

Oct 15, 2008 09:53 EDT

The Redstone family knows drama. Late last week, Sumner Redstone’s family holding, National Amusements, announced that it was making a substantial stock sale in each of its key holdings, CBS and Viacom to comply with debt covenants. 

But the sale raised questions about whether some of the proceeds from the sales were actually earmarked to fund and expansion of National Amusements movie theater business, as reported by the Wall Street Journal.

Sumner Redstone’s daughter, Shari, who runs National Amusements, issued a statement to the Wall Street Journal denying that the stock sale had anything to do with expanding the theater business.

“The implication that this stock sale was required by the operation and expansion of the company’s theater circuit is not accurate,” Ms. Redstone’s movie theater unit said in an emailed statement Tuesday. “National Amusement’s recent sale of a portion of its Viacom and CBS non-voting stock was the direct result of last week’s historic financial crisis, which included the precipitous drop in value of CBS and Viacom stock.”

Sumner Redstone has not publicly weighed in on the reason for the stock sale, and people familiar with the situation told the Wall Street Journal that he was caught off guard by the events. 

The sale — and the reason behind it — fueled more speculation about tension between Sumner and his daughter. For some time, the two have been at odds over a number of issues, including the direction of the movie theater business and her own professional goals.

Is more family drama ahead? Stay tuned.