Changing Student Attitudes Toward Higher Education with Mike Shannon, co-founder of Packback Books
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While the industry innovates for the future, the fact remains that next-generation digital educational resources are not being adopted, in any significant way, by this generation's students. Mike Shannon, co-founder of Packback Books, discusses ways that the higher ed companies of today can weather the transition into the future by taking aim at their biggest competition: the secondary market for textbooks.
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Changing Student Attitudes Toward Higher Education with Mike Shannon, co-founder of Packback Books
- 1. A Better Approach Changing Student Attitudes Towards Higher Education Presented by Mike Shannon and Kasey Gandham Co-Founders of Packback
- 2. A deeper look… Students from a range of universities Focus groups lead by PHD researchers Insight into real student behaviors and attitudes
- 3. “ “ I typically spend a few hours surfing online, searching for ways to save money on my books. - Kristen, Class of 2014
- 4. “ It’s frustrating! I buy all of these expensive books and then end up barely using some of them. - Joe, Class of 2013
- 5. “ I’m old school. Talk to my ten year old brother; he’ll use digital textbooks. - Liam, Class of 2015
- 7. Innovation follows behavior Recognized existing student behaviors: The convenience of rental Scouting Google to compare prices
- 11. Student Book Swaps Student-Driven Innovation Cuts out the Middle-Men Student-initiated or universitysponsored
- 13. eBooks versus eTextbooks Consumer 22.5 eBook Sales % of trade publisher’s total revenue eTextBook 6.0 Sales %
- 14. Dual Adoption Challenge + Changes Behavior = Price Disadvantage High Switching Cost
- 15. Our industry’s current solutions… Build for the future versus innovating for current behavior
- 16. Enhancing Textbook Content We built a promising future, but increased switching costs for students What we thought: Digital adoption was low because “students will not pay extra for a static PDF reading experience.” What we did: Present a greater switching cost by expecting a larger behavioral change while ignoring price barrier.
- 17. Built-Into-Tuition Model Win-win for students and publishers, but barriers to widespread adoption persist Opportunity: Ensure every student has a low-cost textbook; kill the used book market at scale Reality: University barrier (bookstore contracts), Professors must opt-in, Students must opt-in. It will take years to work at scale.
- 18. Adaptive Technology We create great products, but are held back by barriers to distribution. The Plan: Students master subject matter; rendering used books become irrelevant. The Problem: Conservative professors will not move fast enough for our students.
- 19. Desired Content versus Required Content Student’s Desired Content: Pay-per-Use Consistent Usage Micro-Transactions
- 20. Desired Content versus Required Content Student’s Required Content: Purchase Full Textbook Inconsistent, Uncertain Usage High Price-Point
- 21. Short-term subscriptions to digital educational content and resources Exploratory learning through online, social Q & A community Introduce a window of direct adoption for next-gen adaptive learning technology
- 22. Illinois State Pilot Publisher Revenue without Packback: $7,162.64 Publisher New Revenue from Packback: $4,133.66 57.71% total increase in revenue for backlist titles Publisher sell-through/student adoption without Packback: 8.66% of students Publisher sell-through with Packback: 31.98%
- 23. Our partners believe that Packback is… a solution for today, that paves the way for the technology of tomorrow.
- 24. Designing for Future Student Behavior
- 25. Thank you! For more info, check out PackbackBooks.com Mike Shannon Illinois State, class of 2012 Mike.shannon@packbackbooks.co m
Editor's Notes
- Hey, I'm Mike. And I'm Kasey. We’re standing up here as the co-founders of a new digital learning company called Packback, which we’ll explain in a little bit, but most recently we spent quite a long time as… students! While in school, we experienced some of the difficulties present in today’s textbook purchasing cycle first hand we scrambled to borrow books, settled for free, but inadequate material online, and of course, like many other students opted for cheap used books. We saw our classmates doing the same...resorting to extremes like not buying the book, dropping a class that called for a pricey textbook or even trying to download bootlegged copies of the book online. We thought now hold here, let’s see what’s going on.
- We knew how students at our university dealt with textbook costs, but we wanted to see if students from other universities experienced the same problem. so a once in a lifetime, unique experience came along and we ended up partnering with esteemed research firm Leo J. Shapiro and Associates in Chicago to do an in-depth research study on student attitudes and behaviors around textbook and study habits in higher ed. We even shared office space, over the past 12 months, interacting on a daily basis with our partners in research. But what is research, really? While we did the requisite surveying of students and professors from universities around Illinois to collect quantitative data about textbook usage, we feel that our one-on-one conversations gave us the best insight into the industry and student behaviors.
- -dive deeper into the issue of uncertain usage, multiple resources available to professors, use of technology to supplement textbooks, This is just one of a collection of so many student comments we heard regarding the difficulties a studetn faces in making a decision on whether or not to purchase a textbook. Today’s professor’s have so many resources that they can choose to put out the necessary information for a course. Between the Powerpoint information, handout materials, Ted Talks or Khan Academy videos mentioned, the role of the textbook has significantly shifted in today’s classroom.
- This is what today’s publisher is faced with. There’s an intensely robust secondary market where students are searching for there required textbooks with one overarching factor in mind: price. ***address all the extremes, (What extremes?)
- dive into their comments about study habits, reliance on paper for memorization & price wall preventing to a digital book adoption Old habits are tough to break in any circumstance. But in the instance of trying to make a grade, old habits can be down right frightening to break. Today’s generation of students grew up preparing for tests with physical books, notebooks, highlighters, notecards, the whole paper collection that we’re all familiar with. In focus groups with current college students we heard scores of answers, such as the above: “I’m old school. Talk to my 10 year old brother, he’ll use digital textbooks”. Look everyone, If the 18 year olds are calling themselves “old school”, well then we’re all in trouble. But the 18 year olds aren’t “old school”. They’re instinctively connected to the web with a swipe of the finger. Almost every aspect of their daily lives is tied in one way or another to a digital device. So why are they still using paper? Herein lies the divide….
- There is a recognized divide between “test preparation” and “exploratory learning”. Students are accustomed to holding the physical, tangible book in their hands. It’s a process of memorization, writing things down and flashing paper cards in your face to insert an (often temporary) memory into the brain. The textbook provides the bulk of the content for a test, but what happens when the textbook introduces a student to a topic they would like to explore deeper? …back to the screen! Exploratory learning is happening in large part on Google and other websites such as Wikipedia etc. -paper textbooks=memorization, adaptive textbooks= not memorizing, beginning to master the content, still lumped in with test prep, but the top level is self-initiated exploratory learning online. Content mastery is one element, but exploratory learning is the highest level because it shows true interest, connection building, and exploration. BIG POINT
- Innovation follows behavior; recognized existing student behavior – Chegg realized they could get in touch with the students through rental. Slugbooks realized students spent hours searching on Google buying books from five different sources just to save a few bucks. There is a recognized divide between “test preparation” and “exploratory learning”. Students are accustomed to holding the physical, tangible book in their hands. It’s a process of memorization, writing things down and flashing paper cards in your face to insert an (often temporary) memory into the brain. The textbook provides the bulk of the content for a test, but what happens when the textbook introduces a student to a topic they would like to explore deeper? …back to the screen! Exploratory learning is happening in large part on Google and other websites such as Wikipedia etc. -paper textbooks=memorization, adaptive textbooks= not memorizing, beginning to master the content, still lumped in with test prep, but the top level is self-initiated exploratory learning online. Content mastery is one element, but exploratory learning is the highest level because it shows true interest, connection building, and exploration. BIG POINT
- -working off of behaviors that occurred naturally in and out of the textbook market (i.e. Ticket resale companies) to find buyers for used books in person on campus, more and more companies like Chegg took advantage of this behavior and innovated a nationwide service for buying and selling used books that relieved those students of the need to find buyers on their own, and ultimately created a massive inventory of used books. They saw an existing behavior in the market, created a more efficient and sustainable platform to allow that behavior to flourish, and have been extremely distruptive in the overall higher-ed textbook industry as a result.
- The trend continued, picking up with rapid succession. The book stores, who traditionally were able to sell a great deal of new textbooks, of course did not want to get left out of the action, so they got into the ball game as well. The number of book stores that host a rental program increased from roughly 300 in 2009 to 3,000 in 2012
- The trend continued, picking up with rapid succession. The book stores, who traditionally were able to sell a great deal of new textbooks, of course did not want to get left out of the action, so they got into the ball game as well. The number of book stores that host a rental program increased from roughly 300 in 2009 to 3,000 in 2012
- But wait a minute, the students are also savvy. Across the nation, students start developing on-campus swaps innovating off of the use of social media and the web to connect local buyers and sellers to get the best price. As we can see here, there has been so much work put into creating the most efficient possible marketplace for used phyical books, that it’s become a no-brainer for students.
- But, when it comes to ebooks...there haven't been too many companies that have created a model that innovates around evolving student behaviors. Instead, the promising success of eTextbooks had been based off assumptions. The industry assumed eTextbooks would experience rapid growth and adoption, just like the consumer book market (as college students are early adopters, no better audience to embrace digital, right?) Not exactly. It’s as if there hasn’t been a true understanding of why the consumer eBook market took off to where it is today. --Mike's Kindle Story--prices of consumer ebooks are attractive enough to incentivize a behavioral change (switching from print to digital format). In consumer trade eBooks, there have been significant price advantages to buying a digital book. I can remember in college receiving a hand me down Kindle, and thinking I’d never use it. I wasn’t used to the digital format. I enjoyed the tangibility of the physical book. However, one night I heard about a novel and wanted to read it, immediately. There wasn’t time to go online and buy a used book. I didn’t want to make the drive and pay the $25 new price at Borders (now I’m aging myself). So I entertained the kindle. The price was $7. I transaction, and started reading instantaneously. The format felt comfortable after a while, but I still preferred the physical book. The next time I needed a book, Kindle’s price and convenience won out again, and eventually I actually preferred the Kindle. 10. ETextbooks, however, face a dual challenge. eTextbook adoption faces a dual challenge in that it requires students to change their deep-rooted study behaviors and adopt a digital format, and a price wall exists that has been created due to the massive used book resale market that makes used books significantly cheaper than ebooks. Moving more students digital requires sensitivity to their existing behaviors (attempting to smooth the transition between thier current relationship with the textbook and digital textbooks through a simple reading experience, no frills) and through a low enough price point to bring down the barrier to entry enough that students are willing to take the risk on an eTextbook rather than buying a cheaper used book.
- But, when it comes to ebooks...there haven't been too many companies that have created a model that innovates around evolving student behaviors. Instead, the promising success of eTextbooks had been based off assumptions. The industry assumed eTextbooks would experience rapid growth and adoption, just like the consumer book market (as college students are early adopters, no better audience to embrace digital, right?) Not exactly. It’s as if there hasn’t been a true understanding of why the consumer eBook market took off to where it is today. --Mike's Kindle Story--prices of consumer ebooks are attractive enough to incentivize a behavioral change (switching from print to digital format). In consumer trade eBooks, there have been significant price advantages to buying a digital book. I can remember in college receiving a hand me down Kindle, and thinking I’d never use it. I wasn’t used to the digital format. I enjoyed the tangibility of the physical book. However, one night I heard about a novel and wanted to read it, immediately. There wasn’t time to go online and buy a used book. I didn’t want to make the drive and pay the $25 new price at Borders (now I’m aging myself). So I entertained the kindle. The price was $7. I transaction, and started reading instantaneously. The format felt comfortable after a while, but I still preferred the physical book. The next time I needed a book, Kindle’s price and convenience won out again, and eventually I actually preferred the Kindle. 10. ETextbooks, however, face a dual challenge. eTextbook adoption faces a dual challenge in that it requires students to change their deep-rooted study behaviors and adopt a digital format, and a price wall exists that has been created due to the massive used book resale market that makes used books significantly cheaper than ebooks. Moving more students digital requires sensitivity to their existing behaviors (attempting to smooth the transition between thier current relationship with the textbook and digital textbooks through a simple reading experience, no frills) and through a low enough price point to bring down the barrier to entry enough that students are willing to take the risk on an eTextbook rather than buying a cheaper used book.
- These next 4 slides are supposed to show that how all of today’s existing solutions have positive intentions but are not rooted in observing student behaviors – so they are difficult to execute on and take years to put in place. It follows your theme of the promise of ebooks being built off of assumptions. Most companies centered around etextbook adoption are focusing on supplementing the reading experience of etextbooks by adding features, learning tools, interactivity and an improved reading experience. -inkling, kno, etc. These companies are truly creating technologies for the future which will hopefully create a much brighter educational landscape for the students. They go far beyond just a different method of purchasing a book, and their work is crucial to education. However, there remains a gap between the ideal potential for these new technologies and what is actually taking place with students today. It’s as if there’s this arena, the digital future of education, and it’s full of exceptional new technologies and methods of learning. But in order to get students into that arena, the barriers to digital adoption must be overcome. Other solutions involve selling direct to universities, to avoid student input on the purchase. However, this model requires the university to opt-in top-down...which is a slow and arduous process for the sales reps as professors are resistant to changing their curriculum to include the super-adaptive technology or course bundles. By going direct-to-student with a model that fit their existing behavior, the viral potential and adoption rate would be astronomical.
- We took a cue from other incredible innovations in the digital media space that have been spurned on by public behaviors, like Itunes for music and Redbox and Netflix for television and movies...and saw a trend that people are consuming their most desired content on a pay-per-use model In any market, the end user has a very strong record of winning in the long run. The textbook market, by nature, has been a bit different with the professors essentially making the content selection and students making the purchases. With that in mind, the shift to digital will ultimately be determined by the students. These are students who access their “most desired” content through the likes of iTunes, Redbox, Netflix etc. etc. Society is telling them they should only pay for what they are actually using. <-good Thus, it comes as no surprise the issues we’re seeing with the market for textbooks, an item that may not fall at the top of Santa’s list. It’s absolutely imperative to fit to the current student habits. (Desired content on pay per use sets up an even bigger roadblock in the student’s mind to buying a required/undesired textbook for a premium price on the full content—even when 90% of the content in the book is not used.)
- 11. By examining student behavior, as well as digital native behavior as a whole, we see that the solution that will bring about the quickest and most natural adoption of Etextbooks must take into account their price sensitivity AND make the reading experience as close to a paper book as possible (for now) by being as simple and straightforward as possible. Digital adoption of eTextbooks is inevitable, but the process will be accelerated through a solution that provides eTextbooks that are of greater VALUE than used books. What we recognized was a need to bridge that gap between the next wave technologies and the current student behaviors. By offering short term subscriptions to the core digital textbook, a cost conscious student has an affordable alternative to the physical used book. In courses where that textbook is needed on a more regular basis, any money that student spend on short term access is directly attributed to a longer term subscription to that same title. Once on the platform, the fun begins. Packback puts a heavy focus on harnessing the exploratory learning that comes directly from the student in order to report that data right back to the publisher who created the content which of course sparked that initial urge to learn more. The values of having a student in digital format are huge for both publisher and student. There is no better timet o demonstrate direct, immediate value in an adaptive learning technology than at the moment a student is in most dire need of help mastering a concept. As the Packback user base grows, building off the short term access value proposition, we’ll be able to offer students the adaptive technologies that fit directly to their immediate needs, thus taking a load off of publishers struggling with the previosly discussed adoption challenges.
- Finally, instead of creating a business model that utilizes and monetizes publisher content but cuts the publishers out of the revenue stream, we have created a model that keys publishers back into lost revenue while still creating the most affordable option for students. We firmly believe that in order for any innovation in the textbook industry to be sustainable in the long-run, it must include and benefit the content-creators (publishers) rather than cutting them out.
- 11. By examining student behavior, as well as digital native behavior as a whole, we see that the solution that will bring about the quickest and most natural adoption of Etextbooks must take into account their price sensitivity AND make the reading experience as close to a paper book as possible (for now) by being as simple and straightforward as possible. Digital adoption of eTextbooks is inevitable, but the process will be accelerated through a solution that provides eTextbooks that are of greater VALUE than used books.
- As we all know, the behavioral changes of college students will continue to evolve, now at a faster rate than ever. With that, we as an industry must continually fit those evolving behaviors. It’ll be an exciting road ahead as more models and technologies continue to provide access to the world’s leading educational content.