Driving Licensing
ONE COLLEGE STORE’S PILOT PROJECT MAPS THE
CHALLENGES, RISKS, AND REWARDS OF INTRODUCING
ACADEMIC CONTENT LICENSING TO A CAMPUS.
by Michael von Glahn
I
nstitutional licensing, either campuswide or on a
by-course basis, is still in its early days, on campuses
primarily as pilot projects. But as more studies
confirm that up to half of all college students forgo
purchasing at least some of their course materials
due to cost or other factors, institutions are looking
at licensing as a way to ensure all students have the
necessary materials to succeed academically.
Under this model, the institution and publisher
negotiate a set price for the materials, which can be
significantly discounted because the publisher is
guaranteed a sale to every student enrolled in the
course. Students pay a mandatory course materials
fee, either separately or bundled into their tuition.
Some worry that licensing will cut the college
store out of the channel, with publishers getting
content to students directly through an institution’s
learning management system. But stores can
remain part of the process, especially if they move
proactively to insert themselves into any discussions
about licensing, or even start those talks themselves.
Guidance is available from a NACS white paper,
released in April, that reflects the work of the NACS
Content Licensing Task Force. Academic Content
Licensing: Concepts and Considerations for a New
Course Content Model and related resources are
available for free in the Hub Global Library at:
http://thehub.nacs.org (Course Materials folder).
SEPTEMBER | OCTOBER 2014
Managers and directors need to discover if any
stakeholders on their campus are already exploring
the licensing option, either independently or
after being approached by a publisher, and get
themselves a seat at that table.
“We found a good place to ask around is where
the course material requirements are determined
by faculty committee section process, where large
classes have potential for sectioning control groups
for benchmarking comparisons, and where there
is large-volume sales potential to attract vendor
participation,” says Chris Tabor, general manager,
Queen’s University Campus Bookstore, Kingston,
ON, Canada.
Tabor notes that at Queen’s, “the faculties with
the courses with enrollments over 1,000 students
explored the blended options before most others.”
Be aware of the politics involved, as many
administrators worry that licensing could be seen as
a tuition increase, which for many institutions can
only be undertaken via legislation. Faculty must be
assured that they will retain the freedom to choose
their own course materials and that content’s format.
“In my own analysis of the different schemes
underway,” says Tabor, “it seems to me that
the faculty are genuinely interested in superior
pedagogy, admin is interested in superior admin,
and our students remain interested in what they
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Driving Licensing continued
have always been interested in: a good education at the
most reasonable cost.”
THE ROADBLOCK THAT WASN’T
Inspired by the NACS task force and its white paper, UC
Davis Stores, University of California, Davis, adapted ideas
from both to fit its campus.
Director Jason Lorgan, who sat on the task force,
approached the five largest publishers on his campus after
making sure they all offered appropriate product. He ended
up working with McGraw-Hill, Pearson, and Cengage. The
pilot concentrates on large-enrollment undergrad classes
ranging from about 300-1,600 students. In all, about 4,500
students will be involved.
To find out what policies he’d have to navigate to charge
a new fee, Lorgan went to the school’s website and began
searching relevant keywords. He very quickly found the
pertinent portion of the massive UC Davis policy manual:
Chapter 330, Section 86.
Two items presented potential problems. One stated,
“The fee may not exceed $65 for courses with a maximum
actual cost of $160 per student, and may not exceed $80 for
courses with an actual cost of $161 or more per student.”
Lorgan expected some of the materials would cost more,
which he assumed would be an issue.
Another Model: E-Texts in Texas
In 2011, Texas Gov. Rick Perry challenged Texas universities to
develop $10,000 baccalaureate degrees with textbooks included.
In January 2014, Texas A&M University-Commerce and South
Texas College rolled out their joint response: new bachelor’s of
applied science degrees in organizational leadership developed with
the Texas Higher Education Coordinating Board. The online-only
program lets students advance through lower-division coursework
as soon as they demonstrate mastery of a concept, even if they’re
already at that level on the first day of class.
The cost of $750 for each seven-week period includes the cost
of e-textbooks. Wit
Within that time span, students are allowed
to complete as many courses as they can without
being subj
subject to a change in price. A score of 80 is
require to pass each course.
required
The planners say students entering the
program
progra without college credit should be able to
complete th
the degree in about three years for a total cost
$13,000-$
of $13,000-$15,000.
Someone who enrolled already
having 90 credit hours, as an example, could wrap up
degree in a year for about $4,500-$6,000.
the degre
Although the program
started with only a handful of
students, the partners have
stated they expect to have
3,000-5,000 aboard within
five years, especially veterans
and mid-career professionals.
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The College Store Magazine | NACS
“Our students remain
interested in what
they have always been
interested in: a good
education at the most
reasonable cost.”
—Chris Tabor, general manager,
Queen’s University Campus Bookstore
The other possible stumbling block was an item
declaring that “course textbooks are not included in the
course materials and services fee.”
Viewing any policy manual as a living document,
Lorgan set up a meeting with an associate dean and a
representative from the school’s Department of Budget and
Institutional Analysis to explain the pilot and argue that the
school’s policies needed updating. He assumed changes
would be needed to raise the fee limit and move textbooks
under the course materials and services fee umbrella.
“Boy, was I wrong,” he says.
Instead, he was told that the second item applied even
to digital textbooks, which meant his project wasn’t subject
to the first item.
“What we thought was going to be a roadblock for us
actually turned out not to be at all,” he says, adding that
he encourages other college stores to stop falling back on
“Policy forbids me” or “My campus doesn’t allow this” as
reasons not to explore new models.
“To me, that just sounds like a terrible excuse,”
he says. “If you go to people and say, ‘This policy is
preventing us from saving our students significant
amounts of money,’ usually you get a much different
reaction, a very positive reaction.”
However, in addition to their positive reaction, the
higher-ups had some bad news: “The manual basically says
things have to be done a year in advance and you’ve got to
get everyone and their mothers’ permission,” Lorgan says.
As a public institution, no one at the school can implement
mandatory fees without going through a complex,
laborious process.
But they also suggested the project could skirt the
bureaucratic maze if Lorgan could tweak things so the fee
wasn’t 100% mandatory.
So the opt-out option was born.
A WAY OUT AS A WAY AROUND
Everyone enrolled in the pilot courses will receive
access codes by email about two weeks before the quarter
begins, giving them free access to the course content until
the add/drop period ends two weeks into the quarter. The
materials are adaptive content—technology that’s gotten
very positive feedback from students who’ve used it—not
SEPTEMBER | OCTOBER 2014
REAL PRICE EXAMPLES FROM THE UC DAVIS PILOT
National Print
Text + Digital
Access Price
COURSE
Management 11A
$306.00
Management 11B
Human Development 12
UC Davis
Digital Price with
Print Upgrade
Difference
Savings
$95.00
$211.00
68.95%
$463.00
$95.00
$368.00
79.48%
$173.65
$127.50
$46.15
26.58%
Math 21A
$295.65
$95.00
$200.65
67.87%
Physics 9A and 9B
$267.60
$130.00
$137.60
51.42%
Physics 9C
$267.60
$75.00
$192.60
71.97%
Source: Academic Content Licensing for College Stores, presented at the California
Association of College Stores Course Materials Summit 2014
e-textbooks, which have had much poorer reviews. In
theory, since the students already possess the materials,
they won’t try to find them elsewhere.
“We have negotiated really outstanding pricing that we
believe they can’t find anywhere else.” Lorgan says. “The
publishers have given us prices that’re lower than what’s on
their own website and it’s much lower than anything you
can find on Amazon or anywhere else.”
Once the opt-out was added, Lorgan met with his boss
and his boss’s boss, then the vice chancellor of student
affairs, to whom the store ultimately reports. Each gave the
project a green light. By avoiding the mandatory-fee hurdle,
the opt-out was critical for approval.
A print option was also built in because Lorgan assumed
it would be needed as a bridge until faculty became more
comfortable with digital content. However, at the last few
meetings with faculty no one mentioned print.
“The most difficult part of the program is the print
upgrade,” he says, “and it may have been an issue that we
created that wasn’t really an issue for others.”
Students who opt for print will in most cases get what
Lorgan calls “a no-frills, low-cost, black-and-white, threehole, shrinkwrapped kind of thing.” The store’s cost will be
$20-$25, and it will sell for $25-$30.
On the digital side, the publishers will provide the access
codes without charge because, in essence, they have no value
until they’re activated, just like a gift card. Once the add/drop
period is over and the number of enrolled students is final, the
publisher bills the store, which charges the students.
The print option presented one potential problem:
What if a student bought the $25 book and then opted out
of the digital material? The low print pricing is based on the
assumption those buying it have already paid for the digital
content. Lorgan worried word would spread that if you opted
out of the digital you could get a print book dirt-cheap.
Store signage and information printed on each book will
make clear that anyone who tries that will find an upcharge
on their student account. The store’s point-of-sale system
will capture the student ID number whenever a print version
is sold. That info will be compared to the opt-out list. A
spreadsheet listing everyone who opted out will be sent to the
publishers so those students’ access codes can be deactivated.
“So they’ll never have been charged, but their access will
have been turned off,” explains Lorgan. “There’s no savings
SEPTEMBER | OCTOBER 2014
This flier promoting UC Davis Stores’ licensing pilot helped spread
the word across campus that student success and reducing the cost
of academic content are the store’s goals.
Another Model: Minis at Lynn
Lynn University, Boca Raton, FL, launched an initiative in 2013
to provide students with required core curriculum in e-book form to
save them money. Students receive an iPad mini they can use to
download free faculty-produced iBooks and access other course
materials via iTunes U.
Lynn claims extravagant savings, citing the example of “an
average first-year business student” being able to spend only
$29 on materials vs. $938 for new, hardcover textbooks.
p in students’
The program’s first year saw about 750 iPads put
hands, with that total
expected to hit 1,800 in
2014-15. The school says
it hopes to reach 100%
delivery within one or
two years. The program
was expanded this fall to
include all new freshmen
and transfer students,
all day undergraduate
students, and all new
MBA and Ed.D. students.
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Driving Licensing continued
to opt out and get the print book. You will basically pay the
same price. If the digital part was $75 and the print part
was $25, if the student opts out, if they take the print book
for $25, we’re going to do an upcharge of $75.”
With no idea how many students might opt for print,
the store will start with a low order, probably 25% of
enrollment. Lorgan says he’s not worried if print copies
take a week to come in, because students will already have
digital access to the material.
He estimates those in the pilot will save an average
of 70%-80% on their materials. Surveys conducted after
a spring 2013 Educause/Internet2 licensing pilot at the
University of Missouri indicated 42% of students would
support paying a required fee only if it saved them 80% or
more, so Lorgan’s estimate is in the right ballpark.
SURPRISINGLY WILLING PARTNERS
Although Lorgan went in expecting perhaps 10% of the
faculty he approached to sign on to participate, in the end
only one instructor didn’t agree to the proposed model. The
sole faculty holdout wanted a different format for the pilot,
with students opting in rather than opting out.
“There’s a hardcover textbook on the shelf like always,”
Lorgan explains, “but if a student wants digital they can opt
in and we would give it to them at a really low price.” He
doesn’t think that’s the best model for the future, but agreed
to test it for that one course.
Lorgan notes that in his 21 years in the industry, working
most of that time as a textbook manager, he’s never gone into
a faculty office with a publisher as part of a sales call. “Now,
we’re going in with the publisher and we start on offense
with price. We’re so often in defense on price,” he says.
“The publishers have given
us prices that’re lower
than what’s on their own
website and it’s much
lower than anything you
can find on Amazon or
anywhere else.”
—Jason Lorgan, UC Davis Stores
Another change is the switch in focus from by-unit to
by-course.
“I would say, ‘OK, last quarter I made $1,000 on this
course,’ and the publisher would say, ‘I made $2,000 on this
course.’ That’s our baseline, so our goal is to make more
than that on this course obviously,” he explains.
If he wants to make $2,000 instead of $1,000, he takes
that $2,000 he wants in margin and divides it by 90% of
the enrollment. “That’s the number we’re using,” he says.
“We think 10% are going to opt out, we think 90% are going
to stay in. That’s a radical sell-through increase where the
publisher’s willing to negotiate.”
In every case, he adds, the margin the store is adding to
the book is “very, very small compared to our traditional
25% margin. Yet we’re making significantly more per
course. When you go to a publisher and say, ‘I sold 20
last term, I’m going to sell 20 this term, Please give me a
discount,’ that’s a nonstarter conversation. But when you
Blow Your Horn
John Wierson, textbook buyer, Iowa State University Book Store,
Ames, attended the Digital Content Product Institute held last June at
NACS headquarters in Oberlin, OH, hoping to gain some insight from
representatives of five of the major publishers on whether the steady
3% annual increase in digital textbook sales his store has tracked
might accelerate.
What struck him at the institute was the evident willingness of
retailers and publishers to work together to provide less expensive
options, such as licensing pilots. His store is involved in a pilot this fall
for three courses.
“A few years ago, many were concerned that if digital took off
it would happen through the institutional model, where licenses
were purchased through the university, leaving the bookstores out,”
Wierson says. “Today, it feels like many
stakeholders, including publishers, are
seeing that the bookstore can be the
distributor for digital content.”
But to be that distributor you have
to promote your mission and your
availability to other major players,
both on and off campus. Wierson
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“You are the expert in
course materials and
you need to make sure
everyone knows it.”
—John Wierson,
textbook buyer,
Iowa State University
Book Store, Ames
suggests arranging meetings with the provost or someone in the provost’s
cabinet, as well as with the student body government. Try to make
presentations at faculty senate or president’s council meetings, too.
“You are the expert in course materials and you need to make
sure everyone knows it,” he says. He adds that the academic mission
shared by the store and the institution must remain prominent:
“Although much of it has to do with price point, we cannot lose
sight of the fact that many of the digital products—if utilized by the
instructor—can increase the students’ ability to learn.”
SEPTEMBER | OCTOBER 2014
go and you say, ‘I sold 20 last term, I’m going to sell 90 this
term,’ they’re extremely willing to negotiate. To be honest, it
kind of shocked me how much they’re willing to go down.”
THE THREE YEARS ARE FINALLY UP
Lorgan says he’s been “a huge digital skeptic for a really
long time, so it’s kind of ironic that I’m charging full force
into digital right now.”
When he started in collegiate retail, his first boss
claimed digital textbooks were three years away from going
mainstream. “That was in 1993,” he recalls, “so I used to tell
the joke, ‘Digital textbooks have been three years away for
the last 20 years.’”
In his opinion, academic e-book sales have already peaked.
“It’s just a substitution technology,” he says. “It’s really
just going from a piece of paper to the screen, but the
content isn’t educationally superior in any way. … We’ve
heard from students that if that’s how it is, they prefer print,
and you’ve got to listen to your customer.”
Survey results support him, consistently showing
that while students may be fine with e-books for general
reading, it’s not a format they like for course content.
The University of Missouri tested a pilot of its own in
fall 2013, using MBS Direct and several publishers. Even
though offered free or reduced-price e-textbooks, many
students ended up using print versions found elsewhere.
Lorgan has heard from customers and from his own
student workers who’ve used adaptive content that they’re
disappointed now if they go into a new term and their
course materials don’t include it.
“We never heard that in the past,” he says. “If there
was an access code, it was nothing but complaints.” Now,
students look for the codes because the adaptive content has
helped them in the past. Lorgan says he believes that means
the elusive tipping point for digital has finally been reached.
THE COLLEGE STORE ADVANTAGE
Another licensing pilot is also underway at UC Davis,
spearheaded by the school’s library and academic
technology services and using the Courseload platform
(www.courseload.com). When he heard about it, Lorgan
talked his way onto the project committee.
Because the library doesn’t have delegated authority
on campus to deal with course materials the way the
bookstore does, the project faces many more hoops to
jump through before it can charge a fee for content.
“That basically means it is bogged down in this
massive bureaucracy that is higher education,” says
Lorgan. A highly placed administrator told him it would
be a miracle if that pilot ever gets out of committee.
College stores are compliant with credit-card industry
standards, can handle cash transactions, and can often
bill students’ accounts and third parties such as Veterans
Affairs. Stores need to use the advantages they have over
other campus stakeholders that might be looking at
licensing. Lorgan says starting the conversation doesn’t
need to be as massive an undertaking as even NACS’ white
paper makes it seem.
SEPTEMBER | OCTOBER 2014
“Where it talks about basically every single solitary
office on campus is a possible place you have to go, I don’t
know a human being who wouldn’t be intimidated by
that,” he says. “I’m trying to send the message: Don’t make
it more complicated than it needs to be. Involve as few
departments on campus as you think is possible.”
UC Davis starts school this fall Oct. 2, a week later
than normal.
“Hopefully it’ll be great news at that point,” Lorgan says.
He’ll present a session on his initial outcomes at CAMEX
2015 in Atlanta. Even without results yet, though, the pilot
effort has paid dividends.
“It has already been a huge success in building our
credibility on campus as digital leaders who are challenging
the way content has been historically delivered,” Lorgan says.
“This may be the perfect opportunity for stores to create a
CS
win-win for publishers, stores, faculty, and students.” Q
Michael von Glahn is editor of The College Store magazine.
No Model’s Perfect
There are, of course, some caveats regarding licensing academic
content, and college stores would do well to be aware of them as
objections that might be raised in any stakeholder discussions.
Even with the reduced price tag the licensing model offers, some
students may believe they can do better on their own by employing
lower-cost or free options such as sharing or borrowing a book, or
even doing without.
In the comments section following one online story about
licensing, a student wrote, “Currently, my printed textbooks cost
about $140 each. I have several per quarter. At the end of the
quarter I can average the resale for the book at around $100 per
book. That is great! But e-books for my Kindle for the same book
are around $120 per book. That sounds like a savings of $20, but I
can’t resell the electronic copy. That is a loss to me.”
There is also the specter that once licensing helps publishers
minimize the used-book market and remove the incentive for illegally
downloading copies, they will be free to start jacking up content prices.
“If colleges and universities have been unable to prevent even
greater price increases when they switched to a similar publisher
digital-subscription model at libraries, what evidence exists that this
can succeed here?” asks Rich Hershman, NACS vice president of
government relations.
He also points out that about half the states that collect sales
tax on course material transactions—including California, Texas,
Indiana, and Florida—will lose tax revenue that funds colleges and
universities if the schools switch to a fee model.
“True, that represents savings for students,” Hershman says,
“but not without cost to state and county budgets and
higher-education funding that must be factored into
such programs and state funding.”
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