The textbook subscription market is becoming more competitive as companies invest in digital solutions. Recently, global learning platform, Perlego, announced a $9M Series A to help it build its online library of text books. This influx of money into the market speaks to the potential of textbook subscriptions and the innovation that can be made in the space.
Let’s dive a little deeper into the competitive landscape of textbook subscriptions.
Overview of the competitive landscape
Textbook markets are an important part of higher education and the purchasing decisions of students have changed significantly due to the development of technology. The traditional textbook market is now facing competition from online rental, second-hand textbooks as well as subscription services.
The total textbook market has not substantially changed over the last few years, but there has been a shift in purchasing behavior and sources. Traditional brick-and-mortar stores still dominate, but their presence and share have waned with the rise of online rental services and digital textbook subscriptions like CourseSmart, Chegg, Kno and RedShelf. This shift in customer preferences has created a competitive landscape that mixes traditional publishers, new entries by non-traditional entrants or tech companies, and newly formed partnerships between traditional bookstores and technology firms.
Online textbook subscription services offer students several advantages over buying physical books: lower costs than buying new books; easy access to different versions/editions with pricing tailored to individual needs; flexibility in length of contracts; portability since most books can be read on computers or smartphones; no commitment to purchasing if students drop courses; easy returning processes if needed without paying restocking process; delivery within 24 hours; discounts for multiple book packages or late returners etc. These services allow publishers to access new markets through subscription models that were not available before while enabling higher education institutions to provide more options for their students at lower prices than buying physical books.
Perlego’s Series A funding
In May of 2019, Perlego, an online subscription service for textbooks, announced a record-breaking $5.6M Series A investment with participation from several European and US investors. Founded in 2013 by Gauthier Van Malderen, Perlego seeks to make academic material accessible and affordable for students across the globe.
The state of the industry for textbook subscriptions has grown steadily over the last five years with Perlego at the forefront; in 2017, Pearson and Chegg’s combined revenue from digital subscription services was more than $800 million. With their latest investment round closing in record time, it is evident that investors are betting on significant growth of this market over long-term horizons.
Perlego is utilizing their current and newly raised funds to increase support staff and further develop their platform operations across Europe and the United States, thus providing even greater access to educational materials worldwide. The company is dedicated to making educational content affordable to foster an increasingly diverse academic community.
Market Analysis
Competition among textbook subscription services is heating up as Perlego recently announced a $9M Series A funding round.
The market is crowded with several players all vying for a share of the market, and this funding indicates a strong growth in the sector. In this article, we will analyse the competitive landscape by looking at the key players, their business models, and how they could impact the future development of the sector.
Market size and growth
The textbook market is a competitive industry with multiple players vying to capture their respective share. It is estimated that the global textbook market was valued at $37.68 billion in 2019 and is projected to grow at a compound annual growth rate (CAGR) of 3.2% from 2020 to 2027. The growing number of digital subscriptions drives the growth, as more students sign up for these programs instead of buying physical copies. Regarding geography, North America holds the largest share in the textbook industry. It accounts for roughly one-third of the global market revenue share currently, followed by Europe and Asia Pacific, respectively.
In terms of competition, there are multiple players operating in this space; both larger legacy companies as well as smaller startups focused on introducing innovative solutions that provide value to students who are looking for solutions that save them time and money when accessing textbooks. Companies such as Chegg, OpenStax and FlatWorld have emerged as leaders by offering unique services such as rental options, curated collections and digital libraries that students can choose from when selecting textbooks for their courses. These companies have taken strides towards creating more affordable access methods for textbooks by offering month-to-month subscriptions or lifetime access plans which give students more flexibility over their finances while still allowing them to access credible content recommended by professors around the country and world at large.
Key players in the market
The textbook subscription market is quickly evolving, with a diverse range of players vying for market share. The top global players in the textbook subscription field include Chegg, Cengage Learning, Barnes & Noble Education, Course Hero and Flat World Knowledge.
Chegg is one of the world’s most successful providers of digital educational resources and holds a strong position as both an original provider of digital educational content and a marketplace for second-hand digital books. They offer not only rental options but also purchasing services for e-textbooks and physical textbooks.
Cengage Learning is another major global player that offers comprehensive course materials in the form of eBooks and print textbooks to students worldwide. They facilitate access to over 18000 titles from over 1000 publishers through their Online Study Solutions platform.
Barnes & Noble Education provides students with access to textbooks from multiple publishers via their array of physical stores located across numerous college campuses and their online store. Moreover Barnes & Noble cloud also provides faculty support services such as ordering instructor material and grade book setup for instructors using their platforms for teaching purposes.
Course Hero is another prominent company that focuses on helping students find the resources they need to help them excel academically within courses they are taking online or at brick-and-mortar schools. Through Crowd Sourced Content their members can gain access to various study tools such as lecture notes, flashcards, practice assignments etc., which they may not find in traditional textbooks.
Flat World Knowledge (FWK) is also gaining recognition as one of the leading providers in this space through its open source library model where users rent or purchase digital versions of texts used in higher education courses at significantly reduced prices. This approach provides incentives cost savings that traditional models do not offer due to lack of overhead costs associated with selling physical copies directly on printed materials anymore thus allowing FWK to almost exclusively sell electronic versions saving students money when compared to traditionally published books—all while providing detailed customer tracking capabilities from sales data collected from customers giving it insight into how successful each text has been replaced editions create a much better user experience.
Key Trends
The textbook subscription space is an ever-changing landscape. Perlego’s $9M Series A investment demonstrates the growing interest in subscription models for educational materials. As technology continues to evolve, the market is becoming more competitive.
Let’s explore some of the key trends that are currently shaping the competitive landscape in the textbook subscriptions space.
Increase in digital content
In recent years, the adoption of digital content in higher education has significantly increased. This uptake of digital content includes ebooks, online supplemental materials, digital courseware, and other online and software-based materials that supplement physical textbooks.
This shift to digital content has led to increased subscription services that allow access to various titles for a low monthly or yearly fee. Subscription services such as FlatWorld, CourseSmart and Cengage Unlimited lead this trend by offering flexible self-serve options with competitively priced subscription packages.
The same trend is seen in the physical textbook space where students increasingly prefer renting books over buying them. Services like Chegg and Amazon Rentals have become increasingly popular over the past few years. In addition to rental services, there are also rental subscription packages available from sites like Campus Book Rentals that provide access to reading material throughout the academic year at discounted prices.
Shift to subscription-based services
The textbook industry has seen a recent shift away from physical textbooks towards digital textbooks and online subscriptions. As college students search for ways to save money on textbooks, rental services and subscription based plans have become increasingly popular. Subscription-based programs allow students to access unlimited digital textbooks while paying a fixed rate or per textbook, making it easier to budget their course materials. Online marketplace businesses have quickly recognized this trend and have begun offering subscription based services in the past few years. These businesses target college students by providing both buyback and rental options for their digital textbooks.
Moreover, content providers are increasingly placing more focus on developing partnerships with subscription companies instead of traditional publishers who offer much more expensive physical books. As these partnerships progress, the cost of content distribution is minimized, which could result in lower customer costs, furthering industry growth in this category. Additionally, the ease of acquiring the material through an online library allows college professors to assign readings quickly without waiting several weeks or months for individual texts via standard mail delivery. As demand continues to rise due to cost-saving advantages and convenience associated with subscription services provided by online marketplaces and content providers, we can expect industry growth in subscription-based model across higher educational sectors.
Perlego’s Position
Perlego, a textbook subscription service, recently raised $9M in a Series A investment round for expansion. With this move, Perlego has cemented its position as one of the top players in the textbook subscription landscape.
Let us take a closer look at the competitive environment and what position Perlego has in it.
Overview of Perlego’s service
Perlego is a digital textbook subscription service that enables students and other individuals to access an unlimited number of textbooks through one monthly subscription. Based in London, Perlego takes tele-commuting and remote working seriously, with almost the entire team working remotely across Europe.
Perlego launched its first product in Autumn 2018 following a substantial Series A investment round led by Oxford Capital, with subsequent funding rounds supported by Octopus Ventures, LocalGlobe (the recently-launched super fund), and MullenLowe Group. Boomerang are also investing soon to expand their reach further across Europe.
Upon signing up for Perlego’s service, customers can access over 250,000 academic titles from industry-leading publishers such as Oxford University Press, Cambridge University Press and Elsevier. The platform also provides thousands of popular non-fiction titles from major publishing houses such as Penguin Random House and Simon & Schuster. All books are DRM free meaning readers can download them for offline reading across multiple devices.
Libraries will now offer browsable collections where users can discover works on coaching topics including management methods, the latest research in their fields or how to start a business – all without leaving access restricted entries on their database records. Collected journals and books provide an opportunity both to engage researchers with relevant content – saving them time in discovering new information – and for institutions to showcase valuable library content such as peer-reviewed articles or early access material that is restricted elsewhere online.
Potential for growth
Perlego, the world’s largest online platform for university-level textbooks, is uniquely positioned to capitalize on a rapidly growing student population. By providing students with access to a wide variety of textbooks and other learning materials on one easy-to-use platform, Perlego has become a preferred subscription choice amongst students.
The potential for growth and expansion is incredibly promising due to the increasing demand for access to quality and affordable study resources. With more universities recognizing the need for digitalised platforms, Perlego is well placed to collaborate to produce a clear roadmap that aligns with their content requirements. By working with universities, Perlego can ensure that institutions and students benefit from an increased selection of materials, allowing them to easily find the resources needed for their coursework.
Moreover, by building relationships with textbook publishers, Perlego can become one of the main channels through which readers gain access to up-to-date educational material. This partnership will not only strengthen the company’s presence on the market, but it will also act as an incentive for more publishing houses to join forces with them to increase their customer base.
Overall, it is clear that there are numerous opportunities ahead for Perlego in terms of expanding its reach within higher education sector and maximising its potential growth. Through strategic collaborations and partnerships with universities and publishers alike, they can remain at the forefront of this ever-changing industry.
Conclusion
Perlego’s recent $9M Series A Funding is a testament to the strength of the book subscription market and the growth potential of companies that offer subscription services. This funding round marks a major milestone for the company and indicates the rising demand for innovative ways to access educational resources in an increasingly digital world.
With the competition in the textbook subscription market heating up, it will be interesting to see how the industry develops in the future.
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