Educational Materials/Paper

Increasing Participation and Decreasing Regulation in the Educational Materials Industry
(A Summary Paper of our Research to date)
By Erhardt Graeff and Carolina Rossini

Last Draft: November 30, 2009

Introduction

Over the course of twentieth century, the American textbook market evolved into the proprietary domain of large and multinational publishing houses. Only in the past few years have online collaboration and digital publishing lowered the costs of production and allowed for new entrants in the educational materials (EM) field. Thus far, however, new forms of EM have not had a disruptive effect on the traditional textbook market.

Advances in internet technologies and print-on-demand services have coincided with consumer advocacy campaigns and budgetary realities pushing the political climate to be more amenable to seeking alternatives to the traditional copyrighted and expensively bound textbook. A consensus has started to form that the traditional textbook is a broken model. Open Educational Resources (OER) offer a free content alternative, and new business models have emerged attempting sell the service of EM provision atop free content. This paper discusses the evolving political economy of EM in the US and offers a set of observations and preliminary recommendations regarding current barriers to peer production and open access of EM designed for the K-12 and Higher Education levels. In particular, our analysis looks at current OER and for-profit models and their potential for expansion and sustainability.

At the Berkman Center for Internet & Society at Harvard, we have been studying the US Educational Materials industry as part of a larger research project aimed at mapping models of knowledge flow and appropriation across a range of economic variables. Our goal is to understand how intellectual property and other factors affect the movement and utility and usage of knowledge generally, through the selection of a targeted set of industrial sectors for research and analysis. We are mapping the actors, trends, and activities around cooperation in each of these sectors to understand the broader forces motivating cooperation in general, but also the policies that came into places as forces shaping each of these spaces.

Our four sectors are biotechnology, educational materials, alternative energy, and telecommunications. We are interested in the actors are in these sectors, what models they choose to leverage in their knowledge work, and why and when commons-based models emerge and gain traction. The project is built on an analysis of a set of knowledge-intensive industrial sectors representing a gradient of knowledge appropriation styles ranging from significant commons adoption to negligible commons adoption, and focuses within each discipline on paradigmatic knowledge products for deeper analytics.

Description of the EM Market

from History of EM Field

Michael Watt has traced the history of US textbook publishing to the 1880s and ascribes the emergence of the textbook to “greater uniformity in local education systems resulting from immigration and industrialization” (Watt 2007, 9). For Watt, “the development of modern practices in textbook publishing in the USA was concomitant with the rise of mass education, characterized by graded organization of formal schooling into classes" (ibid., 4).

Established publishers quickly took control of and stabilized the new textbook market; and before World War I the American Book Company had formed a monopoly. New publishers proliferated after the war, and in 1931 the National Society for the Study of Education pushed for a standardized culture of publishers soliciting manuscripts and judging the innovative merit of each work and the competency of the respective authors.

During the 1950s and 60s, textbook publishing became more competitive but remained largely professional with companies led by founder-editors. The rise of the role of official state adoption, particularly of textbooks in each K-12 subject, coincided with this moment representing a new and important market force that heavily contributed to the sector structure we observe even today.

In the 1970s, what sociologists Patricia Thornton and William Ocasio call the "market logic" began to pervade the industry as investors became interested in the market potential of publishing houses (Thornton & Ocasio 1999). Many private companies went public and were purchased by investment companies, merged with other publishers, or similarly acquired. For instance, founder-editors, practitioners of an "editorial logic" focusing on reputation, were replaced by profit-maximizing chief executives (ibid.).

The market was further consolidated through the 1980s and 90s. K-12 business strategies for publishers focused largely on widespread state adoption of their textbooks. Leading textbook publishers with longstanding relationships at state and local levels began to include CDs and DVDs with their textbooks to deliver modular content, and many are now acquiring technologies that add value by incorporating assessment and analytical capabilities into instructional materials. Similarly, the strategy for Higher Education has moved toward bundling supplementary materials to cover all learning styles and satisfy a desire for multimedia components. The one-stop-shop strategy (including horizontal growth and product differentiation movements) in addition to resource modularity is becoming routine among the incumbents of the EM sector. However, the marketing approach continues to involve sales representatives approaching lecturers to individually adopt textbooks for their courses, particularly introductory, obligatory courses with large student enrollments.

Further growth in the demand for digital solutions has been caused by the ongoing impact of the No Child Left Behind Act, improving IT infrastructure in schools, and the growing number of tech-savvy students and teachers. In this market, acquisitions and mergers focusing on market penetration and product diversification seem to be the rule. Examples of this trend are Pearson's 2006 and 2007 acquisitions of eCollege, Effective Education Technologies, PowerSchool and Chancery (announced May 2006); McGraw-Hill's purchase of Turnleaf Solutions (announced in 2005), now part of The Grow Network; and Houghton Mifflin Riverdeep's purchase of Achievement Technologies.

However, PricewaterhouseCoopers identified a number of niche players focused on software development who have emerged alongside a “variety of small entities, many with roots in academia, [...] offering open-source instructional management systems to financially strapped school districts” (Cola et al. 2009, 2), as well as OERs. In addition, larger software/communications companies like Intel and Verizon are starting to offer free solutions through outreach programs in order to create goodwill and gain the opportunity to sell proprietary solutions.

Overview of IP Landscape

Copyright represents the most significant intellectual property tool involved in this field due to the textual nature of its outputs. Patents are also involved when factoring in the educational software segment; however, educational software represents a significant amount of copyrightable material as well. The use of strategies focused on copyright is one of the fundamental points on which ideological differences can be identified between private companies, the set of universities and independent organizations interested in OER, and the advocatory associations that represent each. Similar to the issues facing the newspaper industry, and by analogy the film and music industries, the protection afforded by copyright has become uncertain as EM goes digital and the ability to monetize digital distribution still presents a challenge and potential barrier to innovation.

Bibliography

• Cola, C. et al., 2009. Crossing the K-12 digital divide: Understanding and playing in a complex market. TS Insights, 5(1). Available at: http://www.pwc.com/extweb/pwcpublications.nsf/docid/51A2B147879DA97B852574400011BAAF [Accessed May 5, 2009].
• Thornton, P.H. & Ocasio, W., 1999. Institutional Logics and the Historical Contingency of Power in Organizations: Executive Succession in the Higher Education Publishing Industry, 1958‐1990. American Journal of Sociology, 105(3), 801-843.
• Watt, M.G., 2007. 'Research on the Textbook Publishing Industry in the United States of America'. IARTEM e-Journal, 1(1). Available at: http://www.eric.ed.gov/ERICWebPortal/contentdelivery/servlet/ERICServlet?accno=ED498713 [Accessed May 9, 2009]