One start-up that hopes to change this is Packback.
“We’re a gateway to convert students, which right now have a strong preference for the physical format,” said co-founder Mike Shannon. The start-up received a $250,000 investment Friday from Mark Cuban on ABC’s “Shark Tank.”
Packback rents digital textbooks to students for $3-5 for a 24-hour period. $5 is most common price point. For students who rarely use their textbooks, renting a book for a couple of cram sessions is preferable to paying for a new or used book.
One huge question mark is getting publishers to opt-in. Why would they agree to rentals, where the payoff appears smaller than the full price of a print textbook? The reality of the situation is most students go to great lengths to avoid buying new textbooks.
“They scour online and go to secondary used book retailers. These publishers are losing huge portions of what should be their core revenue,” Shannon said. When this happens, publishers aren’t making any money. With Packback, they can at least recoup some money from a student interested in renting a book. In a pilot test, Packback found a 58 percent increase in revenue for publishers.
There’s also another gain for publishers, expediting digital adoption. Packback’s prices could put digital textbooks in the hands of significantly more students.
The Packback team did the pilot test at its alma mater, Illinois State, last fall. It found that 27 percent of students rented or purchased a digital textbook through Packback. That’s a remarkable increase from the traditional penetration of digital textbooks, especially given that 47 percent of students surveyed already had a textbook when Packback was announced. If that level of interest remains as Packback grows outside Illinois State, the implications could be large for textbooks.
“We’re disrupting the used-book market disruption and paving the way to organic student adoption of the next great learning tech products,” Shannon said. “All the while kicking back significant new revenue streams to learning content providers.”
Packback is now available nationwide, but will have to deliver on deals with publishers. Shannon says it currently has 2,500 titles available, and expects to have about 5,000 in roughly a month. Packback currently has deals with the University of Chicago Press and Sage Publications. Others are being discussed, including McGraw-Hill Higher Education, which took part in last fall’s pilot test.
Shannon can envision further growth potential, such as tracking learning behaviors and providing helpful feedback to students.
Cuban offered a big vision as well, saying on “Shark Tank”: “If you look at it as pay-per-view for text, then the fact that it’s textbooks now, that’s just a start.” We’ve seen examples of pay-per-use services emerge in other areas, such as ZipCar and Car2Go. Perhaps Packback will be able to catch the growing wave that is the sharing economy, where services are paid for and used in smaller increments.
For now, Shannon and co-founder Kasey Gandham also get to enjoy the “Shark Tank” spotlight, where they were watched by 8.05 million viewers.
“Kids want to be like [Facebook CEO Mark] Zuckerberg. We kind of demonstrated that millions of students are excited about textbooks. That’s never been seen before. It struck a chord with a cultural hit where the focus is being placed on bright minds nationwide,” Shannon said.