Cengage Learning Using Bankruptcy to Restructure for Future Growth

Earlier this Fall, Cengage Learning - a major publisher for academic markets - made a very open public disclosure of their bankruptcy action stated that "the traditionally stable higher education publishing make has recently gone in decline, furthermore, Cengage is underperforming the market primarily driven by its digital execution." Changes include "resetting our cost structure" and "creating stare of the art product management and development functions."

I was asked to write about this action in a news blog for Against the Grain's website and was able to talk with some very interesting, smart people about Cengage's position. Indiana University Kelley School of Business professor Alan Dennis, who has worked with Cengage in the past and has now set up his own etextbook company notes that "unlike other publishers, Cengage was very slow to consider and adopt new ideas in the etextbook space. They told me that Cengage's strategy was to price their books at a 20% premium over other publishers offering similar content, because they believed their books were better and commanded higher prices."

The textbook industry is finding itself in the same difficult position as other book publishers and print-based information industries. Course reserve packs and other innovations have cut into the profits for textbooks for years, and etextbooks and Open Access products (along with MOOCs for training/practice exercises have cut into the market even further.

What is the future of textbooks? Being in the middle of this maelstrom, we can only watch, wait and see.