Textbook rental: Web-rejuvenation rocks post-secondary market — from MDR/EdNetInsight by Nelson Heller, President, EdNET, MDR


The Rental Phenomenon
In the past two years, the post-secondary textbook rental market has exploded. Driven by the outcry over book prices, federal legislation, readily available pricing information on the Internet, and sophisticated web-based rental management platforms, old and new competitors are disrupting the $10 billion college textbook business. Book rental isn’t really a new phenomenon—a few college stores have been renting books since the Civil War. The National Association of College Stores (NACS) proclaimed fall 2010 as the “Year of the Rental.” Players include long-timers like Follett and Budgetext, institutional stores and fast-growing start-ups. BookRenter, started in 2008, netted $40 million from investors in a funding round this past February. Chegg, started in 2007, has raised $200+ million in venture capital and attracted senior management from Yahoo and Netflix. The same drivers are growing trade in used books, eBooks, and online instructional content. Rental is also driving new business models for sourcing and distributing educational materials that may carry the industry forward into digital. Having book inventory isn’t necessarily required—at least one high-flying firm, BookRenter, exists mainly as an online marketplace. Read on to see how this change in distribution is impacting the higher education market. Next month we’ll look at what all this means for K-12.