College textbooks have a robust secondary market for as long as there have been college textbooks. Students who sell their textbooks don’t usually profit from those sales, but can recoup a part of their investment in those textbooks, making college life more bearable.
Now, the largest college textbook publisher in the world is considering publishing textbooks as non-fungible tokens (NFTs). Cointelegraph reports London-based publisher Pearson wants to capture some of that secondary market for textbooks by turning it into another revenue channel.
How would Pearson benefit from NFT textbooks?
Pearson CEO Andy Bird said college textbooks typically sell up to seven times during the life of the textbook. If true, that could prove to be a lucrative revenue channel for the company. However, there is some question about whether Pearson’s plans involve NFTs or if it’s just a scheme to extract revenue.
One analyst asked on Twitter: “Is this Pearson just allowing people to bundle a book into a code, sell the code?”
Under Pearson’s plan, a code will be printed inside the textbook publisher’s physical books. To earn from the sale of the textbook, evidently, the seller must pay $10 to reactivate the code. This is a far cry different from how NFTs are designed to work.
With NFTs, the original buyer sells the NFT to a second buyer and if that sale is for more than the original purchase, the seller earns a profit. Regardless of the price of the NFT when it is sold, the creator of the NFT gets a percentage of that sale. For the life of the NFT, each time it is sold to another party, the originator receives a predetermined percentage of that sale. In that manner, both the seller and the creator of the NFT can earn a profit each time it is sold.
What Pearson is attempting to do is provide a trackable code for each textbook sold that allows the company to make a profit on digital sales. That’s not quite an NFT.
It seems to be an extension of their plan to phase out print books and focus mostly on digital textbooks, presumably because digital book sales account for more than half of their revenues. If they can convince college students to pay an activation code for the privilege of reselling a digital textbook, Pearson can make money on each resell of a digital product that otherwise would not provide any revenue. Another benefit to Pearson is the ability to track the ownership of a digital book, which could be useful in cases where fraud or content tampering is evident.
Would trackable codes benefit college students?
Currently, textbook publishers don’t make money on secondary sales of textbooks, which must be painful since there is a built-in captive market for the product. And in most cases, students must buy certain textbooks because some courses require them. Those books must be acquired in some manner, and buying the books is the surest way to ensure a student meets the requirements for passing a course.
Trackable codes inside of textbooks would benefit the publisher more than the students, but students could potentially recoup their investment in a textbook. Since they can do that now with print books, being able to do so with digital books would provide no distinct advantage.
On the other hand, e-books cannot typically be resold. In that regard, being able to resell a digital textbook would give students the ability to recoup their investment in the same manner they can now do so with physical books.
In short, Pearson’s plan may equalize a student’s ability to recoup an investment for a required purchase in the digital realm with the same purchase in the physical realm.
