5. The Expansion of “Inclusive Access” Courseware
The pandemic further accelerated the transition from print to digital courseware within US academic institutions. In 2020, Pearson derived 70% of its US higher education revenues from digital products. (It was about 60% in 2019.) For McGraw Hill, digital courseware accounted for 72% of FY 2021 US higher education revenues1 (vs. 61% one year earlier), and for Cengage, for the nine months from April 1, 2020, to December 31, 2020, digital revenues accounted for 81% of the total (vs. 79% for the comparable period during the previous fiscal year).
“Inclusive Access” (IA)—digital course materials that are automatically charged to a student’s tuition or fee bill—accounts for an estimated 20% of McGraw Hill’s revenues. Cengage does not disclose the exact number, but IA and Cengage Unlimited combined account for about 15% of revenues. Pearson does not disclose the weight of IA. While the weight appears modest, the growth rate of these programs is much faster than for the overall business: At McGraw Hill, for example, IA net sales grew by 58% in FY2021, while US higher education billings grew by 5%. Publishers attach great importance to the IA model and have strenuously opposed consumer protection legislation in states, including California and Texas, which proposed a shift to “opt-in” student billing among other provisions.
For academic institutions, IA poses increasingly complex issues, because campus bookstores play a significant role in promoting this model to faculty, yet they also stand to financially benefit from its adoption.2 Not only does IA grant the campus bookstore an effective monopoly over student sales, but it also offers a potential bite at the apple of the vast amounts of student data generated through digital courseware (which SPARC has already discussed at length as an alarming trend for publishers). Particularly on campuses that have outsourced bookstore operations to companies such as Barnes & Noble and Follett, administrators considering IA need to grapple with these conflicts of interest and long-term implications.
Administrators may view bookstore sales of course materials as a means to an end, especially in cases where a contractual agreement shares course material-derived revenue with the institution. However, as course materials are increasingly digital, academic institutions need to shift their thinking away from how to sell textbooks toward how to sustainably manage the campus’s teaching and learning content. Thus far, the expertise of academic libraries in the negotiation and procurement of digital materials has been underutilized in this transition, and it will need to become increasingly central as the adoption of IA models creates conflicts of interest for outsourced bookstore operations.
The increasing number of academic institutions that have adopted IA programs should also adopt policies that ensure student awareness and choice. The best option is to make programs “opt-in,” so that students are charged only with their consent. Transparency measures also benefit students, such as the new law adopted by Texas in June 2021 requiring that institutions disclose information about IA fees to students up front in the course catalog.3 Furthermore, in-depth scrutiny of contractual terms and conditions is crucial, as some of the legal agreements with IA vendors contain onerous clauses for students (e.g., charging students unless they actively “opt out” or linking discounts to threshold participation rates). SPARC has created a searchable database of more than 70 publicly available IA contracts as a resource for comparing these provisions.4
For McGraw Hill, Fiscal Year 2021 covers the period from April 1, 2020 to March 31, 2021 ↩