The Great Book Debate

Microsoft’s new social media platform,, is aimed squarely at the education sector, claims it is not to trying to be Facebook’s rival (yeah riiight), and contains the usual panoply of social media tools. But irrespective of Microsoft’s goals, is a day late and a dollar short.

The mere fact that Facebook famously started in a dorm room is pure coincidence, I’m sure. Since those early days of social media, most of the technology barriers that slowed early growth have now been resolved and pretty much anyone can put up a socially engaged platform. The challenge that everyone struggles with: how to get people to actually use their site.

In my humble opinion, there is a way that Microsoft could bring a real competitive edge – by leveraging the online textbook mess.  Along with OPEC, the textbook cartel is one of the most expensive costs we all have to bear. A survey a couple of years ago cited that each student spends about $900 on textbooks a year.

As a father of two boys going through the school system, that feels like a low number. The book manufacturers claim that their costs are reasonable given their overhead. I find that hard to believe when a calculus book costs $120 and calculus hasn’t changed much since the time of Newton. This is a multi-billion dollar market well poised for disruption.

We have black and white Kindle tablets for $79, and I was at a trade show last week where one of the vendors was pushing color Android tablets for $99. Clearly, the delivery mechanism is there.

The textbook industry could face the kind of digital apocalypse experienced by the music business. Back when CDs and DVDs cost $20 to $40, respectively, the file-sharing charge was led by kids who would rather stream their music than pay for it.

Despite various attempts by the music industry to sue end users, the market changed and bands now make a lion’s share of their revenue from live performances.  Meanwhile, the recorded content is almost free promotion and iTunes has become the largest music delivery platform. The exceptions to that paradigm appear to be standards and country music because older generations never quite figured out this whole online thing.

Where the model breaks down is where the pain is felt.  If students had to pay for their own schoolbooks (as opposed to having their poor besieged parents pay for them), the schoolbook industry would be in tatters. I just asked my youngest son the following, “If students had to pay for their textbooks in the same way they have to pay for their music, how long would the market last in it’s current form?” His answer: “Half a semester at most….then it would all be electronic.”

If Microsoft teamed up with (say) Amazon and the top 10 educational publishers and came up with a way to purchase and share educational content similar to iTunes they might have a reason for millions of kids to sign on. They could then extend the approach to broader content, serving as the foundation for a whole new world for Microsoft.

Microsoft has proven in the past that it can take on established market leaders and succeed (and fail …witness XBox and Zune). But if teamed up with educational content, it could be a killer combination.

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