$200 Textbook vs. Free. You Do the Math.

NY Times  July 31, 2010


By ASHLEE VANCE

INFURIATING Scott G. McNealy has never been easier. Just bring up math textbooks.
Mr. McNealy, the fiery co-founder and former chief executive of Sun Microsystems, shuns basic math textbooks as bloated monstrosities: their price keeps rising while the core information inside of them stays the same.
“Ten plus 10 has been 20 for a long time,” Mr. McNealy says.
Early this year, Oracle, the database software maker, acquired Sun for $7.4 billion, leaving Mr. McNealy without a job. He has since decided to aim his energy and some money at Curriki, an online hub for free textbooks and other course material that he spearheaded six years ago.
“We are spending $8 billion to $15 billion per year on textbooks” in the United States, Mr. McNealy says. “It seems to me we could put that all online for free.”
The nonprofit Curriki fits into an ever-expanding list of organizations that seek to bring the blunt force of Internet economics to bear on the education market. Even the traditional textbook publishers agree that the days of tweaking a few pages in a book just to sell a new edition are coming to an end.

“Today, we are engaged in a very different dialogue with our customers,” says Wendy Colby, a senior vice president of Houghton Mifflin Harcourt. “Our customers are asking us to look at different ways to experiment and to look at different value-based pricing models.”
Mr. McNealy had his own encounter with value-based pricing models while running Sun. The company had thrived as a result of its specialized, pricey technology. And then, in what seemed liked a flash, Sun’s business came undone as a wave of cheaper computers and free, open-source software proved good enough to handle many tasks once done by Sun computers.
At first, Sun fought the open-source set, and then it joined the party by making the source code to its most valuable software available to anyone.
Too little, too late. Sun’s sales continued to decline, making it vulnerable to a takeover.
Houghton Mifflin Harcourt and other top textbook publishers now face their, forgive me, moment in the sun.
Over the last few years, groups nationwide have adopted the open-source mantra of the software world and started financing open-source books. Experts — often retired teachers or groups of teachers — write these books and allow anyone to distribute them in digital, printed or audio formats. Schools can rearrange the contents of the books to suit their needs and requirements.

But progress with these open-source texts has been slow.

California and Texas dominate the market for textbooks used in kindergarten through high school, and publishers do all they can to meet these states’ requirements and lock in their millions of students for years.
Both states have only recently established procedures that will let open-source textbooks begin making their way through the arduous approval process. Last year, Texas passed a law promoting the use of open, digital texts and is reviewing material that might be used in schools.
In California, a state board is studying whether open texts meet state requirements. The CK-12 Foundation, a nonprofit financed by another Sun co-founder, Vinod Khosla, has created several texts that have met the board’s criteria.
“In three and a half years, we have developed nine of the core textbooks for high school,” says Neeru Khosla, Mr. Khosla’s wife and the head of CK-12. “If you don’t try this, nothing will change.”
Aneesh Chopra, the federal chief technology officer, promoted an open physics textbook from CK-12 in his previous role as the secretary of technology for Virginia, which included more up-to-date materials than the state’s printed textbooks.
“We still had quotes that said the main component of a television was a cathode ray tube,” Mr. Chopra says. “We had to address the contemporary nature of physics topics.”
Eric Frank, the co-founder of Flat World Knowledge, argues that there is a huge financial opportunity in outflanking the traditional textbook makers. His company homes in on colleges and gives away a free online version of some textbooks. Students can then pay $30 for a black-and-white version to be printed on demand or $60 for a color version, or they can buy an audio copy.
About 55 percent of students buy a book, Mr. Frank said, adding that the leading calculus book from a traditional publisher costs more than $200.
Publishers have started de-emphasizing the textbook in favor of selling a package of supporting materials like teaching aids and training. And companies like Houghton Mifflin have created internal start-ups to embrace technology and capture for themselves some of the emerging online business.
They are responding in much the same way traditional software makers did when open-source arrived, by trying to bundle subscription services around a core product that has been undercut.
Ms. Colby of Houghton Mifflin puts the state of affairs politely: “I think the open-source movement is opening a whole new conversation, and that is what is exciting to us.”
Mr. McNealy wants to make sure there is a free, innovative option available for schools as this shift occurs.
Curriki has made only modest strides, but Mr. McNealy has pledged to inject new life. He wants to borrow from Sun’s software development systems to create an organized framework for collecting educational information.

In addition, he wants the organization to help build systems that can evaluate educational material and monitor student performance. “I want to assess everything,” he says.

MR. McNEALY, however, has found that raising money for Curriki is tougher than he imagined, even though so many people want to lower the cost of education.

“We are growing nicely,” he says, “but there is a whole bunch of stuff on simmer.”