Make The All-Nighter Pay With This Chicago Startup
[NEWS]
Students have a new incentive to get all their
studying done in a day.
BY MATT LINDNER
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Five dollars can still get you a lot of things on a college campus even in 2013.
But a textbook?
“You buy your music off of iTunes, you rent your
movies from Redbox and Netflix, why not rent your textbooks for $5 a day?” says
Kasey Gandham, 23.
It’s an idea that Gandham and fellow recent
Illinois State University graduate Mike Shannon are banking on.
The pair founded Packback, a pay-as-you-go digital textbook
rental service that enables students to download e-textbooks and use them for
as little as 24 hours. They’ll launch a pilot program on Monday at ISU,
offering e-textbooks for 25 courses. (The school estimates the cost of
traditional books and supplies at $996 this year.)
The patent-pending platform has safeguards in
place to ensure books can’t be pirated.
“Similar to how your CD or DVD can’t be ripped
off, our textbooks are completely locked down,” Shannon says. “We restrict
copy-pasting, printing and screen-shotting of the text to certain extents.”
Gandham says the idea was born after noticing
most of their course materials amounted to nothing more than overpriced
paperweights by the end of the semester.
“(Students) carry a laptop and five physical,
heavy expensive used books as well,” he says. “We’d see some of the books were
still in the plastic wrapper that they came in if they were new, some of them
were in the same orange box that (online retailer) Chegg ships them to you in
and they just stayed there unused.”
Of course, Packback isn’t the first to go down
the digital textbook rental road, with Amazon established in the market and
Google entering the fray last week.
But Packback is the first to offer digital
textbook rentals on a 24-hour basis, a concept that has its skeptics.
“What I’m questioning is if it’s more of a
gimmick than a business model,” says Kathy Mickey, senior analyst and managing
editor at Simba Information, a publishing industry research firm. “The toehold,
it might be a service. It’ll be interesting to see whether it catches on.”
Investors and publishers seem to think it will.
Packback has raised more than $300,000 in
funding and established partnerships with textbook industry heavy-hitters
McGraw-Hill and Sage despite the fact that they haven’t launched the program
yet.
The publishers are intrigued by Packback’s
microtransaction model, Shannon says.
Adds investor Howard Tullman, founder of Tribeca
Flashpoint Academy: “We live in an à la carte world and everything about fixed
pricing for anything is over.”
Gandham and Shannon acknowledge that their peers
have been slow to transition from traditional to digital textbooks.
“There’s not really an affordability play in
e-books right now,” Shannon says. “We’re looking to, with at least getting
students’ feet wet by trying $5 rental, expedite that e-book adoption rate.”
And therein lies the issue, Mickey says.
“The bottom line problem is students are not
flocking to digital textbooks,” she says. “Until that comfort level or the
demand is there, a rental really doesn’t solve anything if you’re renting
something that kids don’t want to begin with. I’m just not sure that this is
the model that’s going to change it.”
Mickey says whether Packback becomes a long-term
solution depends on its ability to generate revenue for publishers, something
Gandham says he and Shannon are acutely aware of.
“Our goal would be a national product and
ultimately we’re going to be working hand in hand with publishers,” Gandham
says. “Whatever we do, we want to work hand in hand with the publishers to make
sure they’re on board and comfortable with everything going on.”
