Since web sites like Chegg and BookRenter started renting textbooks, some students have been avoiding college bookstores. Now, the bookstores want in on the game, reports the New York Times. BookRenter announced June 3 that it has partnered with more than 75 college bookstores to rent textbooks. It also announced that it has raised $10 million in venture capital from Norwest Venture Partners and its previous investors, Storm Ventures and Adams Capital Management. BookRenter and Chegg are in head-to-head competition, but with different business models. Chegg has raised $146 million and operates a warehouse in Kentucky, near the UPS, from which it mails books. BookRenter has raised $16 million and does not hold its own inventory, but instead contracts with Amazon.com and several other booksellers to fulfill customer orders. “Education is going through a massive transformation,” said Mehdi Maghsoodnia, chief executive of BookRenter. “Renting textbooks is what iTunes was to music. It’s unraveling the economics.” College bookstores can use BookRenter to set up their own web sites, branded with the college’s name, and BookRenter does all the behind-the-scenes work. BookRenter and the bookstores share the revenue; students can receive the books by mail or walk to the campus bookstore to pick them up…
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Why universities should hate the iPad
If students embrace textbooks on the iPad, college bookstores might lose their shirts, CNN reports. As the higher-education industry plans for a future involving digital content delivery to devices like Apple’s iPad, college-branded impulse purchases — and perhaps even college bookstores themselves — might become a thing of the past. Despite the large size and robust performance of the higher-education book market, college stores are wary of the effect digital textbooks will have on their future. According to research conducted by the Oberlin, Ohio-based National Association of College Stores (NACS), campus booksellers netted $10.2 billion in total sales last year. Of that, $5.8 billion came from the sale of course materials, with the remaining $4.4 billion taking the form of soft goods. Last year, NACS says, 51 percent of students bought their course materials at brick-and-mortar college bookstores, and 18 percent purchased books online through school-approved web sites. The remaining 31 percent either bought no materials or purchased them off-campus. eBooks, meanwhile, are slowly gaining traction with students and presenting problems for the stores. According to NACS, electronic titles currently account for just 2 to 3 percent of college bookstore sales, but by 2012 are projected to reach 10 to 15 percent. And should students demand content on the iPad, bookstores will be locked out. Apple’s current App Store and iBookstore sales models give publishers the lion’s share of a 70-30 revenue split, and cut out the schools entirely. Meanwhile, in bookstores’ current distribution model, colleges pocket, on average, 33 percent of the price of a new book…
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