A Cengage Buffet

Cengage, the publisher and technology company, is introducing a subscription service that will enable students to access Cengage’s entire digital portfolio for one set price, no matter how many products they use.

The new offer, called Cengage Unlimited, will give students access to more than 20,000 Cengage products across 70 disciplines and 675 course areas for $119.99 a semester. For 12 months’ access the price is $179.99, and for two years the price is $239.99. For students taking three or four courses a semester with assigned course materials from Cengage, the subscription could offer hundreds of dollars of savings a year, versus buying or renting the products individually.

Cengage described the introduction of the Netflix-style subscription service in a press release as a “bold move”; the company has set a strategic goal of being 90 percent digital by 2019. The new strategy is a notable departure from the traditional publishing sales model, which historically has relied on the sale of individual print textbooks. Print sales have been heavily disrupted, however, by the introduction of rental programs, piracy, the sale of secondhand books and the failure by some students to purchase textbooks at all due to prohibitively high costs.

In addition to access to Cengage ebooks, digital platforms and study guides, students will have the option to rent print versions of the course materials for free, excluding a $7.99 shipping fee.

Cengage already offers an extensive ebook and print rental program, but CEO Michael Hansen said in an interview that Cengage Unlimited would offer an alternative to the “traditional and costly approach of paying for each course’s materials individually.”

According to statistics from the National Association of College Stores, students spent an average of $579 on their required course materials during the 2016-17 academic year. The College Board estimates that the average annual cost of books and supplies for students at four-year-public colleges is much higher, at $1,298 -- though it is noted this figure could be lowered by buying used textbooks or renting. Hansen said that lowering the cost of course materials for students was a key factor driving the decision to introduce Cengage Unlimited.

“High costs are limiting too many students from being able to access and succeed in their learning,” said Hansen. “We are taking unprecedented action to break down the cost barriers and end the cycle of students having to choose between course materials they can afford and the results they want,” he said.

Starting in August 2018, students will be able to access a dashboard that offers unlimited access to the company's online library, once they have paid a subscription fee. The subscription includes use of digital learning platforms MindTap and WebAssign. After their subscription ends, students will continue to retain reference access to key course materials for one year. For those that don’t want to subscribe to Cengage Unlimited, students will still have the option to rent or buy individual titles. “We would expect that the majority of students would go for Cengage Unlimited, but we don’t want to predetermine that,” said Hansen.

Cengage’s digital catalog includes titles from authors such as economist Gregory Mankiw and the late mathematician James Stewart. Currently, a new hardcover print copy of Mankiw’s Principles of Economics, eighth edition, costs $249.95. There are also rental options starting at $99.49 for print for 60 days’ access, and $76.12 for six months’ digital access with MindTap.

For students who are taking multiple courses with Cengage course materials assigned, the Cengage Unlimited proposal offers significant savings, said Joseph Esposito, a digital media, software and publishing consultant. But if you only have one course that has Cengage materials assigned, then the offer is not so attractive, he said. Rick Anderson, associate dean for collections and scholarly communication in the J. Willard Marriott Library at the University of Utah, agreed.

Both Esposito and Anderson said it was clear that Cengage was looking to convince whole institutions, not just individual faculty members, to go all in on Cengage materials. This, they worried, could result in pressure being placed on faculty to assign Cengage materials, potentially impeding their academic freedom.

Hansen said he is aware that faculty may not be receptive to top-down suggestions from provosts to change their course materials, which is why in addition to selling Cengage Unlimited at an institutional level, Cengage will also be making the case to individual faculty members that Cengage Unlimited allows them to continue teaching with high-quality learning materials in addition to offering value to students.

Esposito said that the Cengage Unlimited model, which he described as “like Spotify for books,” was a shrewd move by Cengage to increase its market share, and that the strategy reminded him of telecom company MCI’s “friends and family” campaign, where MCI gained a large share of the market by offering discounted calls to fellow MCI customers. To leave the service and switch to another provider, customers would have to explain to their friends that it would now cost more to call them. This social pressure discouraged people from switching, even if better deals could be found elsewhere, explained Esposito.

Cengage describes Cengage Unlimited as a “first-of-its-kind” subscription offer, a description that is probably accurate, said Anderson, at least among higher education publishers in the U.S. But there is precedent for this kind of model, he said. Questia, for example, offers access to a large catalog of research books and journals for $99.95 a year but is marketed as more of a “personal research library” than Cengage Unlimited, said Anderson. Cengage is familiar with Questia, having acquired the company in 2010.

Phil Hill, the co-publisher of the blog e-Literate and a partner at MindWires Consulting, said that he was “impressed” by the Cengage announcement. “It’s like someone at Cengage woke up and decided to take this digital content transformation seriously,” he said. “If you combine Cengage Unlimited with the OpenNow announcement, both of them really represent a rethinking of Cengage’s business model.” While Cengage and other publishers have dipped their toes into digital-first models, Cengage is “taking the lead,” he said.

While Hansen said that the announcement of Cengage Unlimited was significant, he said he didn’t think it represented a big shift in strategy for the company. “I think our strategy has been very consistent for the last five years. In terms of leading with digital, we believe, and we know from the data, that digital is a better experience relative to print for most students,” he said. For those that still want access to print, Cengage Unlimited would give them that option, too.

Cengage reports that currently more than 2,000 institutions in the U.S. are assigning Cengage products in more than 10 courses. Around 1,400 institutions are assigning Cengage materials in more than 20 courses. And some 600 institutions are assigning Cengage materials in more than 50 courses. Hansen said he hopes to expand adoption by attracting both students and faculty with Cengage Unlimited’s “very compelling price point.”