The dubious logic of Apple's iBooks textbooks

I keep looking at Apple's announcements about ePub textbooks, and I just can't figure out how it works.

Sure technically, I can, but from a business perspective, it's really hard to see how this will take off.

Let's see if I have the story right so far:

• Apple is announcing a new iBook 2 application that has more multi-media and embedded logic capabilities, so textbooks can come alive for the readers.
  
  Bringing a more app-like experience to books is a great thing.
  
  
• Apple has released a free authoring program to support creation of this material.
  
  Good authoring tools are important.  When I see that the publishing format is HTML5, I think that there's a big dearth of good HTML5 authoring tools.  So anything that adds to the mix is great.
  
  
• Apple is insists that the books are priced $15 or less.  To support this, electronic textbooks, unlike physical ones, will be owned by the student and cannot be given away, transfered, or re-used.
  
  The idea is something like noting that a paper textbook has lifespan of a few years, but costs $75, so a $15 eBook that has to be re-bought every year is the same as a 5 year life-span on your paper text book.  Except that the eBook is always up to date, whereas your 4 year-old textbook may be out of date.  That seems like a better book at the same price.
  
  
• Apple insists that books be sold only through their store.
  
  They built the tools, they should benefit from them.  No problem there.

On the surface, then this all seems great.  Better books at the same cost, and we save a forest or two in the process. 

But under the surface, there are some real problems with this.

First, it's definitely an "I'm from the vendor and you can save money by buying my newest kit" kind of proposal.  True, the iPad is a wonderful device. But the lifespan of an iPad is probably the same as a textbook or less, especially in the hands of the K-12 market.  That $500 is the cost of 5 to 7 textbooks (given the $75 price point McGraw-Hill used as a comparison).  So is this still going to be the same cost as paper books?

Let's do some math.

Imagine that there are 5 textbooks needed for any given grade. ( I'm kind of far removed from K-12, so forgive me if they need only 2 or 10.) That's $375 of textbooks, but they last on average 5 years, so that's $75 a year per student for paper textbook purchases.  That's one side of the equation: $75/PSPY (per student per year).

On the other side, the iPad costs $500.  I would expect the average life to be about 4 years at best (either because the device gets destroyed, the battery dies, or it no longer runs the latest iOS and becomes useless), and you can figure on a $100 repair midstream (new battery, cracked glass, etc.), so that's $150 per student per year for iPads.  And, you still have to buy 5 text books at $15 each, so you're back to $75 per student per year for content.  Grand total is now $225 per student per year, or a 200% price increase to go eTextbooks.   That's the other side: $225 PSPY 

Since $75 does not equal, $225, where is that extra $150 going to come from?

It's easy to predict what will happen.  Either (a) A school will get a grant to buy a bunch of iPads and then not have money to repair or replace them over time and they will be abandoned, or (b) the costs of this will be dumped on the parents -- you can choose the eBook track of instruction if you keep your child equipped with an iPad, or you can choose the paper book track if you do not.  That's just going to further divide the haves from the haves not.  Buy your kid an iPad, they can go to the iPad classes.

The situation would be a lot easier with Kindle Fires or Nooks, since these devices are substantially cheaper.  But Apple doesn't sell cheap kit.  Perhaps, in the upcoming iPad 3 announcement, they announce that they're going to keep selling the iPad 2 but at a reduced price, say $300.  You still end up with an extra $100 PSPY in costs that have to be eaten by somebody. (Note that the iPod touch is $200, so if they try to move the iPad 2 below $300 they have to start squishing the iPod prices too).

Next, let's talk about content.  

Other than a few showcase efforts, how committed are textbook manufacturers going to be in creating spiffy interactive content for their textbooks when they still have to create dead-tree versions of the same books?  It would be nice to think the market will drive them towards richer content, but the decisions in textbooks are political, and I have to think publishers will turn their eBooks into shovelware.

Put another way, textbook publishers can already publish their textbooks as iPad apps in the app store.  Where are they with that?  Nowhere.  So a slightly better editing program and a PR campaign is going to change that?

I hate to think that I'm the guy saying that iTunes music sales aren't going to do anything at the dawn of the iPod.  But there are a lot of differences here.  First, the record industry already had its content in digital format (from CDs), so the conversion to iTunes format was completely automated.  Second, there is no real difference in the experience delivered by the downloadable music.  It's not like they all had to gain video or games or dorian mode explorer software. It was the same product as before.  No one was disappointed to discover the downloads had roughly the same quality and features as the previous format.

Finally, there's a philosophical issue.  

The approach as I understand it is fundamentally at odds with the new cloud-based world.  If you use dropbox or similar -- or even iCloud -- you're used to the idea that wherever you are, so is your data.  I read Amazon Kindle books.  The same book is on my iPad, my laptop -- heck, even my phone.  And as I make progress through it on one device, the rest are in sync.  If I am at my desk, I would much rather read a book on my 23 inch monitor than on my iPad.  This is how cloud works.  Apple knows this: see the commercials for iCloud? Change my presentation in one place, and it's updated the other.  Take pictures here, see them there.  But this is not how the new text books work -- you have to read it on the iPad only.  And it's locked to that iPad.

It's this last issue that makes this a real head-scratcher.  It's like the last 5 years or so of technology advances hasn't happened.

If the goal of Apple is to start to introduce electronic textbooks into the marketplace and see if they can make for better education, that's great:  it's a noble experiment.  But if the expectation is that this is going to have a radical impact soon, I think that is not realistic.  Look how long and hard Bill Gates has tried to make education better.  And that's with him throwing tons of his money at the problem. As much as I respect Steve Jobs, this is not a an area that lends itself to easy solutions.  If it did, our schools would be the best in the world.

A year from now, I expect this will all be moved to the back burner as Apple tries to figure out what went wrong.  Or they will realize the real market for this is college, where you can insist on students having an iPad -- and they find success there.  We'll see...