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Cengage Unlimited: Is Leasing Educational Content a Good Idea?

June 25, 2018

The first day of uni is unlike anything a student experiences during their time at school.

There’s the lack of uniforms, the shops and cafes on campus, the exciting feeling that for the first time they’ve had control in choosing what they study.

Masses of first years sit down eagerly in their first tute, opening up their laptops and cracking open a new pack of Paper Mate Kilometricos.

They’re collectively surprised to find they’re invited to call the tutor by her first name, but what shocks them most comes a few minutes later when they find out how much their resources are going to cost.

$180 for a textbook?! You’re not in Kansas anymore, kiddo.

Most seasoned tertiary students will be quick to complain about just how ludicrously pricey their prescribed resources are (regardless of whether said student decides to buy them). The average Australian full-time student spends $602 per year on textbooks alone. So when a new service comes along that claims to save students hundreds of dollars each year, it sounds like a win for everybody.

Cengage Unlimited

Cengage’s latest offering, an educational content subscription service (think Netflix for learning), is helping the company rekindle lost paper sales and help students afford course resources—but is bringing our rental obsession to education a good idea?

A Cengaging History

The educational content provider filed for bankruptcy in July 2013 after the digitisation of learning led to a decline in demand for paper textbooks. Less than a year later, they eliminated $4 billion of debt and emerged triumphant, ready to take on the education sphere again—with a new goal of becoming 90% digital by 2019.

In a bold move to stay on the technology bandwagon, Cengage has launched a new product: Cengage Unlimited, a Netflix-style content delivery service that claims to save students hundreds per year.

Costing $120 per semester (or $180 annually), students can access 20 000 Cengage products spanning 70 disciplines and 675 course areas. And for those not quite ready to give up physical books, subscribers have the option of renting a copy (at the expense of shipping).

But how are they making money?

Cengage Unlimited is now giving students a semester’s worth of content for $120, when in days gone by they might have sold a single textbook for that much. How can they be making money?

Well, Cengage CEO Michael Hansen says that this new service will allow them to capture revenue from sales they lose to second-hand book sales, PDF downloads, and rentals—which gave students access to educational content without any revenue reaching Cengage’s wallet. By offering this subscription service, Hansen believes they’ll be able to start recapturing the market.

So, students get access to ‘unlimited’ content for less than the price they would pay for a handful of books, and can still loan paper copies.

But is this truly a win-win situation?

Rentism, With a Side of Smashed Avo

The business model seems to be financially viable, at least at the grand scale: companies like Netflix, Spotify, and our own home-grown Stan show that consumers are happy to pay for subscriptions services.

But is this what we want for our education industry?

Are we heading closer to Peter Frase’s definition of rentism, a futuristic alternative to capitalism where the resources are owned by few and leased to many?

“[Rentism] is based on the extraction of rents rather than the accumulation of capital through commodity production.”

There’s a big difference between renting entertainment content curated by Netflix and renting educational content from a single publisher who controls what resources are available. A grand scale implementation of a product like Cengage Unlimited could see the end of educational content diversity.

Winning Hearts and Minds

Cengage have a team of 675 sales reps who go by the title of learning consultant. They make on-site visits to training and education faculty, convincing them that Cengage Unlimited is the best choice for their students.

Hansen claims that educators are concerned with three things:

  1. High-quality content
  2. Affordability
  3. Freedom to teach what they want

It seems Cengage is hitting the first two points on the head; they’re renowned worldwide for their exceptional educational content, and Cengage Unlimited certainly appears to be a financial win for many students.

But what about content freedom?

“For introduction to psychology, we have 12 different books. I mean, I'm not a psychologist, but I can tell you there are not 12 different ways to teach introduction to psychology.” - Cengage CEO Michael Hansen

By choosing a subscription service like Cengage Unlimited to deliver content to their students, teachers become limited in the range of resources they can use in the classroom—which is just how Cengage likes it.

“We work with faculty to convince them what the best technology is and what the best content is to teach the students.” - Cengage CEO Michael Hansen

Cengage Unlimited sounds like a great idea—and for the most part, it is.

But instead of the solution being a subscription service that locks students into predetermined content (of course, they can always fork out more money to diversify their materials), how about tackling the issue in a different way?

The Root of the Problem

On average, Australian students pay 35% more for textbooks than those studying overseas.

Parallel import restrictions limit booksellers in how they source their textbooks. If the book has been published in Australia, retailers are unable to import a cheaper copy from overseas—giving the Australian Publishers Association control over the prices students must pay.

Instead of embracing subscription services like Cengage Unlimited, our industry should strive to make textbooks more affordable for its students. Learners shouldn’t be coaxed into narrow subscription services which discourage the external sourcing of content.

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