Strength in Numbers

The custom courseware platforms XanEdu and AcademicPub will merge as quickly as the two parties can sign the paperwork -- a response to a textbook market still clamoring for an all-of-the-above solution to course materials.

The merger captures yet another snapshot of the market as it inches away from traditional textbooks and toward an indeterminable future. But that transition is nowhere near complete, which leaves providers such as XanEdu and AcademicPub attempting to address the calls for a suite of products that colleges and universities can plug into learning management systems, sell through campus bookstores and open to students -- yet somehow alternatively offer as a physical textbook.

“We know that the custom materials component is growing at a double-digit pace and textbooks are declining at a double-digit pace,” said John DeBoer, CEO of XanEdu. “The market hasn’t shifted all the way to that level yet at this point, but it’s moving in that direction.... Everybody’s trying to gain access to that as quickly as possible.”

XanEdu is an established presence in the custom courseware market. The company launched under ProQuest in 2000, spun off on its own in 2005, and has amassed more than 630,000 customers at over 1,000 institutions. It offers a hands-on approach to curating custom courseware by partnering instructors with teams of editors.

The much younger AcademicPub offers a variation on that approach. “We’re the new kid on the block who came to the market from a technology standpoint ..., but [had] a harder time building customer relationships from the ground up,” said Caroline Vanderlip, CEO of AcademicPub and SharedBook. “We fill a very, very strong niche for them.”

AcademicPub uses a self-service approach to custom courseware. The company has reached licensing deals with 265 publishers, and the platform features more than 12 million copyright-cleared articles, textbook chapters and multimedia -- about 10 times what XanEdu offers -- which instructors can explore and assemble into textbook replacements or supplements on their own.

AcademicPub’s service is slightly less expensive to instructors than XanEdu’s, but since the price of the content -- set by publishers -- is the major expense, the difference is “not anything that would change a sale,” Vanderlip said.

The new XanEdu will offer the “complete solution” of custom courseware services, DeBoer said, from “Hey, I can do it all myself, and I don’t need to talk to anybody” to “I don’t want to spend so much time doing it myself, and I would rather talk to someone else.” On top of that, the company is already working with early adopters to break into an adjacent marketplace: corporate training materials.

This is not the first time XanEdu has considered adding a DIY option to its services. About three years ago, the company rejected the idea in favor of building the student-facing platform myXanEdu. DeBoer said that investment was the right decision at the time, but three years later, the market is “demanding easier access to content.”

“As you get younger academics into the market, you’re going to see much more of that,” DeBoer said. He suggested AcademicPub has struggled to develop its user base because it was “a little bit early” with its DIY model. XanEdu, on the other hand, can deploy that option and wait for it to grow more popular while leaning on its other services, he said.

Vanderlip suggested a similar reason: “It’s a dispersed market in that every university -- every professor -- operates independently, and so to be able to reach any critical mass of those professors, you really need a strong sales arm, feet on the street,” she said.

AcademicPub attempted to capture market share with direct marketing, but found it difficult to reach professors. “How many spam messages do you get a day? How many do you pay attention to?” Vanderlip said.

XanEdu hopes to finalize the merger within two or three weeks, but both companies agreed to announce it on Wednesday to tell the market they are “integrating the systems as quickly as we can,” DeBoer said. XanEdu could have built its own DYI solution, he said, “but with the time that it could take and the way that this market works ... you could lose two years to put it in place.” 

The terms of the merger were not disclosed. AcademicPub’s team will join XanEdu, now a company of about 75 employees, with offices in Ann Arbor, Boston and New York, and a development group in Tel Aviv. Vanderlip said she will not be involved in the company’s day-to-day activities, but will “help guide the strategic direction of the company” as a member of its board.

“I certainly think that consolidation of the marketplace is inevitable, and I wouldn’t be surprised if there were others down the path,” Vanderlip said. “Why? Because there certainly is strength in numbers.”