Textbooks go 'all you can eat'

Many things can happen when two friends go out for a drink. However, it is rare that the result of a night out is the formation of a new company delivering information to students, especially if neither of the friends has any prior experience of this industry other than having been students and researchers themselves.

Strange though this scenario might sound, it’s exactly what happened when Hamish Brocklebank and Nicolas Philippe met up for a drink a little over a year ago. As they chatted, the conversation turned to consumer-orientated services like NetFlix and Spotify. Such products provide their users with an ‘all you can eat’ online supply of, in these cases, films or music, for a monthly charge, along with services that enable users to find things that might interest or entertain them. Brocklebank and Philippe began to wonder aloud about the lack of similar services for students and the idea for Flooved was born.

The vision of Flooved, which takes its name from the pig Latin for ‘stream of books’, is to put all the resources that students need – core textbooks, past papers, monographs, journal articles and course notes – in one place. On top of this, the company has added social tools that enable students to add notes and questions that can be shared with other users of the platform. The platform also links to Facebook so that searches can come up in users’ timelines.

It uses semantic indexing to provide links between relevant chapters, papers and questions within exam past papers. Flooved built its own semantic indexing and is working with Bergen University in Norway and Sussex University, UK. The company is also doing user testing in order to optimise mobile access. It is web-based and has an iPad app.

The cost of the services to students will be £20 per month (excluding the two summer-holiday months), with discounts if terms or whole years are paid for in advance. This price tag may seem high but Brocklebank is confident that it won’t be a barrier. He said that in the UK, which will be the company’s initial market for the platform, students pay, on average, £350 per year on textbooks so £200 per year will be a saving. In addition, the company’s research indicates that students’ parents and grandparents often pay for textbooks and that they are likely to be happy to pay directly to a platform where they can ensure that the money ear-marked for textbooks is actually being spent on textbooks rather than on socialising. The company also plans to have a mobile payment option.

Of course there is an inevitable challenge: availability of content. The Flooved vision is to provide ‘all the content that you need’. However, many aggregators and other third-party resources in the past have found publishers reluctant to include their core textbooks as part of the bundles they make available for resale. Indeed Brocklebank said that when the two friends first approached publishers with the Flooved idea, a few publishers told them that they would never be successful in getting licensing deals.

Nonetheless Philippe and Brocklebank were confident enough in their idea to quit their jobs and invest around £20,000 between them – as well as a few per cent of company equity – in paying a web development firm to come up with a prototype platform that they could show to publishers, investors and potential customers.

This prototype has clearly been successful in winning over investors, with the company now boasting £0.5 million in venture-capital funding. In addition, publishers have begun to be convinced. Brocklebank said that Flooved is in late stage legal discussions with four major publishers and has about a dozen other publishers on the platform.

The reasons for publishers’ change of hearts come down to money, said Brocklebank. The company’s business model is for 25 per cent of revenues to go to Flooved and 75 per cent to be shared between publishers. This, he said, is actually pretty attractive to publishers because, of the £350 spent annually per student on textbooks, around half is spent on second-hand books. Much of the remaining half is swallowed up by booksellers and others in the distribution channel, leaving publishers with their share of only about £50 per year per student – compared with a similar share of £150 per student via Flooved.

How the Flooved revenue is shared between publishers is carefully planned. A third of the publisher sum will be dedicated to those titles considered to be premium textbooks. The rest of the publisher revenue will go to the other titles, half of which is calculated based on usage and half calculated based on recommended retail price.

In addition, the platform includes applicable free-to-access content, although providers of this content do not share the revenue. ‘Semantic indexing helps discovery,’ said Brocklebank.

Beyond negotiating for content, Flooved has been working on its user experience. ‘The content is what the payment is for but it’s the services that students will value,’ observed Brocklebank. After all, the students’ libraries will also have textbooks.

This highlights an interesting way that Flooved differs from many other e-textbook platforms. Its model is not about selling to institutions or even currently a mixed model; the initial focus is on selling directly to the end users.

‘One of the big differences is that institutional platforms are rubbish for users. You need a degree in information profession to find content. It is easier to build platforms for institutions but students expect interfaces that are efficient, slick and completely effortless,’ he said. ‘One day we will do an institutional model – once we’ve got the business to consumer model sorted.’

The company hopes that its features will attract customers. ‘We are recruiting current university students as brand advocates and they get referral fees. We’ve had extremely large amount of interest in the platform, especially during exam time,’ he said.

By the time of the product’s launch in the Autumn Brocklebank believes that the company will have negotiated access to 90 per cent of the core content needed for the hard sciences. It will launch new subjects when it has enough content in further areas.

And although the initial focus is on the UK market, Flooved plans to look at other markets that study in English. ‘We are very much looking at a blend of licensing and partnerships with other geographies,’ said Brocklebank.