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“Amazon to the Amazon”: Digital Textbooks in Brazil

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As EdSurge reports, Amazon and Brazil’s Department of Education have come to terms on an agreement allowing Amazon to deliver digital textbooks to teachers throughout the country.  The delivery would be done exclusively via Whispercast, the mobile device management system Amazon uses for Kindles deployed within an organization.  In addition to stating that Amazon has already delivered more than 40 million textbooks, the announcement also dropped an almost innocuous note that Amazon and the Brazilian DoE have jointly started converting over 200 textbooks to digital for delivery to public high schools as well.

There are three elements to this announcement, two concerning Amazon specifically, and one broader implication.

1)  Brazil – Amazon chose to pursue this policy in Brazil and not in the US, or, more likely, some locality thereof.  It would likely have been impossible to get the US DoE to agree to such a contract but would have been easier to get something like the State of Washington’s DoE (or King County’s) to trial such a period.  Staying in the US would have also opened up a larger pre-digitized content library as well for quick Whispercast distribution.  Instead, Amazon chose to sacrifice expediency for scale – Brazil gets them a greenfield market, it gets them an entire country rather than a subdivision, and it also suggests that their true ambitions lie in significant depth of content digitization since that’s exactly what they’re committing to right now.  In all sincerity, bravo, Amazon.

2) Whispercast gets proprietary content – just like Netflix and Comcast, Amazon is betting that content distribution is a commoditized service without proprietary content.  Not coincidentally, Amazon Prime’s Instant Video has made this bet as well.  This is maybe the biggest example of this ethos outside the television world, though – how many other literary marketplaces or distributors have tried to lock in customers with proprietary content?

3) The more universal observation is how committed Amazon is to the digital textbook movement.  It’s not just that they’re trying to build a userbase for the Kindle – they could do that with an easier contract or heavily discounted pricing or education specific apps – but that they’re turning Whispercast into a marketplace and committing real resources to digitizing 200+ textbooks.  A behemoth like Amazon committing so definitively to this movement is encouraging.

As far as “buzzwordiness,” the digitization of textbooks doesn’t rank as high as other pushes like adaptive, or big data, or MOOCs, but it’s equally important.  Education is nothing without content.  Period.  Adaptive is a new paradigm in content delivery, as are MOOCs.  Digitization of textbooks has the potential to change the content itself.  What’s going to happen in the textbook market is exactly what has been happening with the regular book market.  Yes, textbooks will start being delivered through online marketplaces, there will be easier access and lower prices; more important is the existential crisis that seems to be gripping so many authors in recent years: nothing is “set in print” anymore.  (How’s that for an idiom that’s likely on its last legs?)

This move is absolutely a win for schools, teachers, students, and parents.  It offers more choice in terms of delivery and it commits one of the four dominant tech companies in the US to the future of the Brazilian population.  The benefits besides the convenience of digital textbooks likely include discounted Kindles, a broader textbook selection, and a more standardized textbook marketplace.  The move is obviously a win for Amazon as well, giving it a new, meaningful toehold in the multi-trillion dollar global education market.  Whispercast gets to trial run at scale in a non-core market, setting Amazon up for a larger push in US corporate or education endeavors.  And they greatly increase the Kindle library in a way that likely locks out any future competitors permanently from Brazil.

The people who should worry fall into three categories: content providers, marketplaces, and Amazon’s direct competitors.  Content providers, already being bullied by Amazon given Amazon’s ownership of online content sales, now have to contend with Amazon in yet another manner – namely the medium of content consumption.  They’d almost rather people read their books on the iPad, since Apple isn’t already telling them how much they can charge for their books and mediating their rankings on a major online marketplace.  Instead, Whispercast is going to own Brazilian textbook distribution, the Kindle, consumption, and it sets the stage for Amazon to attack this in a bigger way in the US.

Other textbook marketplaces, of course, have to be less than thrilled.  It’s yet another layer of the textbook supply chain that Amazon is building ownership in, more vertical integration for the largest competitor, and it also sets the stage for disintermediation in traditional textbook consumption as well.  (See my post on the new dynamics of the textbook market.)

Other contenders for technology dominance have to be irked as well.  We’re seeing so many components of our tech-centric lives converge.  Google is building hardware, Apple pushing software, and both making moves on Amazon’s ecommerce dominance.  All of these players are moving into the education space as well.  Google’s Chromebooks and iPads are trying to become the systems of choice for school districts’ 1:1 ambitions.  Amazon’s Kindle has a ways to go to catch up to them, but this push shows that they aren’t backing away.  Google Scholar is no longer the only attempt to digitize massive volumes of educational content.  Chromebooks – the current hardware darling of the education world – is going to lose a lot of content that will now be exclusively available on the Kindle; and the same goes for iPads.  Sure, it may be just in Brazil, but Amazon, by going in early and before there’s any real competition, is giving itself the opportunity to lock that market up for the foreseeable future.

Amazon’s commitment to education is laudable and the idea to  become the early mover in a huge, but underdeveloped market is brilliant.  The implications of this announcement, though, go far beyond just Apple / Amazon / Google.  It could sound the death knell for the traditional textbook market and traditional textbook consumption as we know it.

Author: AJ

I'm an education enthusiast, growth equity investor, and MBA student at Wharton.

One thought on ““Amazon to the Amazon”: Digital Textbooks in Brazil

  1. Great article AJ! I agree there are huge benefits to getting affordable educational material out there to students. Although I’m afraid students will miss out on the educational benefit on a physical textbook. Please hold off on the death knell. I think Dom would have a conniption.

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