One of the largest textbook publishers, Cengage Learning Inc., has recently filed for bankruptcy protection to seek help under Chapter 11 of the Bankruptcy Code for about $5.8-billion in outstanding debt. According to Cengage’s written statement, the filing is an attempt to reduce their debt and help them to restructure the company. By restructuring the company, Cengage says it will be able to better align the company with their long-term business strategy of transitioning from the traditional print textbook models to digital educational and research materials.

In 2007, a partnership led by a private-equity group called Apax Partners LLP bought Cengage Learning from Thomson Reuters for an estimated $7.75-billion. Michael E. Hansen, the chief executive officer of the company, explained in an interview that they overpaid for Cengage and the market came under pressure on the print side, forcing them to file for bankruptcy due to the excessive debt.

Mr. Hansen said that their print textbook market has steadily given way to customizable packages of digital content, which include textbook materials, learning assessment aids, and other features. Many publishers nowadays have been investing heavily into such digital products to get a stable foothold in the digital market and to make up for lost sales in print publishing. Mr. Hansen described that the print side of their operation “has seen a pretty steep drop in terms of unit sales,” and he expects that it will be another two or three years before digital product sales offset the depressed print performance.

According to several studies, digital content is steadily becoming more popular while the print market shrinks, but many students and faculty still largely prefer print textbooks. However, as our society continues to move in a digital direction, it is expected that digital textbooks will become more readily accepted by the newer generations of students who have grown up with digital content their entire lives.

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