Educational books

Regulations are influencing the educational publishing sector’s shift towards more digital learning solutions. An improved experience for users and teachers is required for a step towards change.

Playing field

The playing field for the educational book market remains similar to last year’s. Although there is a worldwide trend of rising investments in Edtech companies, the traditional large educational publishers still dominate the Dutch market. Digitalisation in the sector provides opportunities for new entrants as well as the traditional publishers, which continue to shift their focus towards digital education methods. Although traditional supply chains remain intact, new technologies are creating opportunities to distribute content directly to end-users.

What’s new?

Government spending on education has increased slightly year-on-year and is now approaching 6% of the country’s gross domestic product. With pupil numbers stable, growth in educational publishing revenues will have to come from a different mix within the total budget or from growth in non-government spending. Digital publishing revenues rose to 10% of total revenues in 2017 and this percentage is set to increase further while total revenues remain broadly stable.

As the focus on these digital revenues grows sharper, the tax difference between printed and digitally published content becomes more important. The European Commission is finalising its plan to loosen up VAT regulations in the EU by replacing a positive list of products subject to low VAT tariffs with a negative list of products that should be subject to high VAT tariffs. This will give countries more flexibility in switching products from high to low tariffs. Once the plan has been introduced, we expect digital educational materials will be switched to the lower VAT tariff. The tailwind that this generates for the sector will, however, be offset by the announced increase in the lower VAT tariff from 6% to 9% on 1 January 2019.

A limitation on the digitalisation of learning materials was recently resolved in the Netherlands. In 2017, the Dutch Parliament passed a law on the use of digital pupil data which will optimise efficiency and ensure safe data sharing. This will remove the worries of parents regarding their children’s data privacy and therefore accelerate the pace of development towards more digitalised and personal learning methods. Investors have recognised this and are more willing to invest in the educational market. Squla, the online educational gaming platform, has recently been acquired by an Edtech investor. Having a new shareholder allows Squla to continue to grow and expand the reach of their digital materials into new markets.

Educational book publishing market (€ millions)
Netherlands Historical data Forecast data CAGR %
  2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 18-22
Print 374 370 367 365 364 362 360 359 357 356 -0.4%
y-o-y growth   -1.1% -0.8% -0.5% -0.5% -0.5% -0.5% -0.4% -0.3% -0.3%  
Digital 13 19 24 29 35 41 46 52 57 62 12.1%
y-o-y growth   48.8% 28.2% 21.6% 20.3% 16.5% 13.5% 11.6% 9.9% 8.8%  
Total 387 389 391 394 399 403 406 410 414 418  
y-o-y growth   0.5% 0.6% 0.9% 1.1% 1.0% 0.9% 1.0% 0.9% 0.9%  

Outlook

The shift towards digitalisation will continue in the coming years. As the Dutch Ministry of Education, Culture and Science is aiming to increase the quality of Dutch education, government spending on education is likely to remain at least steady. With infrastructure and privacy issues being resolved, investment in digitalisation in the educational publishing market is expected to increase at a CAGR of 12.1% over the next five years.

Adaptive learning methods and other new approaches are a growing field of interest. Using artificial intelligence and machine learning to create enhanced personalised educational methods could help to increase pupils’ learning curves. As in other media sectors, a focus on user experience is the key to success. By emphasising the user experience of teachers and pupils, traditional educational publishers and new entrants can speed up the pace of digitalisation and its implementation in the educational system. Incorporating such techniques will allow both pupils and teachers to focus on the key learning points, leading to better results.

Contact us

Christiaan van Toor

Senior Manager, PwC Netherlands

Tel: +31 (0)88 792 58 70

Follow us