Educational books

Educational book publishers are ready for the future, but is the market finally ready as well? Will digital learning methods take over when privacy limitations are solved by market participants?

Playing field

The Dutch market for educational publishers has not changed significantly as it is still dominated by the three biggest players: Noordhoff, Malmberg and ThiemeMeulenhof. However, digitisation in the sector is providing large opportunities for new players, including start-ups. An excellent example is Squla. Although Squla already entered the market several years ago, it has shown tremendous growth over the past years and found a foothold in the Dutch educational publishing market with the development of an online educational gaming platform. Currently, Squla has a collaboration with CITO and its online platform has over 100,000 children using the platform at home and over 600,000 at school. Teachers and parents are using the platform that provides monitoring tools and opportunities to set goals for children. Squla established itself in the Dutch educational market and provides an example for others to do the same. Entering the educational market requires large investments but worldwide investors are showing a willingness to invest their money and therefore an increasing number of Edtech companies could enter the market in the coming years.

 

 

Educational book publishing market (€ millions)
Netherlands Historical data Forecast data CAGR %
  2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 17-21
Print 378 374 370 367 365 363 361 359 357 356 -0.5%
y-o-y growth   -1.1% -1.1% -0.8% -0.5% -0.7% -0.6% -0.5% -0.4% -0.4%  
Digital 8 13 19 24 29 34 39 44 48 53 12.7%
y-o-y growth   48.8% 48.8% 28.2% 21.6% 17.4% 14.5% 12.4% 10.1% 9.2%  
Total 386 387 389 391 394 397 400 403 406 409 0.7%
y-o-y growth   0.0% 0.5% 0.6% 0.9% 0.7% 0.7% 0.7% 0.7% 0.8%  

Source: PwC, Ovum, Note: Because we rounded off amounts and percentages throughout this Outlook, tables may not sum to 100%.

What’s new?

While digital revenues in the educational books sector are small at just 7% of total educational book publishing revenue in 2016, Dutch publishers are looking to grow digital revenues. According to the Dutch educational publisher association (GEU) momentum exists for an increased pace of conversation to learning methods using IT-based applications. Developing a digital learning solution that can be used in all schools is a challenge, given the inherent flexibility in the educational system. Nevertheless, the rise of digital teaching methods will continue, with a focus on interactive learning. Digital platforms will offer teachers more advantages than solely digital textbooks, such as the possibility of personalised e-learning.

Furthermore, publishers and distributors of learning materials collaborated in solving one of the main issues of digital methods: privacy. A covenant providing basic guidelines and ensuring the monitoring of these guidelines has been developed to protect the privacy of children using digital applications. The covenant is mainly providing concrete measures that are to be taken in accordance with Dutch laws relating to the protection of personal data (Wet bescherming persoonsgegevens).

Further steps are taken to embed the privacy of students into Dutch law with a new proposal for approval by the Dutch parliament on the possibility to develop pseudonym IDs. The law is intended to optimize efficiency and to ensure safe data sharing. These developments may take away worries of parents regarding the privacy of data relating to their children, and therefore may also increase the pace of development towards more digitalised and personal learning methods.

Outlook

The educational system in the Netherlands is effective, flexible, and performing well in the OECD Programme for International Student Assessment (PISA). Government spending on education is relatively steady and is expected to remain so in the coming years at around 11-12% of total government spending. Very little education spending comes from private sources, which are more changeable. Although new revenue streams might exist in developing learning content to be used at home. As a result of this stability, spending on educational book publishing will also hold relatively stable with a CAGR of 0.7% over the forecast period.

This growth can be entirely attributed to digital sales as educational establishments shift their budgets to digital. Print revenues will see a small -0.5% CAGR decline over the next five years, but this is not surprising as it is a trend that can be seen across all developed markets.

Like all other EU countries, digital items are subject to higher rates of VAT than printed items, with printed publications taxed at 6% while digital content is taxed at 21%. This means that digital is often more expensive than printed publications. However, the European Union is currently deciding on a proposal to equal rules for taxing e-books, e-newspapers and their printed equivalents.

According to the GEU schools have developed their vision of more modern types of education over the past years and are aware that more gradual changes will not be sufficient. Furthermore infrastructural problems for digital methods are expected to disappear over the coming years with expanded bandwidths, 4G networks and further investments on devices. Where computers were the most used device in digital education, other devices as tablets and smartphones are used more and more in line with the change in most used devices in different age categories, (between 1-8 tablets, between 8 - 15 mobile phones). More rapid change to personalized learning using digital learned methods is therefore expected to come and underpins the expectation for higher digital revenue growth.

Contact us

Wouter Poot

Partner, PwC Netherlands

Tel: +31 (0)88 792 50 39

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