College textbook rental startup BookRenter is also taking part in this growing market, reporting 725 percent growth in revenue from textbook rentals since last September. The company says that revenue is expected to be in the range of $20 to $50 million in 2010. Of course, this is still behind competitor Chegg, which is expected to see revenues in the range of $130 million this year.
Like its competitors, Bookrenter wants to be the Netflix of textbook rentals. By renting textbooks, Students are able to save money by loaning textbooks for a fixed duration, usually a semester, and end up spending only the fraction of the cost of outright purchases.
Textbook rentals make little sense at the moment because even a fraction of the cost of purchasing a new textbook is more expensive than buying a used book and re-selling it at the end of the semester. What we really need, is a subscription-based rental service, like a true Netflix for books, for book rentals to fully replace purchases. You would pay a monthly fee to rent x amount of books per month. Profit would be made by attracting large numbers of people and conquering the market instead of pulling large profit margins from a small number of people.
This model would work best for ebooks, which desperately need an affordable subscription model to replace traditional textbooks in schools. An even better service would allow schools to purchase campus-wide licenses to certain ebooks and then allow students access to the books associated to their enrolled classes from their iPads or other mobile devices.
I have experimented with replacing some of my textbooks with ebooks, and the experience has been amazing. Being able to easily search and annotate books, as well as carry my whole library in a small bag, has increased my productivity and study abilities tremendously. Unfortunately, the licensing terms required to make the above business model a success are probably too aggressive for traditional publishers.