Textbooks: fewer choices
US-based Houghton Mifflin announced it would pay $4 billion for parts of the Harcourt Education divisions of publishing giant Dutch-based Reed Elsevier. Earlier parts of Harcourt (including the educational testing division) were sold to UK-based Pearson PLC, a major rival of Houghton-Mifflin.
According to Wall Street Journal ("Houghton Mifflin to Buy Reed Elsevier Units", 7/17/07), this only hastens the increasing concentration in educational publishing:
The deal places Houghton Mifflin, best known for its textbooks for students in pre-kindergarten through college, among the top educational publishers in the market and marks an increasing consolidation in the category. The major players now will include the combined Houghton Mifflin-Harcourt, New York's McGraw-Hill Cos. and Pearson PLC.
While Houghton-Mifflin has an old name (it was the original publisher of Thoreau and Emerson), it is in fact a very new company, formed when Irish-based education software company Riverdeep Holdings bought it from a consortium of equity managers, Thomas H. Lee Partners, Bain Capital, and Blackstone Group. The 2006 deal was worth $1.75 billion.
Riverdeep makes such educational games as Reader Rabbit and Mavis Beacon Teaches Typing, Houghton-Mifflin already controls 15% of market share of US K-12 publishing according to Bloomberg News, and Harcourt controls 20%. The 35% share of the market will make it the largest textbook seller,
As it is, the major textbook publishers produce me-too textbooks aimed at snaring large state contracts from Texas and California The abysmal "No Child Left Behind" program makes it even worse. Don't expect any innovation in this even more concentrated industry.
