Curriculum

Business Outlook for Publishers Turns a Page

By Kathleen Kennedy Manzo — March 29, 2005 4 min read
  • Save to favorites
  • Print

After a bust period of flat or declining revenues, U.S. textbook publishers are expecting a boom in the sales of K-12 instructional materials and assessment products over the next several years, according to a prominent Wall Street analyst.

The rosier outlook comes thanks to the slate of upcoming state textbook adoptions, improved forecasts for state spending on education, and the provisions under the federal No Child Left Behind Act that call for research-based instruction and annual testing of students.

“We think that after three years of lackluster growth, the boom is back in the K-12 educational publishing market,” says the report released last week by the New York City-based investment firm Goldman Sachs. Publishers of K-12 products could see the market grow 7 percent or more over the next four years, compared with virtually no sales growth from 2002 to 2004, according to “Making the Grade in 2005,” written by Peter P. Appert, the firm’s publishing-industry analyst.

The 70-page report was presented to investors and industry representatives as part of a private conference on educational publishing in New York last week. The Goldman Sachs report estimates that publishers will have revenues of $4.7 billion from K-12 instructional materials in the United States in 2005, up from $4.3 billion last year. The report indicates that the four largest publishers now control 95 percent of the U.S. market for K-12 educational publishing.

The conference, which was closed to the press, also featured presentations from representatives of the largest education publishers, as well as budget analysts, all of whom agreed with the optimistic outlook for the industry, according to several attendees.

“We feel the market is vibrant,” Margery Mayer, the president of the education division of Scholastic Inc., the New York City-based publisher of children’s books and school materials, said in an interview. “Everyone agreed that No Child Left Behind has been good for business.”

Textbook publishers were far less optimistic at their annual conference a year ago, when Mr. Appert predicted the industry would experience its worst period in terms of revenue growth in more than a decade. The calculation was based on a lull in the cycle of state textbook adoptions and decisions by some states to delay big purchases until the economy improved. (“State Budgets Put Fear Into Text Publishers,” Feb. 25, 2004.)

The 2003-04 school year ended a little better than predicted—with the industry showing no growth instead of a decline—owing to the availability of federal money under the Reading First program for buying commercial reading products and professional-development services, said Stephen D. Driesler, the executive director of the Washington-based school division of the Association of American Publishers.

The improvement of the adoption cycle “over the next three years in particular, and the continued demographic growth in the K-12 population,” he said, “continue to increase the need for the number of instructional materials.”

Growth for Tests, Too

During the current school year, California, Texas, and Florida are all slated to select books in key subjects and allocate hundreds of millions of dollars to enable districts to buy them. Those states are the largest of the 21 so-called adoption states, which designate which texts can be purchased with state money. The three states spend, on average, a combined $1 billion on instructional-materials purchases annually.

Publishers’ Pie

SOURCE: Goldman Sachs

Publisher's Pie

While the 2005-06 school year may bring another brief dip in revenues for publishers, the following school year is expected to yield big sales in mathematics programs, according to Mr. Appert’s analysis. And, in the 2007-08 year, the big three adoption states are scheduled to select reading/language arts texts, the most lucrative subject area for school publishers.

The testing requirements of the 3-year-old No Child Left Behind law is driving unprecedented growth in the test-publishing sector as well, according to John Oswald, who oversees the elementary and secondary education division of the Educational Testing Service, of Princeton, N.J. Mr. Oswald participated in a panel discussion at the conference on the assessment market.

“Everyone knows that under NCLB, the state assessment business is growing like crazy,” Mr. Oswald said in an interview. “That’s now causing school districts and the states to say we need to get high-quality classroom-based diagnostic tests and formative assessments [to monitor students’ progress throughout the school year]. That market as a result is booming, and everybody is looking to fill it.”

The Goldman Sachs report projects that the U.S market for K-12 testing materials will exceed $1 billion in 2005, and will continue to grow through 2007, when states will be required by the federal law to add a science test in grades 3-8, in addition to the math and reading exams that are mandated beginning in 2005-06.

Related Tags:

Events

Jobs Virtual Career Fair for Teachers and K-12 Staff
Find teaching jobs and other jobs in K-12 education at the EdWeek Top School Jobs virtual career fair.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Reading & Literacy Webinar
Science of Reading: Emphasis on Language Comprehension
Dive into language comprehension through a breakdown of the Science of Reading with an interactive demonstration.
Content provided by Be GLAD
English-Language Learners Webinar English Learners and the Science of Reading: What Works in the Classroom
ELs & emergent bilinguals deserve the best reading instruction! The Reading League & NCEL join forces on best practices. Learn more in our webinar with both organizations.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Curriculum Letter to the Editor Finance Education in Schools Must Be More Than Personal
Schools need to teach students to see how their spending impacts others, writes the executive director of the Institute for Humane Education.
1 min read
Education Week opinion letters submissions
Gwen Keraval for Education Week
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Curriculum Whitepaper
Media Literacy for the Digital Era: A Must-Have Guide
Equip educators and students with strategies to discern truth amidst misinformation and AI with practical strategies and interactive acti...
Content provided by Britannica Education
Curriculum Q&A Why One District Hired Its Students to Review Curricula
Virginia's Hampton City school district pays a cadre of student interns to give feedback on curriculum.
3 min read
Kate Maxlow, director of curriculum, instruction, and assessment at Hampton City Schools, who helped give students a voice in curriculum redesign, works in her office on January 12, 2024.
Kate Maxlow is the director of curriculum, instruction, and assessment in Virginia's Hampton City school district. She worked with students to give them a voice in shaping curriculum.
Sam Mallon/Education Week
Curriculum One School District Just Pulled 1,600 Books From Its Shelves—Including the Dictionary
And the broadening book ban attempts may drive some teachers out of the classroom.
6 min read
Books are displayed at the Banned Book Library at American Stage in St. Petersburg, Fla., Feb. 18, 2023. In Florida, some schools have covered or removed books under a new law that requires an evaluation of reading materials and for districts to publish a searchable list of books where individuals can then challenge specific titles.
Books are displayed at the Banned Book Library at American Stage in St. Petersburg, Fla., Feb. 18, 2023. In Florida, some schools have covered or removed books under a new law that requires an evaluation of reading materials and for districts to publish a searchable list of books where individuals can then challenge specific titles.
Jefferee Woo/Tampa Bay Times via AP