School and university textbooks are to be converted into non-fungible tokens (NFTs), according to plans by FTSE 100 educational publisher Pearson, in order to get a share of the lucrative used book market.
Chief Executive Andy Bird said blockchain technology would allow Pearson to place unique traceable codes in its digital books, allowing the company to take on some of the resale by a student or college.
Mr Bird said: “In the analogue world, a Pearson textbook has been resold up to seven times. We were only involved in the first sale, and the so-called secondary market emerged.
“The transition to digitization is helping us reduce the secondary market, and technologies like blockchain and NFTs allow us to participate in every sale of that particular item throughout its lifetime.”
NFTs are an offshoot of cryptocurrencies that allow digital items to be given a unique code. The idea is to prevent duplicates and track ownership.
NFTs have been used primarily in the art world and have enjoyed great popularity during the pandemic. However, trading in NFTs has plummeted in recent months. According to a report by Chainalysis, a crypto research firm, sales of NFTs totaled just over $1 billion in June after peaking at $12.6 billion in January.
Pearson produces academic guides for students in the UK and US, as well as textbooks for learning English. Using blockchain technology to track the resale and trades of its guides should allow it to demand payment whenever it changes hands.
Plans for NFT books are Pearson’s latest attempt to reinvent himself as his traditional print business falters. The escalating cost of college textbooks has forced Pearson to cede market share to the used book market, where students can acquire academic titles more cheaply. Prior to Mr. Bird’s arrival, Pearson suffered six profit warnings in seven years.
Mr. Bird is trying to move Pearson to a digital publisher and launched the student subscription app Pearson+ last year. The app offers 1,500 titles for $14.99 per month to create direct relationships with students, unlike colleges and universities.
Pearson shares rose as much as 12 percent to 845 pence on Monday after it said it would hit its margin target earlier than previously expected.
Half-year revenue rose 12% to £1.8bn and pre-tax profit rose 14% to £179m, helped by cost cutting and growth from Pearson+.
When asked if the cost of living crisis would affect Pearson’s performance, Chief Financial Officer Sally Johnson said, “We are a very diversified learning company so there will be give and take across the portfolio I’m sure.
“We’re also seeing high wage inflation and the employee package that people are expecting now is not just about the wages you get but also the other things you get from your employer. One of those things is learning, which can make the difference between one company and another.”
Pearson turned down an offer of 870 pence per share from American buyout fund Apollo in March. The FTSE 100 group is valued at £6.1 billion.