School and university textbooks are to be turned into non-fungible tokens (NFTs) under plans from FTSE 100 education publisher Pearson to get a cut of the lucrative secondhand book market.
Chief executive Andy Bird said blockchain technology would allow Pearson to place unique trackable codes in its digital books, letting the company take a slice of any resale by a student or college.
Mr Bird said: “In the analogue world, a Pearson textbook was re-sold up to seven times. We would only participate in the first sale, and it created what is known as the secondary market.
“The move to digital helps us diminish the secondary market, and technology like blockchain and NFTs allows us to participate in every sale of that particular item as it goes through its life.”
NFTs are an offshoot of cryptocurrencies that allow digital items to be given a unique code. The idea is to prevent duplication and track ownership.
NFTs have mainly been applied in the art world and exploded in popularity during the pandemic. However, the trade in NFTs has fallen sharply in recent months. According to a report by Chainalysis, a crypto research firm, NFTs sales totalled just over $1bn in June, having peaked at $12.6bn in January.
Pearson makes academic guides for both secondary school and university students in the UK and US, as well as textbooks for learning English. Using blockchain technology to track re-sale and trading of its guides should allow it to demand payment each time it changes hands.
Plans for NFT books are Pearson’s latest attempt to reinvent itself as its traditional printed business stutters. The escalating cost of college textbooks has forced Pearson to cede market share to the secondhand books market, where students can pick up academic titles more cheaply. Prior to Mr Bird’s arrival, Pearson suffered six profit warnings in seven years.
Mr Bird is trying to shift Pearson to a digital publisher and last year launched student subscription app, Pearson+. The app offers 1,500 titles for $14.99 a month in a shift towards forging relationships directly with students as opposed to colleges and universities.
Pearson shares rose as much as 12pc to 845p on Monday, after it said it expects to hit its margin target earlier than previously expected.
Half-year revenues rose by 12pc to £1.8bn and pre-tax profits climbed 14pc to £179m, helped by cost cutting and growth of Pearson+.
Asked whether the cost of living crisis would impact Pearson’s performance, chief financial officer Sally Johnson said: “We are a very diversified learning business, so there will be gives and takes across the portfolio I am sure.
“We are also seeing high wage inflation and the employee package that people now expect is not just about the wage you take but the other things that you get from your employer. One of those things is learning, that can make the difference between one company and another.”
Pearson rejected a 870p per share offer from American buy-out fund Apollo in March. The FTSE 100 group is valued at £6.1bn.