In this Chronicle of Higher Ed piece, Anant Agarwal explained the two flavors of edX' business model. In the 'supported' model the client institutions pays $250k up front and then 30% of all student fees for the course over that amount. In the second, the 'self-service' model the upfront fee is $50k with the client institution surrendering 50% of all student fees beyond that.
Imagine that model in the context of the textbook publishing industry.
McGraw Hill owns the rights to a well know text such as Hill & Jones "Strategic Management". It decides to sell "Strategic Management" to universities liek SJSU. It charges half the initial cost of developing the book (any one-time fees to author, focus groups, reviewers stipends, any other fixed fees to copy editors, etc) and then takes 30% of gross sales thereafter. Or on a chapter by chapter basis, charging 10% of the books development cost, and then taking 50% of grow sales for each chapter used.
Now that's a deal most publishing companies would love to get.
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