Sunday, March 9, 2003

Cheaper college texts online

OTR publisher offers lower-cost alternative

By James McNair
The Cincinnati Enquirer

To a typical college student, spending $30 on a concert or $50 on a dinner date is an elective. Shelling out more than $100 on a textbook is a required course. Three years ago, that all-too-irksome problem gave Alex von Rosenberg the scent of a business opportunity.

Alex von Rosenberg, chief marketing officer of Atomic Dog Publishing in Over-the-Rhine, says the company's online textbooks are able to offer today's news and lessons.
(Craig Ruttle photo)
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Von Rosenberg's company is called Atomic Dog Publishing. Based in Over-the-Rhine, two floors above the Jump Cafe & Bar on trendy Main Street, Atomic Dog is taking on the big global monoliths that monopolize university classrooms and bookstores.

No lap pup, Atomic Dog is attacking where the giants are most vulnerable - by price and by delivery. It offers more than 40 textbooks that fall 60 percent to 75 percent below the costs for many textbooks. It also offers Web-based and softbound books. As a result, professors at more than 700 U.S. universities are giving their cost-conscious, computer-nimble students the option of using one of Atomic Dog's online texts.

"As far as I'm concerned, it's the wave of the future," said Chuck Calahan, a Purdue University family studies professor in his second semester with an Atomic Dog title for his undergraduate research methods class. "The way hard-copy prices are going, online texts are going to catch on more and more."

It's a trend that Atomic Dog is spurring and riding. Atomic Dog had 25 titles at the start of 2002 and expects to have more than 60 by year-end. Von Rosenberg said about 100 books are in development, all destined to be Atomic Dog exclusives. In January, Atomic Dog was named one of the top eight educational innovators in the nation by Eduventures Inc., a Boston-based research firm.

Atomic Dog's Web-based books are textbooks come alive. Although largely made up of text on a computer screen, online books offer sound, video, animation and the ability to amend content and administer tests. Its online music textbook, for example, contains actual musical clips. Its speech pathology text includes audio examples of speech defects and how they respond to treatment.

Von Rosenberg, the company's 37-year-old chief marketing officer, said the subjects that lend themselves the most to online publication are "conceptual, visual, auditory and areas that are dynamic, like politics. With our online model, you're able to integrate this morning's news right onto our textbook."

Its biggest seller? The Research Methods Knowledge Base, by William Trochim of Cornell University. The book was introduced in the summer of 2000 and, in more than 200 colleges, remains its most widely adopted title, von Rosenberg said.

The pup grows

In its first full year of existence, Atomic Dog posted about $100,000 in sales, then notched it up to $1 million, von Rosenberg said. In its current fiscal year, which ends April 30, he said the company will do "many times" last year's result. Von Rosenberg believes $75 million is reachable by 2008, profitability by 2005.

"Our products are growing in sales very rapidly, and we have a pipeline of about 100 products that haven't been published," he said. "We're going into this semester with a proven technology that's been upgraded yet again to customer expectations and with the largest increase in new titles that we've had in the history of the company."

Atomic Dog employs 34 people in Cincinnati and has 12 more in Madison, Wis., Dubuque, Iowa, and College Station, Texas. The company solicits many of its authors, but also publishes books by authors who approached the company. Editorial employees work with authors on content, production employees convert it into Web form and sales employees call professors around the country.

The list of colleges with at least one class using an Atomic Dog textbook looks as if it came straight out of a high school guidance counselor's office. Columbia, Penn, Johns Hopkins, Georgetown, Syracuse, Northwestern, Vanderbilt, Rice, Stanford and Ohio State have Atomic Dog users, as do the University of Cincinnati, the University of Dayton, Northern Kentucky University and Xavier.

Professors, not college bureaucrats, select textbooks. Thomson of Canada, Pearson of the United Kingdom and McGraw-Hill of the United States, dominate the market. Von Rosenberg said professors seem to enjoy hearing a sales pitch for a textbook that is so arrestingly different.

Andrew Bergstein, a marketing instructor at Penn State's Smeal College of Business, said he was so intrigued by Atomic Dog's e-textbook that he switched to it in midyear.

"Normally I don't change textbooks in the middle of a school year, but it just struck me that what they offered was better, was less expensive and could be accessed online," Bergstein said. "It seemed like a perfect solution in terms of teaching support for me and something of value for the students.

"I think it's excellent for today's college students because I think we're at a point today where some students don't ever go to the library," he added. "They're very, very adept at getting what they want off the Internet."

Bergstein said he has no idea how many of his students use the online version of the text. Calahan, the Purdue professor, said he thinks about half the class uses the online text exclusively, about one-fourth a combination of the online text and hard copy.

"The benefits are, number one, the cost is much cheaper for the student - $20 instead of $70," Calahan said. "The second reason is I can insert my notes, my comments and my explanations into the text. I can't do that with a hard copy."

And what do his students think of online textbooks?

"They don't necessarily praise it, but I think it sucks them in, and they're covering the content better," he said. "They like the high-tech approach, and it involves them in the learning process. That's a win-win."

Success story

In a city starving for successful technology startups, Atomic Dog looks like a breakout story.

Three years ago, it was just one of many squatters in the five-story Jump Cafe building. Today it occupies three full stories and is preparing for a move this spring into larger quarters across the street. In character for new-tech companies humming with entrepreneurial energy, Atomic Dog's offices shun corporate culture in favor of open workspaces, CD players and couches for anyone to flop on. Yet a play place it's not, and employees are cranking on new textbooks and selling their growing list of titles.

Investors like what they see at Atomic Dog. To date, venture capital companies, led by Blue Chip Venture Co. and River Cities Capital Funds - both of Cincinnati - have invested $6 million in Atomic Dog, and the company hired a technology veteran, Charles Wilson, last July to serve as chief executive and chairman.

Wilson said Atomic Dog just received the first $3.5 million installment of a fresh $5 million round of venture capital.

That ability to keep investors interested says a lot. Venture capital flow is at its lowest level since 1998.

"I couldn't be happier with the fact that we're going to emerge out of an extremely difficult capital market and maintain nonstop growth without sacrificing our general business objectives," von Rosenberg said.


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