Monopoly? Not So Fast!
On Monday, April 21, 2025, VitalSource announced they had acquired competitor RedShelf. This follows their March 2023 acquisition of virtual bookstore provider Akademos. Calling this a major shake-up in course materials doesn’t quite capture the weight of it. For the past five years, VitalSource and RedShelf have been two of the leading players in the digital course materials space. Now they’re one.
At first glance, this looks like a consolidation of power in a market that already lacks depth. My initial reaction – like several others – was that we were watching a monopoly form. It raised obvious concerns: fewer options, less competition and innovation, and limited paths forward for both independent campus stores and lease operators. But after taking a closer look, the story is more complicated. There’s actually more competition and model diversity than there has ever been. So, before rushing to conclusions, let’s take a look back at how we got here.
Retrospective Timeline
October 2022 – Follett acquired Willo Labs. I remember thinking this was a pretty smart play. Willo had solid reach into the independent campus store space and Canadian markets. Operationally, Willo functioned like a digital transaction manager – similar to RedShelf and VitalSource. The twist was that a lease operator now owned a digital delivery platform instead of just partnering with one. At the time, I believed it had the potential to shift how lease operators would manage digital delivery and eBooks.
March 2023 – Nebraska Book Company closed its doors. This left a noticeable gap in the used book market, and I think it still persists today. I am not sure if we have any data confirming less availability in the used book market drove digital adoption, but it would be an interesting review.
March 2023 – VitalSource announced it had acquired Akademos. This was a big one. Akademos was one of the top-six lease operators, in my view. My concern at the time was whether competitors using VitalSource would be at a disadvantage. I was worried that the Akademos side of the business might get access to platform data and use it to gain pricing or RFP advantages. Two years later, that never seemed to happen. I’ve had conversations across the lease operator space and haven’t heard any real complaints. Still, it was a fair concern to raise at the time.
October 2023 – BibliU announced it had acquired Texas Book Company (TBC). This caught my attention. BibliU seemed like a small UK player trying to make inroads in the U.S. but without the logistics to compete. Acquiring TBC gave them physical infrastructure and the ability to run hybrid and brick-and-mortar operations. It moved them from being a RedShelf/VitalSource competitor to a real lease operator. Based on how they’ve held up over the last year and a half, it looks like they’re not just hanging on – they’re building something.
October 2024 – Follett announced they were shuttering Willo Labs for independent campus stores. In a letter to those campuses, they made it clear that continuing to support indie store integrations wasn’t financially viable. The shift made sense: Follett didn’t acquire Willo to keep running third-party integrations – they acquired it to build leverage for their own managed stores. Still, the timing caught many campuses off guard and forced a lot of them to regroup quickly.
March 2025 – Follett dropped another big one: they were leaving RedShelf and shifting their digital and eBook operations to UK-based Kortext. This likely meant that close to 1,000 campuses would transition away from RedShelf in only a few short months. It was a significant loss, and at the time, it felt like it might be a death blow. But I didn’t count RedShelf out. Their work on Cascading Access was forward-thinking – giving students the ability to move between Equitable Access and Inclusive Access or opt out entirely. It was one of the only models out there that gave students some middle ground instead of the usual all-or-nothing. This model will take deep root over the next 2-3 years as more providers bring their cascading models to market – as VitalSource did with their Flexible Access model in Fall 2024.
April 2025 – VitalSource and RedShelf both announced on LinkedIn that VitalSource had acquired RedShelf. I did not see this coming.
Commentary
Given all the jockeying between digital transactions manager and lease operator acquisitions, I expected that if RedShelf was to be acquired, it would be by a bookstore lease operator or possibly a private equity firm looking to stake a claim. I did not expect VitalSource to be the one making the move – but it makes sense.
The first thing to consider is the likely size of the deal. It might not be as big as it seems. After Follett pulled its accounts, RedShelf likely lost more than half its store count – maybe as much as 65-70%. With a drop that steep, their valuation likely followed, making the acquisition more attractive for VitalSource and more of a necessity for RedShelf
Second, while VitalSource is a global player with significant reach, broad scale doesn’t automatically translate to keeping pace with innovation. Staying competitive in this market requires constant tech upgrades and platform improvements. By acquiring RedShelf, VitalSource picks up some useful tools and personnel that could strengthen their offerings and help them respond faster to the evolving demands of students, campuses, and stores.
So yes, the market lost a major player – but it didn’t become empty. There are new (and existing) companies carving out space where VitalSource hasn’t or can’t. The main ones I am watching are Bibliu, Kortext, Perlego, and the publishers themselves. Don’t underestimate what the publishers are doing on their own, especially with the announcements of artificial intelligence integrations made by Cengage, McGraw Hill and Pearson.
Market Competition
I haven’t done a full deep dive into each of these companies – hopefully in a Part 2 (And if you work at one of them, we should chat). But here’s a snapshot of what they are doing that likely pressured VitalSource into this acquisition – and why competition in the market is more active than it looks on the surface.
Bibliu
At a fundamental level, Bibliu came to the US market as a competitor to RedShelf and VitalSource. The acquisition of Texas Book Company expanded their role, but at their core, they still deliver digital materials and now have the infrastructure to support physical and hybrid models too.
There may be questions about the strength of their eReader or faculty adoption tool compared to other competitors, but where they’re clearly seeking to differentiate themselves is with their reporting and analytics. Bibliu is able to report data to faculty at a program, course, and book level that includes things like in-book actions, reading time, and chapter/feature usage. This level of reporting and analytics could be a major differentiator for campuses that care about tracking usage and engagement.
What originally made Bibliu feel like a company ready to disrupt the course materials space is still there. To capture the independent market, they need to leverage their digital and physical capabilities in the same way VitalSource/Akademos has leveraged theirs. If they’re not actively exploring that, I think it is a missed opportunity for growth and revenue.
Perlego
As a UK-based course materials provider, Perlego is positioning itself in the U.S. as a kind of “Spotify for Textbooks” – offering a subscription-based, buffet-style model. One price gets you access to all of the content on their platform. They are doing an impressive job in Europe and they could do the same in the U.S., especially as they continue to advance the functionality of their eReader and text-to-speech capabilities.
Their standout feature is Smart Search, powered by AI. As artificial intelligence continues to mature and integrate into more learning technologies, the company that uses it most effective could have an edge. While Perlego doesn’t currently offer courseware or access to the Big Three (Cengage, McGraw Hill, Pearson) they’re still worth paying attention to – especially for independent campus stores looking for digital-first options and lease operators looking to expand their digital catalogue.
Kortext
I don’t have deep insights into Kortext yet, other than what’s publicly available. My guess is that their deal with Follett includes some form of exclusivity – at least for now. Once the Follett rollout is complete, Kortext could have a real opening in the independent store market, if their tools are advanced and supportive as they seem.
What I’m most interested in is their AI strategy. Perlego’s starting to push into that space – what is Kortext doing behind the scenes that could benefit the broader course materials ecosystem? Additionally, their AI study tools give off vibes of Barnes & Noble’s Bartleby product (since sold off) and Chegg Study. Will they continue to charge students in the Follett partnership for these products or will it be included as part of their agreement? That is something worth watching as Follett and Kortext roll out this fall.
Publishers
Long before the introduction of digital transactions managers, Publishers were doing their own campus integrations and digital content management. That hasn’t stopped. I’ve worked with several institutions that integrate directly with publishers and skip RedShelf or VitalSource entirely. Major publishers still support campus stores and can partner with lease operators directly. They never left; they’ve just been adapting to the environment.
Potential Concerns
While I see plenty of reasons to believe the market is still competitive, this acquisition doesn’t come without potential concerns. Anytime two major players merge – especially in a market with limited U.S.-based alternatives – it creates ripple effects. The RedShelf brand may live on in name or tech, but operationally, this is now a one-platform scenario for many institutions. That shift raises questions about pricing, choice, and the direction of future innovation. And while global players are stepping up/in, the immediate impact of this acquisition will be felt by most U.S. campuses navigating tight budgets, short timelines, and already-limited bandwidth to reevaluate vendor alternatives.
Pricing Pressure
The cost of this acquisition is unknown. However, RedShelf’s shrinking footprint and the timing suggest VitalSource got it at a discount. Still, even a “good deal” requires cash or capital, and those costs need to be recovered somehow. One potential concern is whether institutions and students will see increases in pricing as a result – outside of inflation. Will Inclusive or Equitable Access programs negotiated through VitalSource become more expensive? Even modest increases, spread across hundreds or even thousands of institutions, could add up quickly. This bears watching to see how it plays out, if at all.
US-Based Competition Just Got Thinner
Yes, there’s still competition – but it’s increasingly coming from outside the U.S. The competitors I mentioned previously are all UK-based. The only notable U.S.-based competition in the market just got absorbed. For independent stores that value domestic services, support, and data compliance infrastructure, that could be a concern. With fewer U.S.-based providers, there may be less incentive for VitalSource to prioritize localized service, price negotiations, or platform improvements.
Institutional Leverage Shrinks
Independent stores and lease operators have long used the presence of RedShelf and VitalSource to play one against the other when negotiating platform fees or service terms. That leverage is gone. While other competitors may be viable alternatives, they are not yet embedded in the U.S. market at scale. That might leave many institutions without a credible back up plan.
Technology Consolidation Risks
One of RedShelf’s strengths was its innovation. Now that RedShelf is under the VitalSource umbrella, the concern is whether those innovations will continue, get absorbed and rebranded, or worse, get deprioritized in favor of VitalSource’s roadmap. Consolidation often comes with efficiency, but it can also lead to stagnation if there’s no internal pressure to keep iterating.
Long-Term Data Implications
While there’s no evidence that VitalSource leveraged competitor or partner data post-Akademos, the growing stack of platform services under one company raises long-term concerns. With so many campuses and lease operators running through one-system, what guardrails are in place to ensure data is siloed, secured, and not used to shape pricing strategies or RFP responses?
All these concerns are real, and institutions should pay attention. But they run counter to what I think this acquisition is really about. This wasn’t just about eliminating a competitor – it was about staying ahead of the competition. VitalSource didn’t just acquire RedShelf because the market is collapsing. They did it because the market is evolving, and RedShelf had the tech, tools, and people that could help them move faster. Innovation is still happening, and this acquisition, while a consolidation, is also a bet on what’s next for the market.
Moving Forward
The challenge for VitalSource and its competitors is that the course materials distribution point has changed. A decade or more ago, it was the point-of-sale system. Now, it’s the digital transaction platform. These companies are expected to be enterprise-level distributors, manage and enhance content, address data privacy, deliver robust analytics, and now integrate artificial intelligence.
No single company can do all of that well. Not at scale. What’s more likely is that each provider will bring something different to the table and campuses will pick the one that aligns best with their priorities.
So, while Monday’s announcement may feel like contraction, I don’t think it’s the monopoly I initially worried it was. There’s still competition out there – maybe more than ever. What makes this moment feel uncertain is the effort involved in figuring out what’s next and who is left. But if you are an independent store or lease operator asking, “Where do we go from here?” – I hope this article gives you a place to start.
As always, thanks for checking in and I’ll see you next time.
-MM
