Can Chegg Pull off a Netflix?


Chegg, the US-based textbook rental company, did an IPO last November with not so flattering consequences. Recently the company stated a goal of further strengthening its digital offerings like online tutoring, homework help, and course planning. As a result, the investors started to believe in Chegg. Why?

Chegg is sometimes compared with Netflix. Actually, Netflix insipired the founders to start the rental business in the first place. It should be emphasized, however, that Chegg compares with the DVD rental era of Netflix, not the streaming TV success it has since become. Maybe the market sees more future in digital services than physical book rental and that explains the increased interest in $CHGG.

What would it mean to “pull off a Netflix” in the context of education? I’d say it is not as straightforward as in movie business or television. A film is a film, nevermind if you stream it or watch it on DVD or VHS even. Ok, differences in quality and some folks value the boxes the casettes or records come in, but you get my message.

With study materials it is quite different. When content is used in digital form as opposed to print, a plethora of possibilities emerges. The content can be easily updated, jointly edited, and curated. Answers to questions can be automatically or semi-automatically corrected, lectures can be streamed across the globe, portfolios stored and shared, etc.

In recent years Chegg has acquired several companies such as InstaEDU (online tutoring platform), CourseRank (course scheduling), and Cramster (community-based homework help). Having done so, it seems to have a good start in building its digital offering.

Even though printed textbooks are going to be with us for many years to come (I am sure a lot longer than DVDs!), it is wise to start building a digital future. We’ll see if Chegg started with the right pieces.

Flickr image CC credits: ~Brenda-Starr~


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