Cengage
Cengage is a prominent American educational technology and content provider headquartered in Boston, Massachusetts, founded in 2007. It specializes in delivering digital and print learning solutions for various markets, including K-12, higher education, vocational training, and library services. Cengage ranks among the five largest college textbook publishers in the United States, offering a wide array of products such as textbooks, eBooks, online reference databases, and training courses. Notably, it operates under six major divisions, including higher education and English language teaching, with its National Geographic Learning brand offering unique educational materials.
The company made headlines with its innovative Cengage Unlimited subscription service, likened to "Netflix for textbooks," which allows students access to all digital products for a flat fee. Cengage has faced challenges, including a Chapter 11 bankruptcy filing in 2013, but has since restructured, reducing its debt significantly. Attempts to merge with McGraw-Hill Education were halted due to regulatory concerns, reflecting broader challenges within the educational publishing industry. As of 2023, Cengage continues to evolve, receiving recognition for its innovative approaches and workplace culture.
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Subject Terms
Cengage
Company Information
- Date founded: 2007
- Industry: Educational development
- Corporate headquarters: Boston, Massachusetts
- Type: Public
Overview
Cengage is an American educational technology and development company providing content and digital and print learning solutions to the K-12, higher education, library, and vocational markets. Cengage is one of the largest college textbook publishers in the United States. The company’s other offerings include online reference databases and test preparation, distance learning, and corporate training courses.
Cengage has three major divisions: Cengage Academic, Cengage Work, and Cengage Select. Its higher education division, Cengage Academic, provides materials for college faculty and students, including textbooks, e-books, and courseware. Its workforce skills segment, Cengage Work, offers online training courses outside of traditional higher education. Cengage Select provides learning programs to help students in various markets, including English language teaching materials under its National Geographic Learning (NGL) brand. NGL’s products include courses, TED talks, webinars, and test preparation materials. Cengage Select also includes the company’s library reference division, which provides educational materials for academic, public, and school libraries, including millions of scholarly articles, primary and secondary sources, and e-books.
Cengage serves students, educators, librarians, and governments in 120 countries and territories throughout the world. Headquartered in Boston, Massachusetts, Cengage receives about 80 percent of its revenue from customers in the United States. The company has about 4,500 employees in 40 countries.
History
Cengage’s predecessor was the Southwestern Publishing Company, a higher education business. In 1986, Southwestern was purchased by International Thomson, one of the world’s largest information companies. Thomson aggressively expanded in the 1990s, acquiring companies such as Macmillan Professional and Business Reference Publishing, the Institute for Science Information (ISI), Information Access Company, Peterson’s, West Publishing, Arco, and in 2000 and 2001, Harcourt, Macmillan Library Reference, and Greenhaven and Lucent Books.
In 2006, International Thomson sold off its learning division to a private consortium for $7.75 billion. A year later, it became Cengage Learning. The following year, its library reference resource, Gale Research, was renamed Gale Group. This division enabled the company to sell online databases to libraries along with multivolume reference works, many of which are focused on history, the social sciences, and religion. In 2011, Cengage Learning acquired the National Geographic Society’s school division and combined it with a global English Language Teaching business to create National Geographic Learning (NGL).
By this time, Cengage Learning had accumulated $5.8 billion in debt from its initial buyout and many acquisitions. The company also saw a decline in revenue in college textbook sales because students were finding digital options to be more cost-effective, a challenge faced by businesses throughout the publishing industry. On July 2, 2013, Cengage Learning filed for bankruptcy under Chapter 11, which protected the company from creditors so it could reorganize. Other college textbook publishers, such as Pearson and McGraw-Hill Education, also had to restructure around this time.
During Cengage Learning’s reorganization and under the direction of CEO Michael Hansen, the company managed to shave off $4 billion in debt and secure $1.75 billion in exit funding. The company left bankruptcy after nine months and, in 2016, changed its name from Cengage Learning to simply Cengage.
In 2018, Cengage announced a new service called Cengage Unlimited, which has been dubbed “Netflix for textbooks.” The subscription service allows students to pay for access to all the company’s digital higher education products for a semester or a year—including its many textbooks. A year after its launch, the company sold more than one million Cengage Unlimited subscriptions. Cengage was named a 2021 “Trendsetter of the Year” by EdTech Digest for helping students substantially save money through its subscription service. Since the launch of Cengage Unlimited in 2018 through 2021, nearly three million students saved more than $270 million on textbooks and course materials.
Impact
In May 2019, Cengage announced plans to merge with McGraw-Hill Education. The merger of the two companies would make them a giant in the college textbook market and would create a duopoly, a market controlled by two giant publishers: Cengage/McGraw and Pearson. Cengage held an estimated 24 percent of the market, while McGraw-Hill had about 21 percent. The market leader at the time, Pearson, held an estimated 40 percent of the college textbook market.
Concerns about the ramifications of the merger emerged soon after it was announced. The companies faced regulatory hurdles as well as apprehensions from stakeholders, libraries, higher education institutions, and bookstores. Students already struggling to pay for college textbooks worried that the merger would allow publishers to set prices even higher. Demands placed on the companies by the Department of Justice (DOJ) brought the merger to a halt. While the companies anticipated that the DOJ would request that they sell off some competing products, they considered the amount requested—rumored to be $175 million—too high. Cengage and McGraw-Hill terminated the merger.
In response to the closing of college campuses for in-person learning in 2020 because of the COVID-19 pandemic, Cengage offered free access to its Cengage Unlimited subscription services to students and faculty for the term. The company also offered support to faculty and administrators needing to quickly transition to e-learning. In April 2023, Apollo Funds announced they had made a $500 million investment in the Cengage Group.
Cengage has received many awards for its innovation and ability to adapt to changing times. Michael Hansen, who joined the company as CEO in December 2012, has been credited with transforming Cengage from a print publisher to a digital education company. For this, he was named to Fast Company’s annual list of Most Creative People in Business. In addition, Cengage was named a finalist for Fast Company's 2020 World Changing Ideas Award. In 2023 and 2024, Cengage was named one of the best places to work by its employees in the Glassdoor Employees’ Choice Awards.
Bibliography
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“Cengage Group Announces $500 Million Investment From Apollo Funds.” Cengage Group, 17 Apr. 2023, www.cengagegroup.com/news/press-releases/2023/cengage-group-announces-investment-from-apollo-funds. Accessed 28 Apr. 2023.
“Cengage Group Named a Best Place to Work in 2023 by the Glassdoor Employees' Choice Awards.” Yahoo! Finance, 11 Jan. 2023, finance.yahoo.com/news/cengage-group-named-best-place-135500260.html. Accessed 28 Apr. 2023.
Del Valle, Gaby. “The high cost of college textbooks explained.” Vox Media, 6 March 2019, www.vox.com/the-goods/2019/3/6/18252322/college-textbooks-cost-expensive-pearson-cengage-mcgraw-hill. Accessed 17 Aug. 2021.
“Employee Experience.” Cengage Group, www.cengagegroup.com/about/employee-experience. Accessed 7 Jan. 2025.
Milliot, Jim. “Cengage Learning Charges Houghton Mifflin with Breach of Contract.” Publishers Weekly,12 Nov. 2009, www.publishersweekly.com/pw/by-topic/industry-news/publisher-news/article/27822-cengage-learning-charges-houghton-mifflin-harcourt-with-breach-of-contract.html. Accessed 17 Aug. 2021.
Milliot, Jim. “McGraw-Hill, Cengage, Call Off Merger.” Publishers Weekly, 4 May 2020, www.publishersweekly.com/pw/by-topic/industry-news/industry-deals/article/83229-mcgraw-hill-cengage-call-off-merger.html. Accessed 17 Aug. 2021.
Young, Jeffrey, R. “How Merger of Two Textbook Giants Could Impact Course Materials.” EdSurge, 3 May 2019, www.edsurge.com/news/2019-05-03-how-merger-of-two-textbook-giants-could-impact-course-materials. Accessed 7 Aug. 2021.
Wan, Tan. “In Move to ‘Unlimited’ Pricing Model, Cengage Hopes for a Comeback.” EdSurge, 4 Apr. 2018, www.edsurge.com/news/2018-04-24-in-move-to-unlimited-pricing-model-cengage-hopes-for-a-comeback. Accessed 17 Aug. 2021.
“What Is Gale Cengage Learning?” EBSCO Connect, 20 Nov. 2020, connect.ebsco.com/s/article/What-is-Gale-Cengage-Learning?language=en‗US. Accessed 8 Jan. 2025.
"What We Do." Cengage Group, www.cengagegroup.com/about/what-we-do. Accessed 7 Jan. 2025.