There's a revolution underway in textbook publishing. Last week, McGraw-Hill announced the creation of a new initiative called "Create," which lets college instructors customize their own texts with material drawn from the company's online resources to create e-books or printed texts.

The announcement comes two years after Irvington-based Flat World Knowledge established its own flexible custom-publishing and online-delivery model. Founded by Eric Frank and Jeff Shelstad, former executives at traditional textbook publishers, Flat World is shaking up the industry.

"We were part of the problem for a long time," said Frank, the company's president. "One day we were on a business trip and we looked at each other and asked 'is anybody happy' with the current model? Students were angry at the high cost of textbooks, faculty were unwilling participants in a market they knew wasn't working well and authors were losing revenue. We figured that there has to be a better way."

They decided to take advantage of internet publishing and their knowledge of legal intricacies to try and provide a better experience. Their flexible model lets professors create their own texts—chosen from Flat World's catalog—and also gives students a choice of medium, including web textbooks, PDF files, delivery to e-readers, along with hard-copy black and white or color textbooks.

The prices range from free, in the case of web textbooks, to $24.99 for an e-reader download, to $30 for a black and white textbook to $60 for a color textbook. Online texts can also include audio files and are sold by the chapter, as well. By contrast, McGraw-Hill's Create program charges $167 for a print book and $79.95 for six months of access to an e-book that is locked to a single machine and is DRM-protected, unlike the works produced by Flat World, said Frank.

In the traditional textbook industry, new books make a tidy profit, but sales drop significantly every semester as the trade in used books picks up. In the Flat World model, around 55 percent of students opt to pay for their texts and that number remains steady, said Frank.

Though most current titles cover business and economics, the company plans to extend its portfolio into other disciplines. Authors are happy that they are walking away with more income, students are pleased because they have more choices, including the free option, and instructors like it because they can customize their texts, said Frank.

Some local professors are beginning to take notice. "I chose Flat World primarily because it gave me the opportunity to customize a textbook quickly and easily at a low cost to my students," said Colleen Kirk, an adjunct professor or business at Mercy College. "This class was a basic economic concepts and current issues class, and a full economics textbook would have been too much material, too difficult for students to comprehend, and too costly. Flat World's solution enabled me to choose only the few chapters the course needed, and permitted the students to acquire them in the manner they wished."

The company first took out office space in Nyack, which they outgrew. "We needed to add people and attract top talent, but we didn't want to commute into the city," said Frank. "Irvington has a great quality of life and we're literally a 30- second walk from the train, so we can draw people from the city."

Funded with venture capital for now, Flat World expects to earn a profit in 2012. As indicated by the McGraw-Hill announcement, "We are disruptive to the big guys," said Frank. "We're not under the delusion that the entire market is heading this way, but there's a sea change going on in the industry because as the internet grows, people want more control."