ENTREPRENEUR Barry O'Callaghan looks set to see one of his Education Media & Publishing Group's most important markets abruptly terminated by the governor of California, Arnold Schwarzenegger.

Last week, the former action-movie star announced plans to abandon traditional school textbooks in favour of online learning materials, a measure which could have a dramatic impact on EMPG's Houghton Mifflin Harcourt (HMH) publishing arm.

According to official state figures, HMH accounts for up to 95% of all new textbook sales in some age brackets, a position which led the state to file an antitrust lawsuit against the publisher last month. The case was subsequently settled out of court.

"Textbooks are outdated, as far as I'm concerned," explained Schwarzenegger. "There's no reason why our schools should have our students lug around these antiquated and heavy and expensive textbooks. California is the home of Silicon Valley, the world leader in technology and innovation, so we can do better than that."

If successful, Schwarzenegger's initiative is likely to be copied by other states, reducing textbook sales elsewhere. But a spokesman for HMH told the Sunday Tribune it was confident that it could adapt to this change. "Houghton Mifflin Harcourt views Governor Schwarzenegger's proposal to make all school content digital as an important opportunity," he said.

"History has shown time and again that California-led change can have national impact. No company is better positioned to take advantage of this drive for change."

The spokesman said all of the firm's content was already available digitally. But observers expect the switch to digital learning to have an impact on the education publisher's revenues, with Schwarzenegger himself targeting savings of €250m per year as a result of the initiative.