The Secondary Cost of Digital

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Could the rise of e-textbooks mean the end of markets for less expensive rentals and used editions?

No Longer Free to Choose

The principle of freedom of choice is one of the most critical rights in American society. The Constitution guarantees us the right to choose our own religion. Representative democracy provides us the freedom to choose our elected leaders. In the marketplace we have the freedom to choose from a variety of goods and services.

The ability of individuals to make personal choices is of such importance to the functioning of our economic system that the late, great economist, Milton Friedman, entitled his widely read book Free To Choose. In it Freidman powerfully demonstrated that we, in the West, have the high standard of living we do, in great part due to freedom of choice. This same ability to choose -- to pick a campus, major and instructors that best meet our personal needs and aspirations -- has in large part, enabled our higher education system to become the best in the world.

Today in academe the core freedom for faculty to choose is under attack. It has long been argued that faculty members should have the ability to construct their own courses within a general framework so long as that course covered certain topics, and was done so with the proper amount of intellectual rigor. These standards were needed to ensure a certain level of conformity across sections, but they also allowed instructors to tailor courses to both their own teaching styles and abilities and the learning styles and capabilities of their students. When instructors have the freedom to tailor their courses, students will learn better and retain the material much longer.

This long tradition of choice is now besieged on campuses across the country by both "committees" and student activists. “Committees” are mandating the textbooks, instructional materials and learning aids instructors must use in their classes. In some cases faculty members are being forced to adopt older, perhaps even outdated, versions of textbooks in an attempt to “save students money” by making it possible for students to purchase used textbooks instead of new editions. Some students are demanding that they, not the faculty, determine what and how instructional materials will be used in the classroom. Some professors are taking the risky and misguided step of aligning with the two.

Upon examination, their argument falls on its face.

To begin with, if every student were to buy only used textbooks then no new textbooks would be sold. Thus, no new textbooks would be produced, rapidly diminishing the quality of education.

Second, one must consider why the market prices for new textbooks are increasing. Surprisingly, one of the major causes of higher priced new textbooks is the used textbook market. For example, if the fixed cost of producing a textbook is $500,000 and 5,000 units of the book are sold each year for 4 years then each textbook would bear $25 of the fixed cost.

However, if, due to the used textbook market, only the first 5,000 units are sold and, in each of the remaining three years these same 5,000 units are sold as used textbooks, then the publisher still has the $500,000 in fixed costs spread out over only 5,000 books. Thus each new textbook bears $100 of fixed costs, resulting in higher retail prices for all textbooks. This example demonstrates what has been happening in the textbook market over the past several years: As the used textbook market has expanded so have the market prices of new and used textbooks.

Consider how over the last several years the behavior of many faculty members and colleges has contributed to the fixed costs of publishers. On the positive side, faculty members are requiring more publisher produced instructional tools and technologies -- such as homework exercises, tutorials and supplemental learning materials -- to enhance their ability to educate their students. On the negative side, instructors and colleges are demanding more “freebies” from publishers, such as PowerPoint slides, computerized test banks, videos and class management programs. All of these items force up the price of textbooks.

There are no “freebies.” All of these things require expenditures that must be paid by someone. Most often these costs are passed on to the student in the form of higher prices at the bookstore.

Out with the new and in with the old is not a formula for success. New editions of textbooks carry with them new and improved knowledge and information. As time goes on, authors and publishers find better examples to illuminate and explain information and ways to integrate them with the latest technologies.

If the textbook “committees” and activists are really concerned about prices they will address the causes of the problem instead of limiting academic freedom. Used textbooks are not a cure-all and should not be treated as such. Faculty can be more timely and discerning with their adoptions, choosing only what they need and will use in their classrooms, and they should look more closely at the lower cost options being offered by publishers, like paperback and streamlined books and custom editions. Steps should also be taken to ban faculty members from selling sample or examination copies of textbooks they are given by publishers. The sale of samples, by faculty members or bookstores, is ethically wrong and contributes to the escalation of textbook prices.

The skill and commitment of faculty are the chief contributors to students’ educational success, I am happy to report. A parallel axiom is that textbooks and course materials are the second most important tools in the educational arsenal. If both maxims are true, then it only seems logical that faculty defend their right to choose the tools they will employ and that the debate shift back to quality of education and student success and away from requiring dated materials that drive up costs.

Michael W. Brandl
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Michael W. Brandl is a senior lecturer at the McCombs School of Business at the University of Texas at Austin. He has written an ancillary work to a textbook, Glenn Hubbard's Money, the Financial System and the Economy, published by Addison-Wesley and is assisting Hubbard in the revision of that text.

Teaching Without Textbooks

Here’s a statement with which everyone can agree: College instructors cannot assume that students come to their classes in possession of basic knowledge. Now here’s one sure to generate some controversy: In many cases textbooks deter the pursuit of knowledge more than they help it. The sciences may be different, but at least in the case of the humanities, most of us would be better off not assigning a textbook.

Alas, there are still some dinosaurs lumbering about who only assign a text and subject their students to drill-and-kill (the spirit) exercises straight out the McGuffey’s Reader era. There’s really not much to say about such instructors except to wish them a speedy retirement. If one assumes the ability to read as the rock-bottom criterion for college entry, there’s really no point to rehashing text material with students other than to clarify what confuses them, a matter that should be approached on a case-by-case basis. Any institution still devoted to text-and-test could usefully place said courses online.

Most of us assign textbooks for what we always assumed were good pedagogical reasons: We wanted students to be able to fill in gaps we don’t get to, engage in fact-checking, hear other perspectives, have easy access to data, find a framework for some of our more esoteric departures, and provide students with a specialized reference guide rather than having them reach for a general topics encyclopedia. Great ideas -- except that it doesn’t work that way anymore!

Today’s texts are too expensive, too long, and too dense to be of practical use. I freely admit that it was the first of these sins that first led me to eschew a text in my introductory U.S. history classes. Houghton Mifflin’s People and a Nation retails for $97; Longman’s America, Past and Present goes for $95.20 and The Pursuit of Liberty for $99; McGraw Hill’s American History checks out at a whopping $125.75; with Norton’s Give Me Liberty! and Wadworth’s American Past relative bargains at $77.75 and $79.95 respectively. All of the aforementioned prices are Barnes and Noble online quotes; chances are good that a college bookstore near you will inflate each of these. There are only a handful of U.S. texts under $40 and only one, Howard Zinn’s ideologically loaded A People’s History of the United States that’s less than $20.

I decided to stop using a text when the $35 paperback I was using shot up to $75 and I simply couldn’t justify the price, given how little I teach from a text. (Very little generates more student complaints than a professor assigning a book that’s not used.)

Now comes the weird part -- if anything, student achievement was better after I stopped assigning a text. Part of the reason for this is that textbooks are too long. Many colleges  have a proverbial “‘gentlemen’s agreement”’ that more than 100 pages per week of reading per course is excessive. Even those of us who teach in highly competitive institutions know that there’s an upper limit. Even if you can get away with 200 per week, in an average semester your students will read about 2,500 pages. Do you really want one-third or more of that devoted to a textbook? My initial trade was easy; dumping the text meant I could assign an extra three monographs and probe topics in depth that would otherwise have been glossed. Students consistently tell me they were happy to have read a biography on Betty Friedan or a study of the civil rights movement rather than a textbook. I’m sure that they’ll retain much more from such studies.

Here’s the dirty secret that you’ll never see printed in a publisher’s glossy promo material: Every textbook on the market is a crashing bore to read. All the publishers will assure you that they’ve added special features designed to attract today’s young people and that the prose is lively and engaging. Yeah, right. The colorful maps, pop-out documents, intra-textual questions to contemplate, vibrant graphics, etc. serve only to drive up production costs and students won’t use them. Note to profs: Got an image or a chart you really want students to use? Put it on a PowerPoint and project it in class.

Texts are not boring because of the people who write them. I know many of the folks whose names are on texts and know that they’re dynamic teachers and writers. The problem is density. Put simply, most texts try to do way too much. I’m a proponent of multiculturalism and the last thing in the world we need is a return to “dead white men” history, but the more any text tries to do, the less coherent it will be. What would make more sense is for publishers to knock out some specialized texts. I’m a social and cultural historian and there’s little that I teach doesn’t reference race, class, and gender; hence, I don’t need a text that parrots me in print. What I could use is a really short political/economic history; just as those whose specialty is political history would probably appreciate a nice cultural survey, or perhaps one that discusses multiculturalism.

But what about all those good reasons we assigned texts? Sorry, folks, but that’s old thinking and old learning style. Students tell me that if they need a fact, it’s a mouse click away. They also know about data bases the likes of which no textbook can touch, can locate images to illustrate their papers through a simple Google search, and have access to every one of their library’s specialized reference guides from their laptop. Heck, quite a few of them get so excited by thoughts stimulated by lectures and monographs that they kick off their bunny slippers and get actual books off the library shelf.

Are there some students who can benefit from a text? Yes, but why make them shell out $100? History has several online texts they can read for free, as well as outlines that are much more coherent than most texts. One can also, as I do, simply place a text -- any old one will do -- on library reserve. Not surprisingly, students don’t seem to resent texts nearly as much when they can consult them when needed and for free.

My advice is trash the text. Assign monographs. Fill in the needed blanks and don’t worry about covering every topic. Your students will thank you.

Rob Weir
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Rob Weir is the author or editor of five books. He recently gave up a senior faculty position to pursue part-time teaching, involvement with professional organizations, and freelance journalism. He now teaches at Smith College and in the honors college at the University of Massachusetts at Amherst.

How Can Professors Save Students a Few Bucks (or More)?

It’s tough to make a buck in textbook publishing. There was a time when textbooks didn’t need to be revised into new editions that often, when the used book market was not as pervasive and so easily accessible for any student to be a buyer and seller online, and digital copies or other competitive nuisances hadn’t been thought of, or were even possible. Not so today.

Student purchasers of textbooks can be creative before I, as a faculty member, even begin to save them a few bucks. To protect the market for textbooks, and the incentive for authors, publishers and authors have valiantly fought against this creativity, primarily by revising textbooks more frequently, and secondarily by offering bundling and custom packs for instructors.

As I look at various texts on my shelves where I am interested in how the field has changed or developed, I notice texts from the ‘60s and ‘70s that had five- to six-year spans between revisions, and in some fields, without much change to content, even longer. Nowadays it seems like every two years is the norm for a new edition. Publishers make the old edition obsolete and allow for continued textbook revenue and author royalties. The argument is that examples need to be fresher, cases need to be current, pictures need to be updated, and so on. Those are excuses as much as valid arguments. I’m also beginning to see content rearranged and chapter order changing more often as another way to make older editions slip into obsolescence. The customized and bundled packs also make material obsolete in that the material is only good for those instructors requiring that packaged material. Students lose the ability to resell, or even buy used material, except perhaps through their own bookstore which might be somewhat reluctant itself to invest in one-of-a-kind course materials.

There’s no doubt that fresher content examples make the text more timely for each new cohort of students, but when I think of basic content, I don’t see much change. I teach in a college of business, teaching an introductory course as well as a capstone course. In the introductory course I see no major content changes, no major additions to our theoretical understanding (not that we want to introduce too much theory in a business college’s applied setting) and the same content we have borrowed from our sister disciplines in the other social sciences that we have been presenting since they were new in back in the ‘70s and ‘80s. I do note new textbooks that try to take a fresh approach to “packaging” the information and giving it a new twist, sort of like the old wine in new bottles approach, but when you look at the information, it hasn’t changed; it’s just been reorganized under some hot new way of looking at something … that “paradigm shift” that used to be so hot itself back in the ‘70s.

I note in my strategy capstone course that there have not been any major additions to basic theory in well over a decade. What if I were teaching history, math, biology or another field where, perhaps, content is also slow to change? I could tell my students easily to pick any edition of either of the primary textbooks that I use as long as it is copyrighted after 1985, and they would be at no loss for basic content. The examples would be outdated, but not useless, in that we can still learn from the context of history.

So, what do I do? I send my syllabi to my roster of students three to four weeks before the semester starts with a note that suggests they visit their online used book sellers. I tell them the ISBN of the current edition of the text, and I relate the retail price of that book. I typically give them the ISBN of the prior edition and relate the going price on a major Internet book seller’s site, usually about half the price of the new text, as the older edition loses its value quickly when the new edition comes out. I then give them one older edition’s ISBN number and often report that this used text will typically cost them less than the cost to have it shipped to them. For one of my courses using a popular textbook, the current edition has a list price of $124 for the hardback that contains case material I won’t use in class, so I suggest the paperback version for $104, an immediate savings right there that is even magnified in older editions. I tell them that they can purchase that $104 paperback for $71 used. I then let them know they can use an older edition that sells new for $38 and used for $4 with no loss of basic content. In fact, I give them the opportunity to purchase an even older edition, now a whopping six years old that can be had new for $8 and used for 1 cent. It will cost more in shipping to get the book. With no loss in basic content, it is hard to rationalize paying $104.

To be sure, I now look at the order of chapters and major content to see if anyone purchasing an older edition will be at a disadvantage, and then relate these differences to my class. I also refuse to test on the examples that use current stories, names and events, as I believe they are less important than basic content. I refuse to put together custom books that have no resale value for my students because I might be the only instructor using that package. Some of my students find “gray market” imported books for sale that were printed overseas at huge cost savings to publishers to be competitive in those markets but which then find their way back into the U.S. market, a huge savings as lower production costs are passed along.

I encourage my students to save money. I tell them not to waste money on versions that contain cases if I don’t use cases. When I refer to something in a text by figure I’ll often have students with other editions pipe up and inform those with other versions the page number for their text. And I get notes from students consistently thanking me for making it easier to save money on this growing expense item. Students are even smart enough now that they ask me well in advance for ISBNs so they can shop for value. Students share their secrets like any savvy consumer about where the best deals are and often remark in class about the good deal they found. With textbooks averaging in the neighborhood of $700 per semester for all their courses, they can easily cut this expense in half or more by requesting ISBNs from their instructors and doing online price comparisons. At the end of the semester, I’ve had students tell me they also maximize the resale value of that semester’s textbooks by reselling all of their textbooks online to get the best price from other students.

In the past, the publisher had more of an upper hand in this publisher-student marketplace relationship. Secondary markets didn’t really exist, except within the campus book store. Students knew that used books would save them some money over new ones. They might get a few bucks back at the end of the semester, but resale values would be low because there was only one buyer, the campus bookstore. So students didn’t have the option to be creative. The publishers were also supported by gatekeeper instructors who really controlled what textbooks the students bought. That gatekeeper was a sure thing if the professor wrote textbooks him or herself, but even when the instructor was not the author, the publisher supplied enough teaching materials in the way of PowerPoint presentations, test banks or instructor guides, that there was incentive to upgrade to the newest material, some of which could be specialized just for that instructor, and no real incentive not to. The only cost was borne by the student.

It would be tough to be in the textbook publishing business today. The business model has been attacked by the robustness of the used book market and the creativeness of students trying to get value. Publishing is, at best, trying to keep its product life cycle from declining by using the aforementioned techniques, but you can tell by consolidation in the industry, outsourcing and new technologies that it will remain a struggle based on a savvy consumer and a middleman gatekeeper (instructor) often no longer willing to support price maintenance. It’s a little tough for me to stand in front of a class and tell them to purchase something for $100 or more when the same information to do well in the course can be had for a couple of bucks. Fellow professors, let’s stop being gatekeepers – and instead start helping students be smart consumers.

Thomas D. Sigerstad
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Thomas D. Sigerstad is professor of business and MBA Program coordinator at Frostburg State University, in Maryland.

Regulating the Bookstore

Among the hundreds of new regulations in the Higher Education Opportunity Act (HEOA) passed by Congress in August 2008 are new mandates that require colleges -- and, more specifically, college owned or operated bookstores -- to publish the ISBN numbers and retail prices for textbooks, other trade titles, and related course materials that faculty recommend and students buy for classes. The new HEOA mandates reflect, in part, Congressional concern, echoed in many state legislatures in recent years, about the rising cost of textbooks. The ISBN mandate becomes operational in July 2010.

No question that the ISBN mandate will fuel changes already under way that affect how and where college students buy textbooks. Student Monitor’s fall 2008 survey of full-time undergraduates reveals that 16 percent of undergraduates “bought most of their textbooks online,” up from 12 percent in fall 2007. Additionally, Student Monitor reports that “the share of students who purchase most of their textbooks from their on-campus bookstore continues to trend down: fewer than six in ten students (57 percent) purchased most of their textbooks at their on campus book store,” compared to 64 percent in fall 2006 and down from 72 percent in fall 2005.

College bookstores are (for-profit) service organizations: Prior to the emergence of Internet book sellers just over a decade ago, college students were largely a captive market for the (often one) campus store, usually owned and operated by the college or university (or operated under contract on behalf of the college by an agent such as Barnes & Noble or the Follett Higher Education Group). The money saving options were not where to buy (which store) but what to buy (new or used). Until recently, for most students at most institutions, the primary source for new or used books and related course materials was the “college” store.

Enter the Internet. As with other products and services, Internet merchants provide price and service competition for local providers, in this case college bookstores. The emergence of Internet book merchants -- initially Amazon, followed by Web-based resellers specifically targeting college students such as BigWords, CampusBooks, TextBooks, and others -- offered students new options: the Internet brought a new transparency to the prices of both new and used textbooks. Case in point: in fall 2008 my daughter, a UCLA student, purchased a new accounting book from Amazon for $135 that the ASUCLA store was selling for $176.

There’s little argument that the HEOA mandate to publish ISBNs and retail prices brings a new transparency to the textbook market. It facilitates the efforts of students to shop for books based on price. Concurrently, the ISBN mandate poses new challenges for colleges, college stores, and the firms that operate college stores (and the store Web sites) under contract.

Ahead of the regulations due later this year from the Education Department, campus administrators, college store directors, and, yes, even campus lawyers are parsing the HEOA legislation (Section 133) and also reviewing bookstore operations, Web sites, and current contracts to assess compliance issues. For example, as reported by Theresa Rowe, the CIO at Michigan's Oakland University in a recent Educause listserv post, the campus counsel at Oakland recently rejected an ISBN–link-system solution incorporated into the campus portal provided by Barnes and Noble, the contract operator of the campus store for Oakland.

Campus counsel at Oakland ruled that the B&N link-solution is "not legally acceptable [under HEOA] given that [the university’s] contract with Barnes and Noble does not obligate [B&N to provide the ISBN linking service]; hence, if [B&N] fail[s] to comply with the statute Oakland would have no one to point the proverbial finger at.… if we did, [simply] saying that B&N screwed up is not a good defense to a claim that [the university] failed to comply with federal law."

No doubt lawyers at other institutions may have different perspectives on the linking solutions provided by store operators. Still, it is a safe bet that these contracts will be carefully reviewed -- and many will be revised -- following the release of the regulations governing the ISBN mandate later this year.

While the new transparency that accompanies the publication of ISBNs may be good for Internet book sellers, it will also be a catalyst for new services that target college students and also colleges and universities.

For example, Apple’s student-oriented iPhone ad broadcast during the NCAA men's basketball championship game on April 6 highlighted SnapTell, an iPhone app that supports “photo commerce:” take a picture of a book (including college textbooks) and the SnapTell app will link you to multiple Web sites that sell the book. On the institutional side, Verba Software, a Cambridge, Mass., firm launched by some recent Harvard grads, offers an application that links course lists to IBSNs and then searches the Web for the best prices for new and used textbooks and course tomes.

Internet book resellers that target college students and the textbook market proclaim that they save students money. (Hey, Amazon saved me and my daughter $40 last fall!) So we can expect the ISBN mandate to foster more competition between bricks and clicks -- the campus store on (or near the quad) vs. the on-screen Internet reseller. The ISBN mandate will accelerate the demise of a once captive market: college students buying books and course materials at the local college bookstore.

Many will applaud the increased competition because students will save bucks on books. Still others who lament the decline of “community bookstores” to chain stores, big box stores, and Internet booksellers will also lament what may be the demise of campus stores, as they continue to lose the annuity-like revenue stream from textbooks and course materials that has been essential to their operations.

But let’s also acknowledge that the HEOA mandate to publish ISBNs will not resolve the recurring complaints about (and some might add structural problems affecting) the suggested retail price of textbooks and course materials -- and by extension the wholesale price of course materials.

Here other factors are at play that include accelerated updates to stem the used book market, the costs of developing ancillary materials for faculty and maintaining web sites for students and professors, routine and appropriate development and production costs, modest author royalties and, yes even a little profit. Regardless of what I paid for my daughter’s accounting textbook last fall, these factors and others all affected the wholesale price that both Amazon and the UCLA store paid for the book assigned for my daughter’s accounting class. (Note: This article has been updated from an earlier version to correct an error.)

Kenneth C. Green
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Kenneth C. Green is the founding director of the Campus Computing Project. Disclosure: Amazon, Apple, Follett Higher Education Group, and Verba Software are corporate sponsors of the project.

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