February 4, 2011

Don't demonize the textbook companies, children

This is a topic near and dear to my heart, if only for the simple reasons that a: less than 12 months ago, I was a student myself, and b: I now interact on a daily basis with textbook companies (as part of my job). This will be a glossy, windswept post just because I don't have the time to treat it in depth, but I consider myself sufficiently knowledgeable to be able to cover the gist of it, at least.

College textbooks are expensive. Take it from someone who knows -- in my short-lived career as a mathematics major, I was purchasing books that were easily $150 new. (If I was lucky, I could get them for $90 used. Maybe.) And that's just one textbook, for one class. When you're a full time student, taking four courses a semester, you can easily spend over $500 (per semester) on textbooks alone. More if you're in one of the harder sciences -- physics, chemistry, etc.

It sucks. And I totally understand the need and desire for cheaper textbooks, the irate reactions upon finding out that yeah, used textbooks are cheaper...but in the way $70 is cheaper than $95. It's cheaper, but they both hurt. And I understand the impulse to blame the college textbook industry. Those soul-sucking mother-^&*%%*%! Why can't they suck it up and bypass a bonus this quarter?!?!?!??

Children, I'm here to educate you differently. Yes, college textbooks are ridiculously expensive. But to blame the textbook companies solely is just...misguided. Ignorant of the facts. And the facts are these:

Once upon a time, textbooks weren't "used" so much. Most people bought new. Which meant that a college textbook company could anticipate getting at least four or five years (eight or ten semesters) out of one edition of one textbook. Let's do a little math: Pretend with me that you could get a certain science textbook for $30. Say one class is 20 students, that's $600 per class, per semester. Times ten semesters, $6000 for one textbook. (Remember these are pretend numbers, for illustrative purposes only.)

And then, someone had the brilliant idea of introducing the concept of "used." The books aren't changing! they cried. You can buy the very same textbook that was used last semester (that will be used next semester, come to think of it), for half the price! College students aren't suckers in this department, for the most part. 50%? Yeah, I'll take that. So the used business was born. A student who bought that new $30 textbook could sell it to a used bookstore for $10, who could then turn around and sell it to another student (for another semester) for $20. And so on, and so forth. So the students are making a little cash, saving a little cash, and they're happy. But what about the publishers?

Suddenly, things don't look so pretty. I work in publishing, and let me tell you -- the margin between black and red is pretty darn thin. Once (see above) you could expect the return on one textbook to be $6000. Now what? If only one class buys the textbook (that very first semester), and then sells it to the next class, the total amount that a college textbook publisher will receive plummets from $6000 to $600. 90% loss. Now, some people will hang on to their textbooks, and some people will buy new. Let's assume for the moment that 10% of any given class will be purchasing new textbooks, after the first semester. So, the first semester will return $600 for the publisher. After that? $60. At the end of a ten semester cycle, you're left with $1140. Not even a fifth of what you started with.

So what can a publisher do against this? Obviously it's not sustainable -- starting with an expected return of $6000, and seeing that money drop 90%? Not a workable business model. What can a publisher do? Well...they can turn out new editions faster (which will bring back the "new" prices for at least a semester, as students are forced to get them to obtain new material), or they can raise prices. How do you get back up to $6000 from $960? You raise the price of a single textbook to $158, that's how.

And just like that, more students are driven to used textbooks (because $158? for a textbook? that's crazy!), and more textbook companies have to raise prices and put out new editions faster, and more students are driven to used textbooks, and more textbook companies have to raise prices, etc. etc. etc.

Obviously this is not the complete picture. I'm working with simple numbers, not taking into account royalties, what bookstores actually pay the publishers, etc. Just simple numbers. But I hope you've gotten the gist -- once upon a time, textbook publishers could rely on their textbooks being good for at least five years (sometimes more like ten), and so reaching a profit could be spread more evenly among those five to ten years. Now, they have to count on making almost no money after the first one or two semesters. Which means higher prices. Which means more demand for used textbooks. Which means... you get the picture.

Obviously, college textbooks are too expensive. I'm not arguing that everyone go out and purchase new books, rather than used. I'm just saying that things are more complicated than they seem, and that the next time you want to curse a textbook publisher for slapping a $180 price tag on a textbook, take a deep breath and consider that they're not the only ones to blame here. Sorry about that price tag, though. Really. I remember how that feels. But it's a vicious cycle, man. Just vicious.


  1. +JMJ+

    This is an interesting perspective. I always buy new and never resell anything. (Well, not quite: I bought something used once and it was the only one I resold. LOL!) It's simple economics, isn't it? I wish more people knew about this.

  2. @Enbrethiliel

    I agree -- more people SHOULD know about this. Obviously the textbook companies aren't saints (who is?), but they are not the only ones to blame for the fact that textbook prices are through the roof.