Publishers to use digital textbooks to kill resale market

Publishers to use digital textbooks to kill resale market

Summary: The benefits of ebooks (and etextbooks by extension) are clear. But publishers will flock to digital textbooks for one simple reason: they'll kill the resale market.

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TOPICS: Apple
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More details are emerging about Apple's education announcement on Thursday at the Guggenheim in New York City.

The Wall Street Journal reported that Apple "is expected to unveil textbooks optimized for the iPad and that feature ways to interact with the content, as well as partnerships with publishers."

WSJ specifically mentions that McGraw-Hill, Pearson and Houghton Mifflin Harcourt are among the education-publishing companies most likely affected by an Apple textbook announcement but stopped short of linking the titans of textbook publishing to Thursday's announcement. WSJ claims via "a person familiar with the matter" that McGraw-Hill has been working with Apple on its announcement since June.

The announcement is a no-brainer. It's the modernization of textbook publishing and distribution -- j ust like Apple did for music, TV shows, music, books and magazines.

Rinse. Lather. Repeat.

It's quite simple really: publishers will use the iPad as the delivery vehicle and the Apple Store as the cash register.

Publishers I've talked to unofficially are anxious to embrace the new technology. The benefits to digital tomes are obvious, including the ability to add interactive features (think instructional video and tests/quizzes), real-time updates, and all the benefits of Internet access.

Textbook publishers are oligopolies with only five firms representing about 80 percent of all college textbooks published: Thomson, McGraw-Hill, Wiley, Houghton Mifflin Harcourt and Pearson. And they're looking to digital textbooks to increase profit margins and boost the bottom line.

The economies of scale of digital publishing are evident. Publishers are able to distribute textbooks at a fraction of the cost of the dead tree edition because they don't require expensive resources (paper and ink) and because they cost orders of magnitude less to distribute (the average physics textbook weighs 4.8 pounds).

The appeal of digital textbooks to the consumer is also obvious: they'll cost less than their paper counterparts and you can carry an almost unlimited number of digital texts in a single 1.33 lb (600 g) iPad.

There's one part of the digital business model that especially appeals to publishers: lack of resale.

Each semester after a student finishes a class, they can sell their textbook back to the bookstore (often for a fraction of what they paid). The bookstore then slaps a "used" sticker on it and sells it again to another student. That student sells it back, then the bookstore sells it again. In fact, the same textbook can be resold numerous times -- cutting the publisher out of the profit entirely.

The cost of developing a new textbook can top $1 million and fifty percent (or more) of its sales occur in the first year after publication. After that, sales drop precipitously as most students move to (cheaper) used textbooks, again eliminating the publisher.

The appeal of etextbooks to publishers is that they can't be resold. DRM simply prevents it. This means that each semester, each new class of students will be forced, in effect, to purchase new textbooks -- which is music to the ears of publishers.

Textbooks publishers are eager to go digital and won't bat an eyelash at Apple's 30 percent commission.

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Topic: Apple

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26 comments
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  • RE: Publishers to use digital textbooks to kill resale market

    And it's about time Apple brings iBooks to the Mac...
    Isn't that what iCloud is all about? All my books bookmarked everywhere including my not iOS devices...
    FatSushi
    • ANY way to make education even more UNAFFORDABLE!

      @FatSushi
      Ain't free enterprise great? Kill the goose that lays the golden egg!
      kd5auq
  • RE: Publishers to use digital textbooks to kill resale market

    Maybe, possibly, perchance, in my wildest dreams, publishers will drop the cost of textbooks because of that same lack of resale, since they'll be able to amortize the development cost over several years of sales.

    Stop laughing at me.
    R.L. Parson
    • RE: Publishers to use digital textbooks to kill resale market

      @R.L. Parson
      Not to mention the savings on printing and distribution.
      Englishmole
    • RE: Publishers to use digital textbooks to kill resale market

      @R.L. Parson
      The high cost of textbooks is not entirely due to costs of publication and distribution. The price also reflects a lack of competition (i.e., any desired textbook is offered only by one publisher) and who makes the purchase decision. In the cast of textbooks, the instructor decides on which textbook will be used, and the student is forced to pay the asking price.
      weiserw
    • RE: Publishers to use digital textbooks to kill resale market

      Just look at amazon and how they handle eBooks, Its still cheaper for me to buy books at target and walmart than purchase them for my kindle.

      more profitable for publishers and more expensive for consumers
      Kn H
  • RE: Publishers to use digital textbooks to kill resale market

    I refuse to purchase DRM'd material. Hopefully they will maintain a paper option.
    rgcustomer@...
    • Are you going to drop classes to keep from having to buy DRMed texts?

      @rgcustomer@...
      And if they became the standard at your school would you transfer or drop out?

      Make sure you count the cost before making commitments. The biggest reason why textbook prices are out of control is because the one who chooses the text isn't the one who pays for the books.
      John L. Ries
  • Well, folks, how is DRM working out in the music and movie industry?

    Everything in the article is correct in it's basic assertions, yet something is being left out:
    1. Why are most MS Windows licenses sold in China for about 1/3rd of their cost here? (and less than 15% of Windows seats are actually licensed)
    2. Why can I listen all day to music I like on Pandora (free and legal) with just a few min. here & there where I turn off the sound?
    3. Why do first run DVDs of only a few years ago cost $5 in Walmart, when they originally sold for $30?

    Piracy.

    As we all know, SOPA is the latest desperate attempt by the RIAA and others to choke off the pirates. Do we imagine that those same inventive folks won't figure out a way to hack textbooks onto rooted Android tablets? Yes, the publishers are cut out of the resale of physical textbooks, but as the iPad generation gets more sophisticated, will they fail to notice that one textbook at retail might cost the equivalent of <u>ten</u> albums in the iTunes store? Will they want to do something about that??

    Information wants to be free. The story isn't over yet...
    ClearCreek
    • RE: Publishers to use digital textbooks to kill resale market

      @ClearCreek Information should be available to all, but that doesn't mean it should be free. Content creators deserve some reward for their effort. I think the best thing that can happen in the development of e-textbooks is the eventual withering away of the major publishers, as their stranglehold on the textbook market gives way to academics doing more self-publishing. So rather than depending on a few boring lowest-common-denominator books as we do now, having a marketplace where dozens of self-published textbooks compete for mindshare. This, rather than the multimedia features that the corporate publishers foist on the public, would do much more to push the quality of textbooks higher than the mush that now predominates in the textbook market.
      ssaha
  • It's a good news, bad news thing.

    As the author of numerous books, I have a hard time saying that the publishers don't deserve to generate revenue each time a copy of their work is sold. They are the ones who invested in the research, writing, photography and illustrations, editing, layout, printing, binding, and distribution, plus all the accounting that goes with paying authors' royalties in perpetuity. That, to me, more than justifies why printed textbooks are so expensive when new. But it also explains why I'd expect digital textbooks to be SIGNIFICANTLY less expensive, and I'll be extremely disappointed if they're not -- particularly since the publishers will be able to amortize the costs over several years, rather than just one or two. Take out printing and distribution, and a $100 textbook could be $50 ... then divide that over a five-year cycle and it could conceivably be just $10. That may not be "free" enough for all the people who believe that "information wants to be free", but it's pretty reasonable -- and, again, someone deserves to be compensated for all the work that went into compiling and preparing that info.

    Unfortunately, there are two bits of bad news here: One is called greed. The publishers aren't likely to switch from asking $100 to asking just $10. Let's be real. They might eliminate the printing and distribution costs, but they're still likely to try to recoup their costs in year one with a $50 fee, for example. Sadly, that will still look like a bargain compared to $100, so people will pay it and the publishers will be rolling in the dough ... at least for a while. (Imagine that: a publishing model that might actually work in the digital world!) In fact, at a reasonable price, non-students might actually buy textbooks to satisfy their own curiosities. And a low price also discourages piracy: at some point, it's just not worth the hassle; it becomes easier to just buy it for a few dollars instead of jumping through hoops to obtain an illegal copy.

    The second bit of sad news is that the days are numbered for all the small, independent book stores in college towns across the country. Not only will they lose the used book sales under this new model, but they'll be cut out of the new sales, too, because the books will be easily downloadable right from the students' dorm rooms.

    But I'm all in favor of digital textbooks. Even though I'm also not convinced that they'll be an ideal replacement. For example, I'm having trouble figuring out how are students going to deal with the inconvenience of switching back and forth from iBooks to their word processing app when writing papers. I can see that being a huge hassle: look at the text; refresh your memory about what you need to know; switch to Pages; write a couple sentences; switch back to the textbook for more refreshing; switch back to Pages; write some more; switch back ... repeat and repeat and repeat.

    But the weight savings and avoidance of spinal injuries should be worth it.
    jscott69
    • RE: Publishers to use digital textbooks to kill resale market

      @jscott69 - If I were in college today, I would probably want both the hardcopy and digital versions. I fondly remember having four books open at a time while I was typing furiously on my laptop trying to get a paper done, I can't even imagine how I would do that from just one iPad.
      terry flores
      • RE: Publishers to use digital textbooks to kill resale market

        @terry flores
        I guess you would bookmark the pages you want in all four books and just toggle between them at will. Doesn't sound so hard..
        Tigertank
    • RE: Publishers to use digital textbooks to kill resale market

      @jscott69
      Once we've figured out how to transfer clippings from iPad to iMac/MacBook transparently the switching back & forth will cease to be a problem. I can see the difficulty of trying to read several texts concurrently will continue although the Mac's multi-screen feature could be transferred to the iPads, after all, you can't actually read several texts truly concurrently, only in quick succession.
      I'd also be interested to see if Professors could enforce "the latest version" of a text when it's only a couple of pix and a paragraph difference, especially when an important feature of eTexts is their ability to be updated at any time. Find a serious typo? 48 hours or so later, every copy in existence is corrected. Scientific breakthrough renders a chapter out-dated, the revised chapter is available on iTBS within a week.
      The worry I can see is the ease with which teenagers will find ways to obtain copies without having any outlay beyond a spare pen drive. Will the schools have to become agents for the publishing equivalent of MPAA & RIA? Or will the publishers follow the iT Apps Store and make items so cheap they're not worth pirating? My iPad is full of stuff that cost less than a cup of coffee.
      Kiwiiano
  • The answer could end up being fairly simple.

    Look for a brisk business in selling used iPads, along with the "used" textbooks. If I'm a psych major, I can sell my fully-loaded iPad to an underclassman who has the same major.

    But look for the publishers to timelock the DRM of the textbooks to 1 year or less, in which case you are just "renting" the book. If the publishers get really greedy, look for a HUGE increase in piracy, and no student will feel the least bit guilty about it. The war will go on.
    terry flores
  • RE: Publishers to use digital textbooks to kill resale market

    [b]Each semester after a student finishes a class, they can sell their textbook back to the bookstore (often for a fraction of what they paid). The bookstore then slaps a ???used??? sticker on it and sells it again to another student. That student sells it back, then the bookstore sells it again. In fact, the same textbook can be resold numerous times ??? cutting the publisher out of the profit entirely.[/b]

    That's a rare occasion when one can purchase a used textbook - My daughter is in her second semester of school and she was unable to resell the physical books she bought brand new because they changed the textbook for the class. The kicker was that they were [i]the same exact books[/i] with the exception of 2 photos and a bit of cover art - total. One was a German textbook the other was an English textbook for German 1 and English 101 respectively. Did either language have any major changes lately to necessitate a new book?

    Locking out the publisher? Please. They run the biggest racket... they've ripped off more people over the years than Bernie Madoff.
    athynz
    • RE: Publishers to use digital textbooks to kill resale market

      @Pete "athynz" Athens

      Exactly, When I was in school we had new editions nearly every single year. And honestly, I don't know if the professors were in on it, but they wouldn't allow an older version even if it was 99.9% the same as the new version.
      Tigertank
      • RE: Publishers to use digital textbooks to kill resale market

        @Tigertank professors need to publish, what better way to get published than to require your textbook.
        jhuddle
    • RE: Publishers to use digital textbooks to kill resale market

      @Pete "athynz" Athens
      However, depending on the subject, some if not most textbooks get old and the professor or who ever the authors are will need to update the information in their textbook so they either create a addendum or if there enough changes, republish the entire textbook so that used textbook will be irrelevant. Using etextbook will allow changes to these textbooks without wasting a paper by issuing either a addendum or republishing the entire textbook. I still have some of my old college textbooks as an old reference and I now see many errors and outdated information in them since many discoveries since the textbook was published are now outdated (ie Jupiter had 10 moons, yes I'm dating myself). Some textbooks don't change that often, like English maybe handed now for awhile.
      phatkat
  • Who knows

    Maybe writers will decide to self-publish.

    Other than that, I look forward to an acceleration in the rate of the release of new editions. Edition de jour if you like.

    There's also the issue to formatting. What works for one size of reader probably doesn't have the same effect as another size. After all, so much time and effort has been spent on making web pages readable (which apparently zdnet isn't all that concerned with) and they are still horrible for the most part once you're out of the "sweet spot" for a particular reader.

    As to cheaper, here's hoping, but then again I do feel that is a vain and false hope.
    ego.sum.stig