What Leads to the High Prices of Textbooks?

Lots of hard work goes into the writing of any textbook.  No question about that.  But few textbook companies front that money to the author(s).  Further, while textbook companies regularly cite the high costs of developing and producing texts, those seem overstated to me.  For example, after our for-profit differential equations with linear algebra text was finished, one of my co-authors (who has substantial experience in for-profit self-publishing) told me that he could get our book printed in small volume runs for as little as $5 per text.  The text sells for a not-outrageous $89.95 (at least in comparison to other differential equations texts), but still with a huge markup.  With royalties shared 3 ways (and some other pricing complexities), I make well under $3 per text that sells.

In my particular experience, I don’t understand where the publisher generated major up front costs, as my editor seemed to invest a limited amount of time, energy, and resources in the project.  So, as I watch textbook prices rise, I often wonder about the real source, which I have typically suspected is something like “it’s what the consumer will bear.”  A recent case heard by the supreme court has brought to light an interesting perspective on where these high prices may really come from, and seems to confirm my suspicions.

Perhaps first made famous on the Colbert Report, Cornell student Supap Kirtsaeng came to the U.S. from Thailand, and he found our textbook costs ridiculous.  So ridiculous that he started having his family buy texts back home, ship them to him in the US, and he sold them for far less than college bookstores, making over $1 million in a short time!  Wiley sued Kirtsaeng, and the case went all the way to the Supreme Court.  The high court ruled this week, exhonerating Kirtsaeng.

Now, this issue in textbook copyright law has long been a problem.  It’s what leads to a strange used textbook market, as well as the neverending publisher’s game that leads to popular books being printed in their 13th edition.  This has always struck me as unfair to authors:  if authors could get a small royalty on used text sales (and publishers, too), that would seem to be the fairest use of this type of intellectual property.

That said, there’s an interesting take on how publishing houses are acting in their pricing model in a worldwide market, which is again what I suspected: it’s what consumers will bear.  As Jerry Brito notes, “In order to maximize profits, Wiley charges different prices to different consumers according to their willingness to pay.”  (Emphasis mine.)  So, basically they can produce the text so cheaply that they can sell it in Thailand for a few dollars, while in the U.S. they sell it for $150.

Here’s hoping that many of the factors discussed on this blog are contributing to college students the world over collectively being far less willing to pay $150 for a textbook.

Hat tip: The Dish.

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One comment

  1. […] starting this blog, I’ve posted frequently about the rising costs of college texts, including here, here, and […]

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