The debate over textbook prices was rekindled last year when the Government Accountability Office released a study indicating that textbook prices have increased an average of 6 percent each year – double the rate of inflation – since 1987.
Student interest groups were quick to thrust the study like a dagger at an increasingly defensive publishing industry, which denies prices have been inflated to maximize profits and claims the 2005 report was tailored against it.
“Addressing an issue like this where a publishing industry has run away with pricing and has the disproportionate market power to do whatever it wants is drawing public attention to it,” said Sabrina Case, national coordinator for the Make Textbooks Affordable campaign for the Student Public Interest Research Groups.
The Make Textbooks Affordable campaign began in 2003, and is a collection of college student advocacy groups critical of the textbook publishing industry.
“Textbook publishers are a lot like pharmaceutical companies in that they produce the product and sell it to people who are not paying for it, but rather choosing it to assign to a consumer who has no choice,” Case said.
J. Bruce Hildebrand, executive director for higher education at the Association of American Publishers, which is a textbook industry lobbyist in Washington, D.C., disagreed and insisted that much of the hullabaloo over textbook prices relies more on emotion and less on facts.
“Much of the stuff that’s out there is factually incorrect, a lot of it is urban legend,” he said.”? It goes to an old adage: ‘When anecdote becomes fact, print the anecdote.'”
Hildebrand said the AAP disagreed with the findings of the Government Accountability Office and was quick to point out that the publishing industry is not a high volume or a high profit industry with massive returns.
“I was told at a meeting the other day that an average return on an iPod is 150 percent to the manufacturer,” he said. “The average return to a publisher before taxes is about 7 percent. We’re not looking at anyone making a lot of money off of these products.”
Nevertheless, much of the criticism the publishing industry receives is aimed at the way they market their books to realize higher prices.
The Make Textbooks Affordable campaign released a report in October 2006 titled “A Look at the Worst Publishing Tactics at Work,” which mentions six ways publishers either furtively increase their prices or eat away at the used textbook market:
– Increased Prices, Same Product: Publishers increase the price of textbooks from one edition to the next at twice the rate of inflation.
– Costly Bundles: Half of all textbooks now come bundled or shrink-wrapped with supplementary materials such as workbooks and CD-ROMS and generally cost 10 percent more than their unbundled counterparts.
– New Covers, Old Content, Zero Used Books: New editions are frequently introduced that are not substantially different from the prior one.
– Modern Bundles-Resell Sabotage: Many textbook supplements are one-time use components – such as one-time passwords to Web sites with problem sets – that prevent the entire book package from being resold at the end of the semester. This in turn hurts the used-textbook market.
– “Low Cost” Options that are Anything But Low Cost: Despite publishers’ claims, many textbook editions that are touted as low-cost are actually higher in net cost than the standard edition.
– Customized to Limit the Used Book Market: Publishers increasingly promote “custom books,” which allow professors to pick and choose the content they will use for a course. Though this decreases the cost of the book, it hurts the used-textbook market since students cannot sell the book back.
To counterweight these tactics, Case recommends that academic senates encourage faculty to use older editions if it is appropriate to do so and to make an effort to discover the price of the book they are thinking about assigning.
“It’s hard to believe a sales rep coming to your door to try and sell you something without telling you the price,” Case said. “We’re finding right now, even when they’re directly asked the price of textbooks, sales representatives will still avoid telling the professors the cost of the books. A lot of times professors don’t receive the information they need to make the best informed decision possible to select the books they need.”
The CSU Academic Senate passed resolution AS2747 in May 2006, which encourages faculty to select materials that are “pedagogically most appropriate for delivering” their curriculum, to select textbooks and materials that minimize cost to students, and to communicate clearly with publisher representatives about textbook pricing concerns and options.
The CSUN faculty senate discussed textbook prices at a committee meeting and two important issues came up May 17, 2006.
“Publishers sometimes send professors ISBN numbers that correspond to a number of bundled additional items, not just the text book alone,” said Jennifer Matos, president of the Faculty Senate. “Another important cost saving issue that was brought up was if a faculty member can commit to an edition and author for a period, say, the next four semesters, then the bookstore can predict the future, which may result in savings to students because they can procure more used copies of the book.”
Professor Say-Peng Lim, who teaches general physics and statistical physics, said the publisher representatives told him and other faculty that the cost of the physics textbook they adopted would not increase if they selected the package with grade assistant supplementary software. He was surprised when he learned in the interview for this article that that was not the case.
A quick search of the Follett Corporation’s – the parent company of the Matador bookstore – Web site revealed that the physics book was $153.35 without the textbook supplement but $173.25 with the textbook supplement.
Lim said many students tell him that high textbook prices compel them to buy their textbooks online for cheaper prices rather than at Matador bookstore.
When Jerry Chang came to CSUN as a freshman, he spent $500 to $600 on books. He, like many students, bought all of his textbooks at the Matador bookstore. The cost of textbooks was a common complaint among students, he said, so it was only a matter of time before he heard there were better deals elsewhere.
“Me and my friends were all buying our books at the bookstore,” he said. “Then you heard people say they got their books cheaper buying them online. So I jumped online.”
Now as a junior, Chang says he typically saves $100 to $200 a semester by buying most of his books from eBay and Amazon.com. Soaring textbook prices, tuition and student fees have prodded many students like Chang to bargain shop for their textbooks.
Sophomore business major Mike Gomez said he buys all of his books at the bookstore because he generally waits until the last minute to buy his books.
“I have a friend who buys a lot of her books at overstock.com,” he said. “I’ve thought about looking online but I haven’t had the time.”
A comparison of 35 textbook prices from the Matador bookstore, the respective publishers’ Web sites, and Amazon.com yielded significant disparities in price between the three vendors.
The prices at the Matador bookstore were on average 8.4 percent more expensive than the publisher’s listed price, and 16 percent more expensive than Amazon’s listed prices. It should be noted that these prices, according to publisher representatives, range from wholesale to suggested retail.
Dave Nirenberg, Director of Commercial Services at the University Corporation, pointed to the overhead costs the bookstore incurs as a reason why they charge more than elsewhere. He mentioned the services the bookstore offers that outside vendors do not, such as a buy back policy as well as t
he convenience of being on campus.
When asked what the Matador bookstore’s profit-margin is, Nirenberg said he could not say because it would violate the privacy agreement between the University Corporation and the Follett Higher Education Group, which runs the Matador bookstore as well as the campus bookstores of 700 other academic institutions.
College bookstores typically set their retail prices to ensure that a percentage (called the margin) of the selling price goes to the bookstore. The average margin on new college textbooks among stores reporting to the National Association of College Stores is about 23 percent, according to a NACS College Store Industry Financial Report.
To give a more detailed picture of the costs a textbook incurs before it hits the store shelves, of every dollar, 77.8 cents comes from the publisher’s side and 22.2 cents comes from the retailer’s side. Most of the publisher’s expenses come from the cost of paper and printing (32.5 cents), marketing (15.5 cents), and the author’s income (11.7 cents). Retailer’s expenses come from the cost of personnel (11.4 cents), operations (5.9 cents), while the remainder goes toward store income (4.9 cents).
Amy Berger, manager of the Matador bookstore, said her bookstore does everything it can to increase the number of books it buys back from students.
“The number of used books we have sold has increased over the past few years,” she said. “Last year, 34 percent of the texts sold were used, and 66 percent were new. The previous year, 31 percent of the texts sold were used, and 69 percent were new. Over the last two years, the dollars we paid out to students who sell their books back has increased 6.9 percent.”
Typically, the Matador buys books back at 50 percent of the retail price and then sells it back to the student population at 75 percent, according to Berger.