whether prices are excessive.

[David Farber <dave () farber net>]

________________________________________
From: Mary Shaw [mary.shaw () gmail com]
Sent: Monday, July 07, 2008 10:06 PM
To: Sunil Garg; David Farber
Subject: Re: [IP] The real meaning of the Act of 'Civil Disobedience'

Not that I take Wikipedia as definitive, but in the university model the professor can usually choose the textbook from 
among competing texts for the same course.

The underlying question is whether prices are excessive.

Here's a quick overview of where the price of a book goes. This is for regional guidebooks, which I understand pretty 
well.  I don't know how closely it corresponds to textbooks, but it's probably a good first cut.

Divide the retail price of a book into six roughly equal segments -- 15-20% per segment.
      Two parts (40%) goes to the retailer for rent, salaries, stocking books, etc
      One part (15%) goes to the wholesaler for warehousing, distribution, etc
      One part goes to the publisher for editing, business risk (fronting the money), marketing
      One part goes to the printer for putting ink on paper and binding the volume
      One part goes to the author.
For a $60 textbook, that's about $10/part.

The retail markup seems to be in line with general retail practice. A low-visibility cost to the publisher is fronting 
the money to edit and print a text that doesn't compete well in the market. A few years ago I paid my printer $3-4/copy 
for 250-300 pages softbound, so $10-15 per copy for a large textbook doesn't seem out of line. For textbooks, author 
royalties used to go 10-15%, higher as volume goes up, so that's about right. As I noted earlier, it doesn't pay the 
author very much per hour.

Note that the author does get a cut of the income.  This isn't like the music industry, where a common complaint is 
that the performer isn't getting any of the income.

So which of these parts is exorbitantly expensive?

As for frequently-changing editions, it's gratuitous to suggest that they're changed solely to force students to buy 
new books. Particularly in computer science, the material changes.  For some large freshman courses, 
university-specific editions are sometimes printed to keep the size and cost of the book down by including only the 
chapters required for the course.

One way to get the cost of textbooks down would be to sidestep the retailer.  For example, a student could sign up at 
course registration time to get the books automatically, and a distributor could make up individualized text packages 
and ship them in bulk to a university dispensary. Given the lead time, it seems like this could take a third off the 
top of the price.

Another possibility to explore would be sets of monographs rather than monolithic textbooks.  That, however, has 
integration problems of various kinds.

Mary Shaw


On Mon, Jul 7, 2008 at 8:47 PM, Sunil Garg <sunil () sunilgarg com<mailto:sunil () sunilgarg com>> wrote:
According to Wikipedia, "Monopolies are thus characterized by a lack of economic competition for the good or service 
that they provide and a lack of viable substitute goods."

For the vast majority of courses,

 *   students are prescribed a particular textbook,
 *   that book is published by a single publisher, and
 *   frequently changing editions eliminate most of the pricing competition with used books

...thus characterizing a monopoly, even if a single company doesn't control the entire industry.

-Sunil


On Mon, Jul 7, 2008 at 5:24 PM, David Farber <dave () farber net<mailto:dave () farber net>> wrote:

________________________________________
From: Mary Shaw [mary.shaw () gmail com<mailto:mary.shaw () gmail com>]
Sent: Monday, July 07, 2008 7:42 PM
To: David Farber
Subject: Re: [IP] Chron of Higher Ed: Founder of Textbook-Download Site Says Offering Free Copyrighted Textbooks Is Act 
of 'Civil Disobedience'

The undergraduate who is running this site clearly needs to study the basis for civil disobedience more carefully.  
First, civil disobedience is not committed anonymously, but publicly and with full expectation of suffering the 
penalties.  Second, its purpose is to protest injustice, not prices.

Also, though there has been concentration in the textbook industry over the last decade or so, I don't think it is yet 
a monopoly.

Mary



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