Chicken And Egg

24 01 2011

It costs a lot of money to go to college these days. It has never been cheap, mind you, but the inflation rate of academia has been around 8-10% for many years, the result being that a college education now consumes a higher proportion of one’s income than it once did.

But paralleling the rise in tuition and fees has been the rising price of text books. A student taking a full load of 15 hours could face up to $750 each semester if new books are the only option. The question is almost the chicken-and-egg dilemma, for I am not really sure which came first: expensive books, or expensive tuition.

It has been this way for years. As for text books, the more esoteric the subject, the more expensive the book. And the thinner that book is. I remember paying $150 for an Econometrics book in 1984 that was no thicker than a book of prayers I had seen in a religious bookstore. And believe me, the book of prayers would have been a lot more helpful (and worth $1000 at least).

Sure, most state universities have competing off-campus bookstores nearby to tr to help students save a few bucks, but the fact remains that college text books are enormously expensive. OK, go ahead and say it: “Outrageously expensive!”

I led a student group in 1999 that built the first online store for WT’s campus bookstore. It was during that process that I learned something about the pricing game for these books. New books only net the store about a 25% margin (the publisher getting the bulk, and the authors a couple of bucks). But used books are an enormous profit center, with up to 75% margins. Which explains why the bookstore only gives you $10 for you seldom-used Principles of Finance text.

But the game has changed now, and students are quickly finding themselves in the driver’s seat. Starting first with eBay, Amazon and Half.com, and now a more mature offering of options from Chegg, eCampus and Campus Book Rentals, students can look their campus bookstore manager in the eye and say, “Au revoir.” Hey, it never hurts to practice your French.

So big is this threat to campus bookstores that I have heard that our very own store is only ordering a few copies for some classes. With students now able to rent, buy and resell online with competitive and fair prices for all, it makes little sense for universities to stay in the book business. They simply cannot compete.

Which is another way of saying that I fully expect campus bookstores very soon to just be in the t-shirt and gift business.

But even the new breed of competitor had better not get too comfortable. Once a preponderance of students own tablet devices like the iPad, there is little sense in buying or renting any tangible book. Already some publishers are testing the waters with digital texts, and I expect this to explode in the coming years.

This makes sense for many reasons. Publishers and authors can revise texts far more frequently than the current 2-3 years (which is a huge benefit in fields that seemingly change over night). Universities will no longer require faculty to adhere to a 3-year adoption cycle (which necessarily ensures the used book market market…and whoever is selling or renting them…a captive audience). Finally, publishers can embed access limitations such that the e-books can only be downloaded to one device. Students could retain their digital copy, but with new editions appearing regularly, the ability to pass them along to subsequent students would be slim.

If you ask me, the campus Humpty Dumpty is about to fall off its wall. And all the king’s hoprses and all the king’s men won’t be able to put Humpty together again.

Anyone want some eggs?

Dr “Over Easy” Gerlich


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