That Hissing Sound? Textbook Bubble Is Deflating
Can $220 textbooks survive?
Is this really a sustainable model where a concentrated group of textbook publishers charge students more than $1,000 per semester for traditional college textbooks (assuming 5 books @ $200 like Mankiw's "Principles of Economics" above at $220) when comparable textbooks are now available "for free" from Flat World Knowledge? One example is "Principles of Economics, " by Libby Rittenberg and Timothy Tregarthen, which is currently in use at 120 colleges including University of Florida, San Diego State, New Mexico State, St. Louis University, Penn State, etc.
Actually it's only the online version that's totally free, the other options are $35 for a printed black and white version, $90 for full color version, a print-it-yourself version for $25, and the e-book version for $25. Students can also purchase individual chapters at a reduced cost.
According to the Wikipedia entry for Flat World Knowledge, 2,000 colleges and 300,000 students have used its textbooks.
Bottom Line: It's hard to see how the traditional cartel-style textbook model can survive, and that giant hissing sound you might be hearing is the "college textbook bubble" starting to deflate..... After all, the U.S. textbook bubble makes the U.S. housing bubble seem almost insignificant by comparison, see the chart below:
Actually it's only the online version that's totally free, the other options are $35 for a printed black and white version, $90 for full color version, a print-it-yourself version for $25, and the e-book version for $25. Students can also purchase individual chapters at a reduced cost.
According to the Wikipedia entry for Flat World Knowledge, 2,000 colleges and 300,000 students have used its textbooks.
Bottom Line: It's hard to see how the traditional cartel-style textbook model can survive, and that giant hissing sound you might be hearing is the "college textbook bubble" starting to deflate..... After all, the U.S. textbook bubble makes the U.S. housing bubble seem almost insignificant by comparison, see the chart below:
HT: Sy Banerjee
54 Comments:
We also use Flat World Knowledge books for Accounting 101 here at UNC-Chapel Hill.
No, they can't survive, but they won't go quietly, as this new online textbook company found out. Apparently that online textbook company asks students what textbook they need and then they create a version of that textbook, with the same section topics but made up of freely sourced material instead. Those publishers are now suing them simply for using the same section topics, claiming that's copyrighted. I'm guessing they do have a case under Feist v. Rural, but they probably shouldn't. In any case, it won't do anything to keep them from bankruptcy, so it hardly matters.
Here's a breakdown of textbook prices, supposedly from the association of college stores. The only parts of those costs that can stick around will the author's cut, plus some editorial: everything else will be squeezed to almost zero. Factor in that everything will be collaboratively created and edited, like Wikipedia, and there's no way that the cost for the online product will rise above 10% of what's sold on paper now, ie you will get better material than a $200 paper textbook for $20 online. Of course, you will always be able to pay more or less online for quantity or quality, but if you compare similar units, it'll be about a tenth of the cost, at higher quality. The notion that the backwards-looking incompetents working at these current textbook companies will ever figure any of this is out is laughable, :) hence they're all headed for bankruptcy and good riddance.
Exactly!
Housing prices were eventually subject to reality. I'm not sure textbook prices have the same pressures, especially when professors like Mankiw teach the class using the book they've written.
Hmmm, considering the difference in costs of producing an e-version of a hardback/paperback book I'll guess we'll find out just what the actual cost of intellectual property really is...
Don't forget that there is a large secondary market for textbooks through websites like half.com and amazon.com. You can get physical copies of textbooks for dirt cheap (I bought one of my textbooks, $200 new, I paid $50).
Jon: Often those lower prices are for textbooks in an older edition. The publishers have gone to a 2-year publishing cycle with new editions every other year for most textbooks, in an attempt to kill the secondary market for used textbooks.
For older editions of Mankiw, you can get them for less than $1. But for the most recent edition of Mankiw's textbook, the new ($110) and used prices ($106) are almost exactly the same.
I understand, Dr. Perry, but in many cases there are little difference between and older version of a book and a new edition. Even Mankiw's 6th edition has very few changes from his 4th.
I remember being forced to buy overpriced text books, written by the same professor(s) who's class I was taking.
You could never buy a used text book because the books would be "updated" every year.
I do not miss college at all...
This is an interesting post because I am attending a Webinar at noon today for textbooks for our fall courses.
"Textbooks" now come with supporting resources such as tests, quizzes, online simulations, and support so that you can standardize course content across campuses using part-time instructors. You simply can't compare "textbooks" from a couple years ago and later to today's textbooks.
If you don't have the resources provided by the textbook publishers, you have to pay extra for them with curriculum writers, Web experts, and professional development fees for instructors. Technology is expensive. Nothing is free.
At first glance, a $200 book might seem expensive; however, you have to compare how much money you will have to pay and quality you might lose if you decide to use a $50 book without any supporting resources that the $200 book includes.
The students are going to pay the full cost of their education regardless of the cost drivers. Hopefully, someone like me is looking at the big picture instead of trying to cut corners in the wrong place.
Jon: That's always an option for students to use an older edition, at least for some courses, and some professors will either encourage that, or at least not discourage it.....
"You could never buy a used text book because the books would be "updated" every year."
What kind of profound principles are these people teaching that requires a textbook revision more than once every couple of decades?
CanSpeecy,
Try to find the "Apps" section of a technolgy textbook from 2 years ago. Also, try to standardize a technolgy course taught on 13 campuses by 20 different instructors that will enable 75% of the students on every campus to pass a national test on the first try. Many of the textbook publishers are putting packages together that meet those outcomes.
Textbooks are not always just textbooks anymore. The entire educational delivery model has changed.
I looked up price comparisons for Mankiw's 6th ed. Micro and found many options.
Options include buying a chapter or just renting whole for a term. I thought rental looked very affordable but it is a very risky propostion. The ratings on renters are very, very low, with disappointment in product and service.
One option that I could not find was e-book edition renting for this text.
Buddy,
I am familiar with the publisher of Mankiw's book. You are only seeing the student pricing options for the textbook. I have six different options as supporting resources from the instructor side that I would have to choose from for my program from Cengage.
An example for an option of an economics book would be an animated display of a supply/demand curve that allows manipulation of price along the demand curve or other change that shifts the entire curve. This could be done on an overhead projector in a classroom for onsite students and duplicated for an online course so both types of students receive the same instruction from whomever happens to be teaching the class. What's something like this worth in 21st century educational delivery? It's not free. Don’t limit your thinking to just the textbook you see in the picture.
"Try to find the "Apps" section of a technolgy textbook from 2 years ago"
Ha! So what these textbooks by top economists provide is not fundamental principles, but "Apps"?
Perhaps the smarter students would do well to sign up for a different program altogether. Of are "Apps" the future of advanced civilization?
Walt,
It is interesting to see the different textures of texts available that you note.
If extra media edu benefits are incorporated in the texts, that could be beneficial. It would be also beneficial to deliver via e-book rental to help defray the cost.
BTW, I paid $195 bucks for the 5th ed. Mankiw Micro for my son two years ago.
CanSpeccy,
I was not limiting my discussion to economics. Both content and delivery methodology change very, very quickly.
The aim of the publishers would be to duplicate Mankiw's knowledge without Mankiw's presence. That possibly makes two winners: 1) Mankiw gets paid for his intellectual knowledge and, 2) someone at a community college gets a cut-rate for a Harvard education.
Great resources can make good instructors deliver great outcomes.
Buddy,
Did your son have a part-time instructor or full-time professor. Was his class onsite or online? Was the majority of his class able to engage with the course content?
There are a lot of factors that produce different outcomes, so focusing on textbook prices alone leaves too much out of the big picture.
Nature and others have come out with an interactive "Principles of Biology." It claims to be the first textbook designed as a digital textbook. I've never seen a price, but the digital/interactive feature sounds promising.
Interactive ebook
Oops. At the bottom of that page it says "Affordability: Principles of Biology is available to students with lifetime access for under $50."
Sounds like a good deal.
The last class I took (American history) changed books every year. I was sent the wrong copy of one of the 4 books we had to buy and our professor told me not to worry about it because the only difference was the chapters were out of order.
Walt: "At first glance, a $200 book might seem expensive; however, you have to compare how much money you will have to pay and quality you might lose if you decide to use a $50 book without any supporting resources that the $200 book includes."
And you believe that the "supporting resources" are worth $150?
The example you give of an animated supply-demand curve doesn't sound like something each student would need to buy for themselves.
What else would that $150 provide?
"Try to find the apps section..."
Does each student need to buy a $200 textbook to become aware of apps? Give me a break.
The text Prof Perry cites is Mankiw's "Principles of Macro", not "Everything You Might Ever Think You Need To Know About Macro - And More".
It's described as:
"A text by a superb writer and economist that stressed the most important concepts without overwhelming students with an excess of detail..."
But then continues with:
"The sixth edition features a strong revision of content in all twenty-three chapters. Dozens of new applications emphasize the real-world relevance of economics for today's students through interesting news articles, realistic case studies, and engaging problems."
An obvious excess of detail. Can you seriously believe that the principles of macro economics have changed so much in 2 years that an entirely new text book is required? I say BS.
If the intent isn't to force students to buy new books at high prices, all that supposedly valuable new material could be presented as an online supplement.
It appears that the folks at Flat World Knowledge have a better model. What do you think?
And, other than some obvious cost savings, you haven't explained why standardization across all campuses is a benefit to students, unless you believe that Mankiw, or someone like him,should be the only source of econ knowledge.
In the future there won't be any disagreement among economists, as they will all be little Mankiw clones.
"What kind of profound principles are these people teaching that requires a textbook revision more than once every couple of decades?"
The principle that publishing textbooks is a lucrative business.
"There are a lot of factors that produce different outcomes, so focusing on textbook prices alone leaves too much out of the big picture."
Exactly. Assuming that an expensive textbook is necessary to learning, misses too much of the big picture.
Ron H.,
I believe that the day of a student with a textbook in front of them listening to a professor lecture to them in a classroom is over. My Smartboard integrated classroom with an online component engages students in ways I would have never thought of 5 years ago.
You can't teach them if you can't get their attention. The textbook along with whatever reesouces accompany it is only part of the overall learning experience (and cost).
Yes, if we can get a Mankiw economics' lesson from a $15 or $20 an hour instructor for a $200 textbook, it is worth every penny. Don't underestimate what it takes to reach the average student in the technology age. I don't think we have too many former students at Carpe Diem who were just average students. I wish everyone were as motivated to learn as us, but that is not the real world.
A lot of programs require national or statewide testing for credentials. You can't have online sections of a course, or sections at different campuses, or different instructors in the same course having deviations below the goal. If a 75% pass rate is the goal for every section, standardization is usually necessary to meet that outcome (and they would not have me coordinating the program).
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Walt,
"Yes, if we can get a Mankiw economics' lesson from a $15 or $20 an hour instructor for a $200 textbook, it is worth every penny."
While that's absolutely correct, it doesn't explain why the textbook must cost $200, except that it's a gold mine for authors and publishers, who can sell essentially the same material every two years with a few minor updates like "interesting news articles".
"Don't underestimate what it takes to reach the average student in the technology age. I don't think we have too many former students at Carpe Diem who were just average students. I wish everyone were as motivated to learn as us, but that is not the real world."
It's not up to the instructor to force information into a student through their eyes and ears, but to make information and techniques for acquiring it available to them.
If students aren't motivated to learn, they shouldn't be wasting their time and money, and/or my money, by being there. They should stand aside so someone else who IS interested can have their spot.
"A lot of programs require national or statewide testing for credentials. You can't have online sections of a course, or sections at different campuses, or different instructors in the same course having deviations below the goal..."
Yes, all well and good, but that doesn't explain the benefit, if any, to the students.
Thanks - very timely and interesting,
What gets me is how bad some of the top-selling textbooks are. Updates only add to the bloat and the price and they don't remove outdated material.
I wrote a post on Statistics Textbooks today!
http://learnandteachstatistics.wordpress.com/2012/04/10/statistics-textbooks/
I've also been asked to develop on-line material for a textbook as market share is dropping.
We think/hope apps like ours have a better future.
http://itunes.apple.com/us/app/atmypace-statistics/id477053351?ls=1&mt=8
But we don't have the marketing power the big publishing companies have.
Ron H.,
You teach all of the students if you take the job on. Even the ones who are a challenge. If it were easy, anyone could do it.
I've got a $200 textbook and great integrated resources for my class on tap, and we can use the same textbook in the next 3 classes in the sequence. What a steal of a deal for me and for the students! The cost of the textbook (and supporting resources) has to be looked by its contribution to the class outcomes and not by its sticker price alone.
The students benefit by having a nationally accredited program available to them due to the success of those who came before them. It's a data-driven world now.
I teach accounting part time at a local community college. I use the textbook published by Pearson which costs almost $200 but it is good for two courses. It also comes with access to their website which allows me to easily assign homework and tests which are taken online by students and graded automatically. It also has neat exercises and video clips. It is better than the flatearth equivalent and is well worth the extra cost. It saves me lots of time and the students like the instant feedback. This website (myaccountinglab) allows more class time for reviewing problems and is a more efficient way of teaching that the e-textbook publishers can't beat - at least for now.
The term textbook is outdated. What we are buying is a new educational delivery methodology/software package that comes with a printed manual that those not in the industry call a textbook. It's not free.
It is clear to me from the post and the comments that the textbook bubble has already deflated on the supply side. A full range of textbooks are available, from the high-end packages like Mankiw to the purely cut-and-paste products that have minimum price and minimum editorial values. There are also companies like BVT Publishing that try to hit the sweet spot in the middle, with fully-developed textbook packages with prices a fraction of the major publishers. [Disclosure: BVT publishes my own econ text]
If the supply is there, the continued dominance of the major publishers has to be coming from the demand side. In part, it is from professors who just don't care what their students pay for textbooks. In part, it comes from the efficiency of the used-book market, which means purchase and resale are equivalent to rental. In part, it comes from professors who go by reputation of books and are too lazy to examine lower-priced options carefully to separate the good ones from the wikis.
The entire higher education bubble will deflate at some point. What can't continue will not continue.
Ed Dolan,
It is not necessarily that professors don't care about the textbook price, but incentives do matter.
I am teaching two courses this semester that I have never taught before, so I don't have any lecture material, tests, quizzes, handouts, website links . . . .
One class has a full and excellent assortment of material from the textbook publisher, and the other class has only a textbook and a CD of the textbook in a PDF file.
The class with the supported textbook is taking me about 1 hour of prep time per contact hour per week while the other class without textbook support is taking about 3 hours of prep time per contact hour per week.
I did not have any choice of textbooks for these two classes, but I sure don't like making less than minimum wage to teach the class without textbook support. I would not have taken this workload on if I still had my GM job.
As an aside, the textbook prices are $180 for the supported textbook and $100 for the barebone's book.
The quality of the $180 textbook is superb even without the additional supporting resources. The $180 book simply makes me a better instructor, so the students are receiving a better value for their tuition dollars. You have to look at the whole picture.
Walt,
"The class with the supported textbook is taking me about 1 hour of prep time per contact hour per week while the other class without textbook support is taking about 3 hours of prep time per contact hour per week."
This shouldn't be about you.
So you are claiming the difference in textbook prices between one that costs you 2 extra hours prep time per contract hour, times the number of students paying that difference, is a smaller dollar amount than your 2 hours times the number of contract hours you will prepare for.
In other words, the total additional cost to students for a better textbook (package) is less valuable than your total time spent on extra preparation using the lesser textbook (package).
And, if you had a choice, you would prefer to spend the students money rather than your time.
Walt,
I understand that those two textbooks are for different classes, and that you don't have a choice between them, and I didn't see the $180 vs $100 price before I posted my previous comment.
Do I understand correctly that $80 times the number of students is a smaller amount than the amount at which you value your total extra prep time for the class?
If you would also argue that the extra material they get for $80 is more valuable to them than the time they spend with you, then perhaps you are arguing that you aren't really necessary to their learning.
Ron H.,
Have you ever taught a class? Things are not the same blogging about a topic as standing in front of 30 or 40 students and trying to get a message across. All of my students who successfully complete the sequence of prescribed courses are tested by a third party and ranked with their peers nationally. I can run, but I can’t hide. We do not pick the students we have to teach. Our success is measured mostly by how well we pull up the marginal students to a 75% pass rate on a standardized test.
Anything that makes the instructor better/worse affects the student. If it does not, the instructor does not belong there. So, yes, it is essentially about me because there are only so many hours in a day.
I am saying the textbook/supporting resources cannot be judged independently of the whole course content and delivery. With the new available technologies and classroom integration provided today by the “textbook” companies today this is a huge, huge improvement area in student learning.
Ron H.,
I am more concerned about meeting our program outcomes than picking apart exact cost differentials. We need all the help we can get with that because we do not have any admission standards other than a high-school diploma or GED. Our goal is that everyone is successful. Whether we like it or not, that often takes different materials than the instructor alone can provide.
If all else is equal, and I have a choice, I will pick a textbook/supporting resources that is cheaper or that I can use in more than one class. I was a student for a long, long time and know how important expenses can be.
Ron, Walt-- As a textbook author, this exchange is very useful for me. My publisher (BVT Publishing) started out with the idea of competing on price alone. It didn't work out very well. Over the past several years, they have come to the realization that instructors like the two of you need both a good book and a full set of questions, study aids, slides, etc. AND a reasonable price. I think BVT is now getting to the point where they can deliver that. Your comments will encourage them to pursue that strategy further.
Hi,
One thing that impressed me recently was a "60 Minutes" piece on the Khan Academy:
The future of school?
One of the points of the Khan Academy is the school is "flipped". Lectures are viewed at home, and "homework" is done at school.
In this setup, I'm not sure the students even need textbooks. In fact, I don't think they do.
The textbook authors would therefore presumably make money by doing the lectures and supporting tests, and the publishers would make money by producing the lectures, and the teachers would make money by the individual instruction given to students (rather than by lecturing).
Of course, this isn't directly relevant to the economics of textbooks, except to question whether textbooks are even needed.
Walt,
"Our success is measured mostly by how well we pull up the marginal students to a 75% pass rate on a standardized test."
Then why don't you just teach them the test? If the only goal is a measurement of your ability to pull them up, as you put it.
The students are there, presumably paying to learn a particular subject. If your goal is merely to meet a test measurement, then just have them work on that.
I take your question about whether or not I have taught a class, as meaning I should shut up, as I don't know what I'm talking about. :)
The answer is, not in a structured setting as you do, but in the form of seminars and mentoring on the job. So, yes, I know how hard it is to reach some people.
As you didn't directly answer my question about whether you believe your time is more valuable than the combined time of all your students time (money), I assume I didn't write clearly.
I don't know what subject(s) you're teaching, but the example Prof Perry uses, surprise, surprise, is an econ text by Mankiw.
I assume this is used for basic 101 type classes, and therefore I can't imagine why it should need frequent updating at great expense to students, as basic economics doesn't change every year or two.
There is no reason to require a "package", when much of the supporting material could be unbundled and sold separately. Every student doesn't need a "slide presentation, or "interesting news articles" included with a basic text, or better yet an online text that can be printed on demand.
markbahner mentions Kahn Academy, which I've used as supplemental material for my grandson, and recommend highly.
I don't argue that things shouldn't cost money, as they obviously should and do, but I question the frequent need for a new expensive textbook package, for subjects that don't change art the basic level.
Anything new in basic micro-economics in your world lately?
Ed Dolan,
Thanks for your comment.
My concern is entirely with the common practice of requiring a new edition of a textbook at great expense, for basic subjects that don't change in meaningful ways, such as basic economics. The support material and updates, in my opinion, can be made available separate from the text, either online, or as small addenda that don't cost much.
What has been missed in this discussion is how much of the textbook cost is profit for the college and the bookstore. The colleges get a percentage from the bookstore and a typical bookstore is making 25-30%. Why does the publisher make a new copy every 2 years? Because they (and the author) only make money when the book is sold for the first time. The bookstore makes a huge profit every time the book is sold/resold. Many colleges have contracts with the bookstores that prohibit professors from telling students cheaper places to buy the books other than the bookstore. Don't just paint the publisher as the villian when there are others involved.
"Many colleges have contracts with the bookstores that prohibit professors from telling students cheaper places to buy the books other than the bookstore."
The Higher Education Opportunity Act (Public Law 110-315 110th Congress) requires, among other things, the disclosure of the ISBN of a textbook well before class starts. All of the textbook/supplies we require are listed on the course syllabus and are available to every student as soon as we know the textbook/supplies. The students are free to shop around.
A lot of financial aid and scholarship programs will not pay for any items not on the course syllabus. If you require an electrical meter for a class, you better have it on the syllabus (even Scantrons, if required, must be on the syllabus). We are a career college, so a lot of our programs are funded and accredited by agencies or large companies to train their employees or current workforce.
Again, the discussion about textbook price is too narrow in scope to discuss 21st century educational delivery. I have taught classes without a required textbook when I could meet the course outcomes by doing so.
Ron H.," As you didn't directly answer my question about whether you believe your time is more valuable than the combined time of all your students time (money), I assume I didn't write clearly."
My students have my personal cell phone number. My time is their time anytime. If I can get a package that imports online tests and quizzes into Blackboard or ExamView from the publisher so my online and onsite students receive the same instruction, I have more time to spend with them.
Several people have asked why a basic econ text needs updating every 2-3 years; what changes?
The easy answer is, yes, updates are partly publisher driven to fight the used book market. No secret there.
There is more too it, though. Start with macro. Two types of changes here. First, new ideas come along, like NGDP targeting, that need to be included. Second, emphasis changes; if you've just been thru a banking crisis, you need more detail on bank regulation, now a hot topic, but barely in the principles curriculum a few years ago.
In micro the pace is slower. I could use a 4-year old micro book easier than macro. Still, some new stuff every year, carbon taxes, behavioral econ, health care economics, new data on changing income distribution, etc.
In principle, you can get around this by unbundling: publish a short "core" text that has the unchanging core theory and then present updates and current applications through lectures and on-line reading materials. That is what I do for an EMBA econ course I teach each year. I have developed my own short (120pp) core text, available as an e-book (free), plus current applications on a web platform. works great, but as far as I know, no commercial publisher has adopted that model. Also, to be honest, the EMBA program pays better than a lot of colleges do for undergrad courses, so it's worth my extra effort.
Teaching without a text can work for advanced courses, I do it all the time, but when I have tried it for principles, it is the students who complain. They want the security of a text. Also, there is a spoon-feed effect of texts. They require less student thought. If you use a grab-bag of web-based materials, there are little gaps,such as changes in terminology or changes the way graphs are labeled, from one bit to another that require extra, painful, thinking by students. Sorry, I don't mean to trash students, they are the love of my life, but like your own kids, they can be pathetically lazy at times, even the best ones.
Ed Dolan,
My students have complained in every course that did not have a textbook. Carpe Diem is required reading in my sales/marketing class :)
"Many colleges have contracts with the bookstores that prohibit professors from telling students cheaper places to buy the books other than the bookstore. Don't just paint the publisher as the villian when there are others involved."
Two things: First, such an agreement, is an obvious 1st amendment violation.
Second, do you really think students are too stupid to look for better prices elsewhere, without being told to do so?
"I have developed my own short (120pp) core text, available as an e-book (free), plus current applications on a web platform. works great, but as far as I know, no commercial publisher has adopted that model."
For obvious reasons. There's no revenue stream there.
Tim Tregarthen and I want to thank Mark for mentioning our textbook. We are very proud and honored to be part of the Flat World experiment that is aiming to bring down the cost of textbooks while supporting intellectual property rights. Since a few bloggers brought up the question of ancillary educational materials, we wanted to mention that the full array of study guide, instructors manual, test bank, etc., is available for our text and for other Flat World books. Of course, professors should always try to select the texts that they feel will maximize student learning, but price alone may not be the best indicator of that.
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