The college textbook racket and how one startup is offering a different solution

The college textbook industry is, to be generous, a racket. It charges overblown prices for items that surely don’t cost even a fraction of the price. Even including the author fees and publishing costs and low production numbers there is no way, but no way, that a book in Macrobiology can justify a $224 price. The only reason publishers can charge that ridiculous price is because they know students are required to have that book in order to pass the class. The second part of this racket is the ever-changing editions, where minimal, mostly paging updates are made to the text and the textbook is reissued as a “new” addition. Many college professors not only require the student to have the book but also to have the latest edition. This makes it more difficult for students to sell their book after the semester is over and to recoup at least part of their hefty investment.

Microbiology textbook pricing options at the UC Berkeley bookstore.  Source: New York Times

Microbiology textbook pricing options at the UC Berkeley bookstore.
Source: New York Times

Yes, it seems like the American College Student is a virtual wellspring of cash for publishers and it really does seem like a racket.

Startups are drawn to inefficiencies like these like moths to a flame. A recent post in the New York Times mentions Chegg, Bookrenter and Amazon as some companies offering an alternative to college bookstores and are trying to rent textbooks at more reasonable prices. This is a good step forward but because of the chokeholds placed on students by both textbook publishers and their professors, they still rent out books at tens of dollars.

Microbiology

Microbiology by Black

In the Times video, the different options for buying and renting a textbook at the UC Berkeley book store were shown. The book is Microbiology: Principles and Explorations, 8th Edition by Jacquelyn G. Black. Let’s look at the different pricing options for this one textbook as an example (if you’ve been away from college for a while you might want to sit down while reading these prices):

 

Location New Buy New Rent Used Buy Used Rent eBook Buy eBook Rent
UC Berkeley bookstore $224.00 $168.00 $168.00 $123.00
Wiley, the publisher $215.95 $93.50
Amazon $132.36 $91.94 $93.50 90 days – $47.15,  120 days – $51.08
Bookrenter 125 days – $87.25, 90 days – $81.14, 60 days – $75.91, 45 days – $69.80, 30 days – $66.31 $149.70
Chegg $145.99 $45.49 – semester $116.99 $86.02 90 days – $64.52,  120 days – $68.82,  180 days – $77.42

Interesting to note how much cheaper the online purchasing options for the textbook are when compared to the university bookstore.

The Times also talked about a very intriguing third alternative: renting for when you need it. After all, why rent for a month or a semester when you can rent for as little as a few dollars per day but only on the days you need the book. After all, many students need the book for a few assignments throughout the semester and preparation for the final test. Packback, the startup profiled in the Times, can do this by offering ebooks with time-limited access for only a few dollars a day. Genius. Unfortunately, right now they only have access to a limited amount of textbooks and don’t have the Microbiology one I profiled above. Also, I have a feeling the textbook publishers might not set licensing fees at rates that will allow Packback to offer books at the rates that can compete with other options.

The Times video ended with the extortion to always be a good consumer and compare prices. The prices for the various options are incredibly diverse and, this being a very high margin industry, I expect more startups to jump in and offer additional access models at different price points. After all, someone needs to help college students to deal with the textbook racket. Offering them these various options is a great start.

 

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