Textbook company capitalizes with lower-cost alternatives
A St. Paul company is cashing in on student frustration with high textbook prices by offering less expensive electronic and print-on-demand alternatives to books from the big publishers.
Textbook Media in St. Paul is one of a number of enterprises that see an opportunity selling lower-priced texts. The company seeks established authors in favor of more affordable textbooks. Since 2004, the company has had more than 1 million student customers.
"We used to be the bad guys," said Tom Doran, the company's CEO. "We just got tired of that role and we saw with the digital delivery and all the publishing technologies emerge, there's no reason why the cost and the infrastructure need to be as expensive as they are.
After working for decades for major textbook publishers, Doran and his team decided to use technology to deliver affordable options to students. He said more than 400 instructors, largely at state schools and community colleges, use textbooks published by his firm.
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"They're really concerned about course instruction, really concerned about the students' pocketbook," he said. "That's our sweet spot."
Among those who have steered students to the company is Peter Lawson, an economics instructor at St. Paul College. A few years ago, he assigned students a popular textbook that cost more than $100, and he regretted it.
Now, Lawson is teaching from a far cheaper book from Textbook Media. Students pay $25 for an electronic edition or $50 for a print version.
"I switched partly out of cost," he said. "That was a big consideration. I felt really bad about students spending so much money on textbooks."
Lawson said lower-cost doesn't mean low-quality. A nationally recognized economist wrote the book he assigned.
"It's a really good textbook -- gives our students a lot of reference, a lot of depth," he said.
Surveys indicate that in four years of study, college students will typically spend $2,500 or more on textbooks - from new books to used books and rentals.
One of Lawson's students, Charlie Nguyen of Eagan, Minn., appreciates not having to shell out money on a yet another pricey book. That's important, Nuguyen said, because sometimes he has been stuck with a book he doesn't absolutely need.
"If a book is cheap, it's OK," he said. "If it's more expensive, they should have a way of returning it, getting some money back. But not all classes do that. It's a little bit annoying. You can't return it once you open it. And it sucks."
Other companies also are responding to student and professor discontent with high textbook prices. Some, like Flatworld Knowledge follow TextMedia's model, selling and renting textbooks they publish.
Others like Chegg and Amazon rent paper and electronic textbooks from many publishers.
Textbook prices have more than doubled in the past 15 years, said economist Mark Perry of the American Enterprise Institute. He said the textbook market is too concentrated.
Meanwhile, prices for mass-market books like those sold by Barnes and Noble and Amazon.com have largely been flat.
"Because it's a small group of producers that are controlling a large segment of the market, I would say that textbooks now are overpriced, that they're not being priced, according to market forces," Perry said.
The big educational publishers scoff at any suggestion they're monopolists immune to the forces of competition.
David Anderson, executive director for higher education for the Association of American Publishers, a trade organization, said students are steadily spending less on textbooks and other required course materials because big publishers are offering more options.
"Students have a choice between a traditional hard-bound color textbook," he said. "You can get it in a three-ring binder or black-and-white or you can rent it or get it in a digital form. Or you can buy it by chapter."
Anderson points to CourseSmart, founded with the help of leading educational publishers. In August, CourseSmart started offering students six e-textbooks rentals a term for $200. He said the top publishers also typically provide a lot of valuable supplemental materials with textbooks, such as online tutorials and multimedia content.
But publishers aren't the only ones claiming credit for a small decline in textbook spending. So are college bookstores and campus-based public interest research groups.
A survey by the Student Monitor market research firm found that from 2011 to 2012, average student spending on books and related course materials fell 11 percent to just under $600 per academic year.
"They're buying less-expensive formats from less-expensive sources," said Eric Weil, the firm's managing partner. "Fewer than half of all students bought even one new textbook last term."
Weil expects rentals could account for a third of the textbook market this fall.
The pressure on the big publishers isn't relenting. Some colleges are joining the fight by pushing for so-called "open" textbooks that can be copied, modified and shared for free.
The University of Minnesota's College of Education and Human Development built a tool to help professors find and evaluate these books.
"Rice University is creating high-quality open textbooks, and they're getting a lot of adoptions there," said Dave Ernst, the university's chief information officer. "State legislators in California passed legislation last year that the state would actually fund the creation of 50 open textbooks. It's growing exponentially. We'll always need publishers. But I think that the open textbooks will hopefully pressure the direction of costs down."
